Financial aid bitter

Paying for College
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<p>vonlost, I think that there is going to need to be some new out of the box thinking. </p>

<p>I have already heard of some schools offering or planning to offer UG programs within 3 years. This might involve some AP credits and/or not changing one’s major or dropping any classes.</p>

<p>Perhaps some schools will pool together for some their costs.</p>

<p>We may see more online interactive classes offered between universities, or programs like this where students could live at home while earning some credits and reducing costs.</p>

<p>We might see new ideas being tried that just have not been attempted yet.</p>

<p>Bottom line, IMO, is something will need to change to lower the cost of higher education.</p>

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<p>Can’t tell you because I do not ask other families specifics about their financials … but I’m not understanding the argument … I know the jobs these parents have so they are quite likely in the range you believe are being screwed … but now these folks are getting aid because they gamed the system … it seems to me to you’re arguing both sides of the issue at the same time.</p>

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<p>We’re one of those familes … at the very low end for the last few years … and all 3 of our kids can go full pay to any school and we can retire at 65 … so I certainly know it can be done. About 100 posts ago you challenged people to run the numbers … I have; I’ve had a plan since I was 30 and have all our financial goals planned in monthly buckets until we’re 100 (if we make it that long). Mom3ToGo and I have both had solid professional careers since leaving school but neither one of us makes (or ever made) huge bucks (professor and corporate mid-level manager) … and have not had any huge unepected expenses or gaps in income … so that certainly helped. Going the other way we have only lived in notoriously expensive areas (LA, Silicon Valley, Suburban NYC, and Boston) and now live in a pricey suburb of Boston so the kids could attend excellent public schools.</p>

<p>Can we agree a family making $180k-$250k should be able to swing their state’s flagship university unless something very unsual has happened to kill their finances? So the questions is really about financing the increment between the state flagship and full pay privates.</p>

<p>So here’s how you get there for 3 kids while barely making into the target income range.</p>

<p>1) Do not let your housing expense eat too much of your budget … while moving into a great school district we made sure we could have the mortgage paid off roughly when FirstToGo went off to college (so the mortgage payment could switch to college payments). Our starter home (suburban Boston) was very small and affortable … when we moved into a bigger house we kept this in mind … and we ended up with house in great neighborhood, a nice yard, and nice bones … and virtually everything in the house needed to be redone (wiring, plumbing, inside and outside painting, bathrooms, kitchen, etc) … picking a fixer-upper saved us about $250,000 off the mortgage … and 15 years later we’ve almost finished all the work. Would it have been nice to move into a pristine house … sure would have … but no chance the mortgage would have been paid off when FirstToGo hit college.</p>

<p>2) Cars … the hidden gem of financing college IMO. I drive Honda Civics until they die … pretty quick spreadsheet analysis … compare buying a relatively cheap car every 10-12 years to continuing paying lease fees on a BMW or a spiffy SUV … do this analysis over an 18 year time span (which I did) … and what is the punchline. I LOVE to drive and a cool car would be my #1 choice of a toy … however, my choice of driving Civic’s into the ground pays about 2/3rds of the increment from our state flaship to Harvard … not one year’s increment the increment for all four years. Mom3ToGo has made essentially the same decisions on cars … so between the two of us just our car choices have financed one kid’s ability to upgrade to Harvard (while actually make a pretty good dent into the second kid).</p>

<p>3) Start saving for college ASAP. In our case the month our kids were born we started saving for college … at first very small amounts (literally the amount of our raises so starting to save did not decrease out take home pay) … and increased the monthly amount as we made more. Frankly we did not change our lifestyle substantially until we knew we had our major financial goals met (kid’s college, retire, etc).</p>

<p>(3B … not directly related to college discussion but part of the overall finance discussion … also max our 401k/IRA payments so retirement works by 65 … again live on budget with these automatic withdrawals)</p>

<p>4) Live within your regular pay cash flow … and apply any incremental cash flow to long-term goals (529s, mortgage, or retirement accounts) … proceeds from stock options, bonus, profit from stock plan, etc was immediately invested into one of these long-term goals.</p>

<p>A long way back the article was presented on how living on $250k is tough … when I read the article I just saw support of my position … everytime that family made more they spent more … eveytime we made more we banked about 80% of the more until we had our long-term goals met.</p>

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<p>From what I have seen in terms of stats, about half the kids at these full need met, or generous aid given schools, pay full freight. And when you look at the stats on the financial aid that is given, it is in averages, so it is entirely possible that a large number of those on financial aid may not be getting a whole lot of money. You can look up the % of PELL recipients who would likely be getting big aid packages and most of these colleges have few such students. So not that many people are getting all that much money from those schools that are generous with aid.</p>

<p>Now when it comes to loans, outside awards, merit awards that are not included in those stats, that’s a whole other thing. If you or your kid take out loans to meet your EFC, FAFSA or college generated, that doesn’t count as financial aid. If your kid gets an ROTC scholarship or your company has a nice award that meets his need, he isn’t going to get anything from the school. I have a cousin who would have needed a hefty financial aid to go to his choice of college but he has a ROTC scholarship. So he doesn’t fall into that category. </p>

<p>Clearly, to save a good portion of each increase is the way to go, but for many of us, life has not necessary brought consistent increases but some loss of income as well. Also, when it comes to buying a house and providing education for your younger kids, you gotta remember that college is not the be all and end all. A lot of our family lives and spends a lot of time in our house. Education doesn;t start at college. It gets to me that it suddenly becomes all fire important to send the kid away to college and to a private one when those parent were perfectly happy for their kid to spend their most impressionable years and the most time in public school. Unfortunately my consistency in philosophy of education cost so much that I can’t easily extend it on to college.</p>

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<p>Where is the “Like” Button for 3togo’s post??</p>

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<p>3togo to see how easy it is to game the system take the money you have saved and instead use the money to buy a more expensive house in Boston and furnish it with some nice antiques. Then as often happens the wife decides to retire early or takes a few years out of the work force. Quite frequently this will result in the family getting significant FA. Are you really unaware of how many people are working the system for disability, SS, and every other benefit. The point is that the system malkes little sense to be giving FA to families making twice to three times the median wage. Either the education is worth the cost or the system will collapse. I commend you for saving enough money at that income level for college but what about professional school? Should getting the bright children of America educated really require the parents to save every penny? Isn’t this really a benefit to the entire country to create the next generation of educated tax payors?</p>

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<p>3ToGo, if I were a single woman and you were a single man…I’d say marry me :wink: Everyone thinks I’m nuts given my penchant for driving vehicles into the ground, never leasing or buying new, and insisting on no new debt :wink: Yet these are the same folks who seemed most vulnerable during the down-dip and who say they can’t afford certain universities. Hi ho.</p>

<p>I think you should create a new thread with the title Hint: How to Live If You Want to Educate Your Children – for our STUDENTS so they can get with the program early! It took me a lot of living the “wrong way” to actually get it.</p>

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<p>I also would like to “like” 3togo’s post. That is precisely the method my husband and I have used to be able to send our two to college full-pay (well, with the addition of some meager merit-aid). Not only has this method enabled us to afford a choice of colleges for our kids, but it has also enabled us to provide for retirement and to be able to survive downturns in the economy like the present one, when my sole-proprietor spouse has virtually no income.</p>

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<p>Also “liking” 3togo’s post. There was actually a point in our lives (we never quite made the income numbers bandied about here, but we were doing much better than now) when we lived on a third of our take-home, paid a third to D’s college (ten years ago, so not quite the prices now), and saved a third toward S’s college. But we’re kind of an extreme.</p>

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<p>You are all missing the point. It’s great that you have managed to sacrifice and save enough money to pay. I salute all the responsible familes since they are in the minority. Surely you realize that the current FA situation ended up costing you more money since it allowed the colleges to keep raising the tuition. But the real point here is what students/families are getting for the cost of their educations. Only if there is a balance between the cost and the value will the system be rational and sustainable. Here are the current salaries and it’s easy to see the huge disconnect since very few of the undergraduates would earn enough to pay off the cost of a private education. In many cases the degree holders earn no more than those without degrees.</p>

<p><a href=“http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/whatsitworth-select.pdf[/url]”>http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/whatsitworth-select.pdf&lt;/a&gt;&lt;/p&gt;

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<p>Also think 3togo hit the hammer on the nail.
One of our frequent posters here is serving as moderator, throwing out questions, citing articles, keeping the focus on the unfairness. Others have revealed their personal stake in all this and how they managed or what particular unanticipated challenges they faced.</p>

<p>3togo is showing the gold standard of how parents can think about college expenses. It is not always possible. There are potholes in the road for many. But, for every woe tale of a high earner who just can’t make it because of all the expenses associated with being a high earner, there is a counter tale of folks who managed wisely or made do because having the toys, treats and trappings today was not their vision and college had a higher priority. </p>

<p>I have a close friend who share’s “the moderator’s” strong views. The kids are twins. One is at a primo state school and the other at a pricey LAC (not a well-known, but very good.) Both ended up with finaid that leaves their costs nearly identical. My friend is complaining because, as a high-earning divorced parent, he is responsible for a large part of the remaining costs. He feels his ex-wife unjustly pointed the kids at schools, without regard to what it would do to his lifestyle. In effect, his gripe is his percieved loss of control. </p>

<p>I wonder how much others’ “percieved loss of control” is running through this thread. Some may be voluntary, with personal lifestyle choices that cut into the earnings. Some may be due to real financial challenges.</p>

<p>We each make choices. We each live with the results. Finaid is meant to, somewhat, level the playing field. Knowing one or two people who scammed does not an intelligent argument make. In fairness, knowing one or two who planned wisely doesn’t mean everyone can, either.</p>

<p>If you want your kid at a pricey school and if you want to pay for grad school, consider how you will do that. Don’t just complain after the other choices have been made and enjoyed. You have the house on the hill or you don’t.</p>

<p>Whichever of the 3togo family is a professor- we could let you know how colleges have made cutbacks to shear expenses, held down increases and dipped deeper into their endowments to increase aid- for those they feel will benefit.</p>

<p>Btw, there was some mention that a frequent poster’s kid is at a pricey LAC, despite meager future prospects. Any chance we can learn why? Why, when he/she is so adamant that it is not worth it? Thanks for listening.</p>

<p>ps. My divorced friend’s ex did all she could to point the kids at reasonably priced schools. She’s a high-tech gal who lost her job and is still responsible for her portion.</p>

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<p>LF–you brought up a really good point here. There is much talk about colleges blilthely raising tuition “cuz they can” but little factual proof offered. I know that the LAC I work at is barely scraping by–we can’t offer enough aid to meet need, and our students suffer. No one is getting rich around here–I have a job which requires a grad degree, and I make about 40K. The profs make more,but not taht much more. Our dorms are shabby; the res life make do as much as they can, but the budget is limited. We do not cost 50K, but the difference is obvious in everything this school lacks, especially adequate aid. We have a microscopically small endowment.</p>

<p>Except for the for-profit schools, the canard that schools are a business is misguided. There are no owners and no stockholders. No one is getting rich around here. People talk about palatial dorms at some schools, but dorm costs do not come out of tuition. So they do not explain tuition. If you want to find the 30-40K private, go ahead, but in most cases you’re going to find one like where I work–low aid, students taking out big loans and working 20-30 hours a week, shabby dorms, cancelled classes, computer system breakdowns, unfilled tenure lines necessitating reliance on adjuncts, etc etc.</p>

<p>you get what you pay for.</p>

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<p>do honda civics EVER die???</p>

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<p>We followed something very similar to the 3togo model – we are still living in our 1960s split level, unmodernized starter house (bought after we paid off student loans and the kids were in elem school), we drive cars til they die, we throw raises at EFC, savings and retirement.</p>

<p>DH is one of those gov’t attorneys mentioned upthread. I can safely say that not all gov’/t attys make $150k, and they most assuredly do not have a $125k/yr. pension. DH have maybe half of that when he retires at age 65 with 28 years of service. I will also state for the record that he works more hours as a gov’t attorney than he ever did in private practice as an overworked associate. (He is still at work as I type; midnight is not uncommon these days.) No inheritances will be coming our way. </p>

<p>We pretty much full pay with one kid in school, and are getting some FA while both are enrolled. Both kids help with Staffords and work, and one has a partial scholarship. We fall into that hole where we make enough to pay, but not without lots of pain – but it was a choice we made before our kids were ever born and a promise we made to them as they grew older.</p>

<p>I have worked FT, PT and not at all at various points since our kids were born. We debated whether I should return to work from five years of unpaid medical leave (and against my oncologist’s advice) because of the hit we’d take on FA from my part-time salary. The decision was for me to work, because we had no way of being assured that whatever FA we’d get would be in the form of grants, not loans. Everything I make goes to EFC. We feel damned lucky.</p>

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<p>It’s commendable that you’ve chosen to work when all of your income goes to college costs but most people would simply not work. It’s great that a few people are willing to sacrifice so much but many/most Americans are going to get the maximum benefits that are possible. It’s just human nature and the primary reason all the states/America are broke.</p>

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<p>I am not sure it’s human nature, but it does appear to be the American way to spend what one earns (and more). I appreciate knowing that others who feel the need to save for education, retirement, etc are out there … sometimes H & I feel quite alone in our commitment to being the ones responsible for our own family.</p>

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<p>I am wondering where the “proof” is that “most people would simply not work.” Or, the idea that families in certain income pockets are routinely scamming to get aid. Where do you get this info? It may seem like a clever idea, but I can’t agree that it’s universal. Do you know someone who did it. ? I’m not sure we can assume based on a few examples.</p>

<p>I am also unsure how much you know about how colleges evaluate a family’s financial position, before dishing out aid. It’s not as black-white as what a family earns. It’s certainly not as simple as the way the colleges’ web sites make it seem. Many factors are taken into account and there are certain reductions or protections in the formulas. There is also accountability.</p>

<p>And, as Garland suggests, I don’t think you are aware of stringent cuts colleges have made, to keep offering a targeted level of services to kids, in both the academic and non-academic categories. All the details about income, endowment growth, expenses, increases, and you-name-it, is usually published in annual reports.</p>

<p>And, perhaps you don’t know what a stink college kids can put up when they don’t get the bus schedule they want to go from one end of campus to the next, when they don’t like the food and the dorms are outdated. Or, funding to clubs is cut, the price of ticets to see some concert is raised or whatever it is that has nothing to do with the education, per se.</p>

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<p>This article shows that the college system is unfair, but not in the way that some think:</p>

<p><a href=“http://www.nytimes.com/2011/05/25/business/economy/25leonhardt.html[/url]”>http://www.nytimes.com/2011/05/25/business/economy/25leonhardt.html&lt;/a&gt;&lt;/p&gt;

<p>Here is one quote:</p>

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<p>So despite offering a heavily discounted price to the poor and lower middle-class, they are still very underrepresented. It may be that many discounts are deliberately going to the upper middle-class; otherwise, the majority would come from the highest-earning 10% or 5%.</p>

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<p>Then there’s the correlation between SAT score and family income:</p>

<p>[SAT</a> Scores and Family Income - NYTimes.com](<a href=“http://economix.blogs.nytimes.com/2009/08/27/sat-scores-and-family-income/]SAT”>SAT Scores and Family Income - The New York Times)</p>

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<p>Spurster, good link.<br>
I do think of colleges as “machines.” They know how they define success, what they need (in order to keep their particular status,) and where they can afford to take risks. (All this through their “institutional research.”) In the top schools’ admissions process, their national rep and the kid’s likelihood of future success are always in their crosshairs. Retention stats are important to reputation; moving into a good career affects both the college’s rep and the likelihood an alum will donate back to the school. In terms of fundraising, having had a “sweet” college experience also affects donations, so colleges are mindful. </p>

<p>There is less overall risk in taking a kid with educated parents, who support (and maybe drive) his path through to graduation. And, often drive their kids to wise career choices. IME, this is not a spoken consideration, it is more of a recognition. These families can also be less risk-averse. Ie, more willing to send a kid across country or to a different region, more aware of options like Plus loans and in a better position to pay them back, over time. Etc. </p>

<p>The 1st gen is disadvantaged in a few ways- they may not have had the exposure to academic concepts and strategy at home, the college experience (the good and the bad) may be foreign to the family, there can be other pressures (back at home or at school) which cause the kid to drop out, etc. Coming up with the right finaid can be the least of the issues. Low-income can include kids from undereducated families or educated families with few assets. </p>

<p>Part of my work is with admissions; there is a strong drive to admit a class that is balanced in many respects- opportunity, geography, economically, majors, talents, life experiences, and more. Whether you have 30,000 kids vying for 2000 slots or 6,000 vying for 500, there are plenty to chose from. Amherst, eg, can choose all top-performers, no matter what their socio-economic status is. It would be interesting to learn more about how enrollment and retention break out at Amherst, across these lines, and whether they have discovered what specifics affect this.</p>

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<p>3togo the article from today’s NYTposted by spurster exactly makes my point. Everyone outside the top 5-8% is almost certainly getting aid from every single top school. The article clearly states that over 80% of students at elite colleges are not remotely poor. How exactly does it foster meritocracy or even diversity to help a non-poor student with no disadvantages in the 88th percentile over a child in the 96th percentile. Can someone please try to give a rational explanation for the current FA model?</p>