We gave our kids a budget that we felt was affordable to us using a combination of savings specifically for each of them and current income, no loans. We framed it before applications as we can pay for tuition (kid lives at home and commutes) at the local state U, or room and board anywhere if you get a scholarship for tuition. Then we let them choose from their acceptances that met the budget. We also had college savings set up so that they can keep the leftover in their college accounts if they come in under budget. The older one finished a bachelors and masters in four years and a summer on a full tuition scholarship at a private. The second will graduate a year early from an LAC on a nearly full tuition scholarship. We did pay a bit more for her. costs go up year by year, and she worked very hard to find an affordable good fit option. It isn’t even but it’s fair… Both were very motivated by leftover money. One will probably save it, the other may use it for grad school. The third kid is applying this year and has the same budget.
If we had saved enough for four years full pay at an expensive private, we may have framed it differently, but this worked well for our particular situation.
Interesting thread. 2 kids 2 years apart. 2 529s. It will only cover partial for school. We made excel spreadsheets for colleges and costs etc. We talked with both since my daughters field will not yield the same as my engineering son’s will. She is a junior and all her loans schooling is paid off. We are just starting to reach into the 529 to help us pay for her tuition plus she got an increase of like $20,000 in merit due to transferring schools. My son is taking on small loans and will reevaluate where a we are with him yearly. He is aware he might take on loans since he will have the better ability to pay them back. He is fine with this. We have some extra savings in a “just in case” account also. He might do a 5th year and she wants to get a masters at some point. We have been upfront with both of them. They are appreciative of what we can do. I think being upfront from the high school college search days was key. They knew unless they got merit etc that they might not go to their number 1 school. My daughter didn’t and it ended up being a blessing in disguise.
My kids are several years apart, so the COA were different based on timing. The oldest got a good scholarship to a private school, the middle chose an in-state public and the youngest an OOS public, which was not that different in cost to our in-state (not an inexpensive in-state). Our deal was that the one that went in-state did not have to take any federal loans, but after that we paid any remaining difference. If there is a good reason to not go to the in-state, which it sounds like there is, I would not penalize the OOS student by more than the loan amount. To me, the 529 (or other savings) money is for under-graduate education and should be spent that way to give each kid the best opportunity for their major and that is affordable and I would not worry about the difference in cost.
Some families see it differently and may tell a kid that if they go in-state the additional 529 money could be used for grad school. If that is the case, you would need to honor that. However, our attitude has always been that (with the exception of small loans), we would pay for undergrad but they are responsible for grad school. I also believe money saved for college is family money and does not belong to the kids. YMMV.