<p>rhandco - I’m under the impression that many colleges have cut back on tuition benefits programs for their employees. </p>
<p>At the same time, I heard about an administrative assistant job at a private college that had 400 over-qualified applicants. Amost every one had a kid in high school, and they wanted the tuition benefits. </p>
<p>Too many families don’t plan for all 4 years. They blow their savings and their debt capacity on the first 2 years of a college with a high net cost, and then the student has to transfer to a cheaper college. That is the worst of all worlds - you may miss out on small community college class sizes in intro classes, but you don’t get to take advantage of the expensive college’s resources in the upper level classes, and you don’t have the prestigious college’s name on your diploma or access to the networking resources.</p>
<p>Another danger - allowing the first child to blow your finances, so there are many fewer choices for the 2nd or 3rd child. I have two kids and their college funds were always equal in size. Each would have had to make up any difference in costs on their own. </p>
<p>One more trick - try to avoid taking your son or daughter to visit an expensive college until you are sure it is affordable. The idea is to avoid their falling in love with an unrealistic option. (However, there are some colleges that are less likely to offer admission if they don’t have record of a college visit from a family who lives within a reasonable driving distance).</p>
<p>Bumping this thread because I am already seeing posts from kids getting early decisions who didn’t have this conversation with their parents. For those who are entering the Regular Decision period, it’s not too late. Talk finances up front.</p>
<p>And if you have a junior, it’s not too early!!!</p>
<p>^^^
I was just going to write that.</p>
<p>Also…there are starry-eyed parents out there who are also math-challenged when it comes to EMOTIONAL matters.</p>
<p>If you don’t have any college savings for your child, then look at your monthly budget situation now and ask yourself honestly, “Can I really find an extra $5k a month for 48 straight months to put towards Mary/Johnny’s college costs?” A similar evaluation needs to be made even if you have some college savings or your family contribution would be lower.</p>
<p>The last thing you’re going to want is to need Mary or Johnny to leave PriceyU after the first year because you were too optimistic about how much you could contribute…month after month after month (assuming a monthly payment plan). </p>
<p>Furthermore…virtually every household has 2-5 unexpected large expenses EVERY YEAR…these could be: major car repairs, dental work, home repair, major appliance replacement, last-minute airfare to visit sick relative, or whatever. So, when figuring the amount that you can contribute, consider that you’ll still have these pricey surprises a few times per year. </p>
<p>I still remember the student who in JULY had to quickly find another school to attend because his parents had to spend the “family contribution” on an A/C system for their home. </p>
<p>We could swing fullpay 65k for just S1 for 4 yrs. But knowing S2 would be following soon, we knew there was no way we could do 130k per yr. Despite heated arguments w S1 over how unfair this is because his achievement & hard work have earned him the right to try for HYPS, we dug in our heels and said NO to all the non-merit schools, We said this is the limit of what we will pay for undergrad, period-- IT’S JUST UNDERGRAD; GET OVER IT!!!</p>
<p>S1 even begged to apply just to see if he could get in. We knew how that would go, so we still said NO.</p>
<p>Had we not been so firm, S1 might not have applied to the schools where he has already been admitted w very generous merit money. He has good viable options now and is ecstatic to have been admitted. </p>
<p>I’ve lost count of how many CC threads I’ve read where a younger sibling is decrying his/her financial constraints in college selection because parents have blown all the money on the older sib to indulge the older sib’s fantasy to attend “dream school”. Did the parents also buy the pony the kid wanted at age 4?</p>
<p>GMT: just a note - full need schools would take this into account though, so that you wouldn’t have to pay 130K for two kids.
Essentially, your budget is about 35k per kid. So that’s child1’s budget. It’s good you dug your heels - a good course of action is to say “the budget is 35K, you can attend anywhere within budget. Run the NPC’s.” There are lots of schools that could be in contention.
I agree with the essence of your post, but I disagree with “it’s just undergrad”. It depends on the kid, of course, but undergrad can be a time of tremendous growth. A merit school can (and should) be a good fit (it certainly doesn’t have to be HYPS - as I said, I agree with your post :p) but readers shouldn’t be quick to conclude that it’s just undergrad, so where you go doesn’t matter. </p>
<p>Another note: even if you are willing to pay as much as you can afford, the question of how much a particular college will cost YOU is not always straightforward–you need to do some research. You shouldn’t assume either that your family can’t afford a particular college, or that a particular college will give you enough aid to make it affordable.</p>
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<p>@MYOS1634 That depends on what GMT’s situation is. There are people who would be full-pay with TWO in school. My sister had one at Tufts and one at Vandy at the same time and got NO aid. She was fine with that…but others would find paying that much each year to be too much …unless they’re really quite affluent. </p>
<p>There are people here on CC that are full pay with two in pricey colleges at the same time …so, yes, there are schools that will have you pay $130k per year.</p>
<p>Let me emphasize again that whether you, as a parent, can’t or won’t pay for an expensive college is not the point here–the point is that your kid needs to know this IN ADVANCE of applications.</p>
<p>Because the vast majority of parents with whom I come in contact are tuned into the costs of college, I’m always floored when I meet people who just don’t worry about it. Last weekend I met somebody whose bright, hardworking child had gotten in ED to a very prestigious school. The mother said, “We figure she’ll graduate with about 80 thousand in debt. But if she lives at home for a few years, she should be able to knock that out pretty quickly.”</p>
<p>Wow. </p>
<p>20K is more than half of my annual income, so we are definitely hoping for good need-based aid, but she’s already getting some good merit aid as well. I know how much I can contribute to college, it will have to be on a monthly payment plan, and it will hurt a little, but we’re already making the changes to accommodate that amount. It’s not a lot, and she’s probably going to have to borrow some, but my goal is to keep in the neighborhood of the cost of a car over the 4 years. Debt is a yoke that holds you down, so the less she graduates with, the better. </p>
This is timely again.
I agree that parents should make every effort to discuss finances with their kid ahead of time to head problems off at the pass.
On the other hand…sometimes circumstances change. There’s another thread on here in which a parent makes the very real statement that a couple hundred thousand dollars is difficult to pass up when it’s actually on the table, staring at you. And 17-year-olds sometimes don’t understand the magnitude of money that they are proposing to borrow (or spend, or spend of their parents’ money). Sometimes it doesn’t make sense, especially if the “relatively undesirable college” is a great one. For example, in August I might say “Sure, we can pay for Georgetown if that’s your dream!” But then in March you’ve got a half-scholarship to UW. UW already is over $40K cheaper than Georgetown, but with a 50% discount, we’re talking less than $15,000 per year (even if your kid lives on campus) vs. $67,000 per year at Georgetown.
Sometimes these things unfortunately don’t become clear until after financial aid packages are in, and parents are faced with the actual reality of shelling out almost $47,000 a year when they could be paying $15,000 and what that means for their wallets. Why bust the budget if you don’t have to? Especially given that some of these parents are sharing that they had unexpected expenses, layoffs, etc. Even if nothing unexpected happens, maybe we can bundle up that $160,000 extra and give it to kid to get their life started. They still get a world-class education at an excellent university (and WA has several great public universities in addition to UW!) AND they get a six-figure sum that maybe reduces medical school debt, helps them buy their first house, goes in part to pay for a lavish wedding, goes into their grandchildren’s college funds, etc.
And the flip side - which @riverbirch alluded to - is on the off-chance that you do become one of these families who thought you could handle it and later realized you couldn’t, don’t let your 17-year-old child guilt you into being those parents who sign up for PLUS loans they can’t afford vs. having a difficult conversation and telling your child they can’t get what they want.
The type of student who is realistically applying to highly selective schools is likely to be able to get a full ride or full tuition scholarship somewhere (e.g. 3.0 HS GPA and 32 ACT => full ride at Louisiana Tech). It would be best for parents to think of the scenario of choosing between a full ride or full tuition scholarship at a less desired school versus a higher price at the student’s top choice before having the money talk, which should happen before application season. Some parents include “incentives” (e.g. if the student chooses a school that costs less than the parental budget, the extra money can be put toward professional school costs, additional costs for study abroad, etc.).
FYI
Is an elite education worth $170k debt?
http://www.cnbc.com/2014/10/03/middle-class-squeeze-is-an-elite-education-worth-170000-in-debt.html
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Sometimes these things unfortunately don’t become clear until after financial aid packages are in, and parents are faced with the actual reality of shelling out almost $47,000 a year when they could be paying $15,000 and what that means for their wallets. Why bust the budget if you don’t have to
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I agree.
Yes, some parents don’t have the “money talk” because they’re embarrassed or they have naive ideas about how much aid will be given…but…some parents are hesitant to give an amount for the above reason. Why tell your child that you’ll spend $50k-60k per year on ANY school they want, when an adequate, equal, or even better school will cost less because of merit?
I’ve seen kids on CC who already know that they have $XXXXXXX in their college funds, so they believe that amount can be spent on the school of their choice, even when that’s a total waste of money.
I once met a kid at Alabama who had the stats for free tuition, but didn’t bother to apply by the deadline (which he knew) because he knew he had a college fund to pay. How crazy is THAT! Just shows how 18/19 year olds can have no clue or any foresight about such matters.
The kid could have saved that money for something else. Who throws away a winning $100k lottery ticket because, “I already have $100k in the bank.”
I think you can be penny wise and pound foolish and send your high achiever to too low a school too, one that does not provide enough academic challenge to push them to what they should be.
UW sure, but Louisiana Tech ?
I think @julliet makes some valid points. I also think that sometimes (and in our case two generations in a row) there are unexpected opportunities that arise, that while not your first choice, certainly are great opportunities.
If you really have to tell your children that you will weigh options and possibly they will choose a large merit scholarship over their first choice (made by consulting USNWR or some other source or maybe because the dorms looked nice or there were hot chicks in shorts on campus that day) … I think you have missed some personal finance lessons in your long 18 years together … and may face many years of them living with you because they have just blown their six-figure salaries on nice cars, fast women and whatever …
Families should be able to discuss options and decide on the best path … without a prearranged contract or fear that son/daughter will post on the internet how daddy won’t let me go to Princeton.
And, especially with the help of CC, you should be applying to some schools that give you good merit awards because you know … making $100K after taxes just takes a lot of work, whether for mom and dad or for junior paying loans (plus interest) for many years of decades to come.
If daddy has $10 mil in the bank, sure maybe you don’t apply to your state flagship … but i bet many prudent kids actually do because they would take that full ride scholarship and invest the $300K college fund in their first business venture.
And running the EFC so you don’t get delusions of some magical scholarship money (also note that it is in clear text on Ivy websites that THERE ARE NO MERIT SCHOLARSHIPS HERE).
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Yep, some students pick Louisiana Tech because that’s the school that is right for that student financially, and while there might be other dream schools, the family just couldn’t afford the dream. Giving up vacations and steak dinners doesn’t make $65k per year appear suddenly. You can criticize the family for not saving enough when the child was 8 years old, but at that time maybe the family was making $50k per year with 4 little kids, 4 sets of braces, 4 sets of piano lessons and girl scout camps fees and maybe one or two needed tutoring.
I applaud the families who had it all together and the their kids could pick any school and pay full price. Most of us limp into high school trying to save enough for a few ECs and trips and still put some away for college. It is a shock to all of us that even if we’ve saved $20k for college it isn’t enough to pay for the state schools (even LA Tech!) never mind sending the kid off for 4 years of fun and learning to Stanford or MIT or Pomona. I know a lot of people who did Florida pre-pay, and did it thinking their kids could use it at any school in the country. They could, but all they get is the amount of tuition that would be at a Florida school, so $6k or so a year. Really, they didn’t know that OOS and private schools were really going to be out of the picture as they thought “Oh, I’ve paid in and was told the funds could be used anywhere.” Many of those kids then are limited to Florida schools to get the most of the investment.
I really think there are a lot of parents like me who weren’t embarrassed to discuss finances but just didn’t know what I could afford, how much colleges cost, or what to expect for merit or financial aid. The kids also don’t have a comprehension of what $70k x 4 means in working hours. My daughter became a much better spender when she realized she had to work an hour to buy 2 Starbucks coffees, or 10 hours to earn $100. $70k is beyond her comprehension.