How did the $300,000 cost for Stanford become $500,000 ? Time value of money ?
My understanding is that Stanford University COA is about $70,000 per year. With an assumed 4% increase each year, the figure grows to $72,800, then to $75,712, then to $78,740. Four years of tuition, fees room & board at Stanford would be about $297,252. Add in travel & books to round it out to $300,000.
Measure lost interest at 4% per year as well = roughly $30,000.
It is fair to view total COA for a Stanford degree at about $330,000, not $500,000. What am I missing ? The WFU Stamps Scholarship stipend ? The stipend is $750 per month for, presumably, 9 months per year = $6,750 for 4 years = $27,000 plus $15,000 research grant =$42,000.
Total is now $372,000.
But Stanford awards research grants as well. Plus, internship opportunities may be better for Stanford students.
^^^
Also, note that the student may get lucrative summer internships that can help pay for other expenses. The COA given on the college website is usually the max. amount.
The student can mitigate some of the cost (roughly Publisherâs âlost interestâ portion for maybe 4 years) by working summers as well. I know my kid has already found a job and is helping defray college costs this summer.
Ultra wealthy schools like Stanford & Princeton tend to offer generous funding for student research. In my estimation, it is more reasonable to view this as a $300,000 decision or investment, rather than as a question involving $500,000.
How long does the benefit of having a Stanford degree last with respect to real world job placement ?
Stanford degree value in career versus value of WFU Stamps Scholar ?
Just an obvious point here. Thereâs no Wake Forest Stamps Scholar universe that exists where lucrative internships and summer jobs arenât a thing as well. None.
Financial
Stanford 330k plus op sons med or law school is another 250k and daughterâs public university in state would be 160k. Best scenario. 740k and current 200k saved. And four years to save 540k on an after tax income of 150k. And a life to live. How does that math work? Itâs just nuts what we are suggesting. This is a Stamps Scholar at Wake. Good lord.
Tesla analogy and the decision to sacrifice to get the student to a better brand. I get it. But the decision set isnât home made moccasins vs a pair of air Jordanâs. Itâs addidas cross trainer vs the best Nike runner available.
And then new Tesla is not a good analogy. Itâs the opposite. .
You are saying no to a brand new Toyota Avalon Or Mercedes E 350 each and every year for the pleasure of âpaying 70mâ for the the new Tesla each year.
Thatâs the choice.
Itâs not eating vs Stanford. Or no new car vs Stanford. Or no family vacation vs Stanford No retirement for us vs Stanford.
This is a third choice. New car each year and almost Stanford. Vacations and almost Stanford. Retirement and almost Stanford. Itâs both not one or the other.
Good luck op. This is silly really and circular. You either think a top top school for free with a recognized Stamps network/opportunity is better than a notch up the better school ladder and costing you financial independence and choice. Or not. Itâs that simple.
I read the $500k versus $300k to result from the reality that tuition is paid with after tax dollars. To have $300k in after tax dollars, you need a higher number of pre-tax dollars. So if someone is looking at what they will need to earn to spend $x for college, you need to earn more than that on a pre-tax basis to get there. Required pre-tax earnings will depend on nature of that income, tax rates and rates of return. That is at least how I read it.
OP has the money. Apparently the cost of Stanford will not affect current lifestyle.
I believe that folks have the right to spend their money as they want. It is okay to spend money on a super elite education if that fits with the family values & priorities.
P.S. @saillakeerie : Thank you for your response to my question.
The op does not have all of the money. He has a lot of it. And a solid high income. 300k. But as poster above reminds itâs after tax dollars that buy things.
California resident with a blended tax rate of fed and state will probably be 42 percent.
That before health care fica ss tax etc. 50 percent leaves 150k for the mortgage the 401k insurance gas food car payments. Kids dance lessons and donating to charity.
Whereâs the extra for the 540k need coming from. Itâs lunacy to me .
Maybe not with this family.
But other familyâs with a lot less will read this and think the big plus and private loans make a lot sense.
The heloc sure.
The 401k loan. Why not look at lifetime earnings charts.
Look at the research opportunities and brilliant cohort of student. Heck itâs Silicon Valley everyoneâs to be there right? Of course all of this is true. However. Wake and the Stamps gives you at least what 90 percent of this. 80 percent? I think itâs much closer thank that.
Op has another child on the way to school Theyâve saved 200 to 250k for a 320k need. No extra for med school and no money for child two.
I live essentially at âGround Zeroâ of the Stanford. UMich talks about the âMichigan Differenceâ ad naseum. I see first hand the âStanford Difference.â
My neighbor and family friend is a regular on CNBCâs Squawk Talk, my employer is a Stanford alum and the neighbor across the street is a doctor at Stanford with 2 of their 3 children going or attending Stanford. The other is in middle school. Stanford is building campuses, facilities and a collections of buildings everywhere around here. Theyâve closed one side of the street entirely and made parking at my gym âmission impossible.â (hyperbole)
Itâs all around me and I canât get away from it. Please help me!
So 58%X300,000=$170,000 is for OPâs take-home income. Stanford is about $70,000, and the OP should have $100,000 to spend annually on something that the OP thinks worth to do.
A lot of posts here are insult to Stanford full-pay parents. Have been there and done that. My case was really to choose Yale or Stanford, not full ride to schools like Michigan. My son spent 4 hours to apply Stanford and got in. He was recruited by Google upon graduation (he was not CS major). He randomly applied to Stanford MBA and got in (w/ MS-CS joint program.) He made me a Stanford parent 4 times ( two BSs, an MBA and MS-CS). He is a PM (product Manager ) at Google now and also teaches a class at UC - Berkeley (extension). All is from my original investment of $200,000 at Stanford and his effort.
OP â I think my sonâs case is an outlier that could be influential. My suggestion is still my original one - if you can comfortably afford it, do it, otherwise, go to WF and never look back.
We had a similar situation for both of our daughters. Both got accepted (full pay) at their Ivies - Harvard and Dartmouth, respectively. And both were offered generous merit money at cheaper, lesser but still solid schools. We are not rich but paying the full pay was doable by employing some economy and sacrifice but without taking a huge hit to our lifestyle.
We werenât big spenders to begin with, so refraining from buying say expensive toys or costly vacations wasnât some big sacrifice for us. In practical terms what it has meant to us is that we had to forego some of the more expensive maintenance work on our house along the way, so we now need to get caught up on that. Get the house in shape for our golden years. And I will probably need to retire 2 or 3 years later than I would have otherwise in order to boost the retirement portfolio up to our target numbers.
But overall it has been worth it. I warned each girl at the outset of their college years that if things went south for us financially (say lay-off or market crash, etc) they were going to have transfer to lower cost options. And they agreed. I also offered to set them up with a nice car at a lower cost college. But both still opted for their dream schools without a car. Both had worked for very heard for many years to achieve their high-end acceptance letters, so I had to agree that they had earned it.
And I have to say it has worked out fine. Both girls earned STEM degrees and have gotten internship, job, and grad school opportunities that in some cases Iâm not so sure they would have had if they had taken the same courses and earned the same degrees at some of the low cost schools.
You certainly should NOT go into big debt or otherwise wreck your finances for the sake of Stanford, but if you can make it work financially then maybe you should consider going for it. In the end I thought it was worth spending the big money on the education of my kids. Itâs not like I had something better to spend it on.
OPâs income is above $300,000 according to the original post in this thread. Also, OP has saved almost $200,000 for sonâs education.
Summer internships could make Stanford more attractive. WFU Stamps offers $15,000 research & travel award spread over 3 summers. But if OPâs son works instead, then he can make substantial money if interested in interning at an IB or MC firm. Pay is about $3,500 to $4,000 per week for interns at the top firms.
The input regarding actual $ regarding internships is the most useful. If you can make $4,000 * 10 = $40,000 less 25% taxes = net $30,000 for a summer internship, then some of that can pay for Stanford. The evaluation really needs to be if a student could get this same job at Wake Forest. Maybe they would get a different internship that pays slightly less but still a solid internship.
In following many of these discussions on CC, this has always been my question - Are there jobs/internships available to these students that arenât available to others? And, if so, would my student even want that job? If you read other forums, like Reddit and Quora, the hours for Investment Banking and Management Consulting are horrendous, even for internships. Sure, you gain valuable experience and make lots of money, but does your child really want that? Iâm sure some would thrive on it; others, not so much.
Many find the work environments to be very stimulating due to the projects, co-workers & guidance received. But, yes, if one does not want long hours, then best to look elsewhere for work.
Yes, there are jobs available for students at elite universities which are rarely if ever offered at non-elite schools. Some are great such as two year rotational programs with major Fortune 100 companies, and some are just 2 year paralegal stints at the most prestigious law firms in Wash DC & in New York City.
@Publisher I think the $500,000 came from my post. Stanfordâs cost of attendance on its website is $74,700 PLUS travel home. Throwing in 2-3 plane tickets and other incidental raised the real cost to $80,000. I have a friend with freshman twins at Stanford and he says $80K is a âlittle lowâ. I used the $500,000 number as an illustration of the financial swing I am facing. I am looking at paying $320,000 to Stanford or receiving $160-$180,000 from Ole Miss.
No, interns in IB and consulting are not getting 4k/week. Not even half that. At least not in NYC. So if you know of any firms paying that rate to undergraduates, do share the names of those companies. Nor is silicon valley high tech or private equity.
@publisher Please give examples of these $3,500 - $4,000/wk internships. MBB definitely doesnât pay that much. I canât speak to any other internships, though I know theyâd be extremely rare. And for you and others who seem to be peddling the golden ticket argument, please produce the stats. The facts are as follows: these top internships and full time jobs are extremely hard to get from even the elite schools. Extremely hard. Very few applying for MBB and IB from the top schools get offers. MBB competition is fierce. MBB hires from all over. Top IB firms hire from non-target schools, though in fewer numbers. And competition is fierce for everyone. And lest I become a broken record, most/ the overwhelming majority of students do not want these jobs! So please do tell what these other exclusive opportunities are such that it should be a primary consideration.
