<p>I agree with Taxguy, Im very practical, maybe being a CPA has influenced my decisions. My s was given $100,000 scholarship toward his first choice and with other award totalling $50,000 it made it manageable with NO DEBTS. He is now completing his second year. Has it been worth it?? From what I see so far, its a great education, but that is spoon feed him, he would have received a great education from our public university as well. Without the scholarships not worth the money. It is more important to graduate debt free. I know my s doesnt see it yet…</p>
<p>MD Mom notes, “–what I would like to see is how many kids would go for the big name school if they were told that if they took the scholarship mom and dad would write them a check for $200K (or the difference) upon graduation”</p>
<p>Response: I would be surprised if the majority of kids that were offered this took the money. Frankly, at age 18, most kids are financially stupid. In fact, most adults are bording on financial idiocy according to many public studies. Kids think that they are invulnerable and will live and thrive forever. They don’t understand what an extra 100K or 200K siting in their bank account would mean for their lives.</p>
<p>Soozievt notes,“taxguy, you are assuming that if the parents didn’t pay for these private colleges, that they would offer their kids the money instead post graduation”</p>
<p>Resonse: Actually, I was assuming that the parent would invest the money and put it away for either their own retirement or for the benefit of their children in later years such as for a home etc. </p>
<p>MarinaOne, I completelly agree with you. A few years ago, I would have lambasted all middle class parents who chose to sacrifice their lives and retirement to send their kid to some private school because of the cache of that named school. Today, with states cutting back on course offerings, faculty salaries, and much more, the benefits of state schools become more problematic, although even private schools are facing cutbacks.</p>
<p>^^why do anything then for your kid? how about a $300 prom dress, that could be $12,000 after 25 years in the market. after all clothing is clothing, she can wear something she has to the prom. You’re stupid to invest $300 in your daughters momentary experience. Or, why pay for any type of college, there are numerous examples of successful happy people who didn’t attend college.</p>
<p>people focused only on money and outcome miss life. If you’re constantly investing for the future you miss out on most of the richness of life itself. I, as I bet you are, am a big fan of Warren Buffet’s investing philosophy, but I don’t want to live like him. Locked away in his upstairs office reading annual reports 18 hours a day. I’ve made a lot of money from 3 investments over 20 years, just like warren advised me to do, but I’m happy to spend it as well. Warren’s flaw is he doesn’t know how to live! And by all accounts, including his own, he was a lousy parent.</p>
<p>the difference between public and private schools is that the private is better, on all counts, from class room size to the quality of professors, to facilities, to the IQ of the students. And even the master of investing says himself there’s only two things that are worth investing in because they appreciate in value, well run companies and your education. That’s why he opted to work his way through Columbia instead of go to Nebraska state college. </p>
<p>taxguy, college is a “rich” experience at private universities!</p>
<p>There’s this quote from Erasmus that’s pretty well-known (I’ve seen it on T-shirts) which goes something like this–“When I get a little money, I buy books, and if any is left, I buy food and clothes”.</p>
<p>I don’t necessarily advocate the above philosophy, although I can certainly see the temptation.</p>
<p>There’s a big difference in being able to pay for, go into substantial debt for, and go into somewhat reasonable debt for that ‘dream school’. </p>
<p>I’m sure that some would say that even if you could afford the 200K for the 4 years, it would be silly to do so. I wouldn’t be one of those people. I think it would be worth every penny. I would rather have spent that money for that kind of education that be able to pay for a house for my kid. </p>
<p>However, I’m not sure I would advocate going into 200K debt for that dream school, either. </p>
<p>Here’s an anecdote from my experience. I teach at a non-flagship state school. I know you can get a great education here, and in fact, many of my colleagues did graduate from one of those expensive private schools. However, there is a distinct difference in the attitudes of students.</p>
<p>One year, I decided to teach a ‘freshman seminar’ course and made it very interdisciplinary. There were maybe 10 of these courses offered, some of which were not so interdisciplinary. Many students thought my course would be a cool course to take. However, only 3 students signed up for it and it had to be cancelled. None of them would take it because it didn’t seem to ‘fit their major’. These students wanted the typical Bio 100, Psych 100, Poly Sci 100, etc., for a variety of reasons. </p>
<p>Yesterday, my S just got a course catalogue from his expensive private school. They have a whole set of interdisciplinary courses for first and second year students And they are all ‘off the beat’ type courses that are very interdisciplinary (courses about haiku, code breaking, one course that explores the hand from sculpture to reconstructive surgery etc.)–many more offerings and more diverse offerings that my school could probably sustain.</p>
<p>It’s hard for a bright, curious kid (and his academic parent) not to be attracted to the latter course catalogue.</p>
<p>This is an older thread that I thought should be resurrected. People need to learn from it.</p>
<p>taxguy, it is an interesting discussion but I don’t agree that people need to learn from it. You have your view and your values. Some of us prefer the priority of using our money, and are willing to pay it out over time, to fund education. Yes, it may be a hardship. Yes, we could have funded something else. But we are happy and willing to put our resources into education. It is fine by me that others don’t wish to do that. But it should be OK with you that some of us do. I don’t feel I have to LEARN that this is some unwise choice. I am very comfortable and happy about my choice to pay for my kids to attend any college and grad school, even if it is not easy to pay for. Everyone has different values. Please respect that. Your way is not the RIGHT way. It is just ONE way.</p>
<p>Soozievt, let me make this clear: I have no illusion or even desire for everyone to adopt my philosophy in this. I certainly respect everyone’s decision! However, I do think that the economic consequences of incurring a large student loan debt or even of spending 50+ K per year in tuition should be part of the decision. If after considering the financial impact of such high expenditures, a family decides that they can afford and sh ould afford the more expensive alternative, so be it. Again, I am NOT espousing that all educational decisions should automatically be economic. Just that the economics of that decision be considered.</p>
<p>Taxguy, but at the same time, you have also talked about instead of paying for the more expensive education, a parent should save that money and give it to the kid for things like buying a home. You mention someone spent a lot of money on a bar mitzvah when they could have given that money to the young adult to buy a home instead. These are value judgments. </p>
<p>In my case, it is not either/or. I don’t have a lump sum of money sitting here for the kids. I am willing to take out loans to fund their undergraduate and graduate educations. I am not willing to take out loans to support them as adults. We want to give our kids a great education to set them up and they can take it from there. While we did not give our kids bat mitzvahs, I don’t begrudge people who wish to spend money celebrating that milestone. </p>
<p>Some people choose to spend money on expensive homes. Some buy expensive vacations. Some buy a yacht. Some spend a lot on weddings. Some spend a lot on education. We each value different things. One choice is not wiser than the next.</p>
<p>Another point that has been made time and again is that while one can get a cheaper education (and it can be a good education for sure), some are willing to pay more to get a better fit of certain opportunities that would be different in a cheaper setting. There are things my kids got to do at their respective colleges that they could not have done at certain other, cheaper colleges, even if they could have gotten a nice education at a cheaper college.</p>
<p>Soozievt, "Taxguy, but at the same time, you have also talked about instead of paying for the more expensive education, a parent should save that money and give it to the kid for things like buying a home. You mention someone spent a lot of money on a bar mitzvah when they could have given that money to the young adult to buy a home instead. These are value judgments. "</p>
<p>Response; Yes, you are right. I do have a personal philosophy. However, I also don’t expect everyone to adopt my economic philosophy. I only want it considered when making a decision as college costs and planning affects the whole family.</p>
<p>I will say, Soozievt, that I have seen some sobering statistics. 22% of all people who retire, live in poverty of which 72% are woman! Many years ago a study was conducted that found that only 4% of people who reach age 65 can retire with the same standard of living that they had before retirement. The rest had to either keep working, live on charity from their kids or substantially reduce their standard of living. In fact, there was an article in a Miami paper noting that some older retirees are living on dog and cat food in order to cut their expenses!</p>
<p>Even more sobering was a statistic that ( if I remember correctly) over 60% of those reaching age 50 had a net worth of under $60,000. </p>
<p>Yes, people have the right to make choices. They can spend $200,000 or more for an expensive private education. They can buy yachts. They can spend a LOT on weddings and on expensive seminars, take out loans to support their kids “dream school” aspirations etc. Yes, that is their choice. However, my goal is to simply have them understand the economic conseqences of their actions and what it may cost them. If understanding all this, they decide to buy a yacht, gamble in Las Vegas, borrow 100K++ for undergraduate studies, so be it. However, I just want folks to consider these consequences in making decisions! I certainly understand the need for “fitness” of the college to the student,which also needs to be factored into the equation.</p>
<p>On a final note, I have rarely even seen anyone happy having a lot of college debt. Almost everyone that I have met or read about regrets incurring significant indebtedness for college. This applies mainly to younger people. Parent’s don’t normally regret taking on debt for their kids until they get older and retirement start becoming more immediate. Many folks then wonder, “where did all the money go?”</p>
<p>Bottom line: I don’t think that I am saying anything unaccecptable or asking for something unreasonable when I emphasize that folks should at least both understand and consider the economic consequences of their investment decisions in additon to considering the “fit” of the college for the student’s needs,which is what this thread attempts to accomplish. This is why I believe that this thread should be made into a permenant thread as a counterpoint to your philosophy and that of a number of parents to wit: “education trumps almost anything else regardless of costs.”</p>
<p>Paying 57K (if only it were 50K) will reduce our disposable income significantly (duh), force us to change our lifestyle and consume less. Part of me is actually looking forward to this as it is something I have always wanted to do, but we as a family have been unable to do ;).</p>
<p>taxguy, many of your points about the economics for people when they get older and so on and so forth are true. But at the same time, you have posts that say an expensive education is not worth it but perhaps save that money and give it to your kids for something else like a home. So, in the end, you still spend that money on your kids. </p>
<p>I feel that many of your posts are about WHAT you spend the money on, not simply that spending money needs to take into account long range financial planning, etc. And many of your posts have come across that spending a lot on EDUCATION is not worth it. </p>
<p>To some of us, it is most definitely worth it. I’m grateful that my parents valued this and I got to attend any college and grad school that I wanted and that fit my needs the best. It has served me well in life. This is the gift many of us want to give to our own children now. I don’t have any regrets about the loans I have to pay back for my kids’ colleges and grad school. This will always be my first priority. Much of their lives will follow from this. We don’t support them after they graduate. Their colleges were wonderful matches for them and while there are good schools that are cheaper alternatives, the experiences would have differed. They could not have done the same things. It was worth the added cost. To some it may not be. </p>
<p>Education is like many things. You can get a cheaper or more expensive one. Everyone has different values as to what to spend their money on, and that’s cool. I don’t think it is “better” to save on educational costs so you have money for something else. It is simply a choice. I know you have made that choice and it works for you. That choice is not one some others, like us, have chosen to make. You have money I imagine for something instead, and I don’t want money for something instead of the best fit college for my kids. It isn’t about “dream school” either, but about the right school for each child. For some of us, if the school costs more but is a better fit, it is worth the higher price.</p>
<p>The economic points you bring up are fine and good but pertain to any expenses people incur, not just for education. For example, someone may own a home that costs $700,000 and sends two kids to college for a total expense of $150,000, and someone else owns a home that costs $450,000 and sends two kids to college for $400,000. Both families spent the same amount of money ($850,000).</p>
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<p>Which I think is wonderful. However, there have been a lot of threads popping up about co-signing for a child to take on the debt to do it and, in my opinion, that falls under a completely different catagory. </p>
<p>So, yes, I do think people could learn from this thread because far too often we have parents come here who are gung-ho to co-sign but in reality have no idea what it will take for their child to pay back that debt (ie average salary for new college grad in their kids field, how much will be left over to live on after student loan, etc…) For some reason, the phrase “dream college” is taken as carte blanche and a hard look at the numbers just never happens. Considering that the parents themselves could wind up on the hook for that debt, sharing the numbers as on the first post of this thread is very important information.</p>
<p>pugmadkate, I am in total agreement that educational debt on the part of the student is an entirely different situation. I am not into students incurring a lot of debt starting out. We are not making our kids pay back any of the college loans, including the student loans in their FA packages. So my posts have to do with parents being in debt to fund their kids’ educations, not students. There is certainly the issue of student debt, however!</p>
<p>pacheight said: “the difference between public and private schools is that the private is better, on all counts, from class room size to the quality of professors, to facilities, to the IQ of the students”</p>
<p>I don’t think you can make that general statement. There are so many top public colleges and not all private colleges are top notch, although they may still have the top dollar cost. My son is going to a public university this coming fall. He is a top student and I’m pretty confident that his IQ is well above average. I would not argue with you that a smaller private college is the right place for many students. I will argue with your statement that there aren’t good professors and facilities at public colleges. Also, our public university offers first year students opportunities to enroll in smaller seminar classes and they can get involved in undergraduate research with professors. </p>
<p>If parents want to put themselves in debt so their child can go to school then that is their choice to make. I worry about the students who are responsible for their own loans starting their careers already in major debt. (Sooziet, I just saw you said the same thing.)</p>
<p>I have another question for the parents who are taking out big loans. If you are able to pay the monthly amount of the loan, why didn’t you consider saving that amount prior to now? I understand that long ago your income might have been different, but how about the last 10+ years? Saving the money ahead of time lets you accumulate interest, rather than borrowing and paying interest.</p>
<p>All of the talk about choosing to spend your income on education vs. vacations, yachts, big weddings, etc. is wonderful and noble and understandable. However, we all have to realize that it is a minority of people that have an extra $120,000-$220,000 after living expenses to spend on anything at all. Add in that people are having children later in life (less time to save between childbirth & retirement,) that many of us are in the sandwich generation and are having to partially support parents as they start to have medical needs that aren’t covered by medical insurance (i.e assisted living/nursing home care which either has to be paid for, or an adult child has to reduce working hours to care for personally.) Add in the decline in financial markets over the past two years and the rising unemployment rate, and what seemed reasonable 3 years ago, seems somewhat risky now.</p>
<p>Most financial advisors say parents must fund their own retirement before they worry about college savings, especially since Social Security will be shaky by the time most of us parents get to retirement age. </p>
<p>SoozieVT: I think it’s great that you’re paying your kids loans. But if you look at that website mentioned somewhere on here, that has all those individuals stories, they are all responsible for their own loans. I think you are an outlier in the distribution of who pays for the loans.</p>
<p>BUandBC82: I can answer the question about not saving (enough) up till now. For 15 years, my DH & I decided that I would be a stay at home parent. At the same time we were living in one of the most expensive states in the country with high taxes (NJ.) It was a struggle to make that happen, and I don’t regret it one bit. We were not able to save a penny until we relocated to another state. After the relo, I went back to grad school (paid my way as I went) and went back to work 2 years ago. For parents who do both work, the first 5 years are filled with large day care bills, followed by after care bills at least through elementary school. </p>
<p>I feel the need to comment on the public vs. private school. There are some amazing private schools that are probably “worth” their price in terms of access to internationally noted professors, amazing networking, and world class programming. But…I can think of a larger number of private schools that are just as expensive ($40,000+) that have the reputation of being “where the dumber kids go, 'cause their parents can afford it.” I spent 2 years (a long time ago) at a well known university, that ended up having the most apathetic students I had ever seen, a minority of engaging professors, and way less homework/challenging courses than I had had in HS. Meanwhile, my friends who were attending NJ publics (even the non-flagship ones) were getting a much better education, had a harder work load & had better access to outside opportunities. I transferred to a state institution & had much better profs, classes & enthusiastic fellow students. At about 1/4 of the cost. One of the big reasons why I never fell into the trap of following the rankings with my D.</p>
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This is somewhat ironic given that Buffett completed his first two undergrad years at Wharton (where he felt that he knew more than his teachers) and then transferred to U Nebraska. He went to Columbia for grad school. When he graduated from college, he had savings not loans.
Like some other things but unlike others, there is little quantifiable evidence indicating that educational quality is in any way correlated with price.</p>
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<p>I never said, nor think, that the quality of education is better at a more expensive school!! And private is not necessarily better than public either! I believe you can get a good education at a myriad of schools at all price points. I’m into sending my kids to a college that fits them the best. I never said the best college. I think our state university is a fine school and recommend it to others. It did not fit what either of my kids was looking for in a college, including having neither of their intended majors or degree programs, along with other selection criteria. I was willing to pay for the best fit, and never said it was a higher quality necessarily of college. The experiences they had at their colleges was different than at some other colleges that may have cost us less. The experience fit them well. That was what we paid for and are still paying for. That is what is worth it to us.</p>
<p>RobD- You give a great reason for not being able to save and I know there are lots of good reasons. We were able to start saving when our kids were pretty young, maybe around 5. I know we are fortunate. We also have worked hard and are happy we were able to save. My husband had a large student debt and we do not want our kids to have the same.</p>