For those of you who have a fixed amount for each kid…are you NOT considering inflation of college costs?
Like I said earlier…if we had given DD the same fixed amount her older sibling got…she would not have been able t9 even attend his college…or hers. By the time DD enrolled in 2006, the cost of older sibling’s college had risen by $15,000 from his freshman year.
We said we would pay for undergrad. No funds from us for grad school except help with living expenses…but even those aren’t equal in cost.
Honestly, I am not a fan of you have X and if you don’t use it you can have it for house money or starting a business. I think education is paramount and so therefore I would incent kiddos to spend the money as needed and for the school they want. That includes making concessions based on family funds. You cannot send a kid to a 60K school by taking out a second mortgage. Maybe in that case the family has to consider other options. I’d also expect them to work. ( Also not a fan of parents paying for small items). In terms of merit aid, no that goes into the family pot. It isn’t a lottery ticket.
Graduate school is a tough one. It’s a rare parent who has multiple kids who can send them all to college paid for and still have money for retirement and grad school for each. Even though we could do it, we won’t. At some point, the kiddo has to have skin in the game. You act differently when you want something and earn it. I might make a concession for medical school (since it is so expensive and such a long road) but it would be based on many factors and open and honest communication. It would also likely be a loan on better terms than the market with a part loan/part gift ( keep skin in the game but make sure crushing debt isn’t an issue).
“You cannot send a kid to a 60K school by taking out a second mortgage”
I guess you don’t live in Silicon Valley then? That’s what a lot of people do, and assume they will either hit a homerun with stock options or retire to somewhere cheaper if they don’t. In fact S18’s friend’s parents have just done that to pay for Georgetown, which S18 decide not to apply to because it was too expensive. His friend never considered cost at all, just where he could get into.
On the question of whether merit aid goes back into the “family pot” and when the kid has “skin in the game”, I see these as linked because they are both related to when your kids take on more responsibility for their own finances. I don’t think that requires them to be self sufficient by earning all the money first, just that they are deciding how to budget and spend it (as they would do if they were taking out a loan for grad school for example). I’d prefer that to be earlier (i.e. when they go to college) rather than later (i.e. when they graduate) not least because I certainly don’t want them moving back home after college. But I would only hand over the responsibility at a pace both we and they think they can cope with.
Another thing you could do is to say “I would really like you to look for merit opportunities when considering colleges. If so, we will have more money to pay for your books/fees/etc so you don’t have to work 2 jobs like D17,”
I do think that, yes you have to allow for inflation when you give kids a set dollar amount, especially if there’s pretty decent gap between kids. Also, if he family situation has changed, that dollar amount will change.
I don’t know that incentivizing (either a spelling error, or that’s not really a word…hmm) a lower cost encourages students to make poor choices (obviously, since I did it, lol) wrt to the quality of their education. We’ve heard it, and I very recently watched it play out with my own kids…it’s not where you go to school but what opportunities you take advantage of to build a resume. And that start without loans, and maybe a vehicle you don’t have to purchase with your first income or the promise of a paid for deposit/first month/last month rent in an expensive new city allows the newly minted adult some more freedom. Life is always about choices, and many of those choices have a financial component.
Some colleges are not “worth the price”, and some are (or may be.) I think it makes total sense to encourage D20 to find he best deal AS LONG AS SHE LIKES THE SCHOOL. Many kids who’s parents are paying full price (and loans) to middling private schools regret it later. The cost situation is such now that a top school costs almost the same price as many schools much lower on the tottom poll. This is more of an issue for students with lower high school stats that may get an admissions bump being full pay at a good school, bur little merit at a lower quality school.
Do you think DD20 will go to grad school or would you then help DD17 with law school with the extra money? I would maybe have this conversation with DD17 and just say you have been thinking about how she had no incentive to take the merit awards. Does she think it would have changed her choice? And how would she feel if DD20 made that choice? If DD17 says she would not have changed her mind, then you can certainly offer DD20 the new deal. If DD17 says she would have gone to a cheaper school and used the money for law school, it would be hard to change the deal now. I am surprised that question didn’t come up when comparing schools.
One of mine chose the in-state public and the incentive was that he didn’t have to take the federal loans and that we would buy him a car when he was done. The other two had to chose a school that was affordable, but those were still a bit more than the in-state. Loans and no cars for them. But that deal was available to all three.
‘Fair is not equal’, often repeated by kids 4th grade teacher, but intended for parents.
1 attends top tier school, no merit since meets full need, therefore full pay. We only pay tuition, room and board if the cafeteria is mandated. Jobs and internships pay the rest. Endless opportunities on campus for core education, minors and hospital based research made sense. We already knew that graduate school will be a PHD fully funded program. Brand combined with research and internships seem to boost grad school acceptance. (Merit offers would have been at least between $100 - $150K)
2 also chose ED top tier, no merit meets full need due to caliper of student body, research labs and location. His second choice school gave an EA $130K merit offer. I added paying for the extra semester it would have required to get an MS/BS and a used car starting junior year. He declined knowing that grad school and any more than 4 years for a BS are on him.
3 has chosen not to achieve at the same public HS where siblings flourished. We will not pay full price private tuition for a student unwilling to work. I don't feel guilty and honestly do not see that making any monetary donation to make up the difference is healthy. A free public HS education and a parent funded college education are both gifts to students; why would anyone assume they will take advantage of college without any evidence in high school? Of course there are plenty of schools willing to take $$.
I don’t view as paying different amounts for undergraduates for different kids as an equity issue. For both girls they picked places where they received merit aid but given the different aid level/school costs we paid someplace close to 20K higher over 4 years for one of them. I don’t plan on cutting a check in that amount to the other one.
I also am reasonably sure that neither of them knows how much we paid for the other to go to school. Quite frankly it is none of their business
The difference here is that the family said they would only pay for UG with no real limit on the amount but no money for grad school. No incentive for the kid to chose the merit school. Now the mom is thinking of changing the deal to say that if a merit aid school is chosen, the money could be saved for grad school. The issue is putting merit money to grad school, not how much each kid costs.
The only thing we promised to both kids is that we would pay for their undergraduate degrees. The $ cost was not part of that discussion. We said it would be nice if they won merit-based funding but the most important thing in their college search should be to find a college that suited their academic and social interests.
The only time a possible “fairness” issue arose was when our daughter decided to enroll in a professional school (MBA). But our son expressed no concern that we might be spending more on his sister’s college education.
Later on (in recent years) we also provided some financial support to our daughter. We told our son and he didn’t express any concern about “fairness” or “equality.” He knew that if he had been the one in need we’d have tried to help him out.
In short: there was no sibling rivalry based on the money we spent. They live in the same megacity, and they get along well. But even if there had been such rivalry or jealousy we wouldn’t have handled it any differently than we did.
Schools are not always more expensive for younger kids. In 2014, the Bright Futures top amount was about $3000 per year, didn’t cover required summer sessions. Now it covers full tuition (about $7000), $600 for books, and is available for summer. U of Wyoming’s Rocky Mtn Scholars amounts almost doubled in 2015; lucky us, she started in 2014 and is stuck with those amounts even though tuition is the same for everyone, whether you started in 2014 or 2015.
Some merit scholarships go up, Pell goes up a little each year, schools that give need based aid often increase it if costs rise.
Oh, one of my kids’ tuition went up by $2000 per year, including the time when she first applied and accepted to when she started; tuition was almost $4k more that first year than the published price we first looked at (which was the price from her junior year in hs as website was always behind real time/costs).
For her final year, it ONLY went up $1000 and we felt like we’d hit the jackpot.
But for kids in Florida with Bright Futures, those in school now are paying less than their siblings did 4 years ago.
While the 10% incentive is interesting, I’m not sure if the 25% for grad school is fair at this point. Both of our kids received pretty good financial aid, but we will eventually end up paying more for our daughter’s college - she came second, prices have gone up, she joined a sorority, etc. I’m not going to give our son $ to make up the difference. We have met his needs in other ways. We’ve always told our kids to throw a wide net, see where they were accepted/received aid, and we would pay up to what in-state tuition/fees/room/board at our flagship state school cost. They were/are both in private colleges/universities. You might want to ask your older daughter’s opinion first before you change the rules. Share with her your financial concerns. She may have an opinion that surprises you. I was wondering if the 10% incentive would be enough - why the 25% for grad school?
I’m finding myself on CC for the first time in months and thought I might come back and report on how this particular quandary played out. Whether or not this seems ethical or fair, we ended up striking a different deal with D20, but only after she committed to her school with a 30K per year merit package. She is taking a Gap Year this year, and we wanted her to have some budget for that. We told her that we would transfer one year’s worth of the merit award to her account in two halves: The first in August 2020 for the gap year, plus she could use leftover funds to reduce her on-campus work hours when she gets to campus in Fall 2021, and the second half in June 2023 (end of sophomore year) – to be used for study abroad or other summer adventures, during Junior and Senior year, and/or save for grad school or “launch.” So, bottom line: We split the merit award 75%/25% with her. The end.