Parents Who Paid Up For Your Child’s Dream School - Did You End Up Regretting It?

Parents Forum
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Total agreement. If a super high income is important to folks, they are pretty limited in paths.

Fortunately, a sustainable income isn’t nearly as limited.

How much money one wants/needs in life is often variable, esp if any aspect of “loving life” vs “existing day to day and wondering what’s so great about life” is included.

IME those with the most toys aren’t usually at the top of the list with “loving life,” but neither are those who can’t put food on the table or fix the car when it needs unexpected repairs. With the number of hours one spends on the job, it’s very important to get something one enjoys (to me). If one opts to stay home and not work, it’s important that it’s enjoyable too.

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S22 took a financial literacy class this year that was one of the most useful classes he’s had in HS - they talked budgeting, credit cards (the good, the bad and the ugly), health & life insurance, the stock market and banking etc. I wish it was a required course because it really touched on a lot of topics many kids aren’t aware of. S22 was surprised to find that he’d need roommates to live in Boston after college (based on typical starting salaries/price of rent) or how expensive car ownership is once you factor in insurance & gas.

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I agree w/this advice. :+1:

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Our S was fairly savvy in banking, investing, and credit. He had a piggy bank when he was very young. In the 6th grade that money went into a bank account and we would talk about interest rates and how his money grew (very slightly). In high school the majority of the money went into a brokerage account into a broad index fund (he saw how his money grew much faster). As a junior in high school he bought a few individual stocks (and he learned he could loose money too!). Along the way we discussed how credit cards worked and he could use they for convenience (not credit).

I do think that it would have bee good if he had access to a class in HS were they put together a sample budget in a given local. He did not get this opportunity until he was considering accepting job offers in different cities/states. I helped him do this and it was eye opening (for him AND me). For him - he never really knew how much a car cost (or car insurance), how much rent was, utilities etc. For me it was eye opening at the cost of living in CA!!

I do think having such classes in HS should be standard.

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My D22 is visiting UMich Stamps School of Art & Design next week. We are OOS. I do think about the cost and pros and cons of being OOS and paying for an art degree but we are all in if UMich is her choice. Curious about the dual major part. Where have you heard about suggesting dual majoring?

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My nephew’s dream school was Duke. He got in and went, but did not care for it after all and transferred out. He ended up at Penn State and did very well there. I believe he studied mechanical engineering.

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The STAMPS website has the “dual degree” link right there on their front page. You’ll have to search a bit harder for joint/dual degrees for LSA or CoE.

Also, they mentioned dual degrees being popular with STAMPS enrollees during Admitted Student Day and Orientation. Makes total sense to me, if one is worried about finding work with “only” the art degree.

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Thank you. We are going to Campus Day this week and will be sure to check out dual degree options.

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You know, I never met my FIL but I will tell you a family story. My spouse is one of five children. Born late. By the time college came around there was money and it got spent on college. My spouse had a full scholarship to a local college but really wanted to go elsewhere, the dream school. My FIL paid for tuition and room and board for my spouse for all 4 years. It was a lot for him, he wasn’t a rich man and it wasn’t a cheap college. He also spent 3k on a computer in the 1970’s, a Tandy TX something that lives in our attic in memoriam.

That computer and college education spawned one child in the tech industry and two nephews who followed, six companies( across three students), hundreds of employees and a comfortable life for so far two generations and four families. Was it worth it? You betcha!! Every single penny.

CS didn’t even exist at this major U when my spouse went to college. He was in the first wave of graduates. His two nephews also went into CS. So it was not only a leap of faith for my FIL to buy that computer and send his kid to college but a leap to imagine that a new field could be something to build a life on.

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My daughter applied to very specific grad school programs that see 300+ applicants for a cohort size of 20 - 25. They typically choose students that had some post-college research/experience.

Who is to say, whether Ivy League reputation had played any role - but she has at least one acceptance thus far. A lot can happen in personal lives in a year or two - so her moving-on immediately, and me never having to wonder whether “it could have made a difference”, is worth it for me.

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https://www.cnn.com/2022/04/08/health/parenting-pressure-college-wellness/index.html

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Feels like this should be pinned in the Parents Forum. Thanks for sharing!

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A question for those who paid for the dream school over a big scholarship school, and offered the kids the money in other ways if the scholarship was chosen - did they ever regret it? Did they struggle with buying a car, saving for a house, etc and wish they had some of that money as a life starter instead of a college education? Post-college, are they struggling to do things their friends are maybe and wish they had a bit of a cushion instead of the specific college experience?

My son didn’t go into this with a dream school, but has come to greatly prefer one (Rose Hulman). That one is over the budget we originally gave him by $4-$5k per year. He could cover it with a loan. And, actually we could cover it if we wanted, but we aren’t sure what we want. He also has a NMF scholarship to Alabama. When we visited Alabama months ago, he said he could see himself going there and enjoying it. We’ve told him we’ll spend part of the money on him regardless - a car for an internship job, funding a Roth IRA while he works summers, help with a house, etc. Not writing a check, but just having options down the road. He’s still wanting Rose instead. Clearly they are very different places and experiences and I can see where he’s coming from in why he likes it. It’s tough.

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Our school used to have the same stats to UCs. Not this year. Berkeley isn’t a sure thing for anyone sadly. .

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I’ll answer your question from two POVs - one as the student with no debt after graduating, and one as the parent grappling with a similar issue.

Very long ago, I went to the college that I had a full-ride scholarship to. I was very thankful that I didn’t graduate with any debt, since my parents didn’t pay a dime for school (but I was bought a used car for HS graduation, which I used to move myself into my dorm by myself). It really allowed my decisions about my future to not be overshadowed with a debt cloud hanging over my head. I did end up taking out federal loans for grad school, and I was comfortable with that since I didn’t have undergrad loans to worry about. But I also always wondered if things would have been different if I’d gone with the other school, and that question stays with me to this day. I didn’t have a great experience at the college I went to, I guess that’s why I question it. It was too big, and in today’s parlance it was not “my people,” but back in those days that wasn’t really the prevailing mindset in terms of deciding where to go to school. Was it the right decision? I do think it was ultimately the right decision to go to school for free. But my parents couldn’t/wouldn’t pay for school, so I kind of feel it was the only realistic option available to me. I’m sure that experience now colors my approach to college decisions for my own child, I’m cognizant of that.

Fast forward to now, and what a parent on CC these days hears about is “fit” and finding the best one for their student. Out of our options, my kid clearly has a best fit school (based on admitted student day visits). Unfortunately, it will cost $260+K more than the 2nd choice school. That is fungible money that can go to help out in young adulthood, setting them up very nicely for decades to come. But these formative years during undergrad are only available now, there are no do-overs. I feel in our case that the best fit school will offer support and friendships that will be much harder to find in the 2nd choice school due to school size and “their people.” It’s not an all-or-nothing scenario, since I’m sure there will be some people who would become good friends even at the 2nd choice school. The final decision is still pending, but we are currently leaning toward the best fit school right now despite the increased cost, though TBH there is daily flip-flopping. It seems that gut feeling is winning out over the numbers for us at the moment. Emotions are irrational but remain embedded in memories even if you can reason your way to the most rational decision, and those memories are persistent.

A couple years back when I went to a financial presentation about paying for college, the advisor was vehemently against taking out loans greater than the expected first year salary upon graduation. He felt that up to that one year salary amount was a reasonable proposition, FWIW. I know some people want their kids to have some “skin in the game” and would elect for their kids to take out loans. I don’t think there’s a best approach that’s universal for everyone. Individual situations, strengths and weaknesses of the student, really preclude a single solitary best approach.

My kid spent time recently at the 2nd choice school to see what it would feel like, including going to a Physics 2 lecture for engineering majors. Strangely, the lecture was entirely review material from IB Physics HL my kid took last semester! I have to say, that did not inspire confidence in the program for my kid. There was no opportunity to compare apples to apples with the 1st choice school, but that school has a strong reputation for rigor, somewhat overly so.

Good luck to you in your family’s decision, I know it’s a tough one!

ETA: Just to add about the rigor part - my kid actually loves learning new things, and for the past 12 years has been largely surrounded by other kids who really don’t care about academics much. Being in a school with other kids who actually are into school/academics will be a huge change, and I fear our 2nd choice school would just be more of the same past 12 years.

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We have twins graduating this spring who did similarly well in HS. One took a full ride at a lower ranking university, the other went to a top public (albeit at instate rates so the difference wasn’t much more than $100K). We gave them equal amounts in their 529s to spend on college or keep for afterwards. I think their experiences have been different but equally satisfying and the locations have also been ideal (one loves city life, the other loves the outdoors).

It is probably fair to say that the classes at the lower ranking university are not as challenging (ie it’s easy to get an A). But there are lots of opportunities to do things with professors, and the top students are very much in demand and can do as much extra work as they want.

What is clear now is that the kids in the full ride cohort have a lot of flexibility in terms of what to do next, especially if they aren’t sure about what they want as a career. If they want to go and be a rafting guide they can. My kid can take an unpaid position in a dance company and use some 529 money for living expenses. OTOH another one won a Rhodes Scholarship.

In comparison the kids who have paid a lot for college seem to feel under more pressure to get a well paid job. That’s fine for the ones who have a clear idea of what career path they want to pursue. It’s a lot of pressure for the kids who don’t (even when they don’t have any debt).

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Doesn’t 529 savings need to be used for education?

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The earnings are taxable if not used for college. But since she won’t have any other substantial earnings and won’t be subject to kiddie tax next year, her tax rate should be very low (well under 10% of the amount withdrawn). Whether or not the penalty needs to be paid (since she received a scholarship while in college) is not entirely clear.

And we said you each get four years of support for college (529 plus allowance plus some money from grandparents). You’ve got enough to save any money from summer jobs in your Roth IRA and/or savings account for later. After that it’s up to you to figure things out financially.

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This is where I get confused.

The account is in the parent’s name. The student is just the benefactor.

So wouldn’t the tax on pulled out $$ be paid by the account owner - i.e. you?

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No the tax is paid by the recipient. Send the money to your kid, and if they are exempt from kiddie tax (provide more than half their own support or are no longer a student for some part of 5 months in the year) then they pay tax at their own lower rate (including taking advantage of the $12550 standard deduction).

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