How do middle class parents afford to pay 60,000 a year?

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<p>Net cost after financial and and scholarships, as opposed to list price tuition and other costs, should certainly affect college selection.</p>

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<p>Watch out. Most who are pre-meds as freshmen eventually get into zero medical schools. Be sure that you have some other backup plan, and that you can pay off the loans in that case. (Note: biology majors have poor job and career prospects at the bachelor’s degree level.)</p>

<p>Also, medical school is generally very expensive, so you could be burdened by a lot of medical school debt, plus your undergraduate debt. This may prevent you from choosing some of the lower paid specialties (e.g. the primary care ones) even if that is what you really want to do.</p>

<p>My parents and I plan to subsidize any money not covered by financial aid through loans. Even though it is not ideal, I plan on becoming a doctor so I feel I could adequately repay those loans in a healthy period of time</p>

<p>Anyone planning on going to med school should minimize any undergrad debt. Private med schools and OOS public med schools have COAs has high as $80k per year (and these prices will be higher when you’d go). Instate public med schools can be $50k per year. </p>

<p>Since admittance is so competitive, you may find that your only acceptance is to a med school that will cost you $400k for four years. The monthly loan payments would be over $4k per month!</p>

<p>Do you have any idea how hard it will be to pay back that much? (and that’s without ANY undergrad debt). You may not realize this, but newish doctors do NOT earn that much. </p>

<p>And, as UCB mentions, very few students who are “premed” as freshmen end up in med school. I have a son who’s a senior in college and he’s been admitted to med school for next fall. The process was grueling. The cost will be high (I think his COA is about $70k per year).</p>

<p>I’m another parent who started saving when my kids were born. I saved $100/per kid each month. I also had a heart to heart with grandparents when they were born (not at a holiday, by the way) and told them that I’d really appreciate even a $10 deposit to their college accounts as a birthday or Christmas present instead of toys, especially when the kids were too young to have expectations for presents. When guaranteed college savings accounts came into existence, I rolled all of those savings into the 529 accounts. When I had a “windfall” from an accident, I put $1000 into each of the kids savings accounts. By the way, my spouse wasn’t happy with all this college saving and kept arguing that we should be using the money to pay off bills instead. I felt that if we deferred college saving, there would always be a reason to defer…whether it was bills, family vacations, or some other expense.</p>

<p>I raised my kids with the expectation of going to state universities. I bought them the T-shirts, we visited the campuses a few times so they were familiar with the schools, and followed the sports teams. I didn’t want my kids to have expectations that they might choose to go to hugely expensive liberal arts schools, and thought that being familiar with the state university would help them to look forward to being a student there. </p>

<p>I know that many posters will disagree with me, but I also talked to them from childhood about majors. I wanted them each to pursue practical degrees that would let them earn a living when they graduated. If they wanted to pursue less practical interests, I explained that they could take on minors or pursue those other interests on their own once they were earning a living.</p>

<p>We also discussed the fact that they could graduate from the state universities without debt, which would make a huge difference for them if they chose to go to graduate schools.</p>

<p>It worked for two of them, who attended state universities without undergrad debt. One is now a lawyer (passed the bar and found a job, thank goodness) and one is in pharmacy. </p>

<p>One did choose a $45,000+ year private school for nursing, BUT the “deal” was that the cost had to be the same as the public university or the student would be solely responsible for paying the difference. Fortunately, scholarships brought the cost down. This student also has decided to live at home to save room and board costs.</p>

<p>I can’t imagine facing college expenses without 18 years of prior college planning. Some of my kids’ friends parents just threw up their hands and told their kids that they were on their own. Two of them chose ROTC scholarships to get through college. Another kid was fortunate to have earned great scholarships, and a few took out big loans. Many chose state schools to keep the costs down, and another two went to CC for their first two years to save money. Many of those expensive schools are always hunting for students, and are happy to take transfer students.</p>

<p>Well said, Neonzeus, and well done.</p>

<p>Does it make financial sense for middle class parents to save for their kid’s college costs? It seems there is now a perverse reversal of Aesop’s fable about the Ant & the Grasshopper. </p>

<p>In the fable, the ant diligently stored up food for winter, and the grasshopper that didn’t save, starved.</p>

<p>Don’t colleges nowadays deliberately raise the tuition sticker price to subsidize FA? And don’t the middle class parents with diligently saved money in the bank end up with a smaller FA grant? In essence, the ant ends up feeding the grasshopper? </p>

<p>It seems it would be in one’s financial interest to be a grasshopper. If you spend the money now on vacations in the Bahamas, then come time for junior to go to college you will get the money back in the form of a higher FA grant. Yes? No? Am I missing something here?</p>

<p>^ You’re missing the possibility that FA policies and practices, or your own eligibility for aid, might change. The “grasshopper” strategy could pay off, but only if your child gets admitted to a school with fairly generous FA … and only if you are committed to never breaking into an upper middle class income bracket.</p>

<p>Saving for college gives the students the option of chosing the best fit for them. Without adequate savings the student is more limited to the best financial for for them/</p>

<p>I never imagined when my daughter was born that she would need over $100,000 for college. In my head, I was back in the 70s, when college was under $5000 a year and there were no such things as SAT subject tests! We started saving in a 529 plan when my daughter was born. By the time she started college, we had around $45000 (we ended up with $9000 left over). Her great-grandmother and I also bought Series EE savings bonds, which I haven’t had to use. How did we do it? First, I encouraged my daughter to go to a state school (UC). I have been paying out of pocket from my earnings the whole 4 years, trying to stretch out that 529. She also has worked since freshman summer, paying for her personal expenses. She’s graduating a quarter early due to AP credits. I don’t know the exact figure, but the total cost has been less than $100,000. We still have about $40,000 set aside for her in case she decides to go to graduate school. I can’t imagine paying $60,000 a year for undergrad (or even grad). That’s $240,000 for a BA/BS. Crazy. One thing I was determined NOT to do was saddle her with debt. Now she can start out her life freely, without any student loans to worry about. And I can focus on my retirement accounts.</p>

<p>Thank you ucbalumnus and mom2collegekids, I appreciate your feedback. I do have a couple alternate career paths (dentist, psychologist, business etc.), as I tend to be very paranoid about how both the economy and job prospects will change while I’m in and once I graduate from college. Plus, I definitely am not trying to say I will become a doctor until I am one, because I know that it is a long arduous and difficult process. As well, I know it does take a long time to become established and bring in a healthy income just like any other career. Obviously I’m still just a child so I don’t know everything there is to know about finances. My parents and I have said that if my loans surpass a certain limit for undergrad, that I will seriously consider transferring to my state school.</p>

<p>I’m probably a bit biased towards paying more for an education as my school basically filters seniors into the top universities and ivies each year. Going to school with such fortunate people, I never wanted to admit “no, I can’t do that because of x,y, and z.” (so I guess that’s the psychology behind that) My counselors always stressed school fit over finances, as they tried to impart the educational benefit over the financial opportunity cost. Anyway, if you have any more advice feel free to message me or reply. Thank you!</p>

<p>Agree with tpshorty that we can never know what the COA will be for our kids, so staring a savings account with as little or as much as possible as early as possible keep options open. JMO.</p>

<p>For us, it was almost always a choice between full pay public and merit discounted privates. Our EFC exceeded public costs a long time ago, so I actually felt like the grasshopper mode was advantageous. Any significant savings that we accumulated would have worked against us in the Profile. So I pumped most of that money into retirement accounts instead. DS would love to attend 60k private, but even with best merit, net would still be 25-50% more than public and include max loans and work study, and that is in year 1 only. And, if grades arent maintained…say hello to the remaining 30k. So at slightly higher but still solid middle class incomes…publics are the solid choice IMO</p>

<p>It is really unfortunate that middle income families would shy away from applying to the private universities because of the price tag. Mostly because we don’t know about all these generous need base FA. To pay less than a public state school for a top private school sounds like a fairy tale.</p>

<p>Back in 2008, that was true for us - our kids are the first generation in our family to attend a US undergraduate school. Most of our focus was really the merit aid at lower ranked schools, with only a couple top privates. </p>

<p>Until we saw the FA package from all the schools, then we realize that some of very best private schools with high price tags are really very affordable for us. </p>

<p>In other words, a student from a family with $80,000 income will attend these private essentially free - if they could gain the difficult admission. I just wish all the GCs in HS will know this fact and educate families that not well familiar to these things.</p>

<p>@penzly, well done young grasshopper…</p>

<p>“For us, it was almost always a choice between full pay public and merit discounted privates. Our EFC exceeded public costs a long time ago, so I actually felt like the grasshopper mode was advantageous. Any significant savings that we accumulated would have worked against us in the Profile. So I pumped most of that money into retirement accounts instead.”</p>

<p>This is us and we were fortunate that our student was accepted to a school which gives significant aid. He was also accepted to other schools with gave him large merit award but the closest was $10K less than the aid he got at the school he is attending. It is also costing us less than our top state school - which we made him apply to and where he was accepted and could afford to pay for out of our income.</p>

<p>Neonzeus,
+1! any future parents out there needs to read your description. We did something similar (although with one child, we have more options with our savings). Your long term “grooming” and strategies are great.
Once our daughter was near college age, we had a talk. 1. about considering value. Do you go into debt for a marginally better school because you THINK you like it? 2. A reminder that the way we lived our lives up to this point makes it possible for her to have more college choices. It meant a smaller house, economical cars that lasted 7-10 years) and fun inexpensive family vacations (you know, like the ones us 40+ year olds used to go on when we were kids). I explained we are not bringing this up to say “look what we gave up for you” (very bad message), but to show her how simple decisions over a long period of time yield fruit. This basic life lesson has been lost on many from the past two generations. Even among my peers (40+), I’m a minority on this point of view.</p>

<p>The sad thing is that SOME schools discourage savings (a completely new topic), and my conclusion is that our aid would have been better living a more extravagant life, rolling over the debt into HELs and having less equity in our home. But, that’s some schools. Others it makes no difference. Besides living that way would train my D to live this way too. The lesson would be lost.</p>

<p>PS. By no means do I mean to imply everyone struggling to pay for college wasted their money on BMWs and trips to the Virgin Islands every year. I came from a poor family that could not save much or contribute little to my college education, so i know. But, these days, there are a lot of people out there who made decisions to live for today.- and children see this</p>

<p>I know people on this site crow about how they get so much merit aid that they pay less at a private than they would at a public, but that wasn’t the case for us. My duaghter had high enough stats and ECs to get into UCLA and on the waiting list at Stanford, but none of the privates she applied to offered her much merit aid at all. We are at the high end of middle class, so our EFC was $75,000. I suppose we are lucky to have good incomes, but it was still a struggle to pay for college as well as cover our living expenses now and save for retirement. We did it, but only by working very, very hard and not taking vacations, buying new cars, or spending much on clothes, etc. Couselors who push “fit” aren’t even thining about finances. “Fit” is a luxury.</p>

<p>We’ve a two-salary upper-middle-class professional household, adjusting lifestyle expectations to live on one salary and mostly bank other salary after DH’s near-catastrophic illness. Both our professions are “lay-off” prone, though we’ve personally not lost our jobs during the multiple economic downturns we’ve endured. I read Elizabeth Warren’s book “The Two-Income Trap: Why Middle-Class Parents are Going Broke”, and felt we had made the right decision.</p>

<p>Our middle-aged friends split into two camps: those “savers” like us, and then those who despite their professional degrees and professional careers live nearly on a paycheck-to-paycheck basis with little savings and low net worth.</p>

<p>Theres always varying opinions, and many ways to accomplish the same result. I dont think that my choice to fund my future retirement over saving for college at the time my children were young was necessarily the right choice for others. But I think I saw the writing on the wall, college costs were going up faster than anyones income and ability to save, particularly in the 90s and 2000’s. In hindsight now, 50% of the way through the college experience, 1 finishing undergrad and the other starting, it worked. I have a well funded retirement, I hope:), and I can pay as I go for much of my kids education, so long as reasonable choices are made. Had I chosen to save that same amount of money for college, I would be expected to pay it all in college expenses, garnering no FA. And my retirement accounts would be empty.</p>

<p>I am curious about the point of view that I sometimes see people express that it is better not to save for college because they believe that they will get more FA this way. I have played around with EFC calculators and tried different scenarios (maybe we should buy that new used car a year earlier than planned to lower the amount we have in cash, etc.) and have figured out that the EFC depends more on income rather than savings. </p>

<p>If I just put in our income info and our cash savings amount and make it look like we have no money in 529 accounts (currently about 65K), our EFC gets lowered by only about 3K (from around 25K to 22K). Now if we didn’t have savings it would be very difficult to come up with $22k per year solely out of income? Frankly, I would rather have savings available to help pay that $25K per year.</p>

<p>We also started our kids young with the thought that we would give you X amount per year to pay for college. What you do with it is your decision. If you go to State school the money will go much further. If you choose to go elsewhere it is up to you to come up with the difference. </p>

<p>Luckily, thanks to a new job 5 yrs ago, we have been able to raise the college savings amount (along with putting away 20% for retirement) so that X amount is now somewhat higher.</p>

<p>ConfusedMominMA–I think current savings has a lot to do with it but so do liquid assets–how much one has in savings I think plays more into it then even 529’s. Take our your savings and the 529 and see how that works out. I also think that it’s not a straight line from here to there and at lower incomes savings and 529’s have more of an impact then at higher incomes. Consider also, even at the 3K someone making 60K is going to feel that 3K a lot more than someone making $260K.</p>