<p>Our family income is too high for financial aid benefits. We should have saved enough money for college, but we didnt. Now, should we 1) Pull money from home, 2) Pull money from 401k account, 3) Get personal loan 4) Have Kids get student loans. Any thoughts on which avenue to pursue? Thanks</p>
<p>We're in a somewhat similar situation, but with two kids in expensive LACs at the same time. :( (Though with our second, who just finished her freshman year at Carleton, we did receive some grant aid. ... Still, it's $50,000 a year out of pocket/savings to keep the girls in school!)... Actually, we saved like crazy while they were growing up, but couldn't keep pace with the rapid rise of tuition and costs of liberal arts colleges. ... We've taken some loans. ... Our daughters will also have some loans of their own when all is said and done. Plus, they do work study at their respective colleges and also work during the summer, with the expectation that they will contribute to their college expenses. ... Another option, Ptbcath, is to look at less expensive state universities. ... Also, do you think your son/daughter might qualify for merit aid? Some schools are very generous with this.</p>
<p>Never, never, never 2. Don't mortgage your retirement. Borrow, refinance, have your kid borrow. Other options: look for cheaper schools; look for local scholarships; look for merit aid. As to the latter see this thread: <a href="http://talk.collegeconfidential.com/parents-forum/548063-merit-money-b-students.html%5B/url%5D">http://talk.collegeconfidential.com/parents-forum/548063-merit-money-b-students.html</a></p>
<p>I've pondered this many times and I think we'd handle it this way if the need arose...</p>
<ol>
<li> Stay in state</li>
<li> Look for merit aid opportunities. This may mean applying to lots of safeties because they're more likely to entice high-end students with money. This could also mean privates in addition to in-state publics.</li>
<li> Look for a school with a monthly installment plan</li>
<li> Determine what the family can afford to "cash flow" on the monthly installment plan.<br></li>
<li> Have the kid borrow the max unsub Stafford</li>
<li> We parents borrow the rest. I don't know if we'd borrow against the house or PLUS loans. That would depend on the amount and our circumstances at the time.</li>
</ol>
<p>ETA: I agree with tsdad. NEVER borrow from the 401k.</p>
<p>We're in the same position. Well, sort of. We would probably qualify for financial aid, but we're not comfortable with the concept. We're researching merit aid opportunities. We will not borrow (against the house or from retirement), nor will we allow our D to borrow. Unless your student is extremely high achieving, stick to publics. Most but not all privates give merit scholarships, but not enough to bring the cost in-line with a public. Some privates that are exceptions are Washington University, Tulane, Loyola Marymount, Texas Christian...those are the ones I can think of off the top of my head. Focus your search on schools where your student would be in the very top tier of the applicant pool. Collegeboard.com is your friend. Good luck.</p>
<p>This might be unpopular on a list like CC, where the seeming goal for many parents is to send their children to an elite LAC... </p>
<p>1) Unless you have massive amounts of equity in your home - don't refi your home. In this market, that goes even moreso. I bet there are lots of families in upsidedown mortgages because they took equity out of their homes...</p>
<p>2) No. Never take out of your retirement fund. If you are younger than 59.5 you will be hit by a 10% penalty from the Feds, a penalty from your home state, AND pay taxes on it. If you took out 50K, you'd be lucky to get 25K of actual cash after fines and taxes.</p>
<p>3) No. Do not take out personal loans. I say this nicely - are you nuts? If you don't have the cash in savings, taking it in parent loans is just going to strap you with huge debt. Where's your retirement heading with this? Sit down and do ALL the numbers... where will you end up if you take out 50K or 200K or more in these kinds of loans?</p>
<p>4) I recommend MODEST student loans. Don't let the limits of the Stafford Loans be the guide (23K culmulative max with some supplimental figures). Instead - sit down and figure out what might be a reasonable amount of loans for your child to handle upon college graduation (assuming they do graduate). Plan for worse case scenarios - like he doesn't graduate, or he takes 6 years - and be sure he can handle the debt load no matter what. </p>
<p>Use your local community colleges (very inexpensive). Use state or local flagship universities, not the private LACs and other outrageously priced places. Only go to the LACs if the family + student can <em>afford</em> it. </p>
<p>It's okay to tell your kids "we can't afford it". You must, you must, you must protect your home and retirement so that you don't become an elderly homeless person living in extreme poverty or a burden on your children in the future.</p>
<p>Annika</p>
<p>Agree. We need to get our heads out of the clouds and have our kids select in state schools. I think we can handle in state cost. Our first D is a very good student who score high on PSATs. I feel bad because I told her before her freshman year of high school that if she does well in school she could go to any college. That no longer appears to be true. The good news is our 2nd D wants to attend our state schools. Thanks</p>
<p>If you D scores high, there are other schools that will offer in state tuition. check out the thread <a href="http://talk.collegeconfidential.com/parents-forum/52133-schools-known-good-merit-aid.html%5B/url%5D">http://talk.collegeconfidential.com/parents-forum/52133-schools-known-good-merit-aid.html</a></p>
<p>DD was offered scholarships based on scores and grades that made OOS schools less expensive than the in state ones. They were typically state schools in other states, but some private came very close. Many great schools. We just set her expectations early that any of those had to provide 4 years of merit aide that brought costs to match in state costs. She understood that the school was not in consideration if that did not happen.</p>
<p>D applied to several top schools that offered virtually no merit aid. When it came time to make her final choice, a wise admissions counselor told her that "financial fit" is as important as other factors when considering schools. Best advice ever. Be sure to do your research when making your list of schools to apply to. And read the thread on schools that offer merit aid referenced above.</p>
<p>Have the kids considered taking a year off to work and earn money for college? It might allow them to go to more expensive but stronger schools. Contrary to what some on CC like to maintain, academics and opportunities are not the same at all colleges.</p>
<p>Merit aid, which several people have brought up, is also something to think about. Or scholarships (not administered by the universities, but by random groups). There are so many scholarships out there, for all sorts of students. Not applying for scholarships is my big regret from the college admissions process. It was stupid not to...all that free money out there.</p>
<p>Would your kids qualify for military service? ROTC will pay your full tuition and sometimes more at many schools, including some of the most elite in the country (I certainly knew people at MIT who could only afford to come because of ROTC), and allow you to be commissioned as an officer upon graduation (lots of students these days would appreciate the idea of a guaranteed post-graduation job). Along similar lines, if they are strong enough students to get in, there's the service academies, which are free and academically strong.</p>
<p>I think that people are too quick to say "Oh, you can't afford it, get your head out of the clouds and go to an in-state public or community college." There are sometimes ways to make that unaffordable school much more affordable! Idealism and pragmatism are not <em>always</em> incompatible.</p>
<p>For elite colleges, the FA qualifying bar is set pretty low. If you do not qualify for FA, it would mean that your income is sufficiently high that you can probably manage to pay along. Best of luck,</p>
<p>I had no idea so many schools offer Merit Aid. So does anyone really pay the 50k/year cost? It seems like you should apply to schools you like and wait to see what the real cost is.</p>
<p>Your conclusion is right on target, Ptbcath. But then prospective students need to be prepared to take a cold, hard, realistic look at the outcome of their application process. If it comes down to going into serious debt to attend the "dream school", versus going to another school and graduating debt free or almost debt-free, you should go with the latter. I have seen some of my students graduate with $30K, $50K or more in debt. Honestly, that is absurd! Unless you are guaranteed a substantial income in your chosen career (virtually nothing in the current economic environment), no young person should do this to themselves.</p>
<p>cadbury, I a not sure if I agree with you. There are quite a few jobs out there that would allow young people to pay back 25-50,000 in 5 years. I think it's money well spent. The pay back is certainly better than a new car.</p>
<p>There is another thread a while back shows there are a lot of parents paying full fare, at least on CC.</p>
<p>OP, there are many excellent schools offer extensive merit based $$. However, just be ware, it is very competitive to get any of those. </p>
<p>You mentioned that your daughter scored high on PSAT. When she obtains her NMF status, many schools will offer full or 1/2 tuition just because of that. </p>
<p>Best of luck.</p>
<p>Hi Oldfort.</p>
<p>If a student's parents can afford to pay, no problem! That's where the "cold, hard, realistic look" comes into play. I'm talking specifically about the student who's parents can't afford to pay this kind of $, and who plans to assume a mountain of debt themselves. You may be right that there are some entry-level jobs out there that would allow a student to pay such debt off. But that's certainly not true with most degrees in the liberal arts. Heck, a few years ago a computer science person with a bachelors degree could write their own ticket. With programming going offshore, that's no longer the case. I even remember a time when engineers couldn't find work! (I'm showing my age here.)</p>
<p>D1 was a good student but not a top student...top 20%, I think???? She applied to 6 different LACs and all provided merit aid that made the cost equal or better than cost of state flagship. If a small private is a better fit make sure you check out what they can offer before you give up on them.</p>
<br>
<blockquote> <p>So does anyone really pay the 50k/year cost? <<</p> </blockquote>
<br>
<p>At any super-selective school, I'd say that 50% of the families are full pay--because they can afford it or have saved for it.</p>
<p>"Heck, a few years ago a computer science person with a bachelors degree could write their own ticket. With programming going offshore, that's no longer the case. I even remember a time when engineers couldn't find work! (I'm showing my age here.)"</p>
<p>Good CS majors are still in demand. And some of those programming jobs are coming back thanks to the weaker US dollar and the related problems of offshoring. The tech bubble burst of 2000 resulted in a big dropoff in high-school graduates applying to CS programs resulting in shortages a few years later.</p>
<p>CS jobs are definitely coming back - offshoring has not been as wonderful as the bean counters thought it would be...</p>