Let Kid Apply to Full Pay Schools?

Parents Forum
1

I have a similar question to a recent post, but it is different enough that I thought that I would start a new discussion.

We have two kids (K1 and K2) that are 6 years apart. K1 is a sophomore in HS and K2 is in fourth grade. K1 has always been a stellar student. Straight A’s at a private college prep HS, 1 AP fresh year (World His, 5 AP, 710 SAT II), 1480 PSAT soph year. K1 has been in the 98-99 percentile in every test ever taken. K2 is more of your “average” smart kid, but still young.

We have started to have conversations about college including going to a few info sessions put on by the top schools. With K1’s current stats, trying to reach for the top schools isn’t unreasonable. We understand that they are a reach for all, but the question is should I let K1 try to reach? The reason for this is financial.

I have run the NPCs on a few top schools and our results are normally right around full pay. Sometimes it comes back with a little fin aid and sometimes zero. Could I afford to send K1 full pay to top school? Yes. However, I worry about my ability to reload for K2. I think I could get back to the in-state level for the state flagship (good school), but not likely full pay at a private. Especially if K2 also goes to a private HS.

So, my question revolves around fairness and not having 1 kid begrudge the other (or me/spouse) for different educational opportunities. I am not trying to keep them dime for dime equal, however, the difference could be > $200k. I realize that a lot could change in the future. But I am just trying to understand if I should let K1 even consider schools that don’t give merit or it is highly unlikely. I would rather have this conversation early in the process. Comments/suggestions greatly appreciated.

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@Eeyore123

You need to set a budget of what YOU think you can spend annually on college for kid 1. And have the money talk with kid 1.

Kid 2 won’t be going to college for 8 more years. No one even knows what the landscape is for college costs…and you have NO idea at this point what types of colleges K2 might be a competitive applicant for.

If you feel you want to allocate the same type of money…you could say YOU will pay the cost of your instate flagship…and that to attend elsewhere, the student would have to have sufficient merit aid to make up the difference.

Many families do that.

3

I wouldn’t encourage it if you really are full pay. There are a bunch of 2nd tier schools that are really fabulous that give good merit. We are actually looking at a similar situation. There are a couple tier 1’s I would consider letting my oldest apply if he wanted possibly but I full expect him to go to a public or a private with good merit offers. Consider also that it is a huge gift to your children to be financing your retirement and elder years fully and not to take on debt.

I wouldn’t pigeon hole a 4th grader either. Sometimes those 2nd kids are covert just to be in contrast to kid #1. My 2nd born 13 year old is starting to show some fire and drive. Anyway - I would assume you know nothing about what that kid’s high school and college years will look like. I almost sense that since kid #1 is a high flyer, you’d be more apt to throw more money that direction. Have a reasonable general budget in mind for both. If one is a higher flyer, that may open merit doors that the other will not have. And I don’t mean dime for dime at all. But I would absolutely NOT pay for a high end full pay private for one, and then tell #2 only the state flagship is the option. If kid #2 were 16+ and wasn’t leaning toward college at all, maybe you could throw all your eggs into kid #1 education basket.

4

Make a budget based on what you know now and divide by 2.

X out of current income, Y out of savings. Kid one has to figure out some college options with that budget- augmented by the federal limit on student loans, summer work, etc. Kid two does the same.

Do you have to stick to the budget dollar for dollar? No. A lot can change in 6 years. But give both kids the knowledge of what your constraints are.

Going to private hs? that decision is on you. Spending Kid 2’s college fund on Kid 1 seems unfair- even if you can regroup. Limiting Kid 1 so you can have a bigger war chest for kid 2- too many variables. For now- each kid works with the same set of numbers.

Can you ramp up professionally to increase your earnings?

5

Read the other post about the parent that completely favors one sibling over the other- the family is on the verge of never speaking again. So…not a good plan. In fact, you may need to spend a little more on a child that can’t get merit scholarships so plan ahead!

6

I have two boys, a college freshman and a HS junior. When my oldest was a sophomore our financial planner had us start having the “cost matters” discussion with him about college. We told him that he could apply to where he wants but that the last cut is ours as a family…money.

When it came time to choose he had three main choices. One was full pay (approximately $70K all in, even after I appealed their lack of package)…the other was $40K all in (he got nice merit there)…the last was $28K all in (no merit). He had taken 3 other acceptances off the table for various reasons. So we put all three in a grid on our whiteboard that included all of his criteria (including price). He stared at it…for far too long in my opinion…and said “well the $40K one is out. It doesn’t meet all of my criteria.” Now I sweat. “And honestly I like the $28K option the best so let’s save $160,000 dollars.” The reality is even without the cost factor the $28K school was the only one that hit all of his criteria.

My point is this: have some full pay but have some cheaper options as well. (That can be the state flagship and it can also be schools that traditionally give lots of merit to kids like yours. We had both in our list.) But explicitly have the conversation around “money matters”. And keep having that conversation all the way through the process.

7

I say a couple of things. I agree with apply it a bunch of schools and get some "deals’ on the table. Then decide on the best overall fit. I even gave the kid a little incentive by telling him I would return a % of the scholarship into his pocket if/when he graduated. Hopefully he won’t pick a full pay school. :slight_smile:

As for how you treat each kid with regards to college costs, good luck. The “smarter” one may have more expensive opportunities. But the “less smart one” could save you thousands if he did two years at a community college. Bottom line, you want both the maximize their opportunities. Good luck.

8

Perhaps a more common scenario is when a student with great grades and test scores lands all sorts of merit scholarhips at lower tier schools or public flagships. What if you are looking at a four year cost of $60K versus $250K?

Are you really going to cheerfully pay so much more money for a prestigious school? You might! How will you feel if you do, and it’s not the awesome experience everyone thought it would be?

What else could you do with that money besides spend it on UG? Could it be better used for helping with grad school, or professional school? A downpayment on a house? Seed money for a business?

There are no guarantees!

9

By the time K1 is ready to attend college, a 4 year education will cost $300K. If trends continue for K2, you will be spending $400K+ more. Add the cost of private HS and you are starting to approach $1 million, and that doesn’t include graduate or professional school. That’s a lot of money for a middle class family.

We faced the same decision with our youngest and had to turn down several top 15 schools because our in-state flagship was better in his chosen subject area and 1/3rd of the cost. Depending on your state, that may or may not be a good option for you. Many of the better private schools have merit scholarships, so I would aim at those first and see if you can get the cost down to more reasonable levels.

10

I think you have to evaluate based on two. Whether you choose to pay full price for a private college education is a personal family decision, but I always felt it best to factor all kids into the budget. We felt that paying a full college private educate x 3 kids was not in our best interest even though on paper we were headed in that direction and even though I had a private school undergraduate experience. Unplanned and totally unexpected for us was a 1.5 year jobless situation for me right after my husband retired when the auto industry tanked, so in hind site setting a flat budget for all three was the best solution. None of the kids felt slighted and I’m sure glad that we weren’t on the hook for $60,000 a year during that year and a half of unemployment. They each found a reasonable college solution within the budget and don’t feel like they “lost out” on anything. The last one graduates soon after a longer than expected engineering education but he chose an in-state university so was “in budget” despite being full pay plus a small academic based scholarship.The older two are gainfully employed and have been since they graduated from out of state locations where they, too, got smaller academic scholarships that brought them in-budget so I don’t feel like they lost anything in not going to “expensive colleges”. Our budget was $30,000 per kid for four years or roughly $120,000 per kid x 3…which is still a huge amount of money if you think about it, but for the older two they leveraged academics against selectivity to get tuition discounting to come in budget. And we watched our EFC decrease each year but never to financial aid level. For some people the end game is to get into the most selective college - again every family will be different. For us it was to find a spot at the best college that was affordable.

11

Tough call. There’s a lot of different ways to allocate resources between different kids. Many opt to give each kid the exact same college nest egg regardless of circumstances.

In our case, we were willing to allocate more resources to our stronger students so that those kids could attend better schools. But there’s so many variables.

Turns out our weakest student cost us the most – 6 year plan at full in-state price. Middle student cost us less (merit schollie at a top 50 private). We were prepared for our best student to cost us the most (full pay at a fancy private). But wound up costing us the least – best student kid won a huge schollie from a top 20 private.

12

What do your retirement and savings look like? What happens if you are made redundant at 48? The world is changing at a rapid pace. Make sure you have your oxygen mask on before you help the children.

13

Have you read this thread? Granted, in the reverse order (first kid was the cost-limited one, but sees excessive spending of dubious value for the second kid)…

http://talk.qa.collegeconfidential.com/parents-forum/2041479-sibling-college-choice-cost-and-fairness.html

14

I wouldn’t choose to spend it all on the first child, especially when there is no need to do so. There are so many options for merit at really good schools, or for an instate flagship with honors college, or going to an LAC in the midwest which might be significantly cheap than a similar school in the northeast.

Spend a lot of time planning the finances for the family, not just for 4 years of one kid in college. I have one in an expensive private paid for with merit aid, and one in a very inexpensive OOS public. Each is in the right school for her, but we did have to take the fact that there are two in college, and a parent’s life to support too when shopping for schools.

15

I will try to answer some of the questions asked:
@blossom The next step in my career is a big jump. Not even sure if I would want it.

@Midwest67 That is a very likely scenario. I just want to make sure that when we get to that time it can be K1’s decision from all choices that work financially. If something has to be removed for cost it is done before the application. Of course, some schools may be if and only if sufficient merit aid is awarded. But that application has to be submitted with eyes wide open.

@Sybylla None if this would touch our retirement savings. I know that that is my #1 priority. If I become redundant at 48 all my issues are solved because I invented a time machine. In the spirit of your question, nothing is set in stone. If a major life event happens, plans would have to change.

@ucbalumnus Yes, I have been following that thread. I am trying to avoid what is happening to the OP over there. Also, that thread jumped the shark.

16

We also struggle with the question of why pay $70K per year when there are good options (state flagship or merit options or S18’s current favorite, UK schools) for half that. We told our kids they would all get the same amount, they can use the leftover money for grad school or even a house down payment if it isn’t spent on undergrad.

17

because I invented a time machine. <<<<<<<<<

LOL, well, in the same spirit, you are then an, ahem, older father of k2.
All my kids are in 98/99th percentile for most stuff (testing, if that is what you mean) and none of them are worth 70K a year (sorry kids).

18

Start a 529 savings plan for your younger child, now. You have 8 years to build a solid nest egg for him. You don’t have to go 50/50, because the future is uncertain – but you certainly can start to put money away each year. Make a college savings plan and stick to it, and that means continuing contributions during the years your oldest is in college. If you can’t afford both – funding K1 college + continue to contribute to K2’s 529… then you will know that you are overspending for college for K1.

19

I agree that the plan has to consider both kids. The younger one will be heading into junior year by the time K1 graduates from college. Not a lot of down time to save. I would divide the total amount you can afford for college by 2 and make that your plan. If you come into a windfall, you can help K1 with grad school or something else if K2 goes to a private school.

Also, there are very good colleges, well above “tier 2” that offer merit aid for top students. National Us ranked from the high 20s thru the 40s are still excellent schools that may offer at least some merit money.

20

We are in the same boat. High achieving S19 and a very good student in D21, but she probably won’t be set up to apply to the very tippy tops. We will be full pay, but aren’t dying to spend $70K per year for undergrad. S19 doesn’t have any current plans for grad school but I surmise that he will go at some point. He’s interested mostly in LACs. I started first by making a list of schools that are ranked high and gave merit. For us, schools like Grinnell and Kenyon are a match that give merit. S19 also may be competitive for merit at Wake, Davidson, Richmond, William and Mary, Macalester, and a few more that looked interesting.

At first, we thought we would stick with these and add a few “for sure” merit schools like Denison and Dickinson. Then, we got his 1540 SAT score and he’s keeping his straight As in four AP/two honors classes this year and we’re reevaluating a bit. We’ve decided that, if a school is a perfect match and we can find real reasons for him to choose a full price school, then he may attend one. He’s undecided for major - still wavering between science, history, econ, writing…he’s a little bit of a Renaissance kid and still likes it all but has ruled out the techy stuff like comp sci and engineering.

We tacked Carleton on to his trip to visit Macalester and he loved it. So did my husband. He also may add Brown as a reach and maybe some LACs out in the Northeast. We’ve been very clear with him, though, that he should not fall in love somewhere. We will evaluate all offers at the end and we will be reasonable. There won’t be more than a handful of full price schools on his list. None of these schools will be inexpensive. If one comes in at $55,000 including a little merit and a full price school is $67,000, we don’t think we would rule out the more expensive school for that difference in price. That being said, it’s quite possible that the $55,000 school would be a better match. Maybe even his safeties at more like $45,000 will be the best match. He seems to be changing all of the time and honing in a wee bit more on his interests so we want to keep options open.

We are comfortable doing this because we have the savings for retirement. We’ve saved in 529 plans for 15 years and we could fund a pretty good chunk of full price out of those. We would, however, have to dip into savings a bit for a full price private school. Our wish for merit really comes into play because (1) we think the price of college is just out of control and he could get an amazing education at many schools and (2) after investigating schools for S19, I’m starting to see schools that would be a good fit for D21 and she could most likely get some merit at schools she would like quite a bit.

My advice is to keep options open but make no promises. And find schools in the “budget” that he likes. Right now, S19 would be thrilled to get into some of his matches that give merit. We visited them first and I think that was a good plan. I don’t even know if we will visit any more full-price schools until results come in. If he gets in and is still interested, then we would go to admitted student days to help make a final decision.