<p>As I do not have lofty ideals, the reason I spend all this time on CC is entirely from extrinsic motivation. The chuckles have saved me $$ in psychiatric bills. (Though, on the downside, the teeth gnashing and grinding has caused some bone loss.)</p>
<p>I actually forgot to add some information to my original post. </p>
<p>If you take the same $100,000 of debt ( thus, you would take the highest scholarship offered and go to the school with the lowest net cost) and instead put that money in an average performing investment for your kids or for you yielding 8% compounded annually for forty years,which isn't that aggressive, you or your kids would have an extra $2,172,452 at retirement. </p>
<p>This is really the marginal cost of attending an expensive school instead of taking the same money and investing it. Notice, I am not talking about the debt. I am simply comparing the benefit of taking the same $100,000+ of excess tuition that you would pay over that of a state school and investing this excess cost.</p>
<p>Would an extra $2,172,000 substantially improve either you or your kids' lives?</p>
<p>Bottom line: Before you blithely send your kids to that expensive school rather than taking the one with the best scholarship or lowest cost, consider how much this is really costing your family. Yes, it is nice to achieve dreams. However, as my dad always told me, "be careful of what you wish for. You may get it!"</p>
<p>I actually forgot to add some information to my original post. </p>
<p>If you take the same $100,000 of debt ( thus, you would take the highest scholarship offered and go to the school with the lowest net cost) and instead put that money in an average performing investment for your kids or for you yielding 8% compounded annually for forty years,which isn't that aggressive, you or your kids would have an extra $2,172,452 at retirement. </p>
<p>This is really the marginal cost of attending an expensive school instead of taking the same money and investing it. Notice, I am not talking about the debt. I am simply comparing the benefit of taking the same $100,000+ of excess tuition that you would pay over that of a state school and investing this excess cost.</p>
<p>Would an extra $2,172,000 substantially improve either your kids' lives or your life?</p>
<p>Bottom line: Before you blithely send your kids to that expensive art school rather than taking the one with the best scholarship or lowest cost, consider how much this is really costing your family
Yes, achieving dreams is nice. However, my father had a great line that he used a lot on me, "Be careful what you wish for. You may actually get it."</p>
<p>IMO NO family ought to put an expensive private education ahead of their own retirement. I'd much rather see the child take on some of the loans if that were the case (they are younger and have more time working on their side) , and not so much there as to bury in debt for the rest of their life there, either. </p>
<p>On the other hand, IF and only if one is fortunate enough to be able to afford the price, whether one is paying full freight or taking out loans(parent or student), and by afford I mean not risking one's retirement, which should be inviolate, then and ONLY then do I agree with the notion that you shouldn't put a literal price tag on an education as a whole experience nor would I see it as an investment for which I expected a certain dollar return. </p>
<p>An education is something that no one can ever take away from you - it can help mold and shape you to become the person you will be and gives one options for the future. It is never a waste. But no parent ought to sacrifice their own security for the cost of a private education if they cannot afford to do so.</p>
<p>berurah, if you're ever looking for a wonderful book for your son, given his interests, I'd highly recommend Mountains Beyond Mountains: The Quest of Dr. Paul Farmer, a Man Who Would Cure The World by Tracy Kidder. You and/or your DS (given his interests) may already know of the amazing Dr. Paul Farmer, as he did his undergrad at Duke. :) I discovered this book thanks to one of the many what-are-you-reading threads here at CC and it's one of the best books I've ever read.</p>
<p>Sorry to stray off topic!</p>
<p>taxguy: You are mixing two threads in to one.</p>
<ol>
<li><p>Take or not take the six figures loans.</p></li>
<li><p>Parental (family) decision to spend money rather than taking the scholarship - it is an individual decision that is often not driven by dollars and cents. There are no right decisions and there are no wrong decisions. There are many families who like money - like it very much, but are not in LOVE with money.</p></li>
</ol>
<p>
OMG!!! *<strong><em>ROFLMAO</em></strong><em>!!!!!!!!
You DO realize, choc, that I will *not</em> be able to associate with you anymore, though, due to your less-than-lofty ideas! ;)</p>
<p>always~
Thanks for this book recommendation! I don't believe that S has this one yet.</p>
<p>~berurah</p>
<p>why are you trying to run same topic in two threads simultaneously?</p>
<p>If your choice is between hugh student load debt and a "dream college"l, the wise choice is to adjust, reevaluate an reinvision a new "dream" college.</p>
<p>Our son only imagined dream colleges which were affordable. He is finishing up his junior year at Rensselaer and will be graduating next year not only with no debt but with about $50,000 of his college savings intact. </p>
<p>Can you imagine what a benefit that will be to him following graduation? He will be free to invest in a house/condo following graduation, consider investing in a startup business, travel for a 3 or 4 months, or easily afford living costs for grad school.</p>
<p>I have always advised here that the real evil of large college loan debt is not the debt itself-that will eventually be paid off. It is the impact debt has on post graduate choices. Students are sacrificing their freedom of choices in order to attend that "dream" college while stifling out their post graduate dreams as they begin their adult lives.</p>
<p>This is when the important dreams should be just beginning.</p>
<p>In my work I see credit reports of many college grads. What I find shocking is that almost every credit report has student loans on it. Many already in default. Not to mention already quite a bit of credit card debt. Something also disturbing is how many of these young people don't seem concerned that they are behind or not paying off the debt. When asked about it they say well it isn't really a bad credit report because it is just student loans.
Also I feel for these young people who think they are out of college and going to be able to enjoy so free time for the first time in years. But they don't have the free time since many are working 2nd jobs in retail or food service to pay off their student loans. And as someone else pointed out they are still having to live 4 people in a small 2 bedroom apartment.
My D's good friend works m-f in his post college job. Sat and sunday in a 2nd job.</p>
<p>Original - I could not have said it better. And while I could be accused of overgeneralizing a bit, I can't understand for one moment why anyone would go into debt for an art or fine arts degree. The CMU vignette above is just one great example. The statistics are so dreary, and the present value of the debt so high, it just makes no sense to pursue an art or fine arts degree at the expense of a large debt. And for those that aver that I have no sensitivity, lots of us athletes in minor, non-revenue sports see the financial writing on the wall and put our energies (at some point) into building human capital rather than the sport so that we do not have to rely on others to get along in this world.</p>
<p>Simba, different people read different forums. I think, perhaps foolishly, that this is a VERY important topic for all parents and kids to read.</p>
<p>Our strategy as parent of HS Junior. He can do whatever he wants as an undergrad (He plans to do acting), but he has to go somewhere that we can pay out of pocket while he is in. We have saved a large pot of money for his education, but that is reserved for grad school (when reality sinks in). If he does not use it, I will retire a bit earlier. Primary principle: follow your bliss now, but have some cash reserves once confronted with reality.</p>
<p>taxguy</p>
<p>Sorry if you interpreted my comments as a knock on top schools;that certainly was not the intention, in fact I thought I was giving you a real world story to reinforce your original post. </p>
<p>We have been in that same situation twice and in our case both kids took the money (their call) opting to be either debt free in the case of our son, or finish with very little debt in the case of our daughter with both knowing that med and law schools are in their future.</p>
<p>eadad, you obviously did a good job with your kids if they were bright enough and foresightfull enough to make that choice.</p>
<p>Great post Taxguy.
RainingAgain- your post makes some great points too. My oldest D started at our state u as a theatre major. I figured that it made more sense to go there than anywhere else since where ever she graduated from I knew her first job would involve the lines "are you ready to order now?"
Anyway - after 3 weeks in the theatre dept she realized that it wasn't what
she wanted to study and is so glad she didn't limit herself to a conservatory program. She is still involved in acting- but it's on her terms now.</p>
<p>taxguy started a great thread: a bit more active under its dual-posing in PARENTS</p>
<p>Well, I'm practicing what I preach with this one: I have the choice right now between several schools for my masters degree, and had recently narrowed the options to the University of Washington and Pratt (for more info, see "SCAD for grad?" in this section). I got the financial info in today- Pratt would mean taking on about $60k in loans. Their financial aid package including over $40k in loans per year, but I figure I could make at least $10k/year working. UW would mean taking on about $15k, including a month studying abroad (not included in Pratt estimate). They are both great schools, and I can honestly say that the only advantages Pratt has are name and location. Are those worth an extra $45k in debt? No way. Sent in my commitment to UW today with a clear mind and heart.</p>
<p>Mom60 notes in another thread:</p>
<p>In my work I see credit reports of many college grads. What I find shocking is that almost every credit report has student loans on it. Many already in default. Not to mention already quite a bit of credit card debt. Something also disturbing is how many of these young people don't seem concerned that they are behind or not paying off the debt. When asked about it they say well it isn't really a bad credit report because it is just student loans.
Also I feel for these young people who think they are out of college and going to be able to enjoy so free time for the first time in years. But they don't have the free time since many are working 2nd jobs in retail or food service to pay off their student loans. And as someone else pointed out they are still having to live 4 people in a small 2 bedroom apartment.
My D's good friend works m-f in his post college job. Sat and sunday in a 2nd job</p>
<p>Taxguy. Thank you for posting the numbers in black and white. Thank you for posting about investments. </p>
<p>What I have learned in my life is that money allows me to have choices. The more money I have the more choices I have. I don't "love" money but I do love the freedom of having many options in my life. Debt reduces choice.</p>
<p>Every one of us has our own answer to the question "is one school experience worth $100,000 more than another school experience." No need to debate.</p>
<p>It is our jobs as adults to do the best job possible in teaching our children about money. It is very difficult to teach an 18 yr. old with no financial history the amount of money one has to make in order to save $100,000 of after tax disposable income. Thank you for offering up some facts.</p>