Yeah, that might make it difficult in some places.
But it seems the most vocal and numerous complaints are directed at schools priced at more than $50K.
On the lower price point you mention, it seems the best option would probably be community college. I’ve heard some states have expensive CC prices and fewer locations than optimal. I would hate to live in a state like that. In NC there is basically a CC for every county, though some are more complete than others. The vast majority have in-state tuition of approx $2500 or less. And most have arrangements that allow graduates to easily transfer to 4-year public universities to complete a Bachelor’s Degree. Pell Grant qualifying families in NC could use the CC route to earn a bachelor’s degree for less than $5K total out of pocket for tuition, if they lived at home and commuted.
Even for middle-class families there are affordable commuting options. In-state tuition at ECU is about $7K including required fees; AppState is about $5500; Western Carolina is $4200 - approx $1100 can be deducted from those prices if the student has their own health insurance. That should be affordable for just about any middle-class family.
If you live in NC. My husband attended Rutgers for under $20,000, with R/B. My daughter got the same thing for over $120,000. Most kids who opt for community college go to the one in the next county, I believe ours is pretty bad. It does cost over $10,000 a year.
Actually, you could, at least for most of each month. While this may not be practical for everyone, a retiree could charge their monthly expenses to a credit card and then request a withdrawal once a month from a retirement account to a regular bank account to immediately pay the credit card bill using an online bill pay app. The money could move in and out of the bank account within a day or two. As long as FAFSA/Profile aren’t completed while the money is in the bank account waiting to be sent to the credit card company, there are no assets from a qualified retirement account to be reported on financial aid forms.
Correct me if I’m wrong, isn’t all the talk of forgiving student loan debt just the Federal loans? That’s a max of $27k. If parents are co-signing loans outside of that, I don’t think that’s on the table for forgiveness, is it?
Homer, the financial aid system is not set up to give special dispensation to a family which has maxed out on their retirement contributions, maxed out on their 529 contributions AND has managed to save a considerable amount outside of these tax advantaged programs. You can lobby Congress if you want- but I’d be pretty shocked if the “we’ve maxed out on our IRA/Roth/401K and don’t want to use our “other” savings to pay for college” crowd represents a terribly sympathetic special interest group.
Like any other “system”, financial aid has evolved to cover the maximum number of beneficiaries with the least amount of pain, costs, time, etc. If colleges had to retain forensic accountants to determine “level of need” among the affluent (family A has maxed out, extra money is in a money market account. Family B has maxed out, but their money is in a Picasso lithograph and an antique Cartier diamond bracelet) they’d never have time to process applications and conduct the work of auditing what they can audit (i.e. that the student who got approved for financial aid actually shows up and is enrolled in the minimum number of credits they need).
I understand your point but I’m not sure I understand your pain- that your spare cash is going to be used for college, and not for your retirement? Is that the point? assets are STILL not assessed at 100% BTW, so they aren’t coming to confiscate your entire savings.
That’s what I thought. That’s why I’m surprised to see so much mention at that here - to me, $5500 - $7500 being forgiven isn’t enough to change our budget when looking for a college.
Don’t get me wrong - I would sure love it! S17 only has the federally subsidized loans, so it would be great. But I certainly wouldn’t have let him go to a $75k/year private school instead of a states school because of it.
I don’t agree that one “has to” save outside of retirement accounts for retirement.
In 2021, the general maximum elective deferral to qualified retirement plans is $19,500. Add a possible catch-up contribution of up to $6,500, and then add any available employer match to all of that. The 2021 traditional and Roth IRA contribution limits are $6,000, with a possible $1,000 catch-up contribution, and even a non-working spouse may be eligible to contribute this much each year to their own IRA. A dedicated saver who starts saving for retirement early in his/her working life using qualified retirement accounts, with the amount saved each year increasing as high as the contribution limits allow as wages increase and with the money invested in low-cost indexed funds over the course of decades, can easily end up with a higher annual income in retirement than was earned in gross wages during the working years. And this doesn’t even include Social Security income, which obviously adds to retirement income but falls outside the same category as qualified retirement accounts. Yes, it takes discipline, especially early in a working career, but the effects of compounded returns can be amazing.
Yes. I just think Rice’s offer of big FA for families with high incomes might be a bit disingenuous because I’m not sure how many families are making over $200k and have only what they deem “typical savings”.
This is all very interesting to me but given the demographics of where a family lives to reflect cost-of-living, this conversation can go in many directions. Also, we are talking about our own savings but grandparents paying for school hasn’t been mentioned (and often not reported). I have plenty of friends who apply for financial aid, all the while the in-laws are funding the bill. It’s a matter of luck and planning to have financial resources. My point it - it is sooo different for each family.
And my random question, is the tuition bill to be paid all upfront at the time of registration for college or ?? And same question goes for boarding school, monthly or annual?
Do you mean paying the private loans and letting the federal loans ride? That’s what mine are doing (although not a private loan; one is a Perkins loan that is not frozen and not up for forgiveness).
We have been paying tuition for each semester right before the beginning of each semester, one semester at a time.
At first we were getting one bill for tuition, fees, room and board, minus merit scholarship. After our daughter moved off campus the “room and board” part just disappeared from the bill.
There will be additional expenses for things like books. One university said that a laptop was required and specified which laptops they recommended (eg, the on campus people knew how to fix them and had loaners). A laptop is probably a good idea regardless. A cell phone is a very good idea if you ever want to hear from your child.