Guidance on the timing of distributions is not totally clear. But if you do distribute 529 money during college then the gains are likely to be subject to kiddie tax. That is usually not a great idea if your family is full pay so the parents’ tax rate is presumably high.
This…and I will be the odd man out here. Our kids applied to a variety of colleges…and they came in at various price points at the end of the process. Neither of our kids chose the least costly (and by a huge amount, I might add) option. This was fine with us because we had planned to pay for any undergrad college to which they applied (we agreed on the lists prior to applications being sent).
So…I’m not going to try to convince you of anything. This money conversation is one to have with your family. Please do so.
Then apply to a broad list of colleges and make up your mind where to matriculate in April of your senior year (unless you choose to apply ED someplace and need to decide on an admission sooner)
If your parents are on board with spending the higher prices, then fine. But please get that fully clarified before you apply.
I will add…one of our kids got a masters and the other went to professional school. In the Thumper family, we helped with living expenses for those…but tuition and fees was on the kids…and they knew that up front. Both were grateful for a fully funded undergrad college education.
ETA…I know you could possibly have a fully funded undergrad degree with your NM status. But will it be where you want to spend four years? Think of that.
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This goes to the statement that it isn’t always how much you can pay but how much you are willing to pay. For some parents it is worth it to allow their kids to make the decision free of financial concerns and consequently they plan and prepare early which seems to be OPs situation.
Agreed. Make sure the school “fits” as you will have to be there day after day. Consider the total experience including weather, food, housing options, Greek culture, etc. Less expensive isn’t always better.
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Understand and in fact my daughter paid on my tax rate. I only did it when she got into law school with a full scholarship as we would not have the ability to use the money on education. So in our case not having to pay the 10% penalty and her paying the kiddie tax on the gains it still better than not being able to use it. The ability to funnel some into a Roth IRA is a good thing, however as noted above the amount you can roll into a Roth IRA is pretty limited.
On the other hand, the parents can also plan and prepare early and still let the kid make the decision taking into account the financial consequences. That’s what we did, by treating the 529s as our kids’ money, not our own, so they got to make their college choice and keep any remaining balances.
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OP I suggest visiting these schools if possible in order to determine if you can see yourself living there for 4 years, maybe speak to others who are there on full rides so you can learn about their experience, opportunities etc
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Yes agreed. But your D will presumably have a high salary and tax rate after law school. In many cases there will be opportunities where a kids’ marginal tax rate immediately after they graduate is 10-12% while the parents tax rate is over 30%. Or they can get a summer internship which in combination with a large scholarship, allows them to provide over 50% of their own support. Just pointing out that strategizing on this can lead to tax savings. My D pulled a bunch out of her 529 this year while she’s not in school and not earning much.
A few things here:
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Do we know if the money is in a 529 ? Even if so, there are other ways to spend it later. I have this issue.
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OP stated they don’t think they’ll get into a top school.
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Our personal anecdotes are great but I’m guessing once the OP provides the various financial scenarios to the parents, the parents will quickly make a decision as to what they are comfortable with - one way or another.
No matter what - congrats to OP. It’s a wonderful position to be in.
I hope your school visits prove fruitful to you so that you can find a school you’ll enjoy.
Ps if you decide large schools are for you and many do, don’t forget they have Honors Colleges and some have sub programs within Honors.
Best of luck.
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Meaning what? Some students here view their things as weak but in reality, they are fine. The VAST majority of college applicants are unhooked so put that out of your head.
As long as you have a variety of affordable colleges that you like on your application list, you should be fine. Find a couple of sure thing colleges that you like first…then go from there.
It sounds like you are a HS junior so you have time to tease out what your application list will look like.
And congratulations on attaining NM possible finalist status!
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We’re also of the view that every year of your life counts as much as any other, and that the actual experience of college is just as important as what it helps you do later.
And of course more expensive doesn’t necessarily mean better, but four years is a long time and so a significant cost for a better experience is not an inherently bad idea to us.
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I have not read through this entire long thread, so forgive me if this is redundant.
But in my view, it isn’t all or nothing.
You don’t have to choose either the highest ranked, most prestigious school that admits you or the full-ride NMF scholarship school.
My own National Merit Finalist chose neither, but rather picked a school that, with merit scholarships, was less than $40,000/year (but not $0). That school hit the sweet spot of desired location, desired activities, academic opportunities through the Honors College, academic programs of interest, etc.
Don’t get caught up in making your decision based on what you will tell other people (either by dropping a school name that will impress them or letting it be known you received a full-ride, which will impress them). Pick the place that makes your heart — and wallet — most happy.
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I’ll be a contrarian 
:
Ask your parents : perhaps they saved precisely so you don’t have to worry about all that. Some families spend $$$ for their kids’ sports, some go on family vacations abroad and create memories, some families just like to save 
For me, educational spending was the best investment I could make.
Then again, there’s a midway point: it doesn’t have to be Dartmouth/Williams or UAlabama – excellent universities that offer merit aid and aren’t in the South exist, too. You can hunt for merit without selecting only NmF universities.
(In fact, even Penn does… their Ben Franklin Scholars program - essentially a sort of honors seminar for kids who love the Humanities as well as STEM or business - has scholarships, for instance. Washington&Lee may be appealing to someone who likes Dartmouth and it offers merit scholarships too… Same thing for Emory Scholars.)
And then you have special programs within NMSF universities that share characteristics with some of the universities you like, although they don’t share everyhing.
SO, 3 TYPES of choices that can co exist on your list.
How big of a deal is weather? If you have a heart condition or SAD it may be a big deal but otherwise you may be able to roll with it.
If you’re a trans kid, some states are simply off limits for you. Some states are also very LGBTQ hostile so if you’re LGBTQ you may choose not to risk it or if an ally it may give you pause.
Abortion is another issue since college students are very much within the majority age group.
If none of the above is a life-threatening issue nor a deal brealer for you, then you’re looking at preferences: among all the National finalist universities, which offer enough of your key criteria (could be Greek Life, strong residential system, CURO/Research, National Fellowship advising, summer support for unpaid internships… it’s entirely up to you)? There has to be 2 or 3 that “work”.
So, my advice would be to talk with your parents so they tell you what your budget is. Then you keep 2 or3 of your high-cost reaches that fall within the high range of their budget parameters. Then you add 5-6 excellent colleges that offer merit. Then you add the 2-3 National Finalist you’ve identified.
Then see where the chips fall.
…ETA… Your thread JUST appeared on my dashboard but I see there are …72… posts already! So, I apologize as what I said is certainly, all or in part, redundant. Will go and read all those posts now 
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At one school we visited, the prof was giddy about a student who had a 99th percentile LSAT. I asked where will the student go. His answer ? Anywhere they want.
I get that this happened but I have such a hard time imagining a prof being giddy about an LSAT score. Yes, you need high scores to get in to a top law school. But most professors are aware that tests are imperfect metrics, and that you can be very successful at many good law schools, and most profs have had many outstanding students. Maybe he was giddy because the student’s score started out lower and improved substantially or because the student was absolutely deadset on a T5 law school, which would be out of reach without a top score? It’s hard to understand but I think for giddiness there had to be a reason that was not just the score.
Thanks to everyone that replied, and thanks for all the kind messages. I realized that I was rushing into a decision, and my plan now is to consider all my options and see where my acceptances take me. I plan on taking a closer look at other honors colleges and opportunities, and see if I think any of them would work for me. As some of you pointed out, it definitely is not all or nothing; we will see how the merit aid cookie crumbles.
In terms of the money, my parents are completely on board with whatever I want to do. It is in a 529, and it is money they view as “mine”. I could attend a private university with the money, but this thread was mainly about whether that cost is really justified when there are other options on the table. I think I had always assumed that when I got older I would use the money to attend a prestigious school, but when I learned what the national merit distinction could mean for my future, it made me question myself. My economics teacher was very clear of his opinion that the cheapest education is the best education, and so I felt like it was my duty to at least investigate the opportunities national merit opens for me. I won’t lie, Alabama has a bad reputation where I’m from, and many of the people who have chosen there from my school only help to reinforce the stereotype. So when I read other stories of parents who had kids similar to me choose, and subsequently love, Alabama, it made me think that I would be able to see myself at a place like that. Especially knowing that I would have a cohort of others who were similar to me in their academic achievements (I saw a figure somewhere here that over 350 of Alabama’s freshmen class is a national merit finalist). It also made me rethink what I wanted in a college. Dartmouth was beautiful in early September when I visited, but how much would I really enjoy the harsh winters? In addition, would willingly going to a place where depression rates are so high really be the best decision?
And I appreciate all the nuance in the discussion of law school. I think I am a good test taker, and could feasibly do well on the LSAT and prove myself to the top law schools. I also know that is years down the line, and I would not be surprised if I have a change of heart between now and then. $300k is a lot of money, and going to a prestigious school just for the doors it opens isn’t necessarily a good idea (especially if it means I would have to take out loans to fund further schooling).
So I have lots of tough decisions ahead of me, but I am grateful for all the opportunities I have. I hope to make it down to Tuscaloosa and potentially Dallas and Tulsa before making a final decision, and feeling where I feel most at home. From there, it will become a decision based on where I get in and what the costs would be.
Thanks to everyone who replied!
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OP you’re in a great spot. Apply and weigh your offers. We went through the process with S20 and S21. Realistically it was Pitt or PSU or merit somewhere else. They both had nice offers and it worked out.
S21 took some of his 529 funds from scholarships. He used a little to travel with his brother who had a co-op with one of the airlines. Great life experience.
We visited a fair number of schools. One of the takeaways was that there are Ivy caliber students at every school. Visit the honors programs. The kids in these programs will be fine and do well. They’ll get into top tier graduate programs. Good luck.
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He was giddy for the score. Now the student likely has other great attributes and it was obviously someone he’s close to. We were walking campus and he approached us and happened to be a polo sci prof and we were talking about post school and he was excited by that and I asked where the student would go to law school he said anywhere they want. Maybe it was just exuberance for the score or the comment was made factoring in the students overall portfolio.
Law school admissions don’t seem to be like undergrad.
Those LSAT scores have big meaning. Even your second tier schools - your Colorados, Tennessee, Utah report strong scores. Just not T14 level.
For law, it’s critical. There doesn’t seem to be near as many free passes as undergrad.
Anyway it was the comment made and I’ll leave it at that as I have no more context as it was a 10-15 minute conversation with the prof, his wife, they had their two young kids and my daughter and I.
Just got lucky we bumped into them or rather they into us.
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That’s the Thumper family too…but we spent a LOT on music related lessons and things.
In addition to visiting those highest-merit schools, also take a look at an in-between school or two, if you haven’t already. You might find that an honors college near ski slopes in Colorado or Vermont is an ideal balance for you.
For my kid, the visits made ALL the difference. Two schools that look alike on screen can feel very different in person.
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UMAINE-Orono has a flagship match and a strong outdoor adventure club. No on par with your favorites thus far, but may be worth looking into as a safety depending on what you want to study.
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Like most flagships toms of smart kids go to Bama. And yes, likely many not overly motivated
It’s rare for a public in that because its overall merit portfolio is so strong, outside of NMF, it’s still getting tons and tons of smart kids. More than 1500 attend from Illinois as an example with CA and Texas also sending more than 1k.
My son turned down a highly rated engineering school - not for the money but because at Bama he got his own room (4 kids share four bedrooms and two bathrooms). And he got his butt kicked academically and is in a wonderful position now that he graduated.
The schools you visited and like are smaller so make sure to visit Maine, Tulsa and if you make it to Bama, check out much smaller UAH. They have strong merit.
Many think like your teacher. Many think otherwise - similar to folks on this thread. Ultimately you and your family after you explain the economics to them - will decide.
You’ll have successes and failures at each school - high rated and otherwise.
Ultimately you all make the decision that fits for you. And you go from there. I will say that if you want it, you can get a rigorous and impactful education most anywhere. Bama has not just Honors but look at Randall Research and Blount Scholars.
Other schools that have generous merit will include schools like Miami Ohio, U of SC with the top rated Honors college, College of Charleston (my daughter has lots of rigor) and others.
The beautiful thing is you have choices and if you smoked the test now, you likely will later.
Don’t forget grad school costs money too so that may or should play a role in thinking.
One person upthread said they paid undergrad but not grad for their kids.
I don’t know your situation but these are certainly things to think about. How will you tackle the cost of whatever grad school you attend ? That’s likely where your Econ teacher is coming from.
Also - how much AP/DE do you have. They’ll travel further at some schools than others and some of the scholarships can maybe be used for grad schools.
No matter where you go, you won’t be the highest stat or “smartest” per se - so I wouldn’t worry too much about that.
And no matter your major, you’ll find plenty of motivated kids to associate with no matter where you are.
Best of luck.