A Stern Degree is a holy grail in this case. Going from unskilled laborer to Stern graduate in one generation is completely amazing. OP will be making as a 22 year old more than BOTH his parents combined when he graduates and will have a completely different life, expectations, surroundings… that will help his parents.
So yes, it’ll be 4 years of precarious living, but the fact the family already knows how to live frugally is more hopeful than other situations presented in this website. And I fully expect OP will need to take on loans pretty soon, perhaps as early as next Winter to help pay some of these costs (or to fix any problem his parents encounter).
@gmtplus7, no I think most of us are concerned that these parents can’t afford this sacrifice.
That said, if you have ever worked with low income folks (and these parents are NOT low income, although they are certainly positioning themselves to be for the next four years), then you would know that this is really not uncommon. This family has a better plan than some and a worse plan than others.
A lot has to go right to make this work. The bright spot is that this student is well positioned to potentially make a lot – a LOT – of money DURING his four years. But, I say “potentially.” There are no sure bets here.
I don’t like the plan. But I admire this young person and his parents for their mutual pact to put him in a better life than they have. Both sides seem willing to sacrifice literally everything for the other. Reminds me of that O. Henry short story, “The Gift of the Magi,” except I fervently hope it has a better ending.
Anyway, if these parents really can live on $20-something thousand a year, and if they are in line for social security, then they are probably better off than the majority of Americans today, sad to say. If you look outside the bubble, things are pretty nasty out there for a good many people.
And, yes, a Stern degree is as good a sure bet as any degree out there. With nearly 100% employment at graduation with average starting salaries exceeding $70k for a bachelors degree, it’s hard to go wrong. If this kid works as hard as he seems to want to, the gamble will pay. Fingers crossed for this family. If he weren’t an only child, I’d say no way. But this one is a close call for me.
Sometimes kids don’t have a realistic idea of their parents finances. It could be the reason the parents retirement is so low is because they been saving for college instead. OP should sit down with his parents and ask them how they plan to pay.
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think most of us are concerned that these parents can’t afford this sacrifice.
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Right.
If they could afford to “cut back” and save even half that much, they would have been doing so all along and would have more saved.
In fact, the OP has already said that the parents are very frugal…well, do you know what that means? That means that there isn’t much/any cutting back to do.
But, even if the OP isn’t right, and the parents can cut back $25k per year, then it would seem like they already would have been doing so and would have set money aside for college and/or more for retirement.
The idea of banking on an only child to support you in your old age is horribly risky.
Really thankful for all the responses, everyone.
-Just to clarify, I’m actually a girl.
-I’ve spoken to my parents about the loans again. I told them that it’s my decision and the loans will be my responsibility. I confirm that I will be taking 5k in loans each year for a total of 20k.
-This means my parents will be contributing 20k each year instead of 25k. If I can get a part-time job/paid internship during the school year that number will go down.
-My previous summer earnings, future summer earnings, and work-study earnings will all go toward personal expenses.
-My parents had an outstanding debt they needed to pay off for my grandparents until 2012. They also paid off everything they owed on our home in around 5 years. That may be why they only have 40k in savings. Now that they’re debt free they can save more.
-My parents are swearing up and down that they can afford it. I really believed them but looking through your responses makes me concerned. Is it really that difficult to live off ~35k (others in this thread estimated 29.5k, but that was before I decided to take the loans) per year after taxes? Assuming a portion of the 35k would be spent on living expenses and a portion would be saved?
@jmeyer403, a girl from Stern is even more impressive. The school has a 60/40 M/F split. There will only be about 200 of you in the freshman class. Make the most of this opportunity, and congratulations.
In my experience, people who can live that cheaply, debt free, are usually very careful when it comes to finances. I expect (hope?) your parents know what they are doing. And yes, people live on $35k all the time. It’s not ideal, but it is doable.
For the latte crowd on CC, very difficult. It seems your family lives a different lifestyle, making it possible.
We’re all rooting for you! Good luck to you!
Too many unknowns to say Parent’s are bad with money. Clearly frugal. We don’t know when they started saving and it is likely the $40,000 is not in the stock market so is nearly pure capital that they socked away. In that case, $40,000 isn’t as bad a figure. I’m not arguing that NYU is affordable but if they have no cars and no debt, they are in better shape than many on here asking about NYU, often with similar parental income.
The other issue is that the OP’s cheapest option is only about $8,000 less than NYU, so it may not be that much more affordable. Also, does the OP’s cost for NYU assume living on-campus, or the probably-less-expensive living with parents and commuting? If the former, then the cost of NYU can be brought down by doing the latter if necessary, if they live in NYC.
For many on CC, yes.
For those of us who have actually lived on that income, it’s hard but certainly not impossible… especially if the house is paid off.
OP, you know your family and their situation better than strangers on the internet. In this case, I think I’d trust your parents if they say they can swing it. Though if you can take out the 5k every year, that would give everyone some breathing room and will not be hard to pay back post-grad.
Good luck 
Stern, like all other schools, has a bottom half of their class and some students who aren’t able to cash in on big opportunities. No one likes to think that could be them, but what if it is in this case?
@intparent, it sounds like if this is the case (i.e. OP ends up bottom of the class), then the parents have lived very frugally for four years and forfeited about 80k they could have put toward retirement. The parents are not intending to incur debt. And after graduation, they can resume better savings. If these people can live on 30k/year, meager savings, small jobs and/or social security might be all they will ever need, or at least close to it.
It’s not ideal but it’s not a hopeless plan. There is a gamble here, but the odds are favorable.
And, even the bottom of Stern will find employment. Something like 99% are employed within six months. That last kid won’t be in the group drawing six figures, but employment at some level of income is likely.
It isn’t what I would do in the OP or the OP’s parents’ place. Being starry eyed about Stern is no better than being starry eyed about any other school.
I just think as long as the student and parents keep everything in ‘check’ - I do think the parents will be continuing to save. They think and live differently than many on this thread. Debt just puts them into a very high stress thinking. If one parent becomes ill or is unable to work for a time, then I do think that is when the student can go into action with student loan. I do think these parents will continue to save after DD is completed with UG degree. Who knows what will happen to health or other issues in the future? I do think having the game plan parents are comfortable with, while again having strong communication and observation of any behaviors or actions that would cause concern (like being so spend thrift that health and well being are being compromised)…
Frugal people and households can do it without feeling deprived. Try not to take the people who have $200,000+ incomes but not a dime saved for anything as typical. But each household needs to make its own evaluation of its finances.
Your parents know their financial situation and spending habits better than any of us do, so they need to answer the question for themselves.
I think the frugal parents can live on $35k, but that’s not really the point. they need to be funding their retirement, so the student needs to maximize internship opps so that she won’t need as much of her parents’ money.
I know that some cultures are used to supporting parents, but as each generation lives away from the home country, some of these expectations can become a problem if the younger generations have partners that don’t agree with an extensive level of support…or have their own parents that need supporting.
I’m guessing the OP’s parents are prepared to live on social security alone, given the desire to send their daughter to a superb university that will open doors for her. Good on them!
Are you an only child? (ETA: ok, I just saw that your are.)
Are your grandparents still alive? (You mention your parents paying their debt. Are they deceased? Is there any possibility of your parents having to support them?) Are there any other people who might turn toward your parents for financial support? Are both of your parents in good health?
That is a huge percentage of their income and even one small stumble could cause it all to come crashing down.
I don’t know how much social security payments are for two people who earn about $65k per year combined…maybe about $2k a month. That may be enough if they live very cheaply AND don’t have any costly medications or dental needs. My H’s Rx’s cost us over $600 a month and we have very good insurance. @dadof1
It appears from the student’s posts, that the parents will be depending on the student, their only child, to support them in their senior years. While I know that is common in some cultures, that is a risky plan in the US.
It does appear that that is the plan regardless of which college, since the cheapest college that the OP listed would only save them $32,000 over four years compared to NYU. $32,000 added to their existing $40,000 retirement savings is unlikely to be able to make them be able to be financially independent of the OP in retirement.
The OP’s parents may need to buy (term) life and disability insurance policies on the OP if their retirement plans depend on the OP.