<p>I do not want this to turn into a "financial aid is unfair to the middle class" post. I truly though would like to know how people afford to send their kids to pricey private colleges. Fortunately D has applied to some schools that we will be able to afford. But I was hoping (and maybe am still hoping) that finances would not be the deciding factor. I think the liberal arts college like Grinnell would be a great choice for her (assuming that she gets in) but having worked through the FAFSA I do not see how we could afford it, with an income of $150,000 and an EFC of close to $50,000. We will have her borrow some, but will not allow her to graduate with a crushing load of debt. A home equity loan would probably be the cheapest way for us as parents to borrow, but we would have to borrow about $25,000 a year--is Grinnell (or a similar school) worth more than $200,000?</p>
<p>We're hoping for lots of merit aid :) She has lots and lots of SAT (subject and reasoning) guidebooks - hopefully our investment will pay off in the end.</p>
<p>Actually my h's grandfather started a fund for her when she was born, and put money into it every year till his death when she was 10. We've pretty much left it alone and she should be in fairly good shape. H's grandfather was very financially savvy :)</p>
<p>We were <em>very</em> careful to target schools that provided merit aid. That means that we could not aim for the very best school my s. could get into; we had to target schools where he was in the top 20% or so of the applicant pool.</p>
<p>He wanted to go to Vanderbilt, Duke, Wash U, etc, but we knew his chances of merit aid at these schools was virtually nil. Instead, we searched very hard for LACs that were not quite as well known, but that still had excellent reputations. High on the list were Trinity University in San Antonio, and Rhodes in Memphis. S. got a very strong merit award from each, and he ultimately chose Rhodes.</p>
<p>Between the merit aid, and his maxing out his Stafford loans (which isn't much), we're managing to make it work. Oh yeah, and he has to work on campus to earn his "walking around" money.</p>
<p>We committed to paying our EFC- or as much as we could.
our oldest worked summers and put that money toward EFC, also worked during school year, that money went toward personal expenses, travel, and books.</p>
<p>Our EFC is now higher, but income hasn't changed ( lost a child deduction as well as dependent deduction), however, we will still pay most of EFC-</p>
<p>I would not go into $200,000 debt for any college and an undergraduate degree. I have one son at an expensive private but I am lucky in some ways to have twins in college at the same time. MY 23K EFC, on just under 120K income, is split so I save some money rather than having them in college 4 years apart. Sons will have the stafford loans to pay off is all.</p>
<p>I am paying out of pocket, no loans, for the 23K for both of them but I have very little debt, just the house, and set this up rather than a saving account. It worked for me not having a large saving account that would have counted against EFC but it was a roll of the dice.</p>
<p>They had to choose schools that met full need and they knew that going in. We have a Private and a Public that met full need.</p>
<p>We saved and banked as much as we could when we were renting an apartment in the first 7 years of our marriage. We bought some state-issued zero-coupon bonds, set to mature when the kids started college. We have lived well below our means most of our married life and have not increased it when income rose so the expense isn't as onerous as if we were living paycheck to paycheck. S applied to schools where he was likely to get significant merit aid, which he did and accepted (he has also started doing research in his field for a professor to earn spending $; he also uses summer earnings for spending money). D attended community college for 3 semesters & then entered expensive private school as a transfer, saving us significant $.</p>
<p>Your kids' HS counselor might be able to suggest schools where your child may get significant merit aid (when s/he is in the top 20% of applicant pool by grades & SATs), or you can do your own research. Going to local flagship U & then transferrring after a year or two can really shave off signficant sums as well.</p>
<p>There are no easy answers as to what school is worth how much for any particular student or family. Much depends on other demands on your resources, how close the parents are to retirement, what available options are out there for student, what field student will be studying, grad school or not for each child, whether there are other children who will also need educations financed, and other issues. It can be useful to explore each of these issues & write a + / - to figure out what makes the most sense for you, your student, and your family. Crushing debt is not great for anyone. </p>
<p>If there are some savings, some folks are able to use some savings, some current earnings and some loans to keep things manageable.</p>
<p>With D1 we eventally (over 4 yrs) maxed out on our home equity line of credit and she took out Stafford Loans. She graduated with honors, so we are have paid down half of her total loan amount. D2 is in her 1st yr at CMU...6th highest priced in the USA! :( However, she has received a nice $19K grant. Both daughters worked during the summers and the school yr. And, we still have D3 at home...</p>
<p>I have one son at an expensive private but I am lucky in some ways to have twins in college at the same time.</p>
<p>I don't know * what* I was thinking- my kids are 8 years apart!</p>
<p>I read somewhere that you should save for the equivalent of two years, plan to pay for the equivalent of one year out of your current income, and the remaining one fourth should come from work study, loans, scholarships etc. Assuming worse case scenario of a private school coming in around $45,000 a year, this means the kid should come out of undergrad with less than $45,000 a year in loans (assuming the kid works some to help pay for things like books and lab fees and maybe part of the living expenses.) </p>
<p>What my husband and I did was take all his bonuses for the last few years and threw them in to a college IRA account (529?). We just didn't touch those bonuses. We acted like they didn't exist and never relied upon them in our financial planning. Luckily, I got jumpy about a year ago and moved the funds into a very safe 529 account that was only CD's. So, when the market tanked, I lost nothing. We have enough in there to pay for two years, maybe a little more, of private school. I think we will utilize the plan above to make up the other two years.</p>
<p>When I went to college, my parents point blank said "no private schools." Then they said they would pay room and board and tuition, but I had to pay for my books and lab fees. So, all through high school, I worked to save money for those costs, and continued to work through college to help pay for the costs. I came out of college with no debt, but I did go to a public university. (It was Berkeley, so I can't really complain. Go Bears.)</p>
<p>We saved and invested for D1 college since she was 5, so we had cash on hand to pay for her schooling. D2 is 5 years younger. We probably have 2 1/2 years in cash, 1 year in the market and plan to save for the rest from cash flow (we planned to have the house paid off by the time D2 started college and it has worked out). </p>
<p>We live below our means, including the neighborhood that we live in, and we have deferred maintenance on the house. The kids say, "Replace the carpet, already!" "Not till you guys are through with college!!"</p>
<p>We began saving for our ds's college the day he was born. My mom started us out with a $5000 gift and we refinanced our house, adding $7500 more to the kitty. By the time he graduated this initial investment had grown to about $76000.</p>
<p>But we also did what Canyoncreek did. Instead of applying to the likes of Cornell and Penn, he moved a bit down the foodchain applying to Case, RPI, Oberlin, etc. H is strategery netted him $350,000+ merit offers and he accepted admission to RPI with $25k/yr in merit scholarships.</p>
<p>He graduated last year with about $40k remaining in his college fund and got a great job as a game designer which will allow him to add to this nest egg of his.</p>
<p>We saved (from the time they were born) enough to cover the cost of the flagship U for each of the kids including inflation, differences between that and the cost of any other school must come from Stafford and merit or scholarships. Our flagship is running about $22,000 for instate kids (Tuition, R&B, etc. with no scholarships according to our friends). S1 picked out of state, but the cost came in slightly under our flagship U, S2 has a list of both state and privates and fully understands what dollars are available from my H and I should he choose a private or OS. Interestingly, many of our friends went to privates and Ivies, but their kids are not. I went to a private LAC, H went to a non-flagship state public. My H is retired, I continue to work. Consequently we are firmly in the true middle class on paper. Our retirement funds are adequate (and hopefully won't be touched until 3 is finished with college.) We will not "borrow" money to send the kids to college. We would not fund an Ivy-league class education at full boat. We do not see the value with the abundance of really excellent schools that are more affordable. If the kids got in and chose this route (expensive NE private or expensive OS) and it could be managed with our contribution, Stafford and merit we would not be opposed to their choice of path. We are in the midwest so there is not an "Ivy-mania" mentality. We are resolute with our budget and the kids fully understand.</p>
<p>We had a rather low income till D was starting HS. At that point, it near tripled, but we kept living like we still had the lower income. Threw everything else into the bank. Small inheritance, same thing. Out of about the same income you have, we paid D's college ( mid-30s back then) saved an equivalent amount toward S's college, and lived on the remaining third or so. Income dropped precipitously while S was in college, but the savings were there still.</p>
<p>Careful planning, living well within our means, and letting our kids know BEFORE they started HS how much we could pay toward a dream school, and that the rest would have to be made up with scholarships -- no loans. (For that we have home equity.)</p>
<p>We have paid all education costs straight from our pockets and have savings and trusts that we have never had to touch. We act as if the money we currently pay out of pocket is not "income" at all because we truly never see it. If our kids had not gone to private schools we'd surely have had a lot more money to "play" with over the years. But you don't necessarily miss what you don't have or rather what you give to your kids. We made education our priority from the beginning and the plan is to keep paying "tuition" to ourselves long after the kids have graduated as if it doesn't exist. My father in law did this and one year after his youngest graduated from private college, he and my mother in law bought their dream property in the mountains of colorado as a second home with straight up cash. They have absolutely no debt and are now really comfortable heading into retirement. So really it's more or less banking on the future but beyond our mortgage we have no debt either. It's a pay as you go mentality and while it could all blow up in our face tomorrow, it's works to the point that (so far) conservative investing has old money staying old and getting older every day.</p>
<p>If it would be best for son to go to a private, more expensive school, we'll probably do loans & I am going back to work full-time (hopefully!) -- hence, job hunting now.</p>
<p>We pay with a small grant, Stafford loans, current earnings and some savings. DD also has a job which pays for her discretionary spending.</p>
<p>Kids are not in college yet, but when they were in early elementary school we have purchased two properties that we currently rent out. The plan is to sell them when the time for college comes - the first will be in 4 years. Will probably need some good tax planning to make the best out of it.
Thankfully, we are not in the real estate bubble area...</p>
<p>We put aside the bulk of my husband's bonuses into college accounts for several years when the kids were quite young. We always lived under our income -- no trade-up to a fancy house or luxury cars and only one European trip in decades. We did stop contributing to their college accounts in later years but had at least two years of college each in their accounts quite early on. We then paid off our mortgage. We tended to max out retirement savings.
We do not qualify for any need-based aid due to income.
Husband became unemployed when D was a senior in high school but we still sent her to her dream private. (School did not give us any FA because of previous income and assumption that H would find another job at a comparable income level -- which he did, but only after 15 months!) She took on the Stafford loans and also saved one semester's costs by using her AP credits to graduate on time while having an employed abroad experience -- saved us paying anything for her abroad semester, during which she was officially on leave.</p>
<p>D graduated in '06 and son is now a freshman at another pricey private. He is also taking the Stafford loans. (We wanted our kids to have some skin in the game.) At this point we are older and feel the commitment more, especially after the hit our
401-K's took this past year. But we do feel the schools we sent our kids to were the best matches for their needs and have no regrets -- at least, not so far! It worked out very well for D, we shall see with S. ;)</p>
<p>Our kids know that any grad school plans are totally on them.</p>
<p>^agree with jyber about grad school .</p>