"Sticker shock" - how to reconcile >$70K/year expense at Duke

Colleges and Universities A-Z Duke University
1

Extremely smart kid with near perfect academic record and excellent extracurricular background applied for ED (binding) admission to Duke and got accepted. I’ve been at a loss of words to describe how wonderful an achievement this is and what a proud occasion it is.

As a parent though, the amazing news is accompanied by a shocker: the financial aid statement from Duke lists only a token grant, a $5K loan, and a parental contribution of nearly $70K/yr to cover the costs.

Per Duke NPC I filled out well before proceeding with ED, I was under the impression the family contribution will likely be in the $40K/yr range, perhaps a bit higher but no more than $48K/yr. I’ve been working hard over 16 years to prepare for this day and had succeeded to save enough for a $38/yr college expense. Anything higher was going to be a struggle.

However the CSS profile filled out months later (in fact after the Nov. 1st deadline for ED, just before Nov. 15 deadline) and in close consultation with and following several iterations and checks with some tax and financial experts had revised up our calculations on “untaxed income” and “parent assets” enough to end up with a much higher actual family contribution determination by Duke.

As many will know, this school is among the most costly, but it mainly offers need-based aid.

Given my older age, long working history with mostly frugal living and tax-conscious savings, and also to a couple of unusually good years, Duke’s calculation methodology unyieldingly holds me as a parent liable for the child’s college costs, understandably so because they can then help other students more in need of aid.

With about 5.4 to 5.5% increase in cost Duke averages every year, I’m looking at ~$305K for kid’s overall undergraduate education. Given the kid is thrilled about Duke and has the heart totally set on going there and wasn’t particularly keen about pursuing any opportunities elsewhere (even any full-ride opportunities, though at schools with seemingly lesser names, that appeared well within the kid’s reach given the outstanding CV), there is no question of me even bringing up the option to get out of the binding ED agreement with Duke.

Besides, the kid and Duke both can claim I can absorb the cost given my apparent financials, more pretax savings of late and better assets now that I’m longer in the tooth. But they don’t have to consider the price to be paid in the process: $305K, or even the funds I had saved up is no chump change! Things will have to be given up (few hobbies to develop for the sunset period after all the frugal working years, same with vacations and home improvements, vehicles, etc., slow down retirement planning, and also expect to fall short of saving goals for my other much younger child who has years to go before college.)

My struggle is trying to reconcile what seems to me an exorbitant price of >$300K over 4 years with the value of education on offer at Duke. Will that be worth it?!

Are there any suggestions on how to ease the financial aspect, not in terms of taking out loans but any other options with the school and their actual bill to me e.g., what point(s), if any, can now be convincingly put forth to have them lower the family contribution?

2

Do not blow it all on your older child! The younger one will resent it.

An appeal may get you a couple thousand more. They may suggest that you sell some assets. And yes, most parents make sacrifices to pay for elite and expensive collegs.

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3

Call the FA office and tell them about the drastic difference between their NPC and their package. You can back out of ED if the money isn’t there.

If you can’t afford the bill, do not put yourself in debt or eat into your retirement. It’s not worth it!

4

Did you talk to Financial Aid Office about huge discrepancy between net price calculator and the ED price?
Could kid take gap year, defer, work for $? What is career goal?
Are your “untaxed” or “parent” assets really needed for retirement, and not available discretionary spending?

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5

Sounds like OP’s financial picture changed so the much lower FA package is warranted and unlikely to get more than a token adjustment on appeal.

Yes, many, many parents tighten the belt and give up stuff & make cuts in spending. Hobbies and vacations can wait. You’ll have to decide if your retirement and savings for your younger child can be sufficient to meet other goals.

6

I’m not sure what you can gain. You can certainly discuss this financial aid award with Duke, but given what you posted here, you are not likely to see an increase in need based aid. You state pretty clearly that the calculations were based on accurate information that perhaps wasn’t exactly aligned with what was on the NPC. Is that correct? The financials on your Profile were not the same as those on the net price calculators…right? And the Profile ones are accurate, right?

If so, what would be the basis for your request for reconsideration? Most financial aid departments will not reconsider simply because a family says the net cost is too high.

You have a couple of choices.

  1. Decline the ED offer because the cost is not sustainable for your family.
  2. Request a reconsideration but really, that’s not likely to get you $30,000 in additional aid...it will be a smaller amount, if anything, in my opinion.
  3. Is your 2019 financial picture significantly less than 2018? If so, perhaps a gap year with applications for 2021 could be considered.

I would strongly urge you to think seriously about jeopardizing your whole family financial well being by paying $70,000 a year for one kid to go to undergrad school.

Your son sounds like a terrific student…but hoping he understands that the financial well being of the whole family needs to be considered.

Then again…if you have the resources to actually pay these costs…that’s your decision. I would strongly urge you not to fund the balance with huge parent loans.

7

Agree that a talk with the FA office might be in order, but I would re-run the NPC before you do that with correct numbers…seems like maybe you had forgotten to add back untaxed income, like 401K contributions, and/or didn’t include all assets?

But if the NPC doesn’t ask for this info, I would bring it to the FA director’s attention.

8

Did you run the Duke net price calculator with these more accurate figures before you submitted the Profile…?

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9

I don’t think it’s worth it.

What other options does he have, what is his career goal?

10

Look at other aspects of total cost? Will you get a tax deduction from the tuition expense? Can you continue claiming your child as a dependent longer? Can you keep your child on your healthcare and therefore opt out of Duke’s health insurance? Can you reduce charitable giving during the four years?
Are there outside scholarships your son should be applying for (every $250 scholarship makes it easier to get the next $500 scholarship, and so on).
Could you pay off your primary residence and “hide” the money there? Could you move to a much more expensive primary residence and “hide” your money in it?
In the end the best solution will be the simplest

11

“Extremely smart kid with near perfect academic record”

This sounds familiar.

“older age, long working history with mostly frugal living”

This also sounds familiar. Unfortunately universities don’t seem to understand that if you are retired, you will not be able to pay off your debt from future earnings and at least some of the money that is just sitting in the bank is retirement savings.

I think that you probably have only two choices. One is to pay. If you do this, remember that you are setting a precedent that will also apply to younger children if you have any. The other option is to back out of the ED agreement based on finances.

We set a budget for our kids up front. This was stressful with D1. D2 just picked schools that fit the budget with room to spare. It is tougher to do this after you already have an ED acceptance, but you do need to be realistic.

Loans are tough for older parents because you don’t know whether you will be able to work long enough to repay it, and many university graduates make barely enough money to just pay their living expenses. It can take a while for a recent graduate to get established in a lucrative career (if this ever happens). D1 at this point is very happy that we did not let her take out any education loans.

One option is to not retire when you originally intended to. The problem with this is that health surprises do show up, and are increasingly likely once you get past the age of 60. Economic surprises can show up also. We have been living in economically relatively good times recently, but it might not continue. We just don’t know.

12

I think you should have a discussion with your kid before he tells all the relatives at Christmas that he is going to Duke.

Run the NPC again, and this time take screen shots. It may help as you mull over the next steps.

13

Let me ask you this : what does your child want to major in and what is the expected salary at the end of 4 years ? Look at this as an investment, not just a nice gift you want to give to the child. Imagine that one day you will need help/money to take care of yourself. Would your child be able to pay for assisted living or daily caregiver ?
You think a diploma from Duke is a guarantee for happiness and success ? Sure your child is thrilled, especially if somebody else has to foot the bill. Some children don’t even understand what a huge burden a student loan is once you finish school, want to start a family, buy a house, etc. It is our duty as wise adults to teach and bring them back to reality.

14

First off congrats and hope this works out.

However, a child will not be on the hook to support the parent in retirement. That’s absurd. the opportunity to do so considering life’s challenges and the time needed to be in position to support you and their lives - make that highly unlikely and unwise. That’s a silly cycle to begin.

Definately call the FA office.

I would say that on campus costs, books, labs, travel, uber, coffees, potential semesters abroad, summer semesters, spring break, sports package, Greek life dues etc will be much more than you think.

And everyone who says just don’t support those expenses, I understand. But it’s a crappy way to go through four years and not be able to participate. And yes I know there are free events etc.

Just a look at things you need to consider in terms of costs.

Best of luck. I would not do this just because my child “wanted” something. There are options and places nearly as great that would offer a student at this level significant merit awards.

15

Do you understand how Dukes package is coming up with more you have to pay over what the NPC on their website estimated? You can send a copy of how your good faith effort on the NPC has resulted in sticker shock and appeal in that basis. However, if the numbers fall firmly into Duke’s formula, there may be no wiggle room.

A lot of good ideas and advice here. Yes, you might be able to bring down some of the cost by funneling money through 529 is your state offers a tax break… there may be some other things here and there that can shave the cost down a bit. But the bottom line is that Duke is going to be very expensive for you, and it’s a personal decision whether it’s going to be worth the personal and family expenditure and sacrifice.

16

@diegodavis

Th things you are suggesting will not significantly impact th cost for this student to attend Duke.

The max tax credit is I believe $2500. Health insurance from the school might be able to be waived, but it’s also possible it’s not included in the cost of attendance.

“Hiding” money in home equity? @BelknapPoint how much is home equity assessed by Duke? Also, what good will this do for this kid this coming academic year? Assets are reported as of the date of filing the forms so any moving around afterward won’t impact 2020-2021.

If this student got need based aid, it is very possible that any outside scholarships will reduce that aid first. No net gain.

Unless I misunderstood, the OP entered data on the net price calculator…but what was actually ON the Profile showed more unearned income and assets than what was entered on the NPC.

If this is the parent who posted yesterday, their income is $160,000 a year also…and IIRC there was a non-custodial parent as well who seemed to be out of the picture. Did the student get a NCP waiver? If I’m wrong and this isn’t the same poster, please correct me. @EDRacketShock

17

“However, a child will not be on the hook to support the parent in retirement. That’s absurd. the opportunity to do so considering life’s challenges and the time needed to be in position to support you and their lives - make that highly unlikely and unwise. That’s a silly cycle to begin.”
But it has been a child’s duty to take care of their parents for generations. I know, in this day and age we forget our obligations towards our parents and look for excuses, some actually justified. But then, who will take care of mom and dad when they can’t make it on their own and have no savings after footing a 300.000 $ college bill ? The state ? Neighbors ?
A 70.000 $ per year is a rip off price, no matter what the name of the school is.

18

@1Benice

I certainly expect my kids to be here for me, as I was for my parents. But I do not expect them to support me financially and certainly not as payback for paying for them to go to college.

This family has a younger sibling who also just might go to college. Are they prepared to pay another $300,000 or so for sibling 2 if that student works hard and gets accepted at a Dream school that has a cost which is more than they feel they can pay?

This is a family decision for sure…and I hope they can reconcile this.

I wish they had run the NPC with the accurate figures they put on their Profile form. That might have made them reconsider ED altogether…or at least consider the actual net cost.

There seems to have been a difference in numbers between what was put on the NPC and what was actually real numbers entered on the Profile.

19

Tell your child that the cost of Duke, at this point, is not doable and, before he gets upset, say:

“Let’s speak with financial aid and see if we made a mistake on our paperwork or they may have. We will tell them it’s just too expensive for us, but we still need to know how they calculated our actual price.”
That’s it.

Your child will say something to the effect of, “I worked so hard to get into the school and I got in, but now you say we can’t pay for it? WHY NOT?” Don’t try to explain it, at this point, because he won’t hear anything when he’s upset. Let him rant a little.

Go review a print-out of the NPC paperwork. Have it out so that he can see it.

Taking out horrendous loans for his education is a mistake. Some loans require immediate payment as he goes to school. If he says he can repay the loan, he’ll be at it for 30 years.

After your child graduates from college, he should not expect to be compensated on the high end of the pay scale. Large companies have scaled back what they give new hires. He wont be able to live on his own, buy a car/house, go out for leisure, etc. because he will have to make those huge loan repayments.

Please do not go into this kind of debt for your child. There are plenty of schools where your child can earn the same degree. The companies don’t really care where the diploma was achieved.

20

Sounds like this needs to be dealt with ASAP so son can get a bunch of applications in elsewhere.