Should you incur substantial debt for that "dream" school? or an arts major?

Parents Forum
181

<p>
[quote]
Does the "average debt for students" number have any real meaning? It seems that you could have Ms. Moneybags who graduates with zero debt and combine her with Ms. Borrowedlots who has $30K in debts and come up with an "average" of 15K in debt -- Or am I missing something? It seems that the number I want to focus upon is what MY kid will incur.

[/quote]
Nobody answered this one. The figures shown for student loan debt are ONLY FOR STUDENTS WHO TAKE OUT LOANS. Not an average of all student's debt!!! <a href="taxguy">quote</a> Also, if you have one kid whose tuition is zero because of their low income and another who has incurred $30,000 per year indebt, the average yearly debt is only $15,000.

[/quote]
Nope, Taxguy, you were not correct. See below!
[quote]
Average debt at graduation is the average amount of debt owed by a graduate who took out an education loan. Kiplinger.com

[/quote]
</p>

182

<p>Yes, anxiousmom, but the rational is the same. If one student borrows $5000 and another student borrows $35000, that results in an average debt of $20,000.</p>

183

<p>


Self-employed people cannot accurately predict what they will get in aid because colleges treat self-employment income differently. Your AGI on your 1040 might be $50K but maybe your gross receipts are $110K with $60K worth of expenses, and the college decides to adjust your AGI upwards to $75K because they see that $25K of the schedule C expenses were for travel, car expenses, and depreciation. So you have a $50K income and a financial aid package geared to a $75K income. </p>

<p>It can go all over the map -- the bigger the difference between gross receipts and net income on the schedule C, the less the person can predict what the college financial aid department will do with the figures.</p>

184

<p>Calmom...OK, well, admittedly I was the one who helped with the college visits and application support, etc. and hubby's one job was FAFSA, CSS Profile, and financial aid apps. So, I don't truly know exactly how it all works but your earlier post caught my eye as we DO get financial aid, yet are self employed.</p>

185

<p>Yes, I am self employed to -- but the point is you can't just plug the AGI figures into an online calculator and figure that will be the end result. The CSS Profile schools will want to see the schedule C and sometimes a separate statement about the business, and their policies vary as to how they treat various expenses. I was addressing my comments to the parent who said she and her husband were self-employed, and someone had suggested that she should quit working to get more financial aid. So my point is that she can't count on that working.</p>

186

<p>Presumed quality of education at the Ivies. A few of undergrads that I have taught - we are an intense LAC, though not top 25 - when pursuing their MBA at the top programs served as tutors; guess who needed the most help?</p>

187

<p>CALMOM: I certainly agree that the premise to quit working to look better for financial aid is not a great idea.</p>

188

<p>Calmom-Great points--thanks!</p>

<p>ikf725--Sorry we don't live the OC/Laguna Beach Lifestyle. We live in the most crowded city of our county--Santa Ana. They don't do TV shows about us. I brought up the Art School in Laguna, as we were just viewing some work from a friend of ours that goes there. Like I said before we are kind of the "trailer trash hillbillies" of the great "OC".</p>

<p>Our atmosphere can be pretty twisted---some people at our first private school in Newport Beach thought that I was our kid's nanny, because I drive a Honda -rather than a Hummer, Mercedes, or Porche. Oh well, so I don't have a housekeeper and my house is dirty!!! I am the best darn Nanny they will ever have! We changed schools this year and although it is just as affluent if not more--the other families are much less "Barbie/Ken" and do not come across as pretentious. My kids are much happier there. It's difficult in this area to keep your kids grounded to reality rather than reality TV...</p>

<p>Anxious--I wish I could stay home and still afford private school. But at 17,500 a year for the two of them for elementary/middle school--my income has now become the price we pay for them to get a good education. We look at it as an investment in the future. Our district is very poor and the high school is horrible. When we moved here real estate was low and the district was severely over crowded. The policy then, before we even had kids, was that you could transfer out of the district to the better schools. Now enrollment has gone down and that is not allowed anymore. We now cannot afford to move due to the outrageous cost of housing here, so private school was our only option.</p>

<p>Yes, it is excellent budgetary training for us. Paying school bills for college will just seem like "normal" behavior. While some of our friends buy new cars every two years and furnish their homes like a model home--we cook at home, drive older economical cars and our kids stand a chance at knowing how to read, write, and do basic math computations! We have been very comfortable with that decision--no regrets at all. The kids are very respectful that we are making "sacrifices" for them. They understand that we don't have a live in nanny or housekeeper and we don't go to Disneyland a couple times a month, just to hang out. Going to the movies is a treat and we wear our tennis shoes until they are worn out. We mow our own grass, wash our own clothes, and cook our own food. It's a distorted reality for most of their class mates--but these kids at this particular school are very bright and yes, they are talking about colleges--by name in middle school. Most will be going on to college prep private high schools and will eventually apply to the upper level universities. I guess as they say--it all comes with the territory.</p>

189

<p>I think I understand some of the premise behind your desire for an Ivy education for your kids. However, I would challenge you to think beyond the Ivies to colleges/universities that will offer a supurb education, livelong relationships, and long-term networking. They are definitely out there.</p>

<p>Like your example, my H and I attended Cal State schools and we're pretty happy with what we received. We both came from families with parents who did not hold a Bachelors degree. But as is typical for parents, we aspire for even more for our children. Some of the things we did not get from the state college experience was a sense of community (we were commuters), relationships with professors (classes too big, attitudes of formality/distance), and networking connections. </p>

<p>Early in the college search for my oldest son, I stumbled upon a book while browsing at Barnes & Noble. "Colleges That Change Lives" by Loren Pope. I read the preface and then made a bee line for the checkout counter. This book summed up what we wanted for our kids and highlighted 40 schools that would offer an Ivy-worthy education. We read the book and selected schools that met his needs, requests, and academic profile. We attended a Colleges That Change Lives (CTCL) college fair with representatives of all the schools from the book. (They do make an annual stop in West LA each year). We also visisted numerous schools in the East and Mid-West. In the end, he did not choose a college from this book, but he did find a private school (in CA) that has many of the features highlighted in the book. </p>

<p>My youngest son has just finished his college search journey. He did choose a school highlighted in the book. One other that he applied to was not mentioned in the book. My H, worried that we were somehow missing some inside information about this school not listed, decided to contact the CTCL folks. Mr. Pope has retired, but the book, website, college fairs go on. He asked about the college my S was most interested in and why it didn't make it into the book. The response was that the school was more well-known and part of the objective of the book was to highlight lesser known colleges that do a great job. So, my H was satisfied that the school he inquired about met the basic criteria of a CTCL. </p>

<p>Finally, I have learned through these two searches of my kids, that the list of potential schools to apply to will be quite different based on the academics, specific interests, intended major, geographical comfort zone, and the intangible "fit" factor for each individual. Though my two had similar interests in small-medium size residential schools, all the other factors were different and they came up with very different lists as a result.</p>

190

<p>Someone mentioned that younger people are more concern about retirement and saving more than the older generation. According to the April 11, 2007 issue of USA Today, Money Section, this is NOT true.</p>

<p>The lead article is "Workers aren't ready for Retirement."
The gist is 17% of workers noted that their employers have cut retirement benefits and 40% of affected workers have done nothing in response. Moreover, only 60% of workers are saving for retirement.</p>

<p>Also, according to the study, younger workers were MORE LIKELY than older workers to have a smaller retirement nest egg.In fact, "68% of workers younger than 35 had total savings and investment of less than $25,000."</p>

<p>Could it be that large college debt can be one of the culprets as to why this is true?</p>

191

<p>
[quote]
In fact, "68% of workers younger than 35 had total savings and investment of less than $25,000."</p>

<p>Could it be that large college debt can be one of the culprets as to why this is true?

[/quote]
That seems more like a really poor future time orientation.</p>

192

<p>My Payne, you could be right. However, it certainly could be that many kids have higher debt loads due to college costs and don't have the financial wherewithal to start funding their retirement.</p>

193

<p>I really think it is worth incurring in a debt for school. What is really important is to think in long-term benefits. The money used to pay a good education will pay off within the first or second year of work. If you go to a very good university (Cornell, Yale, Princeton, etc.), after you graduate you'll be offered high-paying jobs. These jobs, in turn, will pay the initial debt in a short time. After paying, money will flow directly into one's pocket. </p>

<p>However, if one decides to not incurr in debt and go to a not-so-good school or not go at all, jobs will be worse and money won't be as abundant. </p>

<p>It is defenitely worth it!</p>

194

<br>


<br>

<p>And their first priority may be saving for a down payment on a house or starting a family before saving for retirement.</p>

195

<p>"68% of workers younger than 35 had total savings and investment of less than $25,000."</p>

<p>Sorry, but that is a totally worthless factoid. Not sure where I was at age 34, you may or may not think a 34 yr old worker should have savings and investments > $25k, but your group of "workers younger than 35" includes recent hs and college grads; Of course they don't have savings and investments!</p>

<p>And this? "younger workers were MORE LIKELY than older workers to have a smaller retirement nest egg" Sorry if I am taking this out of context and there is more to it than meets the eye... but my only response to that is... "DUH!"</p>

<p>Most people start their working life with nothing and accumulate savings and investment over their working life. There are a few that inherit great wealth and go through life spending down their balances, but that would be the exception.</p>

196

<p>Elliotsmom--That book sounds great. I will absolutely look it up and read it. I think you do get what my concern/desire is. H and I never got any 'connections' or network opportunities from our big state schools. We got our degrees and we both went on to be owners of businesses. My husband was also first in his family to graduate from college. Nothing to complain about--but as you said we each want something better for the next generation. Our kids, partially through circumstances and partially through our desire are now on the track to the upper level universities (not just Ivies). So as I read this thread, I suddenly started getting concerned about the actual cost of being on this track. Can we afford it for both kids or just one or if all goes sour in our business (which can easily happen) can we afford to help either of them? Yes, we have saved money for their college as we have gone along--but it probably will barely be enough for a basic college education, not upper level.</p>

<p>You are from S. Cal so you know what I am talking about as far as atmosphere and expectations. It's a crazy place, full of consumerism, beautiful people, and too much money--but at least the weather is almost always good!</p>

197

<p>

I'm sure lots of people wish this were true.</p>

198

<p>Thank you for your original post. Now that aid offers are out, many of us are looking at the finances in trying to determine where our kids will go to college. It's more overwhelming than filling in the Profile or FAFSA.</p>

<p>After receiving the final financial award for a freshman, families have to extrapolate to account for so many unknowns. (That is after getting over the shock that COA is a couple thousand more than for the previous year as listed on the college's website!) Your post is an important reminder to evaluate the long-term repercussions of the high cost of educating our children.</p>

<p>Many of us are guilty of "spoiling" our children in an attempt to give them the best that we can. Our kids may not realize the financial sacrifice parents make or the sacrifice the student may have to make in the future. Basically we need to be realistic, help our kids understand and make the choices that are best for our families.</p>

199

<p>This is only meant to be half serious, but the first time we realized we did the right thing by accepting the scholarship school was D's graduation day when the old van with 100+k miles died in the driveway blocking the iron fence gate, behind which were three functioning cars ( ours and both grandparents). The van was so dead it could not be jump started and could for some reason only be pushed a few feet forward, but it was enuf to ease the two smallest cars out the gate, allowing us to drive over our front lawn and get the graduate to the ceremony (with all of us crammed in like circus clowns). Of course, the van died while trying to leave for the ceremony so we only had minutes to spare when we arrived at the auditorium.</p>

<p>A year and a new van later we are now putting an overdue new roof on the house, and are grateful once more we didn't remtge the house to pay for the dream school. Plus the scholarship school IS the dream school. It has provided a world of opportunity for D and was the best decision for her.</p>

<p>But the graduation story of almost missing graduation still makes me chuckle.</p>

200

<p>One of the first times we realized that we had done the right thing by picking the non-free, "we-pay-our-EFC-school, was when we drove up to drop off our then-freshman daughter, and our van was rushed by several people shouting welcome and calling her name (they recognized her just from her photograph since they made it a point to learn all the new student's info) and helped her move in, or for parent's weekend when the college master greeted us by name and told us how much he had enjoyed having DD over to dinner and chatting with Dd at the college commons-and he knew so much about her, and when Dd called to say she had dropped and added classes for two weeks until she finally had her perfect schedule and all the professors she wanted to learn from, and when Dd's professor called her on the phone to ask where was that restaurant she had gone to with her, and we realized that THIS is what we pay more money for - opportunities and relationships that make the education more personal and more flexible. Staffing levels that ALLOW the professors and staff time to get to know the students, and teach them and guide them and consult with them in the journey that is their education.
:)</p>