I think it’s also important to understand your kid and what motivates him or her. For example, the “skin in the game” concept may be important to some kids, but for others, the desire to avoid disappointing parents who are footing the bills may be sufficient motivation to perform well in college (this was true for me).
But you do plan to tell your kids early on, before they make their application lists, what your budget constraints are, right? That way, they can build application lists that have a better chance of resulting in a selection of comfortably affordable schools in April of their senior years, rather than perhaps one barely-affordable school and a bunch of unaffordable schools.
I agree with OP’s basic plan. It is very close to what we started with. Now that we are close to a decision with DS1 we also now have a plan for how to set the “shopping budget” for DC2 when we start that process in 2 years. Whatever % that DS1’s COA goes up over his 4 years of UG will be multiplied by what his shopping budget was. All other parameters will be the same. Both will be expected to work for spending money and books.
Thank you for all of the feedback! Very helpful. Not 100% sure what we have settled on for a plan as this process is still evolving a bit. For those worried that we haven’t addressed the dollars yet, we have to some degree. She already knows that dollars will be part of the decision making process and she gets it. Specifics just haven’t been detailed.
She still needs to revisit 3 of these colleges for second time to get a better sense of fit, etc. Based on that we may have a better sense if there are some we are leaning towards so we can maybe tweak the approach to get her to lean in that direction (or away from one of the others).
Just to clear up any questions:
- DD has been pretty reasonable so far in this whole process and understands that dollars need to be considered.
- We would be fine with her picking any of the 4 schools in terms of fit, reputation, etc. (for instance, no party schools included). College A would be a perfectly fine choice if that turned out to be the best overall fit.
- Colleges A & B are cheaper due to scholarships (that require minimum GPA) so by dangling a carrot on the back end that should be a further incentive to keep the grades up to keep the scholarships. Otherwise, College A could be as expensive as College C if she bombs freshman year.
- DD has already eliminated a College E from consideration after realizing that even though it had a beautiful campus and had a nice “feel” for her it didn’t make sense because it was even more expensive by $10,000/year or so than College D, is pretty far away/tough to get to, and it’s reputation in Engineering isn’t that great.
We will see where all this leads…
For engineering, check whether she has direct admission to her major. If not, or if she may change major, check how difficult it is to enter the desired major, in terms of GPA and other secondary admission process.
We used a philosophy similar to those others discussed. We had an upper level that we could afford, approximately equal to our in-state flagship COA. Fortunately, DS earned a merit award that made it less for us.
We used the phrase “You can apply anywhere, but we can’t necessarily afford everywhere. Get into a (financial) safety and then go for the longshot merit awards.”
Whatever the budget is, try to articulate it to your DS/DD in a way they can understand and accept, even if it’s not ideal.
Oh, and on the multiple child issue, “That which is fair is not always equal.”
OP, you make it sound like she has been accepted to these schools and is now close to decision time. If that isn’t the case, you have the added complexity that she may or may not be accepted – you don’t always have the choices in April (acceptances, merit or need based aid) that you think you will have.
@intparent She has been accepted into all 4 of those schools with merit aid scholarships specified for A and B. We filed the FAFSA but I assume we will get $0 financial aid. So we know the alternatives and the dollars. Just need to decide on the right fit/choice.
i’m going to probably stand alone in this, but if it were me…D wouldn’t really even be on the table unless there was some ridiculously compelling reason (and fit isn’t one of them–bloom where you are planted).
I strongly believe that a 17 year old cant grasp the real costs of $40,000 in loans and as a parent I feel its my role to rein it in. the real costs are more than just the $$$ involved—that kind of debt for a young person is truly life altering.
I would be on board with a much more manageable amount…every kid is different and yes, some are more motivated with skin in, some will be willing to live at home for a year or two to pound out loans, some will have careers that make the payments a drop in the bucket. but many will struggle on a level that can become a stranglehold.
i just feel that these kids end up with choking debt based on a decision made as a teenager in which they just don’t have the life experience to understand the ramifications and i find it both scary and sad.
No, you would not be alone in that, #48.
If I could swing three different colleges with no debt; there is no way I’d allow my child to consider any debt for anything else.
It’s just not necessary.
@kac425, a kid can’t borrow $40K on their own via federal loans, and it is pretty rare that anyone out here recommends going further than that federal limit in loans, even with a cosigner or Parent Plus loan. $27,000 is the max federal loan amount over 4 years.
I also think the loan advisability is situational. A kid who is going to be an engineering or CS major and clearly has the chops and interest in the major? The risk of future adverse consequences from those federal loans is low. But a kid with med school or law school or vet school ambitions, or a kid in a major with poor job prospects or known low salary potential – if it were my kid, I’d be encouraging alternatives with minimal or no debt.
School D (and the additional $60k over 4 years), she would just have to make me believe that D was the path to something or somewhere that she really wanted to be. A launch point, or at least a significantly improved one. Then I would pay. If I couldn’t pay, would let them borrow only if there was clear ROI for repayment. Examples: investment banking, Big 3 consulting, elite graduate school or PhD program, Silicon Valley, etc.
Rankings, prestige, weather, the “experience”, because it feels more like Hogwarts, dorm rooms, how people dress there, and the equivalent aren’t likely to make me open my wallet any wider.
Elite PhD program still often does not = ROI.
This association with buying the car or a house or whatever else is NOT applicable when one chooses the college. Not even close! There is no such thing as " the Toyota education vs Mercedes". Education depends much more on a student than the place that the student attends. This is getting lost in all this hoopla about prestige and ranking and the name recognition. If you want to attend at Harvard, please, do so!! There is no reason though, to call it the Mercedes education vs Toyota education at some random in-state public. We have seen personally the results of both landing in the same medical school class. There was no difference, everybody was on the same footing, there was no advantages for those who graduated from Harvard / Stanford / Berkeley / JHU…I can go down the list. The only difference for them was the bigger student loans at the end of the road. And when the time was to apply for residencies, that was even more evident that nobody cared about applicants’ college name.
Can you afford your state flagship U? You can tell them you can pay that much in tuition so if they want anything that costs more they need scholarships or loans.
What if your child didn’t go to college at all? Would they get all the money? Or only did 2 years of community college?
@MiamiDAP - That was my point, that both a Toyota or Mercedes can get you where you want to go. The only difference is how much money you want to spend to get there.
@MiamiDAP - Your example is true for med schools, but for other fields, the reputation of your undergrad can make a big difference in career path.
@bopper In my original post I said “If you choose a less expensive college, you will get 50% of any leftover money when you graduate.” So she would need to graduate from an already approved college to get any benefit. There’s also an inventive to not drag it out for additional semesters so that there is more money left. She can’t pick any college (Colleges A-D are already approved by us). Community college or not going to college wouldn’t qualify to get any “savings”. This is appropriate for this kid as they are fully capable of graduating from a college. YMMV.
If it makes any difference to anyone for the other comments, she would be studying Engineering (so not a pre-med, pre-law type situation where grad school is the ultimate focus). I think reputation of school could play a factor in decision making process to some extent. They are all ABET accredited schools. So maybe there is a bit of an ROI difference in terms of a potential higher return for College D to balance against higher cost/investment?
We’ve told our kids what our EFC is and that we have enough to cover that for them but won’t pay for pricey extras like overseas travel or greek membership. They both have worked and saved since they were 15 and will be able to pay for their own extra living expenses. S16 did a good job of applying to schools with generous merit aid and the high tier 100% need met so he really only has 1 school where he hasn’t gotten merit aid (oddly enough it’s his safety, I think they don’t believe he would attend) leaving the OOS school a few thousand outside our range. D17 is seeing now the coolness of getting a top tier school at an affordable cost so she is putting a few more of those on her list but her current favorite is a total no go. It’s about $15K over our EFC and provides almost no merit aid. Not even worth applying. She will have moments though where she wants to go somewhere that would be free on merit and save her college money for med school. My son is still pondering but will probably turn down a full scholarship to an excellent OOS to go to a school where he got a nice need and merit pkg. I’m glad he has the strength to pick what is probably the best choice for him but wow he would have a lot of money to start out with in life (buy a house, invest in a business, or start a business from his college account but I don’t think he really gets what that much money is. He’s not into money though. Saves plenty and rarely spends.
FYI, overseas travel (semesters abroad) aren’t always any more expensive than a regular semester at college. Usually kids pay the regular cost to their college here, and tha covers the study abroad expenses. Financial aid is the same, too. Some colleges even cover the plane ticket. It varies by college, but don’t just assume it is a big additional financial cost.