<p>If you didn't have a frank talk with your student about finances when he or she was a junior (see <a href="http://talk.collegeconfidential.com/parents-forum/1638399-parents-of-high-school-juniors-talk-finances-now-p1.html">http://talk.collegeconfidential.com/parents-forum/1638399-parents-of-high-school-juniors-talk-finances-now-p1.html</a>), you really need to do it now. I wrote this in the other thread:
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If you are the parent of a high school junior who will be applying to colleges next year, now is the time to take a close look at what you will be willing and able to pay toward your kid's college education--and to make sure your kid understands it. You may never have told your kid about your family's finances--now, you must do so, even if you'd rather not. Don't be the subject of a thread next year when your kid says, "My parents told me I could apply to any college I wanted and they'd make it work, but now they're saying I have to go to the relatively undesirable college that's giving me a scholarship."</p>
<p>So, look at some price calculators on college websites, get financial advice, think about whether your kid will have to have scholarships, what you feel comfortable borrowing (if anything), what you will expect your kid to contribute, whether you will expect your kid to pay back any of the money you spend on education, etc. And share the result with your kid. There should be no unpleasant surprises when acceptances come in next year--at least, there should be no surprising changes in your position.
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This is even more important now, when they are actually applying.</p>
<p>Another point from the old thread, and relevant for a lot of CC families: Essentially every student who has the stats for a highly selective college will have much, much cheaper options--probably even virtually free options. This should not come as a surprise to anybody, and you should have a discussion NOW about what you will do if your kid is admitted to Selective College at a high cost and Good State College for much less cost.</p>
<p>Hunt- great public service. And I’ll add my own two cents- the advice that nobody wants to hear- don’t blithely assume, “well sure we can afford 20K out of pocket” or whatever the magic number seems to be that pops up as your EFC. You need to sit at the kitchen table with your credit card statements (my suggestion is going back three years), your tax returns, all your bank and mutual fund statements, checkbook if you still have one, etc. Identify NOW where that 20K is coming from- how much from savings and from which account? How much from current income and if so, what are you going to do without in order to free up the cash? If you think you’re getting a HELOC, you need to run the numbers NOW- you may not have as much equity in your house as you think you do. If the folks across the street just sold their house for 350K and you think your is “worth” 500K, it won’t be because you have nicer wallpaper in the bathroom. Wallpaper won’t appraise when the bank figures out what your house is really worth.</p>
<p>I know SO MANY PEOPLE who go into senior year understanding what their EFC is- without having a clue as to how they would actually come up with that much money every year for four years. Not a clue. And they have magical thinking like, “Well last year the muffler fell off and the refrigerator died and little Joey needed braces. Next year won’t be so bad”. Guess what- if your house is 20 years old, next year it won’t be the fridge, it will be the hot water tank or the dishwasher or the roof or termites. That’s just the way it is. If you’ve been unable to save 20K per year for the last few years, for most people, that means they will be unable to divert 20K per year to college.</p>
<p>Don’t wait until April to conclude that none of your kid’s choices are affordable. Listen to Hunt and do it now while you can still add some financial safeties to the list.</p>
<p>My daughter is a HS junior and went to a college fair at her school last night. I couldn’t attend, unfortunately. I told her to make sure to talk to the U Maine people, in addition to other schools. She looked surprised and said, “Why?” and I told her because that would be where she would be attending if she didn’t get some big scholarships from more expensive schools. At least she “got it” and didn’t get huffy.</p>
<p>It is sad when this happens, and often the scholarship-school was kind of an afterthought application…some local state school. If merit is truly what the parents want/need, then say so from the get-go so at least the student can look at merit schools that he might like!</p>
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<p>^^^ very true. Some don’t “do the math”…and some don’t even do it in the spring. Every year we see kids having to transfer out of their current school because the parents can’t come up with the money to continue. They let their kid enroll in an unaffordable school! </p>
<p>I also know people who routinely throw out the $20k per year figure…often because that can be roughly their instate direct costs. But…have they “done the math” and figured that if they pay over 10 months, that is $2k per month…and if they don’t NOW have an extra $2k per month, then they won’t next year, either. </p>
<p>And, if you also have YOUNGER kids to put thru college, consider how those costs will get paid. If you load up on Plus loans for Child #1, you won’t likely be able to afford more loans for Child #2 or 3.</p>
<p>I do budget counseling at our church and the Parent Plus loans are scary. I see parents whose kids should be going to community college signing up for big loans so their kids can go to the college of their choice. They can barely make the mortgage payment and I guess later on money is going to magically appear to pay off these loans they took out.
It can become very hard to fix the financial situations they have put themselves into and these loans NEVER go away even in a bankruptcy. I’m a big believer in not going in debt for a college education…working in your 80’s is usually not very feasible.</p>
<p>When my daughter was a junior we told her she really could go where she wanted and showed her the 529 plan we had for her. She said " Oh so THIS is why we never go on any cool vacations!" Lol. </p>
<p>D. was mature enough to apply only to schools that would give her great Merit award. She ended up on full tuition Merit at state public that was the best for her (4 years later she still thinks so). We did not talk at all. However, when she started applying to Med. Schools, her idea was the same, pick the cheapest. I had to convince her, that at this step she should go to the place that she likes the most. It took several talks and as a result she is a 4th year medical student at the most expensive Med. School on her list. She has been happy there, we are paying in appreciation for the vey wise choice of UG (where she was very happy anyway). We never had any funds, in our case, it made perfect sense to maximize our retirement funds and use them if needed. It has worked so far, only one payment left and we are free to start looking for a second house. </p>
<p>@Jara123 I got a similar reaction from my DS17. His sister is a freshman and he is now understanding as we begin increasing his 529. They have been in private school and now college looms and even the local trips that are usually our vacation are waning. His reaction was “oh that’s why our house looks like ****, I mean old.”</p>
<p>I am an engineer so my spreadsheet is on a 12 month cycle so we always pay tuition in cash up front. Fortunately we are “old” parents so we saved a lot of retirement money early. Now some of that “would be” retirement money is going to tuition or 529 accounts. Our college budget is firm and we will not make post grad loan payments. I explained that we are already contributing part of our retirement.</p>
<p>BTW our budget was below our EFC and we scared DD off of loans I think so we relied on schools that gave merit aid for good but not great stats.</p>
<p>I think it’s important for families at all income levels to think these issues through carefully. For those who really can’t afford expensive colleges, the kids need to know that from the very beginning so they can take that into account in making a sensible list. For families that can afford full pay (or acceptable debt), it’s important to let your kids know if you are willing to spend what you can afford–don’t let them think you’ll pay, when you actually won’t. Also, there is the situation of the family that can pay for the expensive college, has allowed or even encouraged the kid to apply to the expensive college, the kid is accepted to the expensive college–but then Dad (it generally seems to be Dad) is seduced by the free ride offered by a less desirable college. Perhaps this is less likely to happen if Dad, and everybody else, has already discussed the possibility of a generous merit offer, and whether it would change things or not.</p>
<p>Hunt- I think this is an equal opportunity problem. I know a Mom who was prepared to make her kid take the free ride (vs. a college they could comfortably afford and which seemed obvious was a better academic and social fit for her kid) because the college offered- wait for it- a free laptop. People tried to explain that she could go on Ebay and get that same laptop for what- a few hundred bucks? Probably less if she didn’t need the spiffy nylon case and extra extension cord???</p>
<p>It is hard to stay sane given the extreme amounts of money people are trying to discuss using rational factors. </p>
<p>There is a danger of not looking at a school because it appears to be too expensive but that actually offers some good awards or other ways to pay for it. We almost made that mistake because many of the private schools were $45-55k, way outside my ability to pay. I was very anti loans. After running the NPCs and finding out a few things about state aid for private schools, it worked out.</p>
<p>I say be realistic, but don’t just dismiss schools because of the initial COA.</p>
<p>To be a devil’s advocate, would you marry a rich guy instead of the guy you love who is poor?</p>
<p>I do know people who have married for money, and ended up happy in their own way. Not in the “Love of My Life” way, but happy in the “I like his stepchildren, we had two children together, I love my children, and I love my lifestyle”.</p>
<p>Our problem is that I work at the cheapest option, so I see the underbelly of the students who aren’t trying (those 20% of freshman who drop out often come through my classes). The next cheapest option is in a dicey area. But both schools have decent reputations (where I work is ranked on the salary vs. tuition surveys). The next cheapest schools are 10K more per year, so 40K more overall. </p>
<p>I don’t think there is harm in applying if your child knows that they may have to refuse their top choice if accepted because of FA concerns.</p>
<p>I do think there is harm not to share any financial info with your child. Even if you put on the table “most schools are offering net prices around 30K per year, but we can only afford 20K per year”. The tough part is if your EFC is 30K per year and you can’t afford more than 10K per year, or not even that.</p>
<p>To answer my question, it’s better to fall in love with a rich guy that is a school that is reasonably priced that you really like. </p>
<p>There are many different philosophies about the value of college and what parents should do in terms of paying for college. They’ve been debated endlessly, and they range from “We will eat grass clippings so we can borrow enough money to send you to the college of your choice” to “You’re on your own, kid.” My point is simply that your kid really needs to know BEFORE the applications go in what your family’s philosophy and ability to pay is. And of course, as others are pointing out, the parents also need to be realistic and educate themselves about what they can really afford. This should also be done BEFORE the applications go in. I think it’s perfectly OK for there to be schools on the list that will only work if there is adequate financial aid–again, as long as everybody really understands that BEFORE the applications go in.</p>
<p>Any stats available on how many kids drop out solely due to financial reasons?</p>
<p>I know that in my classes, on average 8 kids of 100 are put on the Bursar’s “bad list” in the first week of the semester (registrations are suspended), but 7 and sometimes all of those 8 are returned to class within the week. What is more common is kids flaking out and not showing up at all, after everything is paid for - and in that case, the FA is revoked and the kids end up owing 100%!</p>
<p>Remember that if you <em>really</em> don’t have a good financial option, your child can get a job that has tuition benefits and take classes part-time. This works out really well if they can work at a college, in any job really, and take classes for free there. I did that for graduate school, it’s probably harder for undergrad but not if your child is willing to work as a secretary or janitor ( I worked as a secretary all throughout HS).</p>
<p>We are in a position to be able to afford 4 years at almost any school, but right now I am debating what we really SHOULD pay for. In other words at what point is the premium worth paying to attend a particular school over a cheaper alternative.</p>
<p>Being honest also means that you know what the back-up plan is in case there is a drastic drop in family income. Take a look at your life. What happens if the/a breadwinner’s job vanishes? How will year 1/2/3/4 get paid for in that case?</p>
<p>We were lucky. The kid started at the local CC (even had a nearly full-tuition merit scholarship there!) and transferred in-state for the last two years. Halfway through junior year (1st year at state U), the major income vanished (massive, company-shattering layoff). Thanks to reasonably good planning on our part, there was money for that semester, and something to contribute toward the senior year. Kid covered what we couldn’t pay with a federal loan, and money that the wizards at that U’s financial aid office found for her. Count me eternally grateful that I never overestimated what we would be able to pay.</p>
<p>As a parent, I thought I had carefully considered all of the financial issues, but I let myself be misled. My son’s first choice was an expensive private university that had accepted him in October. That university’s data showed that they only met 70% of need. I allowed myself to be surprised when that university sent my son a letter in March of his senior year that revealed they would only meet 70% of need. </p>
<h2>Fortunately, he had plenty of other affordable options, and he realized a different university was a better fit for him, and he has been very happy there. </h2>
<p>Happymom - You stress a very important point. Plan for the worst case scenario, not the best. If you determine that your family will just barely be able to cover the college costs, you are deluding yourself, because something is bound to go wrong, or college, housing or family costs will unexpectedly increase, or a student will need more than 4 years to graduate. </p>
<p>College often stretches more than 4 years because students often change their original major, and cannot complete the sequence of pre-requisites and required classes in time. </p>
<p>Students also need to understand the connection between high school grades, test scores and college costs, in order to be motivated to do better. With high grades and scores, they are much more likely to receive merit aid or to get into a selective college with excellent need-based aid. Too many high school students are only concerned about getting into a certain college, and not the financial implications. They don’t understand that taking the SAT or ACT one more time, after extensive prep, could result in a big merit aid offer from some colleges. </p>
<p>Everyone needs to understand which colleges emphasize merit aid and which provide good need-based aid. Upper income families may do better stressing colleges that concentrate upon merit aid, while middle and lower income families typically do better at a college stressing need-based aid.</p>
<p>As a result, too many high school students from non-affluent families concentrate on getting into the most prestigious and selective college they can, without understanding they might be much better off financially being towards the of the top of the applicant pool of a less selective college, and thereby receiving large amounts of merit money.</p>
that is a school that is reasonably priced that you really like. </p>