This is not meant to be a philosophical conversation on entitlement, spoiled children, excessive college costs etc…
I’m just conducting a survey to help us gauge our decisions. I know there are many contributing factors that we need not discuss. If you wish to help please respond to these questions.
Total remaining cost of the school after you subtract any merit/scholarships/grants
Amount of that you plan to cover for them
Amount you expect your child to pay through their loans, cash, workstudy etc.
My kids are out of undergrad school. We were fortunate to be able to help a lot financially with college. Two oarent professional incomes.
We asked our kids to take the full Direct Loan every year. Our graduation present to them was repayment of their undergrad loans.
We asked our kids to work in the summer, and for 10 hours a week or so during school. This income was for books and all discretionary spending.
Both kiddos went to private colleges. One had a $10,000 a year scholarship and the other $6000 a year. We paid the balance for tuition, fees, room, board and transportation home for breaks.
Kids had to maintain the GPA required to keep their merit aid. We made it very clear that we would not find that if they lost it.
We agreed to pay for the four year plan. Anything beyond that was on their dime. One kid did take summer classes one year...and laid for it herself out of her college earnings (she had an excellent and good paying job on campus)
My plan is to do my best to ensure that my children graduate from college debt free, even if that requires dipping into home equity. This may or may not be possible, but it is my goal.
I don’t think what other people plan to do really matters. Parents can only do what they can do. Realistically, students can cover ~$5500/year with the federal student loan and ~$3k if they work summers (maybe a little more if they work part-time during the year). We believe that if the parent contribution (without loans) and college grants aren’t enough to cover the balance then the college is too expensive, but you have to do what you feel is right for your family.
Total remaining cost of the school after you subtract any merit/scholarships/grants
This varies by student and depends on whether the college they want is public or private, in state or OOS, and what kind of aid they offer.
Amount of that you plan to cover for them
We intend to cover all of it. We want our children to work during the summer for experience and spending money (which we’ll supplement), but our plan is to pay for everything else. We’ll pay from current earnings and savings; we won’t touch our retirement or take parent loans. We may have our children take the subsidized part of the student loans ($3500/year) to pay for study abroad, etc., but we’ll repay those after they graduate.
Amount you expect your child to pay through their loans, cash, workstudy etc.
Zero. We want them to graduate without debt so they can make career moves, not have to take whatever job comes along because they have to pay the bills. If they work, what they earn is theirs to spend. When our son received his financial aid packages we weighed the offers and threw out those that didn’t meet our financial criteria. The best thing parents can do is set a realistic budget, communicate that to their children, and stick to it.
Agree with @austinmshauri. Each family is different, you have to do what works for your own situation.
We have been determined to be "full pay" due to our "family's financial strength" (ugh).
We will pay the direct costs (tuition & fees, room & board) out of savings (including savings in son's name) and current income. We *might* have to have son take on loans in junior or senior year, but are hoping to avoid that. Maybe the grandparents will be able to kick in....
Son will have to work summers and probably during the academic year as well. He will have to pay all of his indirect costs (books, travel, spending money, ski pass, other extras...). Depending on how much he is earning vs. spending, we may ask him to start taking on costs that we have been carrying such as auto insurance, cell phone plan, contribute to household food budget during summers and breaks, and/or contribute to health insurance.
The whole enchilada. Soup to nuts. But what we do should have no bearing on what anyone else does. Different families have different financial situations and it’s senseless to compare broadly.
I paid for all expenses out of current income. Their college tuition weren’t that much more expensive than their private school K-12 tuition. I just paid the last college tuition this month. Whew!
D16 Is going to a $40,000 a year college. She earned 16,000 in merit and we got 3,000 in need. I am fortunate that we can pay the rest. No loans She will need a car sophomore year (Nursing student) and she will fund half of that.
Paid for everything for H’s two kids and our two kids. Asked kids to earn their spending money for the school year–which meant they worked summers. All went to private colleges/universities. We wanted to do this and could do so. Every family is different–no right way.
Kid knew we are full pay but can only reasonably cover about $45+k a year; his list was crafted for merit awards that would cover the gap for private LACs. He got substantial merit at all schools he applied to (all safeties and matches), so all of his choices were affordable. The merit awards mean that there will be some extra money saved which will help with unpaid summer internships etc, though he will have a paying job this summer and probably summer after freshman year, unless he can get summer funding through his college.
We’re prepared to pay the yearly COA for state school out of savings/current income. If D wants to go to a non-state school, she will have to get merit money to cover the difference in cost, as we cannot count on need based aid most places (small business owners with more assets than cash.) We’re willing to stretch if she gets accepted into a really top-notch program, but no loans beyond her subsidized Staffords.
D does currently and will continue to work at our family business over the summer for travel/personal expense money. She’s very frugal - the vast majority of the tips she’s made over the last 2 summers are just wads of bills spilling out of the bowl of her middle school salutatorian trophy. :)) This is a kid who is happy to make and pack a peanut butter sandwich for lunch every day rather than spend money at the cafeteria…
I do think it’s important to reckon with the costs early on in the process and come to grips with what you can realistically afford as a family. Run the scenarios. Those NPCs are sobering, man.
@thumper1 just curious. What was the reason for the kid to take the loans if you planned to pay it off completely upon graduation? Would you not have paid if they didn’t graduate?
We paid for everything (after grant) out of current income except for books and spending money - which he paid for from summer jobs and a campus job.
There was no way we would have allowed him to take Stafford loan. I am so glad he has no loans to pay back now and so is able to put max allowable into his companies 401k and save money for emergency fund and put a nice down payment on (pre-owned) car and still have enough money to pay rent in Boston and live comfortably otherwise after only 10 months post graduation.
We had already paid for 4 years of private high school (plus 8 years at very expensive sleep away camp) so were very used to living on the income after tuition. Not that it was easy. Now it feels like we got a huge raise!
Congrats Oldfort! It’s a wonderful feeling when last bill is paid!
I think it also depends on whether or not there are any siblings in the picture - how to stretch the finances across a couple of kids can be a big factor, and whether you have more than one attending simultaneously.
Total remaining cost of the school after you subtract any merit/scholarships/grants
It depends. We are chasing free money. Our goal is $0-$5K out-of-pocket per year. Our State U will be unaffordable unless he wins one of their big scholarships, but if he does, I will gladly pay the remaining $0-$3500 per year. He might get into one of the private schools that offer big need-based aid for our income level, which might leave anywhere from $2500-$10K per year. We have two sure things now – full-tuition at one OOS flagship, leaving about $10K room and board that could get whittled down further with additional scholarships + Pell, and another OOS flagship will be full-tuition, and up to full-ride if he gets into special programs with additional scholarships attached.
We would likely pass on anything more than $10K per year out-of-pocket because we should have at least one or two good options that would come in well below that. If he surprises us and gets into a top-10 school, we might have to rethink that.
Amount of that you plan to cover for them
We’ll see. I think we could manage up to $5K per year for son. Between $5K-$10K, he might have to take loans or work. I don’t want him to take loans, but he might want to earn $$$ as a tutor, which he likes and is good at. He might also do a co-op and make $$$ that way. Our $$$ situation is hard to nail down from year to year b/c of medical issues that seem to pop up from time to time.
We have another in college now, and she is doing 3 years CC + 1 year local Directional State U for Nursing (RN+BSN). Her whole first year was covered by grants and scholarship. Next year probably will too. We pay for books, supplies, and gas, and she lives at home. We don’t ask for rent or food money, but she does pay for her cell phone bill and part of her auto insurance.
Amount you expect your child to pay through their loans, cash, workstudy etc.
I want to avoid loans like plague. I don’t want him passing up great programs or opportunities because he has to work, but if he can comfortably fit in work-study, tutoring, or co-op, that would be good. My wife and I worked our way thru college. So if he can work and pay for some, great, but again we’ll have to see. Don’t want daughter to work as she got accepted into a special Nursing program that discourages students from working.
Short answer? Like PG, we paid everything except for some spending money that DD earned in the summer. No loans of any kind (for us or for her) – we paid it all from savings and from current earnings.
Note - we only had the one child and we started saving for college before she was born.
Obviously, YMMV. I will say that D is very grateful that she had no loans to repay, and she understands how lucky she is.
The COA at my daughter’s school is about $42,000 (OOS public). Her scholarships cover all but about $12,000 of that. We pay for all of that difference. Neither she nor we have taken loans, and her summer earnings are hers to use for spending money. We haven’t had a problem with her not having “skin in the game,” which some feel is important; she has worked hard and done well.
We are fortunate that we can afford to pay her costs without any real sacrifice; if we couldn’t, I would expect her to make a greater contribution - at a minimum her summer earnings and also working during the school year.
Total remaining cost of the school after you subtract any merit/scholarships/grants
Kid 1: About 10K/yr, Kid 2: Under 5k/yr. Was willing to pay up to the amount of the state school, still under 20K by the time aid kicked in
Amount of that you plan to cover for them: All of it.
Amount you expect your child to pay through their loans, cash, workstudy etc. Both were expected to work summers and earn money for discretionary spending, including transportation, and books. They got/get no "allowance" from the folks. Kid 1 had a local scholarship that paid for books year 1, so she only had to fund her books years 2, 3, 4. Kid 2 has a decent renewable outside scholarship, so her books are covered with that.
By the way, my favorite forum on cc is the fin aid forum for its pragmatic focus. We were very fortunate to get the deals we did, but I must say that they were found at schools that don’t get mentioned on cc.