<p>@sax did your son chose the reach school or the merit school?</p>
<p>“If you take ‘college’ out of the picture, basically what you’re asking is:
How do people think about the utility of paying for something when they sense that there is a disconnect between
what the product is worth and what they are being asked to pay?”</p>
<p>But I don’t see a disconnect. For <em>us</em> and <em>our</em> family, the full-pay freight is not a “disconnect” between what the product is worth and what we’re being asked to pay. I don’t care that other people get these schools for free-or-close-to-free (because I’d still rather not be in their shoes). And it’s not because of prestige or status-seeking or any of the other stuff, but because we believe there is something special about going to a certain caliber of school that’s worth it (and no, not because it gets you into Wall Street making a zillion dollars a year either). It’s an experience that H and I were fortunate to have and we wanted to pass it on to our kids. It’s as simple as that. </p>
<p>This is like asking me what is the utility of paying to go to (say) Paris to see the Louvre when I could walk around the art museum in my city for a lot less.</p>
<p>I think most of us have experiences in which we don’t see the value in other people’s expenditures. I felt this just the other day when I was driving on the Beltway and a Maserati passed me. I remember wondering why anybody would buy a car like that. Perhaps the owner is status-conscious; perhaps he could give good reasons why he thinks it’s worth it. Or maybe he’s so rich that he bought the Maserati because it has a particularly comfortable steering wheel.</p>
<p>@Hunt
Is it the new Ghibli?</p>
<p>Beats me. It said “Maserati” on the back and went BRRBRRBRROOOOOM.</p>
<p>
But times have changed. </p>
<p>My parents paid for my law school education - as did the parents of my kids’ father — but the tuition at our top ranked in-state publics was $700 per year. In 1975 dollars (year #1) - that is the equivalent of under $3100. I’d gladly pick up tuition costs of twice that amount annually to put my kids through grad school - but that won’t even pay for a single semester. My alma mater now charges state residents almost $50K per year for tuition; if my son opted to attend the state flagship where he now lives, law school tuition would be $30K a year. I don’t remember if my parents helped with living expenses or not - but I do remember that I rented a 1-bedroom apartment a block from campus for $145/month and I can’t imagine that my costs for food and incidentals were much more – I’m thinking that I probably could have managed quite well on $300 a month.</p>
<p>I truly wish that I could fully subsidize law school (or grad school) for my kids - but the economic balance has shifted greatly. It’s not a matter of my parents doing a better job of planning or saving money-- they did save enough to pay for my college as well as law school, but as noted it was a lot less. Here’s one thing I do remember: when I started law school, I felt that I had enough in savings to pay my own way and told my parents that I didn’t need their support financially. (That was actually a factor in my choosing the public U. --the private school tuitions were running about $3000+/year at the time – and I did my own risk/benefit analysis and couldn’t see a justification for paying more. The public law school I attended was ranked #5 in the nation at the time.). Despite my desire to pay my own way (knowing that my younger brother was starting college in a year) – my parents insisted on paying for me – and remember thinking as I relented, “the cost is next-to-nothing, so if it makes them feel good to pay, I’ll let them do it”. </p>
<p>If you are fortunate enough to be able to afford the the cost of a 2014 tuition (plus room and board?) – that’s wonderful: but I can’t and I don’t think my kids would want me to. I mean – I could rationalize “It’s nothing” – assuming that my parents were paying out of their current income – but my kids would have to see me borrowing money and exhausting my savings — I think right now the greatest gift I can give to them is managing my finances well enough that they won’t be shouldered with the burden of supporting me in my old age.</p>
<p>So law school is simply something that isn’t in the cards for my kids, no matter how many generations of family members before them were lawyers. And kids coming up short compared to what I had is really mostly a function of my good fortune of having been borne in the 1950’s, the child of “the greatest generation.” My parents, of course, grew up in the midst of the great depression – my dad’s Ivy law school education was paid for by GI Bill. </p>
<p>Someone previously on the thread mentioned Birkin Bags, so I looked them up. It took me to the Hermes website, where the first bag I clicked on sold for $41000. I cannot imagine any universe in which I would pay $41000 for a purse. Even if some people are rich enough to do this without thinking, are there enough of those to keep this company in business? Mind-boggling.</p>
<p>
I’ve been to Paris – twice – once spending a week there with my daughter, when she was still in college. The cost of traveling and staying in Paris was trivial compared to what I had to pay that year for my daughter’s college- and that’s with need based financial aid giving us at least a 50% discount off of the full cost.</p>
<p>The year that my son decided not to return to his expensive, private college – I used the funds I had anticipated using for his tuition to buy my daughter a car, and to pay for her to spend 5 months traveling and living abroad- and I still didn’t spend as much on her as I would have if my son had attended year #3 at pricey elite (again still factoring in the half-off discount of need based aid.). </p>
<p>I really can’t think of anything comparable, given current costs of tuition. Or maybe it is like the Mazerati or the Berkin Bags. We are not talking about college vs. no-college – or even good college vs. terrible college.</p>
<p>Believe me I don’t feel obliged to fund graduate school! And we could easily have been in the position of not being able to do undergrad either. </p>
<p>@calmom - I think it’s really important, what you wrote about what our parents/grandparents were able to do, vs. what is possible now. Especially if you also look at how salaries for middle-class Americans have in some cases decreased in real dollars on top of those crazy tuition (and housing) price increases. One sticky issue is how to talk to the grandparents about it, when they think you’re being “selfish” or “foolish” or “wrong” to not immediately commit to paying the kids’ full tuitions just like in the olden days…</p>
<p>At least in my family, the grandparents are all too aware of current economics – so nothing to discuss (nor would it have been appropriate for me to ask grandpa for help with financing the costs.) I’m just grateful that my father is doing well enough financially that I wasn’t in the “sandwich” position of having to subsidize him at the same time my kids were in college </p>
<p>@mathmom (“we could easily have been in the position of not being able to do undergrad either.”) – I think that’s why the choice of college equation has changed as well. If you went to Harvard and had the ability to comfortably fund the equivalent for your child --that’s wonderful. But I think that if when the time came, you could only manage the in-state public – I hope you would have been able to do so without feeling that you were somehow letting your son down. Of course the generous need-based aid policies of Harvard and other top elites helps many to bridge that gap – but you could also have found yourself in that in-between upper-middle-class position of having an income too high to qualify for much financial aid, but too low to manage the level of contribution that the colleges expected. </p>
<p>For me, the idea of “comfortably fund” does not mean without sacrifice --but there is a big difference between giving up a family vacation or holding off on the purchase of a new car-- vs. a parent raiding retirement funds or taking on crushing debt. I did borrow to fund my kids’ college, and I also spent down most of my savings for my daughter - but I had done the math and I still had a positive net worth and enough home equity to cover the amount I was borrowing. (I chose PLUS loans rather than a HELOC, but I saw that as simply a choice I made – I would not have used PLUS to take out more than the amount that would have been available to me with the home equity,and in my mind it was one or the other). </p>
<p>Calmom- good points all. If you’re deciding between a HELOC or borrowing against a fully paid up whole life insurance policy, that’s an analysis worth doing. If you’re talking early withdrawal of your IRA and you have no other retirement assets except for a house which has a mortgage- risky if you are over 45 which most college parents probably are. If you are liquidating your emergency fund to pay for Freshman year and don’t have a plan for the next three years- you can’t afford it.</p>
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<p>Believe it or not–there’s a waiting list for Birkin bags. Lots of people buy used Birkin bags at auctions–they aren’t as expensive and you don’t have to wait for them. I read an article in Fortune on how to buy one at auction.</p>
<p>^^^Yup, Birkin bags are part of the “absolute luxury” segment:</p>
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</p>
<p><a href=“Hermes $10,000 Birkin Purse Seen Leading to Record Sales - Bloomberg”>http://www.bloomberg.com/news/2013-02-10/hermes-10-000-birkin-purse-seen-leading-to-record-sales-retail.html</a></p>
<p>LOL… I looked and aside from the cost, I think that those bags are ugly.</p>
<p>@calmom - in my family, the grandparents do not have to be involved financially (and they are not) to express vociferous opinions. ;)</p>
<p>Amen, @fretfulmother . But the opinions of the grandparents could be a whole other thread. No way, no how would I want them involved in financing ds’s college education. No way would I want to be “obligated,” I can’t imagine how “vociferous” they (well, just Grandpa) would be then! He is plenty vociferous now!</p>
<p>In our world, the grandparents are the one who are the most likely to think that certain schools are magical – If I go there I will make a million dollars, never get cancer, never get divorced, get every job I ever apply for, magically be the sort of cultured person who always knows what to wear and what wine to order in a restaurant, have perfect pitch, never get a speeding ticket, be able to speak French despite never having studied it, etc. </p>
<p>My husband and I have a lot of very fine education but both feel that in retrospect we probably would have done as well somewhere else because we’re smart and we work hard. The fancy degrees opened a lot of doors when we were in our twenties, but I’ve always found it a little pathological that someone in their fifties or sixties still needs to tell you where they went to undergraduate. My parents didn’t have the opportunity to get fancy degrees so I think they’re more likely to be in awe of those who did. They are more likely to be of the mindset that says you should sell your soul and live in a basement for the rest of your life as long as you can pay for ‘the school’.</p>
<p>Good point, Momzie. I know quite a few people who attended top 30 schools. I’ve noticed that when they’re asked where they went to college, most of them mention a city, not a particular university; they went to Boston, or Ithaca, or New Haven. Several of them started by doing 2 years at community colleges or state universities, so it doesn’t make sense to me to believe less expensive colleges are intellectual wastelands. All the students rejected from the top 30 universities, those who want to save money, and those who just can’t afford them are going somewhere. If you measure intelligence by test scores (as an excellent test taker myself, I don’t because I recognize that not all people are inherently good at testing), you can still find high test scorers in hundreds of universities across this country. If you believe, as I do, that the measure of intelligence can’t be encapsulated in a test score, you’re going to find intelligent people further afield then that. I think people who are willing to work hard can be successful without going to a name brand college. People should go to whatever school meets their needs, but the intellectual snobbery apparent in some of the decision making is unnecessary. </p>