Paying sticker price, anyone?

Paying for College
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For sure, and since no one in my family has attended Harvard Law or Stanford Medicine, its hard for me to know for sure … but my instinct tells me that within a handful of years their compensation could wipe the debt out easily. I’m sure there is some risk there. From what I have read, you are looking at a starting salary in cities of 200K for this sort of master degree, increasing to half million over 5-8 years.

Obviously if you could attend a much cheaper 4 year school and still get a law degree from Harvard then more power to you.

As a side story, I have an inlaw that went to Yale out of HS, on a full ride. Started down the Yale medicine track, graduated with a 4 year degree in biology. Decided that medicine was not for him, and so got a masters in computer science instead from NYU. Point here being that not all kids who go to an ivy stick with their original path or succeed in that route, so there is risk. But the upside of going to one of these schools, leveraging their insane networks (amazing jobs opportunities), is pretty amazing.

Using my in law as an example, he actually spent a decade after NYU doing nothing serious, part time jobs, strange take a chance type jobs, and so forth. Not much on the resume that would impress someone. To this day, however, now in his early 50’s, he still gets calls right away (as well as offers) based solely on the Yale degree on his resume.

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The top 3 law schools – Yale, Harvard and Stanford – don’t give merit awards so for most students, they will be borrowing the full cost of law school because most financial aid is loans, not grants. Other law schools, including Chicago and Columbia at #4, do give merit based awards. The opportunities coming out of Harvard vs. Chicago or NYU (#6) are pretty similar in terms of “big law” – law firms which pay the most (currently about $190 for an entering student). A student admitted with merit to NYU and with all loans at Harvard should be thinking long and hard about whether to reduce their loan burden, take the NYU offer, and have the same career opportunities. There are some differences in outcomes along the margins but if the goal is “big law,” there are not significant differences.

Another word of advice to parents of kids considering law school – gpa and lsat matter more than anything. A 3.9 from IU is much better than a 3.5 from Princeton. If a student is very likely to attend professional school and have to borrow $400k+ to do so, better to save the money as an undergrad.

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@HankCT We were similar. S was gunning for finance and chose a top school school (private full pay - we could). Even though we could cover it, we had him take out the 27k over four years to have skin in the game. He and we both decided it made sense since he loved the school, has a great program with stellar outcomes. D is a performing artist. She also was accepted to great programs but some ridiculously expensive like NYU (80k/yr). We told her based upon the realistic outcome of being a starving actor, would be far better to have no debt, not have to worry about additional living expenses over the summer while doing Summer Stock ,etc so we opted for a fine program but a far more reasonable price tag. So we have one of each.

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Remember that the path to MD/DO is a long one:

  • 4 years undergraduate
  • 4 years medical school ($400k or so)
  • 3-7 years residency ($50-60k pay – probably will not significantly pay down medical school debt)
  • medical practice ($170k pay for common specialties)

Being able to start medical practice with less debt will give the physician more choices, instead of being pressured by debt to chase the money at every decision point.

For law, Discover law schools | Law School Transparency has post-graduation reports by law school.

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If schools cost $120-160k for 4 years and you pay half that leaves $15k-20k/year ($60k-80k total) for your children to borrow. The federal student loan is only ~$5500/year ($27k total). Are you cosigning for the other $30k-50k per child?

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Agreed! Depending on the specialty, it can take years to ramp up your salary as a doctor (and a lawyer). Plus, some students find themselves having to get additional masters’ degrees while waiting to get into a decent med school, accumulating additional student debt.

My daughter’s best friend and her husband each have loans from undergrad (they went to a public university), law school (her), masters’ programs (him - x2) and now medical school at Georgetown (he’s a 1st year). They are both 25 years old. I break out into a sweat when I think about how long they will have to work to pay off those loans.

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Yeah, we’re looking at paying about 20-25k per year out of pocket, loans for the rest.

So if net cost is 30 per year, kid would borrow 27 federal, another 20 co sign with us, and we’d pay remainder.

If 40k the co sign amount goes up of course

We’ve negotiated further on many of the schools and have lower offers, but we now essentially have two tiers of schools to choose from:

~40k net cost per year:
RPI, WPI, RIT, Purdue, Virginia Tech

Better offers, school “pedigree” a notch down:
Michigan State (27k)
Miami OH (31)
Utah (waiting on merit amount)
Champlain (28k)

So your basically paying an extra 7-12k for a better piece of paper. Hard to actually know if it would make a difference without a crystal ball

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This is a very personal decision. There is no right vs. wrong. Totally dependent on your situation. No one should be arguing that a kid WILL do better from school A or anyone can do great from school B. Typically it comes down to the kid.

That said, the cost is the cost. For some it represents a huge number and would greatly effect their retirement / way of life. For others it is manageable. And for others it doesn’t matter at all.

There are those that will say, who cares, it’s about value? Free is free. They define value differently than others. What’s important to one may be unimportant to another - the definition of value. Some people by $100k cars and million dollar homes. Others, even with similar means may find that wasteful and unnecessary.

All totally individual thinking.

(full disclosure - we chose private full pay vs. essentially free in state flagship / honors college etc at a highly ranked school. Just didn’t like it and we could make other choices without fundamentally altering our life or retirement. That was what was important to us. Others will make a different decision based on what they value.)

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Mostly I agree with you @rickle1 - It is a very individual choice. With our oldest, she turned down what some felt were “better” schools for one that she felt was a better fit, and a little more affordable. In the end, the more affordable was 5K and didn’t have a huge impact, but she just liked the school better.

With our senior in HS, she is extremely focused on the MAJOR and program each school has, so she may end up choosing a school ranked 105th in the nation by US News over several top 50 schools she was admitted to, for the program.

Some people are very cognizant of the prestige, I call it the sweatshirt value (they want to rock that premier college sweatshirt), others more focused on the loans.

Where I disagree is that for some people, a decision is not really needed. Those with enough wealth to pay full price without altering their retirement plans or finances in any meaningful way, sort of get to have their cake and eat it too. And while I would like to say this is entirely fair because those people have earned it, we know quite a few families who really just inherited family money (in some cases the grandparents are paying for all of the kids college at any school they so desire). For these families we know, they are only applying to the most expensive, elite private schools, and they will pick one for ED since they don’t care about what the merit is, if any. We couldn’t pick an ED school due to the risk of the merit not meeting our budget. As a 100% self made family (our parents were broke, no college degree), we do feel good about the fact that we can afford a large chunk to pay for a good school, but not so much that we could just pay full price at any school, so we had to play the offers game (and are still doing so), unless we wanted to start taking money from our own retirement.

So while it is for sure 100% situational, it is by no means merit based or warranted in many cases. I know you weren’t trying to convey otherwise in your very valid reply, just wanted to point that out. Not all who can pay full private actually “earned” the ability to do so.

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Full-pay families get the same product/service as everyone else, but at a much, much higher price tag. It doesn’t always feel like eating cake…if that makes sense. There is a level of frustration that comes along with it, too.

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But they get a product that isn’t available to most people

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I hear you, but I am not sure which way you mean it.

For example, my daughter could have potentially gotten into Brown, Cornell, Carnegie Mellon, based on her stats and digital art portfolio. But we did not apply, because our EFC was too high and we likely would have gotten no merit. And we cannot justify spending 70-80K per year for the name. We instead applied to schools where the net price would be under 40K (ideally under 30).

There are families who aren’t even worried about it. They have the full amount already set aside in 529s, or they have inheritance, or grandparents who are paying some or all of it. Or they just have made a lot of money can can afford it without much trouble. I think we can both agree that 10K to a family on the brink of financial strain can hurt a lot more than 70K per year to a family who has the aforementioned. This is what I meant by having cake and being able to eat it. You can simply pick which school seems the best, or best fit. Money is secondary.

Now, are there families who can afford 70K, but just barely? Sure, and those families will probably feel it, as it will actually have an affect on them.

As an example, we get no financial aid really, and only merit. As self-made first generation college graduates, it is frustrating for me to see other kids who have parents who were not as successful get virtual free rides through grants due to a low EFC. I also know a number of entrepeneurs/small business owners who are adept at “hiding” income through write offs and such, so while they make as much as I do, and live a similar life, they get the near-free college while we take it on the chin.

In a nutshell, all of this leads and points to what is really wrong with the education system in this country. College, which has become the key gateway to a career in this country, is a very different reality for every family. In many other more intelligent and forward thinking countries, this entire discussion is moot, as kids have more access to less polarized education quality, and all have a shot at a college career through merit and achievement, instead of passed down and accumulated family wealth (as we see in America).

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Hank, you surely can’t begrudge the folks who have made sacrifices throughout their adulthood to have the money “set aside” in a 529! That money doesn’t fall from the sky.

I stayed in the labor force after the birth of each of my kids. Took a two week maternity leave after one was born (company had no paid leave policy, I had my own college loans to pay). I spent my kids elementary school years being patronized by the “full time mom’s” (as if I were phoning it in!) and having to use vacation time to show up at recitals, performances, and to chaperone class trips.

I am not complaining. I am an adult and that was a choice I made. But it also meant being able to max out on contributions to the 529’s since we essentially lived on one income, and paid off our educational loans and saved for our kids education with the other.

Yes- I was lucky. But I also had my nose to the grindstone, accepted every promotion even when it meant more hours, more stress, more balancing, and baking brownies for the kids bake sale at 2 am. The “full time mom’s” would show up at school events in their tennis or workout clothes (a nice signifier- “we can afford to have me at home”.) A lot of them had significant sticker shock when they tried to resume their careers when the kids started HS to “help pay for college”. The working world is not that supportive of a 12 or 15 year maternity leave.

Really not fair to then criticize those folks with the 529’s. The money accumulated paycheck by paycheck, the old fashioned way. Good health- yes, luck. On my original marriage (divorce is such a wealth destroyer)- yes, good luck. Solid career-- with a lot of sacrifices, but yes- good luck.

But hardly having my cake and eating it too. Just experiencing adulthood having my own career choices dictated by my college loans- and NOT wanting that for my own kids.

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it makes you upset seeing kids get full rides because their parents don’t have much money? that is absolutely ridiculous

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But isn’t that the nicest gift grandparents can give? My kids went to school with 3 boys (twins and then a cousin) and the grandparents paid for ALL their tuition and costs, from PreK thru college. The parents weren’t wealthy at all and really appreciated it. The kids appreciated it. Yes, some chose expensive schools but that’s where they wanted to go. Some chose pretty inexpensive schools because that’s the school that fit him best. These grandparents are very wealthy, so to them it was no big deal if two went to Notre Dame (they did, as did the mom of one) and one picked a much less expensive OOS flagship (and lasted one semester).

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I don’t think allowing each of your children to borrow $60k-80k for their college educations is necessarily the answer.

In our state 4 years at the public university is ~$80k. Doing 2 years at a cc first brings the cost down to ~$50k. If students commute all 4 years it’s closer to ~$30k. They still get the University degree at the end. Does your state have anything like that?

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I have friends who have kids similar ages to mine. For most of the time our kids were younger, they made more than me but I saved a lot more, and we lived well within my budget. They seemed to spend it all, took several vacations per year (always to NYC for Thanksgiving and Passover), their kids had some private lessons I couldn’t have afforded, and they had a nanny while mine went to daycare. They aren’t wealthy, but didn’t have the same worries I had about paying the day to day bills.

They knew they’d inherit a lot of money from both sides. The grandfather on one side died last year and there was a house on Long Island and some accounts. The grandparents on the other side sold a house in the Hamptons and have 3 bedroom on Park Avenue. My friends know that even if they borrow for college they can recoup that before retirement. We just have different needs for paying for college, for how we live our current lives.

And you know what? It doesn’t matter. Our kids all went to the schools that fit them the best and each family did the finances that work best for that family.

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Got accepted to Columbia ED. I was so suprised when I saw they weren’t offering me any aid…My dads retired and my mom is a elementary school teacher. I considered trying to get more aid but wasn’t sure if I could. I mean, I assume our lack of aid is because of assets, but I don’t know the value of assets we have

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I suggest you research how education systems work in those countries. It’s not the nirvana you imagine. And your children are free to attend those schools as well.

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And that’s a lot of people, but not all. My sister left a good career to stay home with her children. Her husband built a lucrative business they had them set for life, they are the folks who’s money is there to make money. He sold and had to settle with a million dollar a year salary contact (ended up getting terminated after a few years, some people can’t work for others). They really live a nice life with no sacrifices, their kids can go to college anywhere they want. They’ve divorced, but my sister will never have to work if she doesn’t want to.