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I deeply, deeply regret that I offended anyone attending a public university.
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<p>If you were including me in that, I assure you that I was not the least offended!! Just wanted to point out that for me, public schools worked just fine for exposure to and participation in the arts. I'm so glad I had the experiences I had, and had I actually gone into music -- lack of talent and the work ethic would prohibit such a move -- I doubt I could have done as well.</p>
<p>On the contrary; we don't think that everyone who goes to a private college doesn't have financial issues. That's what this thread is about. Whether or not you should CREATE financial issues just to go to such a school.</p>
<p>I would still like to hear from some of those who believe that they should be sending their kids to expensive colleges and K-12 at all cost. Believing somehow that it's better for them and their kid in the long run, Maybe they will answer some of my questions in the previous post.</p>
<p>The question isn't so much if Yale cost $8,000 more a year than U of Wherever. That is pretty much a no brainer. For kids and parents with initiative, there is plenty of money out there to go to school. There's a lot of private money even to go to Harvard, Yale, Princeton, etc... I know Michigan State isn't one of the Ivy league, but it was one of the schools my son was interested in because of certain science research programs they had. They are one of the best in the country. Without ANY school assistance, he was able to pull off a full ride; to include books, tuition, dorm, food, lab, fees, and a monthly stipend. Considering he's an out of state student, that is an excellent deal. He wound up choosing a different school and path, but the point is that there's money out there for HYPS and many others. You just have to look. </p>
<p>But, assuming that because of whatever; you don't get any of these scholarships and grants. The premise of the original question is if the AVERAGE state university costs between $10,000-$15,000 a year ALL INCLUSIVE; and money is somewhat of an issue, (In other words you aren't so rich to write a check for ivy league and not care); would you take loans and debt of $200,000+ for either yourself or your kid to go to that "Dream School" that they/you wanted. We're talking about an ADDITIONAL debt of $140,000 - $160,000 over what you could go to college for. And that's not even counting MANY states where college tuition is almost $0.0000 for in state residents. But assuming the average of $10,000 - $15,000 a year. Everything being even. Straight up dollars. My answer is and always will be; NO WAY IN THE WORLD!!!!!</p>
<p>Now; if you have the money; if you get the scholarships; if you get the grants; if, if, if..... Then that DOESN'T APPLY TO THIS QUESTION because then you AREN'T going into debt. And as such, you might as well go for whatever school you can get into. That's like going to a buffet for lunch in vegas. It doesn't matter if you have the chicken, steak, or lobster. it's the same price. If it's a DREAM school, then it's the student's DREAM. They can DREAM UP the additional money over what I consider to be a reasonable contribution towards college. That part is totally individual. Some parents might think reasonable is paying their entire way through college. All expenses paid. I don't. That again is the personal choice part. If the family is financially prosperous enough to not think anything of Yale, then fine. But in the context of this discussion, if the parent thinks that the most they can REASONABLY spend for college is $10,000 a year, then if the student wants HYPS/etc.... then they should get busy getting scholarships, grants, merit, figuring out loans, etc... The parents shouldn't go into that kid of debt for it. If the kid still wants it, they THEY can go into debt if they want it. They have a lot more earning years left in them to pay back the loan.</p>
<p>But of course there will be those that no matter how much or little they make, they will believe that the $50,000 - $60,000 a year school is worth it and they will be sending their kid there. As well as they did for K-12 to Cherry Hill or some other private. Then again, there's a lot of people out there who max out 23% credit cards; have 2nd and 3rd on their mortgage; lease cars every 4 years instead of buying; and live way beyond their means. Again; we're talking about a parent or student taking on huge debt to go to some Dream school. If you don't think that $200,000 - $250,000 in debt is a lot of money, then that means you probably make enough that it's not a big deal and therefor your position isn't really relative. Your perspective is skewed. Imagine if the original question was; "Should I take on a lot of debt to send my Kid to the University of Idaho instead of the Community College"? That is a totally different perspective on "SUBSTANTIAL DEBT". We're talking the difference of $40,000 and $200,000 and there's some people that are talking the difference of $5000 and $20,000.</p>
<p>I jumped here after reaching exhaustion on page 7. If this has already been asked, please tell me and I will skulk away.</p>
<p>Regarding debt and the ability to pay it:</p>
<p>Do any of you espouse a ratio of debt to annual salary upon graduation?</p>
<p>S has accepted a modest amount of debt to attend the school of his choice. Because he is in engineering, I did not make a fuss, because I figured he could get out from under relatively soon and relatively painlessly.</p>
<p>I have absolutely nothing against the philosophy and art majors among us, in fact I cherish them. But the harsh reality is that they will most likely have a bigger problem paying off that debt than will my engineering son.</p>
<p>My totally baseless rule of thumb: annual debt (each of 4 years of college) should not exceed 10% of expected starting salary.</p>
<p>Comments or opinions?</p>
<p>I don't think I understand your question. More accurately, your math. You said that you don't believe that a person should incur debt per year which is more than 10% of expected starting salary. If I read you right, that would be almost impossible.</p>
<p>I.e. State "U". All expenses; tuition, books, labs, fees, dorm, food, etc... For the sake of argument; $10,000 per year. So, you are saying that if this student gets a student loan for that $10,000 per year, that they need a starting salary of $100,000? </p>
<p>That is very impractical. Especially if you consider loans that we are talking about here of $20-$40,000 per year. It is very unlikely that the starting pay of a 22 year old college graduate; with approximately 2 days of experience; is going to start off with a $100,000 per year salary. Let alone a $200-$400,000 a year salary. There will be a couple of students graduating their under graduate degree program that might make that starting pay; but if they do it will be rare and it will be in an area like NYC where proportionately, it's about the same as a $30-$40,000 a year job in Texas. </p>
<p>Anyway; am I reading your question wrong? I must be.</p>
<p>A student taking 100K in debt for a job that pays less than 60K a year is pretty ridiculous, IMO.</p>
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If your're able to make the stretch, the home value in the second group will probably appreciate more too, thus increasing net wealth. Well it used to, lol.
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<p>Homes do not appreciate at a faster rate simply because they are more expensive. (often times, the most rapidly appreciating properties are those that are in the least expensive neighborhoods....neighborhoods that "turn around"). </p>
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Very large % of college professors make a point of sending their children to top LACs. They are not fools. They know exactly what quality of education they are looking for.
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<p>Very large % of college professors are content with a quite mediocre income. I guess it depends on what your child's goals are.</p>
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Anyway; am I reading your question wrong? I must be
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<p>Yes, you didn't include the parental contributions. Surely, no parent would expect the student to pay for everything. State U or private.</p>
<p>I think mafool's ratio is the student's personal debt.</p>
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Very large % of college professors are content with a quite mediocre income. I guess it depends on what your child's goals are.
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Maybe so. But they certainly value top-notch education.</p>
<p>And yes, it has been discussed to death that you don't need to go to "top school" to make the most money. In fact, Bill Gates and Steve Jobs are both college dropouts.</p>
<p>cbreeze; there are plenty of students who paid their own way through college. I am not the only one who has done that. Until the "Me" generation, it was quite common for students to do it themselves. Personally; I believe that a student should pay for as much as possible. All if that's possible. Get the scholarships, grants. aid, loans. If they can't manage it all and the parents can and want to help out, then that's great. Unfortunately, it seems that in the last 10-20 years, the attitude has been such that kids believe that their parents OWE them a college education and that somehow it's some sort of entitlement. But then again, that's a totally different subject. Suffice it to say that I didn't GIVE my kids a car. I didn't GIVE them a full ride to college. They earn everything they have gotten.</p>
<p>What I DID GIVE them besides love and support was the benefit of my experience and knowledge. I assisted them in applying to colleges. Getting accepted to all of their colleges. Getting full ride scholarships and expenses to some of the colleges. 50% paid to others. I gave them the ability to be independent and self sufficient. I taught them how to value a dollar. How to make the best out of everything in life. To always think positive. What I GAVE THEM was the ability to have choices. The ability to create choices for themselves. </p>
<p>I'm sorry if I don't believe that I OWE my children a college education. My parents didn't OWE me one but they helped me find a way even though they couldn't afford it themselves. I give my daughter spending money and misc expenses while she is in college. I do it because I want to, not because I owe it to her. She received the scholarships to pay her way through college. I make sure she doesn't have to work part time; thus able to enjoy the college experience and do well with her studies. Again, because I want to. She chose to go to State "U" even though she had other options. She did it because she didn't want to have debt; because she liked the idea of going to a school that had some high school friends yet plenty of new people; plus she was tired of moving. She was born overseas and moved a lot. He jr high and high school years were the most stable she's ever had. She liked the idea of staying put.</p>
<p>But, back on topic. Even so; if a person goes to harvard @ $50,000 a year; Parents pay $25.000 a year; $15,000 in private scholarships and aid; that still leaves a $10,000 loan for the student. According to the comment of debt not more than 10% of expected starting salary, that would mean a starting salary of $100,000. Quite unlikely. Unless of course you think the parent should eat all remaining expenses; basically get all the scholarships and aid you can, and the parent pays ALL REMAINING costs, leaving the student debt free. Sorry, but I would never do that. I can afford it, but that is not the best thing for the student.</p>
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Homes do not appreciate at a faster rate simply because they are more expensive. (often times, the most rapidly appreciating properties are those that are in the least expensive neighborhoods....neighborhoods that "turn around").
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<p>When you buy a home, it's all about leveraging, so the bigger the home or mortgage the bigger your chance to make money( or lose money). So the least expensive neighborhoods could be appreciating faster but in term of absolute amount it maybe a lot less. 20% of $100K is $20K. 20% of 1 million is $200K. So the upside potential is a lot higher for a house in the most expensive neighborhood. Now back to the original discussion.</p>
<p>you all value money too highly, excepting those who don't</p>
<p>Let me start by saying this is a fantastic post, full of good practical information and advise.<br>
I agree with most that there is a very practical decision which needs to be made when considering the cost of education. For me, I am trying to consider the return on investment and have trouble with the so called "need" to pay nearly $50m/year for the "Teir 1" or bid name schools, certainly if the student is pursuing a rather traditional major (one which is offered at many state Us, etc.)<br>
Undergraduate engineering choices - Ivy, CMU, RPI, Tuffs, WPI, Lehigh, UMASS, UNH. Each has a very different cost depending on merit and FA.</p>
<p>Here is my problem. What is the best way to convey this philosophy/ approach to a S/D who feels they need to go to the bigger name schools because of their academic performance and merit? Or because all their friends are going down this road? As I attempt to bring up the subject my family errupts into an emotional arguement, and I am the bad guy.
I am trying to find a way to best present the financial facts hoping my family will wake up from their dream word and make a practical decision. Any suggestions? (I can hear it now, the answer is NO and I am at fault for allowing the situation to exist. I have created a monster.)</p>
<p>I have only skimmed this thread but it caught my eye quickly. My son, after an initial deferral, was accepted to what was initially his "first choice" school. Then the aid package came. Ticket for approximately 20k- aid package was around 17k that included a state grant (Virginia gives them to students attending private schools) and a Stafford loan. Time passes, he is accepted to "party school state u" - cost would be around $12k. </p>
<p>I want him to attend the private school. It's smaller, it's got better programs, but he'd have to work to be successful. Party school he could probably just float through. I want him to get an education. So he actually gets the aid packages and says, "Mom, I would end up owning how much if I go to Private?" Compared to State U where he would end up owing nothing. Now the push is on to go to State U because he doesn't want the debt (supposedly). I am more than willing to beg, borrow and steal to get him to go to Private. There's no guarantee the state grant will be available given our state's budget issues. </p>
<p>What kind of arguments do you raise to show the value of one school's education over another's and show the student sometimes debt is not a bad thing?</p>
<p>What we never see around here is a post from somebody saying "I paid full tuition at Some Expensive School, and it probably was a waste of money." What we see are self-validating posts saying "We saved and sacrificed, and it was worth every penny." Why is that?</p>
<p>sabaray - I think your son is really mature to recognize the debt issue. You aren't guaranteed the same tuition all four years at the private school either. If he is the one expected to incur the debt, you really have to let him make the decision. And even if you're the one paying, maybe he is afraid to let you "beg borrow or steal." All schools can be party schools; it depends on who you hang out with.</p>
<p>
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When you buy a home, it's all about leveraging, so the bigger the home or mortgage the bigger your chance to make money( or lose money). So the least expensive neighborhoods could be appreciating faster but in term of absolute amount it maybe a lot less. 20% of $100K is $20K. 20% of 1 million is $200K. So the upside potential is a lot higher for a house in the most expensive neighborhood. Now back to the original discussion.
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<p>Since when would an investor care more about the absolute dollar amount rather than the rate of return? Yes, if I invest 1 million dollars, I should earn more in absolute terms than if I invested 100,000. However, if the 100k project produces a higher rate of return, I will take that project first. If there are 10 projects valued at 100k, each with a higher rate of return than the 1 million dollar project, I will take each of the 10 smaller projects prior to the 1 million dollar project.</p>
<p>dt123 notes,"What we never see around here is a post from somebody saying "I paid full tuition at Some Expensive School, and it probably was a waste of money." What we see are self-validating posts saying "We saved and sacrificed, and it was worth every penny." Why is that?"</p>
<p>Response: There are several reasons for this. First, few folks like to admit that they made a mistake. Secondly, misery loves company. By geting more people to subscribe to the "sacrifice mentality at any cost," they feel better about what they did. Finally, and perhaps most importantly, the financial effects of incurring a lot of debt or of spending a lot of money don't manifest immediately . It takes a number of years to realize the true cost. Also, there are obviously folks who really believe that making any sacrifice,what ever the cost, is worth it for their kids. Frankly, I am willing to make sacrifices too BUT NOT at any cost.</p>
<p>Remember one of my posts: The future cost of about $100,000 was 1.5 million dollars. This is one heck of a benefit or loss for retirement;however, it takes approximately 36 years to get this. See my post 84 above for the computation of this.</p>
<p>^ On the other hand, if the $100,000 thing is so important to someone, not having children would save whole lot more.</p>
<p>I think we have been running around with "examples" w/o any real meaning. With an EFC of 0, no one will be able to get $200K loan to attend a school. Also, how many kids would get "full" ride at the better state U? OSU gives out ~20ish full rides a year. In other words, most of the students attend state U at ~$20K. </p>
<p>On the other side, a lot of the "elite" schools meet 100% of your needs, some with more loan than other. For a middle class family with an EFC of ~$25K, you will either pay $20K for state U or $25K for an "elite" U. </p>
<p>We are a typical low middle class family. Based on our very first FA package from a private school, the toal cost to us is our EFC for 4 years + $18K loan (4 year total). </p>
<p>So, more realistically, we are talking about ~$100K with $20K loan at a "top" U vs $70K with 0 loan at state U for most of the middle class people.</p>
<p>BT, that is a good point. why does one even want to get married? Isn't a wedding very expensive?</p>