I feel that my daughter should pay for her college so she has skin in the game. I have paid over $100000 for her pre college education. What kind of loans are out there to cover the cost of the estimated family contribution for students? Also she has gotten large merit awards from school however they don’t seem to come off the EFC but are counted toward the financial aid package to get her to the EFC. Just a little confused 
I can’t speak to having my kids pay, but students are limited to $27,500 (or so) in loans across all 4 years of college ($5,500 per year for the first two years and then it goes up a little after that). Parents would need to co-sign for any loans above that amount. Unless your EFC is very low, it will be tough for your daughter to cover that with the loans that she alone can qualify for.
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Many times merit awards will lower FA awards because FA is based on the amount she needs. My kids are paying 3 years of college by taking the federal loans of $27,000 over 4 years, private loans which we co-sign and then transfer back in their names after graduation (we pay the interest starting immediately), and part time employment (full time in the summer). My 25 year old has another year of paying it off aggressively, my 23 year old should be done in a couple of years. Both are not paying rent at this time (working remotely). Unfortunately they did not qualify for need-based assistance. All of our kids majored/major in areas where employment is likely.
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I would avoid loans as much as possible.
If your child needs to bear the entire cost in order to have “skin in the game,” I might think either there is a problem with your child’s motivation or a problem with your perception of your child’s motivation.
Is “skin in the game” the only reason you would have your child pay, or is this extremely financially challenging for your family? If so there are ways to reduce cost, including at home and going to a community college for the first two years, or a state college.
Outside scholarships and merit scholarships are often subtracted from financial aid but there are a few exceptions.
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I am making assumptions, but if you’ve already paid $100,000+ for her private schooling, I’m thinking that there’s an implication that she is expecting to apply to some very selective schools.
Are you aware of how expensive colleges are these days? A good value state school will be about $35,000 a year, all in. A private one can easily cost $80,000 a year. As mentioned, the max she can get is $27,000. That’s not free money. Interest accrues. Even if she does two years at community college she will still be looking at a sizable chunk of money for her remaining two years.
You don’t provide any context for your question. Is she a top student who will likely get big merit awards? Did she go to a well-connected prep school that’s a feeder for Ivies and such? Did she ask to go to private school, or was it the best option due to other circumstances? Was she made aware early in that she would be expected to pay for college? Would it have been wise to have saved that money spent on private school for her college education?
Having skin in the game is great. Our D chose the most expensive option with the understanding that she would be responsible for some of the cost and she’s already paid off half of it a year after graduating. It’s definitely a good incentive to work and save. On the other hand, we didn’t want to saddle her with too much debt because we wanted her to have some money left over to pay travel expenses, rent, the occasional meal out, and enjoy life a bit.
My personal thought is it’s incumbent on parents to do what they can to help pay their kids’ college fees. Skin in the game is one thing, but bones, teeth, nails and hair is another. With the astronomical costs of college today, if a parent has the opportunity to help their child avoid paying off debt for 15+ years as a young adult, then we can try our best to help them.
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Most students do have skin in the game because they are focused on getting good grades.
If you want your D to have financial skin in the game, students can take out $27K max in Federal Student loans over the 4 years of undergrad, after that any loans are on the parents. There are any number of places parents can get loans, including the Parent Plus loans. But, I don’t recommend any family taking out more than the $27K loans for undergrad.
Most schools will expect the family to contribute at least the amount of their EFC…whether it’s calculated by FAFSA only (these schools generally don’t meet full need, so families often pay > EFC) or calculated by CSS Profile (run NPCs to get COA estimates)
Is your EFC affordable? Is she a senior now? Does she have at least one affordable safety school?
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Yeah, it’s a shock when these number come back for the first time for sure!
there are parent plus loans - i know a few people who’ve taken them out with the promise that the kid will pay them -or half of them - back upon graduating.
We don’t have a high EFC (but its more than R&B), and have always willingly paid for our kids’ room and board costs as those really are on us no matter where they lived.
Our kids work during the summers and pitch in during the school year for their books, transport etc. One of our kids took out student loans to help with her tuition. the others took high merit scholarships at state schools and wont have any loans. we made a budget and kept within that, eliminating schools that were outside what we could do with merit, student loans, kids contributions and parents R&B costs.
good luck!
@hlgrogan here are the loan amounts your child can take in their own name only if you complete the FAFSA financial aid application…
Freshman $5500
Sophomore $6500
Junior $7500
Senior $7500
Anything above those amounts will either need to be cosigned by you or taken out by you parents. Are you willing to do that.
But more…if your daughter attends a $75,000 a year college, do you really want her to have $275,000 plus interest in debt when she graduates? Really?
Pick less costly colleges. Find schools where she can get decent merit aid. Her skin in the game at merit aid awards is keeping her GPA high enough to have those awards continue.
Other ways to have her have “skin in the game” (I prefer to call this “some financial responsibility of her own”)….have her work up to 10 hours a week to pay for most discretionary spending.
It was your choice to spend over $100,000 on Precollege education costs. That money could have been saved for college.
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There are places that give 100% tuition, room & board. You can find lists of them online. Otherwise, the expectation in US universities is that the family is expected to contribute.
^^I love this!
I struggle with the idea that a young person should start out in life with debt “just because”. The US system is brutally expensive, it is that way on purpose, and that has only been true since the 1970’s. Before then it was entirely possible for a young person to work their way through college. Not necessarily easily, but with no meaningful debt. There are many career paths that can be meaningfully limited by college debt.
A student who already has large merit awards in hand in October is clearly not a student who is under performing or showing serious signs of a lack of motivation. A student who takes their schoolwork seriously has skin in the game: it’s the blood, sweat and tears they put into that work. IME, “skin in the game” means contributing an amount that reflects the student’s reasonable ability to acquire it, not being responsible for the whole thing.
What has happened that you have now decided that you are done?
It was your choice to invest in your daughter’s pre-college education, and she “owes” you nothing for it, any more than she “owes” you for the clothes she wears or the food she eats. She is your child and your responsibility, and you cared for her and invested in her in the ways that you thought best for her.
What has been her understanding of how college will be funded? If the idea that she should pay 100% of it is new, or a change, that is seriously problematic.
As an example, I know a student whose parents told her in the autumn of senior year (at a pricey private school) that they would not be paying for any college. They said that they felt she hadn’t lived up to her potential, and they didn’t see why they should throw good money after bad (she was a solid B student). The student is now working her way through community college, and doesn’t expect to transfer to a 4 year college until she turns 24, so her parents income won’t be used in calculating her financial aid. She also no longer has a relationship with her parents.
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Adding to my post above. IF you want your daughter to fully fund college…she would most likely need to take the Direct Loan (listed above) and work part time, and commute to a community college near your home. I personally can’t see any other way a student can fully fund college costs.
If she does this, perhaps she should consider an associates degree which will enable her to get a job. She can then work full time, and take college classes one or two at a time to finish a bachelors degree.
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My kids did/do pay their off campus rent and groceries by working. DD’17 went to community college only so tuition was a non-issue. DD’19 goes to a directional public with the top automatic merit so it’s not a lot of tuition but she does pay part of it from her savings. Definitely have to go these cheaper routes if the kid is going to be responsible for a major portion of it.
I had the same thought — merit money earned IS skin in the game.
When our daughter receives a $4,000 merit scholarship, she surpasses what our son was able to earn after taxes at a minimum wage summer job. Her “contribution” is more helpful to the family finances.
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As noted by basically everyone, the loans your child can take out themselves if very limited.
And yes, merit awards come off the EFC first. Many schools also don’t allow scholarships to stack so your child will need to be careful about that as well.
If you aren’t going to help pay for school, your child is going to need to look at less selective colleges where she’ll get more merit aid. Do not saddle her with any unnecessary debt.
I also agree with others that there are plenty of ways a student can have skin in the game without stacking the deck against them before they even start.
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Has she inherited money from grandparents or similar? If she has a solid bank account, then asking her to pay some for college makes sense.
Is your family struggling financially? Then there are colleges to look at to try to lower costs, community college being one of them.
Is it a relationship deal? (She’s acting privileged and/or adopting values you don’t share?) I’d work on that with professional help outside of college. Tossing college financing into it will only increase the wedge.
Is it an, “I did it all on my own when I graduated from high school, so my kids should too,” belief? If so, consider how much costs and job requirements have changed. Personally, we Creeklanders felt we’d pay half and our kids would pay half so they’d have skin in the game. Then we looked at costs and realized how much debt that would be saddling them with, thus changing the gameplan.
Having kids take out the federal loans on their own is super common for those who aren’t full pay. More than that tends to put a major crimp on their adult lives.
What ACT/SAT/GPA and state are you working with? Does need-based aid work into the equation? What field of interest for a major or career? Giving that info could provide some good options to consider.
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Yup. My dad, business man that he is, framed it as a contract. He paid for college- but not grad school - and my end of the bargain was (a) I had to do the same for my kids, and (b) I made the most of the opportunity. At the beginning of the school year I had to make a budget and submit it to him for approval. If I needed more than the approved budget, it was on me. It was a point of pride that I never went back to ask for more money. I always had a job, though he may not have always known about it. I did loans for grad school, which were financially quite limiting. I learned from that. It was a luxury that I didn’t have to pay for undergrad, but one I didn’t take for granted.
Kiddo will have the same arrangement as I had, loan free to the best of our ability. He understands the pay it forward contract. He understands his end of the deal. That’s enough skin in the game for me.
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I’m glad my parents didn’t require a promise to pay for my kids’ college tuition in full when they paid for mine, because A mine cost about $20,000 vs. $120,000+, and B I have 5 kids.
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So of course I agree with her contributions to get into school and it was our choice to send her to private schools based on the quality of public schools in the system in our area. She is a good kid and a good student and of course I will co sign loans…she is going into a field that she qualifies for PSLF and can work 10 years, making regular on time payments, while working for a non profit. She has a 4.0 unweighted GPA, yes she worked hard, yes I will help, but I don’t want to put another 100,000 into her education and feel that if she qualifies for merit and she qualifies for loans she should start there. Not looking to be labeled or my daughter to be labeled just asking to see if anyone else was in the same boat.
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I admit it framed and focused a lot of my adult life choices. I think that was the idea.
Probably did for dad, too. He was first gen and paid his own way. My two brothers and I had it way easier than dad did because of his sacrifices. He paid for their Ivy League educations and my state school. I am good with paying it forward.
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Then have your kid look for colleges where she would qualify for auto merit awards or have a good chance of getting a good merit award.
Start with Arizona, University of New Mexico, University of Alabama.
Any chance she is a National merit finalist? That would open up some more merit award doors.
Look at your instate public universities. Are there merit awards for top students?
Do you qualify for need based aid?
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I believe this loan forgiveness doesn’t apply to any private loans you take. Not sure about Parent Plus Loans @kelsmom
Plus, that’s the field your kid is interested in NOW. That might not be the field she actually ends up pursuing or getting a job in.
PSLF is already undergoing some changes, and likely will continue to undergo changes. Don’t make assumptions based on what is happening now…as that may not be the case when your kid graduates from college.
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