Paying sticker price, anyone?

Paying for College
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Base on AGI? I went to college with kids from multi-generational wealth. Their parents were teachers and pastors and artists and poets. My parents were ALSO teachers, so imagine my surprise when visited their homes! It’s easy to “get by” on a teacher’s salary when you summer at the family compound in Maine, live in a multi-million dollar home which is owned and paid for by grandpa, and shuttle between the family’s properties in exclusive places during school vacations.

I cannot imagine a system which is more unfair- wealthy people have a standard of living which is NOT represented by their AGI!

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That is a good point. I guess I don’t know people like that though I’d love for my kids to be those people. Ok, feel like I need to edit or delete posts above. I usually don’t like feeling stupid, but this thread is really informative.

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This thread has been informative and I think it’s tough because most of us are coming at the issues of financing colleges through the lens our own situation as well as our friends and family…those are the facts we are familiar with. It’s also difficult because most of us know very little to nothing about how schools calculate financial aid so it’s an unpleasant surprise to find out it’s not what we thought or expected.

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It is true that financial aid can vary based on how much a school wants a particular student. This is part of enrollment management. However, aid that is based on need will generally not increase for that reason - it’s usually non-need based aid that increases (even if it’s called a grant, it would most likely come from the non-restricted pot of money). I won’t say that no school increases need based aid because they want the student - but most will not. That is why looking for a school that offers merit is often suggested by people on CC.

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Ok. Just looking for some advice from the group.

My son’s 3 top schools he got into are PSU, FSU and UF. All three OOS.
PSU-approx. 50k
UF- approx 43k
FSU- Son got in state waiver- 20. We can afford all three, but I can’t get my head around paying 100k more for a degree at PSU or UF vs. FSU. I offered my son that $$ for MBA program or to use as a down payment on a house in the future…

What are your thoughts???

Thanks!

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If he likes all three schools equally, or at least close, then choose FSU. Some people don’t like FSU, some don’t like UF. My mother thought she’d been kidnapped and driven to hell when she was taken to a PSU Saturday football game as it took about 3 million hours to drive there, watch the game, and drive home. My nephew was a Florida kid who was accepted to UF honors but didn’t even apply to FSU - it was kind of a thing from his high school that they ‘hated’ FSU but were okay with the other big schools, including UCF and USF. My kids when to a Florida high school where the number who went to FSU, UF and UCF were about the same, and FSU was about 3 hours away while the other two were about 1.5 hour away.

My kids would be chanting “Go 'Noles” if those were the choices.

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Great points. Thanks!

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@jack08501 i can only compare UF and FSU. First what is your major? If you are planning on business I would recommend FSU over UF. UF’s business school has a ton of online courses and this was pre Covid. If you want anything medical or vet school then UF is the better choice.

UF is slightly less of a party school.

UF tends to attract kids from Miami/Ft.Laud/PalmBeach/ Orlando/Tampa/Jacksonville FSU has a more diverse student body.

FSU is in the Capital so there is a little bit more going on in Tally than in Gainesville (a little bit)

FSU has a much nicer campus. UF has a better football team and is in the SEC.

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Is this definitely true?

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That’s really interesting!

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Yes, colleges do try to entice particular students to attend. These might not be the highest stat students overall but may be ones that fill a specific need for the college.

If they have a plethora of high stat students applying to CS and Engineering they may offer merit to other majors to entice particular students they feel would prove to be assets in the History, Journalism or Linguistics majors for example.

In the end I assume most colleges want a well rounded student body and they want top candidates across all majors. Offering merit is one way they can compete for those students. It’s probably why you’ll see certain schools offering great merit while others might not give any to a particular student. The one’s giving merit are rewarding students but they’re also, in many cases, vying for them to come to their particular college.

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@Yankeefan20 : It is not as true for public schools as it is for private schools. Public schools have policies for aid that are pretty much set in stone. Sometimes departments might have small scholarships to help a student they really want. However, when I worked in financial aid at a public school, the effect of a department scholarship was that it would reduce a need based grant (if there was one) due to awarding policies. I would say that a private school is more apt to increase aid for a student they want, but it’s not true across the board that a private school will do that. You can always ask, just don’t expect.

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Thank you for the comments. My son is going business. Was unaware that UF had a bunch of virtual classes pre-Covid.

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@yankeefan20 – That confusion is why it’s helpful to distinguish between need based aid and merit based aid, rather than combine both into the category of “aid” or “financial aid.”

A single school’s need based aid should be consistent among identically situated students – same size family, income, assets etc. However, a school may also use merit based aid to attract students with specific attributes the school wants/needs. So, while those two identically-situated students may get a similar need-based award, one of those students may also get merit award because they bring something the school needs. For the student getting both financial aid and merit award, the merit award is often a “grant” which replaces a student loan or work study obligation, meaning the student borrows less or doesn’t have to work during the school year.

Some schools don’t give merit awards at all, only need based aid. Those schools would include the Ivy League schools as well as many of the NESCAC schools (though Trinity and Conn Coll do give merit awards). So if someone says they know a student who got a “full ride to Princeton” for example, that means the student is very low income – not that the student was given merit. Other schools do give merit awards and use it to attract students who might otherwise go elsewhere. It is important to understand the policies of schools you are applying to in order to plan financially.

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idk if this is the right place to ask this, but do you guys think need blind will really be need blind this year? I was thinking about it and I assume that with COVID, colleges, private or public, will want as much money as they can get and will look more favorably to full pay students compared to previous years or will they keep up need blind practices.

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This is a pure guess, but I think so. Most of the need blind colleges are well endowed. Most of their FA money comes from the endowment. Despite the pandemic, most endowments have actually done well (along with the stock market).

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Great question. Our approach as a family has been, if the school is an elite school that is very likely to return on investment in spades (think Ivy League, elite California, Carnegie Mellon, etc) we would consider full price. Also a requirement: major. If the child is going for law, medicine, engineering, and other fields that pay well, it’s an easier call. If they are looking at humanities, or want to be an elementary school teacher, where it may be very difficult to handle those loans, we would make a push against it. While financial companies are falling all over themselves to make offers to kids from MIT, Yale and Stanford, public schools and struggling industries are not.

Ironically, neither of my first two kids applied to any of these schools, they both felt that it would be full of snobs, rich kids, and everyone there would be obsessed with being competitive. In short, even though my kids were high honors / AP kids, they didn’t want to be surrounded by super high achievers. They preferred looking at the next tier down that had a mixture of kids, ranging from amazing students looking to save money, to modest kids who showed something to get into the school.

In a nutshell, as non-wealthy people that the FAFSA considers uber wealthy (partially because cost of living and income in our state is high and salary is a big factor on FAFSA), our offers looked like this:

Very good private school (think RPI, WPI): about 30-35K in merit, so left with 35-40 per year to pay

Very good state school (think Purdue, Michigan, Virginia Tech etc): No merit, or a small amount, leaving about 40K per year to pay

Good state school (think UDel, Miami Ohio, UMass, UVM etc): Larger offers, and they varied. For example, Miami Ohio offer is very large, UMass 12K merit, UVM zero merit, and so forth)

So in the end we will be paying something like 30-40K per year per kid, about half of which will be on them as loans.

To each their own of course!

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I would say it depends on the level of school. Elite schools have more to lose by harming their reputations than anything else. Money is no factor for a school like Yale or Stanford. They could run for 100 years on their current endowments (I may be overexaggerating here). It would hurt them more to take in lesser students to lower their profile than it would to have a smaller class for 2 years.

On the flip side, state schools are all struggling depending on their state’s approach, and they all vary. Some state schools are fine, others are in a real bind. More kids are applying to in state than ever right now as well, so this may offset that.

It’s really the mid-level private schools that are going to be hurting the most, and schools that are weaker that were already on the brink. The brink schools are in a real catch 22, they are finishing themselves off almost either way. The medium private schools will have to choose between lowering their standards, or retaining them at the cost of fewer enrolled.

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My father only invests in stocks that pay at least 10% in dividends a year. Here’s his formula for choosing. Invest in at least 10 different stocks in 5 different industries, food, energy, tech, etc. The stocks had to increase their dividends each year in the past 10 years. He retired a millionaire at 60 even though he never earned more than $45,000 a year. My mother worked part time off and on and lower wage jobs. They had a budget and stuck to it. I wish I had followed his advice when I was younger. I’m playing catch up now.

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Since a student aiming for law or medicine would be a pre-law or pre-med student as an undergraduate, with the possibility of $400k or so costs for professional school (if they get admitted to medical school or a high-enough-ranking law school that is worth attending), it would appear that spending a lot on undergraduate would leave less money for the professional school costs.

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