Seems like the scenarios to avoid are:
A. Parents vague about cost constraints, student applies without considering costs and gets some admissions, but then all of them are too expensive, or at the extreme margins of affordability (more than what the parents expected costs to be).
B. Parents promise some amount beforehand, but then back out of their promise in April, due to not realistically assessing finances beforehand (as opposed to unexpected events like job loss).
You missed this scenario:
C. Student enrolls anyway fancifully thinking, along w parents, that the money will somehow manage to come together for 4 years. After not being able to scrape up enough money for even Year 1, the embittered student ends up withdrawing and then transferring to a cheaper school.
Other variants of scenario C are:
C2: Because all of the choices in April are too expensive, and neither the student nor parent wants to consider community college or a gap year, the student enrolls in an expensive school requiring large amounts of parent loans or parent-cosigned student loans, graduates, but is unable to earn enough to pay off the debt at a significant rate.
C3: Like C2, but student drops out before graduating because s/he ran out of money, so s/he and his/her parents are burdened with lots of debt while s/he has no degree.
“Too many families don’t plan for all 4 years” - True. Better yet is to have a buffer in case a change of major or unforseen health / mental health challenges along the way.
I think @Hunt’s original advice is spot on but it assumes that the parents themselves have a clear understanding of what they can or can’t afford but I’m more and more skeptical about that being the case. Lots of parents out there, it seems, counting on the best-case financial scenario for the next 4+ years.
My son and I’ve been visiting colleges and attending auditions (music schools) and when talking to kids he knows at the school, one thing has been consistent: the kids who aren’t happy almost always cited financial pressures. As adults, we know how distracting financial problems can be. I think we need to be very cognizant about putting our kids in that position the first time they’re out on their own, trying to succeed in college. Not saying they shouldn’t have to work, or earn pocket money, or contribute toward their education, but be realistic about when it crosses over from being a basic responsibility to taking their focus away from school.
Some days it has felt like we’re in a small minority, being pragmatic early in the game. We’re going to stay that course even in the face of secondhand “peer pressure” in terms of what we hear the friends’ parents or the colleagues are planning to accommodate.
I maintain to our D that maybe the other adults have all the facts they need today about the financial realities for school X, as I feel we do, and maybe they don’t yet. A sharp friend of mine with a Ph.D. told me she and her H didn’t know about the four-figure additional annual fee for her D’s honors college participation until they got the first tuition bill.
Every time I hear that a student’s been accepted at a school and the parents haven’t run the NPC, or obtained their ballpark EFC figure, or accounted for tuition and R&B increases year-to-year (including higher tuition sometimes for upperclassmen than for frosh and soph), or looked up what added fees apply to certain majors or honors programs, it blows my mind.
Not that we’re up on a high horse about it, just feel it’s better to be thorough now than surprised later.
Wow. Scenario C and its variants are truly frightening.
If anything, we erred on the other side. Gave D a fairly low ceiling but I also assumed total costs would increase 5%, 6% a year (it’s scary how much more expensive senior year is than freshman year). I wanted the senior year cost estimate to be less than my annual limit, not just freshman year.
I was fortunate that I had the option of a high paying and demanding job or a lower paying job which would gave me more time with my family. I knew even at a lower paying job my kids still wouldn’t be eligible for FA. We purposely had 2 kids 5 years apart so they wouldn’t be in school at the same time. We also chose not to have more than 2 kids because of finance.
I am contrary to other posters on this thread. I do believe UG education is extremely important. Graduating from top tier school will pay for itself over and over again. If I had 300K I would prefer to invest it in good education than stocks or some start up venture (oh wait, I have, twice).
D2 is graduating with a philosophy degree this year. She is thinking about deferring law school for few years. She is getting interviews at premier asset management firms and top law firms. Even I was surprised at her options. I don’t think she would have as many options if she didn’t go to her school because those firms only recruit at a handful of schools.
My kids knew from very young age what it would take for them to continue to live their life style. It is something D2 is weighting heavily now on which career path she will follow ultimately (law in public vs private sector).
I do agree with the premise of this thread, which is to educate our kids on the cost of education and what we can afford, but I don’t agree with the cheapest is always the best option, especially when parents could afford it.
"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. "
-There is no reason to apply to any expensive college (selective or not) if family cannot afford the cost. Why bother? Most very top caliber students are aiming to attend at Graduate School eventually. They feel that a college is just a stepping point. It just needs to fit them personally and match their interests as much as possible and they are ready to work hard at any place. They know it is up to them and not the place to achieve their ultimate goal. At least that was a position of most around my D. who are either graduated or in the 4th year of various Med. Schools. None went to any Ivy / Elite and those who D. met later who did attend at Ivy’s /Elites, regretted it later on because of the accumulated student loans and having no advantages over those who attended at in-state publics on full tuition Merit awards.
The following is one of my main points:
I recognize that that full ride can seem awfully seductive when it materializes–even if you already knew it was likely, and even if you already told the kid that he could go to the more expensive school even if he got the free ride. This is why I think it’s important to think it through and discuss it while it’s still a bit abstract.
^Just keep in mind that you may face the same in 4 years when they apply to Grad. schools. Do you have money to pay for both? Most people who are not at the Trump level of income cannot shed out some $600k + on kid’s education while getting closer and closer to your own retirement. And most top kids who have stats to attend at Ivy / Elite have plans to go to Grad. School.
Lots of people have the philosophy that they’re going to pursue merit aid, for lots of reasons. I just think this should be a team effort, including the student. It shouldn’t be sprung on the student as acceptances start to come it.
I think this is just one of those life values everyone has to decide for themselves. There’s no right or wrong here. I chose the lower paying job to spend more time with my family. Was I wrong to do it? Eh. Sometimes, I wonder how our lives may have been different if I went for the career over time with family. Sometimes, I wish I had gone for the money but mostly I think that choice would have led to a more stressful situation for me.
Yeah, if I had 300K (twice over), I also would have preferred to invest it in a good education. I don’t have that amount of money. That said, I’m not so sure a"good education" is exclusive to “top tier” Again, different values leading to different actions.
I agree with @Hunt, regardless of your approach is toward handling college costs, it’s best to communicate that with your kids early rather than late. Latter half of sophomore year is not too early. Latter half of senior year is way too late.
This is one of the reasons to apply ED to the more expensive school. If you’re accepted, your parents will never know whether you could have gotten that free ride.
Good thread. We worked hard on my kid’s long list, then short list, of schools to apply to. We cast a wide net, we searched scholarships, merit aid, and ran the NPCs. All of the schools she applied to, EA, had one of the following: meets 100% financial need, automatic full tuition waiver, or competitive full tuition waiver.
We’ve said all along that there are steps in the process. Research and create your apply to list. Find out where you’re accepted. See what you get in merit aid. See what you get in financial aid. Compare packages. Read the fine print carefully (GPA to maintain scholarship, hidden fees, etc.).
The guidance counselor at her (private) school was not much help, in that the focus was all on “fit” (ie, where the kids wanted to go), and getting accepted. Apply for scholarships later! (eyeroll)
At our parent meeting with the counselor, my kid offered up her short list. It was a practical list, and she had removed some selective schools she didn’t think we could afford. The counselor said to her at the meeting, “Are you sure there aren’t any schools you’d regret not at least applying to?”
I wasn’t very happy with this turn of events, but also not surprised.
We are guilty of being vague about what we can afford. We cut a deal with kid #1 to pay for half of undergrad education at our state flagship. She is taking out the ~$5000 fed student loan, and working hard for the rest over the summer and during breaks. But kid #2 is getting $$$ offers kid #1 did not get.
If kid #2 went to a less selective school, we’d all save a bundle, and it’s very possible it might be a great fit for her. Big fish, small pond, grab those opportunities and graduate debt-free.
It will be a long wait for those financial packages to come out this spring. I’ve got our spreadsheet all set up, and I’m bleary-eyed trying to suss out the little details. Plane tickets! Hidden Fees! Rules to keep the money! Tuition rising!
What is 100% need met going to look like for us? Is that necessarily better or worst than this other school’s merit package? Do we want to send her to the least expensive good option, or sacrifice those year end bonuses and work harder to help her go to a more prestigious school? Would she thrive in a big fish small pond environment? Would she do better surrounded by high achievers?
I keep saying all will be revealed come spring. In the mean time, I don’t think there is anything terribly wrong with allowing her to dream about those schools that are within reach, although with sacrifice and hard work on all our parts. She will have to come up with her share of the cost too. A less expensive school will be less expensive for all of us. Come spring, she may very well surprise us and decide she’d like to save money too.
Lastly, husband and I are not in full agreement on what we are willing to fork out. I suspect that’s fairly common in households.
Good luck everyone.
Also, even though we knew in principle that schools who ask for the CSS Profile will make their own estimate of what your EFC should be, and it may differ substantially from the opinion of the federal government, it didn’t truly hit home until an acceptance and tentative financial aid offer from a CSS Profile school came in.
Without sharing too much detail, multiple things we’ve “done right” in terms of sound financial and retirement planning, counted heavily against us. The EFC this selective and currently popular school conveyed was a jaw-dropper. It was darn near full pay.
Families who have generated an EFC estimate using FAFSA parameters should know that it may differ wildly at a school that uses the CSS Profile, and probably not in the household’s favor.
Even for those schools who say they meet 100% of need, That can be so misleading. The devil is in the details and the fine print. THEY (the school) decide what that need is - and how much of it they’ll expect to be covered by loans and student employment.
That’s why in my opinion, it’s unfair to the student for counselors or others without a stake in the family’s finances to suggest applying to costly schools “just to see what you can get.”
@ohiovalley16 Exactly. I’m doing my best to estimate, but those numbers are just that. Estimates.
Seems like you were fortunate that even the lower paying job paid well enough to make you ineligible for college financial aid (i.e. still a top 2% or so income), so that, with any reasonable personal and household budgeting, you will be able to save enough to afford any college your kids go to. But most people do not end up with such well paid options.
Of course, this choice is different (and may be more difficult to make without second-guessing) when the levels of pay in question are lower than the top 2% range.
FWIW I top 3 to 4% all NPC I have worked with have shown me as full pay.