Need help with Caltech decision based on Cost

My son got into his dream school - Caltech. Caltech seem to be a perfect fit for my son.

As we are considered rich enough, we do not get any aid or scholarship. Cost of 4 year undergraduate degree in Caltech is over $250k.

While I am thankful for being rich/comfortable, I am not rich enough to ignore an expense/investment of 250k. To put this in perspective it would be about 30% of my savings.

My son has also got into other reputed schools with no aid.(Full cost - Berkeley, Georgia Tech etc.)

He has also got into good in-state schools where he gets full-ride ($0 cost).

Few questions for the follow boarders here:

  1. Is cost of Caltech UG worth it? Imagine a scenario, if I give $250k to my son now, should he spend this money on a Caltech UG degree? Or save it for his future? If it helps, let us say this may be the only inheritance money he is likely to get from us.
  2. Loan or Cash? If we decide to go to Caltech, should we take loans or liquidate the assets to support the education? Are there any advantages to education loan, when we can pay for it?
  3. I do understand the power of the Caltech brand. Would chances of getting to a Caltech Masters / PhD program diminish or disappear if he studies in the instate university assuming he will continue to study well. Does UG from Caltech have higher/lower branding power than Masters/PhD from Caltech?

Appreciate your comments and suggestions.

Our son attends Caltech on the Aunt Bea financial plan=full pay.

We did have our son take out loans in his name because we felt that he needed to be invested and responsible for some of the costs of his education since it was his choice and he was accepted at several universities with full rides. (And, we have two other children at full fees at their schools-graduate school and undergrad). Our son works full time during the summer and is responsible for the loan costs. Don’t give your kid the $250g’s unless there is a substantial tax benefit to either or both of you.

Caltech’s financial aid staff is really good about locating in-house scholarships to help parents with the money burden-even if you can pay for the total. (Everything is need based. Merit scholarships are limited to the top 1-2 students and are almost non-existent since all of the students would qualify.) So, you need to ask the FA staff. It’s such a small school that they know each case and know what the school can provide. (I’m on a first name basis with some of the staff.)

Our son, unfortunately won a number of outside scholarships and these count against us, the parents, since these outside scholarships reduce the “need” and add the price to your costs.

Bills are submitted to the parent via quarterly statements. This helps to break up the shock of the amounts.

I don’t think his chances to get into the grad school are diminished. One of the RA staff (grad student) was on the speaker panel (Northridge grad? one of the local CSU’s). I think the advantage to being an UG from Caltech is that the professors already know him. From day one of our experiences at Caltech, the students meet and eat with the professors. Some professors regularly meet students for dinner at the Athenaeum. My son’s advisor is an electrical engineering professor, that we met and ate lunch with 6 other sets of parents.

Caltech does have some quirks that your son would need to adjust to.
Very small school so they don’t have large-scale operations, which is good for the personalities of the accepted kids; but for others, they might not like these. ex: Meals are almost non-existent on the weekends. He has to walk to Lake Avenue and pay for his own meals.

Thank you, aunt bea!
What % of the cost of the education comes from your son’s loan? I do like the idea of cultivating responsibility. But not sure what cost he should shoulder.

When do we ask about the in-house scholarships? After start attending the school?

My son liked the 10 meal plan. Most weekends, the House had barbecues one day. The kids found lots on cheap, interesting places to eat. There s a store right by the Houses, if they don’t want to go out or order in.

Son was also on the MOM–full pay plan. He did a SURF first summer, and internships each summer after that. He earned $10,000 plus, and this was in the 2000’s . At that time, he earned upper class merit awards, but I don’t think they are offered now. Anyway, I didn’t have to give him allowances or anything.

Being a small school, son got involved in ECs. When his first post graduation job didn’t work out, he got a job as a research tech back at Caltech. Gaining research experience and being in a position for good LORs, helped him gain admission to grad schools. His current roommate is another Caltech grad. When in SV for an extended internship, former Caltech classmates were his closest friends.

OP, I don’t know your state school. I don’t think son would have gotten an equal education nor would he have met like-minded peers.

@ssdad15, this is our DS’s first year, so we asked him to take out $6K which would be ~10% of his tuition and which he could probably earn the majority of, in a years’ time. He earned $3000 last summer and he applied for internships this summer, which we hope, will probably earn double that this year.

@ssdad15, you need to start talking to financial aid now because they are already readying the packages for the fall. Send an email first, so that you can find out who will be personally working on your loan package and in-house scholarships. Good Luck!

That is certainly concerning. One thing that might help you get over that is to spend some time reviewing what some students are willing to go through to get a college education.

If that doesn’t work, maybe you should just write a contract with your student in which they pay you back for the investment you’d be making. That way, your retirement could be unaffected.

JustOneDad: So in your opinion, CalTech education is worth 250k more than a top in-state school?
I am not clear what you mean by “reviewing what some students are willing to go through to get a college education.”. Can you explain?

It’s a tough call, but if Caltech is your son’s dream school and was admitted, he is not doubt of the special stock that can handle and appreciate Caltech’s curriculum and focus. Depending on your son’s areas of interest and career goals, CalTech is one of the schools were you can very reasonably expect very comfortable earnings. As others suggested a combination of “parent grant” + debt might be the best approach.

Take a hard look at the “cheap” in-state schools, the quality of the undergraduate body can be pretty appalling, especially at very large schools, and extra-especially to a guy who was accepted to Caltech. I’m the product of a cheap state school and now humbly work for Techers :slight_smile:

  1. Is cost of Caltech UG worth it? Imagine a scenario, if I give $250k to my son now, should he spend this money on a Caltech UG degree? Or save it for his future? If it helps, let us say this may be the only inheritance money he is likely to get from us. Based on a valuation of the tangible factors (course content, room & board), it is not worth $250K. However, the intangible factors (formation of lifelong friendships as students struggle to get through the curriculum together, opportunity to experience unique culture of pranks/traditions, test mettle against some of the "best and brightest" and develop professional connections through professors and alums) made it worthwhile to our family. I also consider the money as an investment into our child that will yield longer term earning potential.
  2. Loan or Cash? If we decide to go to Caltech, should we take loans or liquidate the assets to support the education? Are there any advantages to education loan, when we can pay for it? If you are making a high return on assets and can land a low cost loan, loan is better. If assets will be sitting in a savings account making low interest, use to support education.
  3. I do understand the power of the Caltech brand. Would chances of getting to a Caltech Masters / PhD program diminish or disappear if he studies in the instate university assuming he will continue to study well. Does UG from Caltech have higher/lower branding power than Masters/PhD from Caltech? If your child is a star at the in state university, his chances will be good to get into a good graduate program. Caltech brand is good, irrespective of undergrad, Masters or PhD.

I just wanted to let everyone know that we decided to enroll in Caltech!
I am glad that I made this decision after giving enough thought based on your valuable responses!
I am very positive that this is the right decision for us.
Thank you all!