How to Deal with The Dollars in Kid's College Decision Process

Parent Cafe
1

I am trying to determine how best to get my DD (and siblings) to think about the dollars aspect of college choice without having it totally sway their decision making. I would be interested to get some other people’s perspectives.

Let’s say you have determined that you are comfortable funding College C for 4 years. You COULD pay for a more expensive school, if warranted, without suffering greatly.

Your kid has these college Choices (purposely made them generic so that this doesn’t turn into a debate about specific schools) that they have been accepted into and are deciding between:
College A - $10,000 less/yr than College C
College B - $5,000 less/yr than College C
College C
College D - $15,000 more/yr than College C

You also have other younger sons/daughters so feel like you are “setting a precedent” with this decision. To make it a bit tougher, let’s say College D might be considered a bit more prestigious (and maybe a better fit) than the others but not sure if it is necessarily worth another $60,000 (over 4 years) than College C or $100,000 more than College A. How to approach this?

I am leaning towards saying something along the lines of “We have budgeted enough money to pay for 4 years at College C for each of you. If you choose a less expensive college, you will get 50% of any leftover money when you graduate. If you choose a more expensive college (or it takes you longer than 4 years to graduate), you will need to cover 50% of any additional cost through loans, etc. and we will find a way to pay for the other 50% of that additional cost.”

In conjunction with that, obviously, we would help them think through which choice may be a good fit, earning potential, etc. But if they think that College D is their ideal they know that it will “cost” them an additional $30,000 (probably debt at graduation) so will need to weigh that as part of the decision. Conversely, if College A is slightly less of a desirable choice than College C but it is still a very good school then they benefit by getting a $20,000 check at graduation (or something equivalent?) if they go there and all goes as planned. Hopefully, this also motivates DD to graduate in 4 years.

What do you think? I think it is silly for kids not to have to balance the dollars in this decision but not sure how best to handle this.

2

As parents we set budgets and priorities. A kid who didn’t want orthodonture but thought he should get the cash instead didn’t get to make that decision. A kid who thought his stutter was charming and didn’t want us wasting money on speech therapy didn’t get to weigh in (but he’s sure glad we spent the money now that he’s in a profession which requires a lot of public speaking).

Figure out your financial constraints and let the kids know what you can afford/are prepared to pay and let them figure out the execution. I wasn’t in the business of “refunding” family resources to kids who picked lower cost options- everyone got the same parameters and then figured out what worked for them.

We told everyone that we were on the hook for 8 semesters. period full stop. Anyone who wanted the five year plan was free to come up with a way to pay for it.

We also felt that fit was important, as was academic intensity/intellectual challenge. We were full pay at the colleges the kids eventually chose, but would not have paid for some of the colleges that their GC’s originally had on the list. No need for a kid to attend a private, second tier engineering school when the public flagship of a nearby state is top ranked. (for a kid who had the stats for that college).

We were not interested in paying for a four year game of beer pong, but happily made the sacrifice to provide a really rigorous and interesting education.

YMMV.

3

No specific advice here, but I think you’re headed in the right direction, especially with younger sibs coming along.

With our son, we want him to have some “skin” in the game. We’re waiting to finalize all the college “offers” before we completely decide how that will look.

4

I like your plan and will have a similar conversation once we’ve visited the final three. My daughter is going to be a business major , so in many ways this will be her first business decision. Once you actually see how much four years costs in total when one place is $15000 more a year than another it really focuses you on value.

5

I generally like your plan. One thing we did is make our kids responsible for their books & spending money regardless of their college choice. Kids can work in the summers, and hold a part time job during college. Our kids also paid for any expenses if they decided to take an unpaid internship. Part of this involved insisting that our kids work for pay the summer after senior year of high school to build up some funds for this. This gives them some responsibility regardless of what college they pick – I think that is good for practice for adult life for them.

6

We had a budget that was equivalent to our state flagship. We told our daughter that she’d need to earn merit awards and scholarships if she wanted to attend somewhere more expensive. She could also take out loans. She knew we wouldn’t take out plus loans and we talked about how her life after college would be much easier if she didn’t have loans. In the end she crossed off three schools that were above our budget. She also crossed off the school that would have come in about $12K below our budget. Her favorite school was a private LAC. She got their highest merit award and was awarded a local scholarship that gives her $5k off each year. With everything factored in, it came in about $7k under our budget.

We talked about value. Is the school worth it to take on debt after school? We were glad she wanted to avoid student loans. She could have attended the school that was $12k below budget, but we thought it was unlikely that she’d finish in four years. We also knew that 2/3 of the applicants for their nursing program are not admitted. The school she is attending is saving her a spot as part of her scholarship award. We feel confident that she’ll finish in four years. Those two things made it a better value. She loved the campus and the city were it’s located. All of those things were factored into the decision.

We never promised our kid that she got all the money in our budget even if she didn’t use it. We said we’d pay for college and there was a limit to how much we could spend. She knows that this is a sacrifice on our part and that we are giving her an amazing opportunity. We will pay for four years of college and that’s it. Anything beyond that she is on her own.

7

Amount of cost of four years plus one year of graduate school at state flagship is budgeted for each child. Doesn’t mean they have to choose the flagship, just that this is the parameter. Whatever merit aid they achieve will accrue to them and not me. Same if they choose lower cost option. Difference will go into an account that becomes theirs for home purchase when they complete degree, or can be used for graduate or med school. Not expecting to qualify for need based aid.

Controversial to some I am sure. No family resources for major or school that I don’t agree is a fit or they can’t make a case it will put them on a path to be self-supportive when it ends. Veto essentially. I don’t subscribe to the claim that this is somehow their money. It isn’t. It is mine and I am choosing to gift it to them. Therefore I am 100% comfortable with this.

Higher cost options - if one of my kids comes to me with fire in their belly and can make a case to me why because they want to do X and this school is the way to get there, I could and would pay, with the agreement between us that somehow the other sibling benefits equivalently down the road.

Prediction - DS will be glad to go to flagship full-ride, then use money for med school. DD will also go to the flagship and close to full-pay, complete MAT, without much change left over.

8

We will contribute full tuition at a flagship state university. The kids are expected to fund room, board and fees through scholarships or loans. They have both worked summers to pay for books and spending money.

Our oldest is a college freshman, and will likely graduate without debt. Our youngest is a HS junior, and is working/saving now because she knows our parameters.

We feel this is a good compromise between our own experiences – H was full-pay by his parents, while I had no assistance and financed it all with grants, scholarships, and loans. I definitely valued my education more because of it, so we want our kids to have their own “skin in the game.”

9

I just told the children that if they picked a lower priced school there may be other things that I don’t have to say no to in the future.

Greek dues can go from a few hundred dollars to $9000 (the highest I have heard) and those are out of house fees.

Semester abroad.

Coming home for Thanksgiving.

Off-campus housing if it is more expensive.

On the other side. Some schools are more generous with the perks.

No nickel and diming you on activities.

Guaranteed paid internships for scholarship or dean’s list students.

Paid international trips for your major, generally a week to ten days.

Try to consider the total cost for the experience your student wants to have in college.

10

Any plan you come up with is fine if it works for your family. I don’t think all kids need to be treated the same. Some kids really want to go to a certain school and it might cost more than the state school. This is a good student, has definite goals so you can and will pay for the more expensive school. Next child up will be just fine at state school, isn’t a top student, doesn’t need to be at a small private school. I wouldn’t start bargaining and I wouldn’t compare one to the other. Each child gets what he/she needs, and it sounds like you are comfortable offering the budget of the state school, so go with that.

I have two kids who go to schools that have a huge different in the price tag and a huge difference in the cost to me (because of scholarships). Each kid has a budget but one comes in well under budget. She does not get to keep the extra. The one for whom I pay more does have higher loans, and she needs to contribute more to her living expenses. That’s just how it is when a family is sharing one pot of money.

11

We told our children we would contribute $xxxx dollars. When the financial aid packages come in we determine which schools are affordable then they can choose from those. If a school is outside of the what is covered by scholarships, financial aid, work and my child’s loans then they will not be able to attend regardless of how much they want to attend.

12

I was prepared to pay for the “right school” for my kids. I didn’t give my kids a budget and let them decide where they wanted to go by themselves. There were schools that I was not willing to pay for no matter how cheap they were.

What was unexpected was when D1 was offered a full ride at a good LAC, but she wanted to go to a higher tier uni at full pay. Since she was our first child, I had a hard time throwing away 40k+/yr away (it was in 2007). D1 asked me if I could pay for what I was paying for her private high school at that time (30K) and she would take out a loan for the remainder. She ended up going to the uni she wanted to go to and"took out a loan" from me for the balance, which I forgave when she graduated.

With D2, I gave her a list of schools I was willing to pay for and she picked one. She is applying to law schools now. We are going through the same process.

D1 is not going to a graduate school, and I am not going to give her additional money because I am paying for her sister’s law school.

13

I’m with old fort here. When my son was in 5th grade, he asked me if he worked hard and got into MIT, could I afford it. I told him I would find a way. I think my response was appropriate, for motivation.

Years later, he could have gone to any instate school for free. I kept my promise, however.

14

It may be difficult to maintain the same same budget for multiple kids, if they have different levels of ability/achievement and/or have very different career aspirations which require different levels of continued education.

15

Big10Grad…I believe the parents that posted above offer great advice. I gave each of my children a budget which would cover all college expenses including grad school. My oldest chose a great school that offered generous merit. He is working and doing very well. He has quite a bit saved for grad school. I still control the funds in a 529, but will transfer to his future kids if he ultimately decides to forgo grad school. My daughter chose the more expensive undergraduate option and will have fewer dollars available if she has future professional school plans.
I believe it is important to have the money talk and set the expectations before applications are submitted. I find a number of folks put themselves in difficult situations either by avoiding the money discussion or by looking only at the first year or two of college expenses thinking they will somehow come up with the rest of the money for the later years.
I believe you absolutley are on the right track. Good luck.

16

I agree with twoinanddone that all of the kids don’t need to be treated the same. We were willing to pay more for our oldest to attend a direct-entry professional program that got her done in 6 years instead of 8- she was focused and knew that was the major she wanted. Her next 2 siblings got large merit awards that brought their undergrad tuition to less than 1 year at our flagship, so we agreed to pay for grad school for them. Our youngest chose a school that was a good fit, but slightly above our budget, so he won’t have help with grad school. We did consider at one point giving them the difference if they had chosen differently, but we weren’t willing to promise that the money would be there. What about a job loss, or unexpected expenses?

17

First, I only allowed my daughter to apply to schools that I was on board with. There were 1 or 2 I was really hoping wouldn’t work out because I just didn’t think they’d be a good fit, but overall, I was fine with all the choices. She was told she could pick any school $20K or under without taking on debt herself or up to $30K and she would have to pay anything over the $20K, using student loans and summer earnings. If she chose a school less than $20K, she still had to pony up $3K on September 1st each year towards savings and another $1K to fund her books and spending $$. In the end, she had six schools that came in under our financial ceiling, half of which came in under the $20K. She ended up choosing one of them but in the end it was her choice. She is quite frugal and was lucky to have one of her top choices also end up being the least expensive of every school she was accepted at.

She was also told that IF, for whatever reason, she had to leave her school of choice, we would not be reliving this process. She would go to our flagship which offered many good things (not monetarily but honors college, BIOtap program, other incentives).

18

I agree that you don’t need to make the same exact choice for each child. One of the more worthy pieces of parenting advice I got was “Being fair doesn’t mean doing the same thing for each child, it means doing the right thing for each child.”

19

We were fortunate that our college budget was a generous one. Our kids knew the amount we were able to spend before their applications were sent. Like Oldfort, this didn’t mean they had free reign. The application lists were well thought out and we worked as a team.

We also had geographic restrictions (either less than a three hour drive from our home, or within an hour of a close friend or relative). They also knew this before they started looking at schools.

I think the important thing…your kids should know any restrictions BEFORE the applications are sent.

20

In other threads, haven’t some said essentially the same thing, except with 100% instead of 50%, specifying that the leftover for choosing a lower cost school is reserved for post-graduate professional school or other educational costs, and limiting the loan amounts?

Of course, college cost inflation means that the younger kids may be looking at higher costs at most of the possible colleges. Also, in some cases, more academically accomplished students may be less expensive, due to greater possibility of earning scholarships or admission to better-financial-aid schools. Students looking for unusual academic programs may be more expensive, due to limited choices of schools with such unusual academic programs.