<p>Although I do understand that many people are not good at managing money and need people like taxguy and Suze Orman to tell them what is or is not a good idea.</p>
<p>Sometimes the situation is appalling. Families who are truly struggling financially are also hit with their kids still expecting to go to a very expensive college. It’s tough on the parents when that happens. Perhaps, it was a good possibility and the expectations were created and abetted by the parents. It’s sad, however, when it clearly is a tough time for the family, that the kids cannot see this. Also sad when the kids just cannot see $80K in loans as a big problem. I’ve seen kids that way.</p>
<p>We also are in the grey zone when it comes to paying for a 52K + school. Could we do it? Only by taking out excessive debt, blowing a hole in our retirement planning (no pension for us, only “defined contribution” plans), or permitting our child to take on excessive debt that will ultimately crush rather than enable her dreams. I also want to be able to help my DD go to graduate school, which these days is increasingly needed no matter what the undergrad degree. </p>
<p>My biggest financial fear is not that my child won’t go to college. I know she will and I have some control over that funding. My biggest financial fear is being old, sick, and poor. Agree with the poster above who commented that Social Security will not be around for us when we need it, or only in vastly reduced form.</p>
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<p>Absolutely agree. Perhaps then, there is a benefit to having discussions like this and for people like taxguy to point out that it does not make sense to take on so much debt. 
I just don’t understand when one side says the other side is stupid to spend so much money on education, not borrow, but spend, when the money was accounted for anyway and did not have to be borrowed.</p>
<p>I also agree, lots of people are hopeless with money. The subprime mess? Caused not just by greedy Wall Street bankers and Hedge fund managers looking to short tranches of bad mortgages bundled as securities (CDOs) but also people who were willing to borrow money at teaser rates against the equity in their homes. And having no idea how to repay it. Or what would happen when the rates were “reset”.</p>
<p>Anyway, enough said…many people are in genuine trouble even though they were careful with their money.</p>
<p>There is nothing wrong with a kid taking on some debt for their degree. The amount of debt is another story as is the college they are attending and the type of earning power they will have. That is why the issue of loans is so personal for both the student end of it and what the parents are willing to invest. I would not be driving a ten year old car if my kid had a maximum earning potential of $50.000. Every parent needs to weigh in on who their kid is and what they see them capable of doing. It is hard to be realistic about such things but when taking on a life style change for parents and some debt for the student, it is essential to do this.</p>
<p>GreatWhiteNorth - I’m with you. A modest amount of student debt (perhaps up to the Stafford subsidized limits) can be a good thing. I think it’s important for students to be invested in their education - by working to pay some costs, using their own savings and/or modest loans.</p>
<p>(I said as much in my original post near the beginning of this thread #26)</p>
<p>And momma-three, I also agree with you that it is very personal. There should be no cut and dry rules, and we should not be so quick to judge other family’s choices.</p>
<p>My original point about Orman’s show still stands. I think she did families a disservice by only plugging state schools, and not discussing the full range of other affordable options out there. Instead of going for the dramatic tears, she should have stressed the importance of planning ahead, many years before you have to tell your child you can’t afford their “dream school”.</p>
<p>I don’t think Orman is a college planning guru by any stretch. Clearly she missed the fact that there are other options than state schools to lower costs. Many posters have experienced lower costs from the pricier privates when fin aid or merit money is taken into account. I know some state schools that are pretty pricey and give very little financial aid outside of what the federal and state agencies offer. Kids can certainly do better at some private school than in that situation. Also commuting is an option. Here, some schools will discount tuition for commuters. There many options.</p>
<p>What she did highlight is a spoiled child who seems to have no regard for the financial limitations ofher family and implications of a large loan. ANd a parent who somehow did not communicate those issues to the child so they were understood.</p>
<p>I can sympathize with some kids though. If you live in a big,expensive house, live very well, and then tell your kids there is no money for college, or very limited funds, it does say something about your priorities. As other posters have said, there are lifestyles that are true luxuries that some folks have gotten accustomed to and seem to feel are necessities. It all comes down to priorities.</p>
<p>I think it’s that old adage that I still read in the papers, magazines,hear college personelle say, about not limiting choices for college and that there is money available. I heard this message a half dozen times last month at a half dozen schools we visited. More emphasis needs to be made about financial safeties. Everyone should have financial safety built into an admissions safety. There should be a good idea on what your family can and are willing to pay. It should not be a huge shocker that your parents don’t want or can’t come up with $50K a year when the financial aid calculators say they can. You should understand the implications of taking out huge loans, and try to come to some understanding as to what kind of debt your parents and you are willing to undertake for college. </p>
<p>College should be a combination of savings–both the students’ and the parents’, income, again from both sources (start looking for those summer jobs), outside resources, and loans. </p>
<p>Funny, when I was growing up, we were definitely low income, but all of us saved money for college in my family. I had several thousand dollars in bonds and bank account by the time I was in high school. Birthday money, Christmas money, baby sitting money got stashed for future use. Don’t kids do that any more? Also my parents had some savings for us too, though it was a small amount,they made some effort. As we are. We are putting away a bit a time now for our two youngest even as we are trying to pay for our one in college and pay of the loans we took for the oldest. That way, despite what happens, there will be some money in some pots. It all adds up. It is for the one in college now.</p>
<p>I agree it is about priorities. Sometimes we need to accept that things may not be right or wrong, just different.</p>
<p>Our family: saved like crazy for college since children were born, no vacation home, comfortable but not lavish vacations, DD driving a 14 year old car with half a front bumper. DD going to expensive private.</p>
<p>Neighbor family: vacation home, foreign vacations each year, D received brand new Jeep on 16th birthday. D is told that parents will pay for state tuition only; D on hook for room, board, books, personal expenses, and incidentals. D therefore decides to live at home and commute to local state school.</p>
<p>Each of us thinks the other one is crazy for their approach to paying for college. Ultimately I guess neither of us is right or wrong, we just have different priorities.</p>
<p>GWN, exactly right. See it all of the time.</p>
<p>c…house Great Post! </p>
<p>It does remind me of a conversation I had with a relative years ago. She sent both her kids to small-ish private colleges. I really wondered how she could do it, given the annual cash flow requirement. She said they started planning early, invested some money in long-term CD’s, saved most of the kid’s earnings and gifts, applied for local scholarships, had small loans, and made modest lifestyle adjustments before and during the college years. Then, she added, “Don’t concentrate on the $40k per year. A thousand here, a thousand there; over time, it adds up to tuition.” (Note - quote is 10 years old.)</p>
<p>I followed her advice. The cost for each of my son’s is covered by a “basket” of funding sources.</p>
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<p>I don’t think that’s possible any more, at least for low income families. Certainly, when I was growing up I rarely (if ever) received cash gifts, savings bonds, or anything of that sort, and working full-time wasn’t a realistic option since I of course had to go to school and looking after younger sisters. Maybe 20 years ago I could have saved enough to put a significant dent in cost of attendance at my local state university, but back then most of our money went into more pressing concerns (electricity, light, water, food etc.) Sure, we could have saved more, but it’s sort of an unrealistic expectation for a student to have significant income and assets that can scale with the cost of college, even if they squirrelled away everything they earned (which often isn’t possible).</p>
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<p>Part of the problem is that college has gotten so much more expensive these days, that a few thousand - or even $10,000 in the bank – isn’t enough to even subsidize most public schools. Plus, if the KID has saved the money, under the current financial aid system, the savings create a disproportionate bump in EFC. (as compared to the same money in the parent’s account).</p>
<p>When my son was in high school he had about $5K saved up. He decided he wanted to go on a summer volunteer program in southeast Asia - the program fees were about $4500. We had always assumed that he was saving “for college” – but I realized that $5K in the bank was a mere drop in the bucket for college expenses, whereas it could fully fund the summer experience he wanted – so I encouraged him to take the trip and spend his own money. (Given the system, it made more sense for him to spend down his own savings than for me to subsidize the trip).</p>
<p>When even a public school has an annual COA that exceeds $20K, saving for college isn’t a realistic option for a kid from a lower income family – at most they may be able to save enough to pay their own out-of-pocket expenses once they get to college – or to buy a car to drive to college. </p>
<p>Obviously, for an upper income family, the PARENTS could still be saving – but again, with costs so high I think its harder to do the planning. I mean – I’ve got a newborn grandson, and I’ve thought that (if I weren’t broke from putting my d. through college) that it would be nice to set up some sort of college fund for him. But can anyone tell me realistically what college is going to cost in 2028?</p>
<p>I just saw a post on the Northwestern board from a student who is looking to borrow $50k to pay for his year there. He did not qualify for fin aid. NW is pretty generous in terms of aid. If he couldn’t get any money from them, his family has to have the availability of some assets, and it is most likely that he lived a life where he did get cash gifts, make a few bucks doing things. Heck, my family was considered low income. My kids worked every summer and stashed away there money, and I had them save half of any money they got from Day 1. So yes, they had some money for college. And they worked very hard to save money over the summer for college. And two of them worked at college for extra money. We also put away some money for college. No,not much. But even a little bit makes a bit of a dent when you are talking local college, state college, commuting. How can a middle class family that dresses well, lives well, intends for kids to go to college, not have a dime saved neither kid nor parents for college?</p>
<p>^^^^
That is the point…Parents want their kids to go to college but did’nt they realize it was going to cost them. We saved as much as humanly possible for our four kids and we would have had three quarters of it saved had my husband not lost his job. We had to use savings to get back on our feet and start our small business. We have been lucky that our kids are receiving some financial aid and that our business is doing better every year. </p>
<p>Our kids have also saved every gift and almost every dollar of their earnings to pay into their tuition. There is not a whole lot more we could have done. When all is said and done our kids will always know that we were happy to invest in what we considered to be a great opportunity for them. Like I said before, public in states are not always the best financial choice and all middle and lower income kids should know that. We were probably hurt in the financial aid award because we still had a good amount of savings even though our business was not making what we were accustomed to when husband was working at his former job.</p>
<p>The bottom line is that evry family makes choices based upon their kid. I don’t think too many parents would tell their kid that they could’nt attend a really great school because they aren’t willing to drive an old car or not eat out a couple times a week. It is amazing how some minor cut backs can make those tuition bills feasable. If some loans are needed than they are needed and again that needs to be decided based on the school the kid is attending and the major. I think many parents can tell when children have what it takes to be large earners. When your kids are doing some remarkable things at an early age you just know. Is it a definite…no…but nothing is definite… it is a risk that only that parent could decide.</p>