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Others living in big McMansions with big mortgages, borrowing for new cars every few years, with all the electronic gadgets, and luxury travel, receive “need-based” aid packages where their full cost of attendance is
20 - 30 K., whereas ours is full price. Living frugally, paying down personal and business debt, and saving/investing
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EFC is largely from income. If people are truly living in mansions, then likely they have strong incomes to pay the high mortgages, taxes, and utilities that those places require.
Unless their kids are going to Harvard, Yale, Princeton or Stanford,they’re hiding income, or they have more than one child in college, if they are only having to pay $20k-30k per year, then their incomes are probably around $100k…which doesn’t sound enough to support mansions, travel, and new cars.
If you want a full ride, become a NMF and don’t be picky about the rank of school you want to attend. And be careful what you major in. I’m on a “full ride” which it is for the most part, but engineering students get an extra fee that turned not to be covered by the “fees” part of the scholarship. I’m actually okay because the book stipend and an Honors College scholarship covers it, but we ended up paying for my books (and of course transportation costs because I’m OOS). Not a bad deal at all, though. I’m not trying to come off as arrogant, I know I’m very lucky (and yes, luck is right). But part of it is just trying to go to schools that are high ranked. Not saying they aren’t better, but if the goal is no debt (assuming that the kid has high enough stats to get scholarships), then you have to look for schools where they really want students with good stats (since not all their applicants are high stats students) and will throw money at you to come.
I was brought up by “save for what you want” parents. I started really looking at college costs for my son a few years ago and made a concerted effort to save and gather available resources. I’m in a much more comfortable position in terms of my ability to pay. Of course, the side effect was that my EFC also went up significantly. I suppose that would seem like a “big mistake” to some, presumably because they consider being able to take advantage of financial aid as being preferable to being able to pay yourself. I happen to disagree. I absolutely do not envy those living the high life who have to explain to their kids that they spend every cent servicing their mortgage, car loans, credit cards and that they haven’t saved anything for college. For me, there’s a deep satisfaction in having done my part, just like my parents did for me. And the added side benefit, again from my perspective, is that it’s passing on the same lesson to my son. I don’t think it’s ever a mistake to save or make sacrifices for something that’s important to you.
In our small town/rural area of the country 100 - 120 K/year is a great income and can support a mortgage for a very nice house(not a real mansion) and new cars on 5-8 year loans.
But my main point was in reply to becautious who advised living simply and saving for college as the best strategy. Our experience and observations are that living simply and saving for college has backfired – we should have had more fun and bought a larger than necessary house with a big mortgage, borrowed for new cars, and avoided paying down personal and business debt, and now qualified for “need-based” aid rather than be told we have no “need”.
The parents that are frugal and savers wind up paying part of the college bills for the kids of the parents that spent and borrowed liberally.
Why has it “backfired” if you can actually pay for your child’s college expenses? Would it be more satisfying if you were the one whose college bills were being paid for by someone else? I guess I don’t get that logic.
@ screenname48105.
We are not asking that someone else pay college bills for us. By “backfired” I meant to draw attention to the logic of way the current system works – parents that live simply and save and thus are determined to have little or no “need” subsidize the families that spend and borrow liberally and are determined to have greater “need”. In effect, the frugal and savers pay part of the tuition bills for the big spenders. Of course, this discussion does not apply to the families that have always been and continue to be poor.
Income matters a lot more than savings in the equation. The people who get burned the worst in this are those who just prior to their kid’s entrance to college finally get a decent paying job. @Marigrow, if those other people are getting better aid, it is mostly because they have lower income than you do. Or their kids are going to schools that meet need (and some schools define that more generously than others) or they wrangled merit aid. Or they have more kids in college at once. Or they are lying about their aid.
This conversation reminds me of the belief that having multiple kids significantly reduces what you are expected to pay. Not really. Unless you have multiple kids in college at the same time AND attend a school where that actually leads to grant $$, family size doesn’t really impact anything other than your own daily living budget. No school cares that our 11th grader is our 5th child going to college and that we have raised and graduated 4 others to adulthood. They really don’t care that there are 3 kids younger than her at home b/c of the age span between them.
What massive debt means for those families is that their kids have fewer affordable options unless they are willing to take on more debt.
How much a given family is expected to pay for college (that even provide for need based aid) is largely driven by INCOME.
These mysterious people living life high on the hog would have to be committing fraud if what has been written is true. All of the comfortable but not rich families I know have EFCs north of $60,000.
I wish misleading information like this would not be posted.
And how in the heck does living simply include boarding school?!
@ScreenName48105 if I could like your post #223 many times, I would.
In the current environment someone who has saved may feel they are subsidizing those that have not. That environment can change at any time while a parent’s savings are theirs regardless of the environment. It is a great way to teach your kids about delayed gratification.
I suspect that if you run some NPCs and reduce your assets to $5,000 rather than what they actually are (which I presume is substantially more), you may discover that your need based aid moves from zero to…well, not much more than zero. Income–not consumer debt like car loans, credit cards balances, etc.–is primarily what drives need. Yes, assets will come into play if you have sizable non-retirement, cash-equivalent assets. But such “savings” are likely the result of good incomes over a number of years, so it’s kind of like the chicken and the egg.
I would rather have lived frugally, saved and invested wisely, and now have a chunk of cash on hand–even if I’m expected to pay $60,000/year–than to have $5,000 cash on hand and be expected to pay $59,000/year. Doesn’t mean that I have to choose to spend $60,000/yr, but the ability to do so without Parent Plus loans, raiding the retirement savings, etc., brings great peace of mind.
@marigold: I used to think your way, but have changed. we have not saved enough for college, nor will we get much aid at the colleges my kids are looking at. Our state has a very generous private scholarship fund for kids with an EFC below 15K; A few years back I had this great idea to qualify for this scholarship.
Someone on CC sent me a hand-made EFC real-time spreadsheet. And i could immediately see the effects of income vs savings/assets on our EFC. Income was by far the determining factor on how to lower the EFC. I played around with this for a long time, and decided i didnt want to give up income to lower the EFC.
in all, i wish we had saved more, and not spent as much on select sports. I’m starting a part-time job next week to help support college costs. We’ve learned with our first 2 kids; hopefully it’ll be easier with the next 2!!
I will say my D16 is slightly jealous of a classmate who’s going to carleton through the questbridge program. But i’m guessing she’s had a harder life situation growing up than what she lets on. We are good with what we’ve had.
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living simply and saving for college as the best strategy. Our experience and observations are that living simply and saving for college has backfired – we should have had more fun and bought a larger than necessary house with a big mortgage, borrowed for new cars, and avoided paying down personal and business debt, and now qualified for “need-based” aid rather than be told we have no “need”.
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I think there is more to the story. From your past posts, you’ve sent your kids to boarding schools. If you paid for that, then I don’t think that is “being frugal” nor “living simply”. If after saving, sending kids to boarding schools, etc…you still don’t have need, then income must be substantial.
BTW…I have no objection to paying for private schools…I went to private and my kids went to private…but it’s a luxury and I wouldn’t deny that.
As someone who’s been both full pay and the benefciary of need-based FA, the former is a MUCH happier (not to mention EASIER) way to live, assuming you actually have the money in the bank.
You cannot KNOW what someone else’s financial situation is or whether or not all that “financial aid” they’re receiving is anything beyond a giant unsubsidized loan. Don’t forget, folks who take on debt with no concern about how they’ll eventually pay it off (not to mention how much interest they’re paying) aren’t big on distinguishing between the two!
@intparent is right. People make all sorts of claims in regards to money and school that are not true. People claim to get “full aid,” when much of it is loans…or they claim to get a full scholarship, at a school that only gives need based aid.
Some of these families may have gotten some merit awards and you’re assuming it was all need. Or they may be saying that they got XX in aid, but most is loans and work-study and some merit.
And…many people don’t consider that if a family has multiples in college, they can qualify for aid at some of the more generous schools.
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100 - 120 K/year is a great income
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It may be…but there are schools that would give some aid with that income, even with some savings and retirement savings. Your assuming that these people haven’t saved. maybe their money is in protected retirement accts…maybe they’ve paid off their mortgages and their schools don’t count home equity.
Assuming that parents whose kids go to private secondary school are high income and pay full tuition is wrong. My observations and experience are that private schools, including boarding schools, provide need-based or merit aid or both. And they don’t hold college savings against you, and they don’t expect parents or kids to take out loans to pay the tuition.
To return to the thread and put all this another way, I would say that a lot of American parents not only expect to get a merit scholarship regardless of merit, but also expect to get a need-based scholarship even if they have spent and borrowed extravagantly, and have saved little or nothing for education .
The parents that are frugal and save(as becautious suggests we should), wind up paying tuition not only for their own kids, but pay part of the tuition for the big spenders(because the big spenders get a “need-based” grant). Personally, I don’t think it is fair, but it is the way the current cost of college system works.
