Telling a kid you can't afford their "dream" college

<p>Am so happy for us and the kids that they were able to both graduate debt-free and are now living their dream lives instead of having crushing debt to repay. They were happy with the U they attended and the older child has an excellent job. Hoping younger child has similar success.</p>

<p>I gave my kids a budget which was a little more than the cost of our state flagship. I told them if they wanted to go someplace more expensive, they would need to figure out how to pay for it (loans, scholarships). If they went under budget, that was money I would put in the “parent bank” to help pay for necessary things in their adult life such as a car. I then showed them how much they would need to pay/month once loans were due. I then let them apply where ever they wanted. </p>

<p>The surprise was the variance in financial aid packages. One of the schools, an elite LAC and DDs “dream school,” came out less expensive than the state flagship. DS’s dream school was too expensive and he could not figure out how to meet the “gap” even with Stafford loans. </p>

<p>My advice is laying out the budget before putting in applications and let them apply with that information. When the financial aid information comes in, they can do the math. My youngest is in her last semester and no one in the family has college loans to pay.</p>

<p>We began saving for college when our two kids were babies. Our plan was to save enough for both to go to instate publics and graduate debt free. We started talking to them about it when they entered high school. We let them know that we could cover instate publics but would not go into debt for college. Neither kid ever had a
“dream” school.</p>

<p>We also told them we didn’t want them to have college debt either. If they could get enough merit money to cover extra costs for college beyond our state schools…fine, as long as there was no debt incurred. </p>

<p>Both had opportunities to go elsewhere (S1(NROTC) and S2(football) but decided that they would rather go to big state u’s here in our state (North Carolina). They loved their big state u’s, graduated in four years with no debt and some money leftover in their college funds to start life. If we had to do it over again we wouldn’t change a thing. We stayed within our means and it all worked out as planned. Now DH can retire at 55 and we can begin our “dream” life!</p>

<p>We went to visit one of our state schools last year ( thankfully it is an academic and financial safety that my daughter likes) and the person doing the information session said to the kids " look to your left and right. I hope you like these people a lot because you will be seeing a lot of them if you go to a more expensive school." I am not sure if the kids got the joke, but the parents certainly did.</p>

<p>I think that, to write a good article, you have to find the population who want much for their kids and can’t always deliver it, so they wait and hope that there will be enough and then sometimes it’s too late. Most of the posters above seem to have it all together, but the fact of the matter is that the majority of the population doesn’t…they often struggle and hope. Unfortunately, I don’t think CC is necessarily the best place to source for an article because often the people who have it all figured out are the ones who tend to answer posts; it may be better to ask to talk to people confidentially about it.</p>

<p>Kim, are you getting what you’re looking for?</p>

<p>

</p>

<p>There seem to be many students who do not have any real safeties in their application list, probably due to either student or parent wishful thinking on either admissions or finances. andi’s son is a classic example on the admissions side. But plenty of others pop up every April.</p>

<p>Well if you read my post. #29, I freely admit screwing up on this issue with older son. I made promises I could not keep and it was heartbreaking. I have shared my experience very openly with friends, neighbors and on CC because I want to help others avoid the same pitfalls. I place an extremely high value on a quality college education and the entire college experience - perhaps some would say too much. And it came back and bit me when I realized we had no way to pay $45,000/year for college. As I wrote, it all worked out in the end, but I broke a promise I had made to my son and I will always regret that.</p>

<p>Points to consider - family income and future fluctuations. When I promised my son any college - it was based on our having a certain level of income. I didn’t foresee the recession and resulting job loss. The advice I have given to my friends is to base their college budget on a very conservative estimate of their income.</p>

<p>I also did not understand the rate at which college pricing was increasing. When I made that promise, my mental picture (this was in 2005) was that even the best colleges cost about $35,000/year. I did not imagine that in 2009, we would be looking at $45,000 and up.</p>

<p>The net price calculators have solved some of this, but I always advise families to start this conversation as soon as their kids enter hs, and to have an understanding that finances change over time and everyone has to be flexible and realistic.</p>

<p>We didn’t plan ahead and I never did figure out how much money we would have available to fund our kid’s college education. Basically, we had modest income, no debt apart from mortgage, and no savings, and two fully-paid for vehicles and a frugal lifestyle. What is absolutely amazing is how well this unplanned “strategy” worked out. It also helped that we had two bright academically talented kids. They were both accepted to big Universities that would have been almost a free-ride due to NMS or merit scholarships, other Universities where costs would have been just room and board and books, on up to costs about equivalent to full-cost at. our flagship. U. They ended up matriculating at a private meets-full-need university that we were able to afford out-of-pocket (due to not having car payment or any other reoccurring costs like cable tv, landscaping services, etc. Like I said, we were frugal folks.) An additional boon was the year where they overlapped and were both at college, since our costs were the same for one as for two in college.<br>
Our unplanned strategy is not necessarily one that i would recommend for others, but it worked out well for us. It just happened that we had no savings, since we had used all our money to build a house and buy the cars. We refinanced the house when rates went down so that we would have more disposal income to pay for college. One kid ended up with no debt, and one with student loans of about $8500.<br>
We will be grateful to the college financial aid system and this university forever!</p>

<p>p.s. The kids were always aware that they would be choosing a college that we could afford. No DREAM colleges at our house. But in spite of trying to educate myself about the college process before starting it, I really wasn’t sure how financial aid etc would work out, so i wasn’t able to determine ahead of time which schools would end up being affordable to us. it’s like most things in life; easier to do the second time around!</p>

<p>There also seems to be real confusion by parents about merit aid and scholarships. Many parents will talk to others about all the merit aid that there children gleaned from schools that don’t give merit aid…like the Ivies and other privates.</p>

<p>Often financial aid packages are given with components to their aid that sound like they are merit aid scholarships based on students excellent grades or leadership.</p>

<p>But in reality, it is still only available to those with financial need and is really a part of their financial aid package given a fancy name.</p>

<p>But parents without financial need will often hear that so and so whose grades are not as high as their child got into a school and got a scholarship. So they hold out hope that their child with higher grades will get a scholarship, too…even though they actually have zero chance because it was given to those with financial need only.</p>

<p>As a financial aid professional, my belief is that parents need to start thinking about paying for college as early as possible. They need to understand the reality of financial aid and plan accordingly. Every time they pay the bill for the travel hockey team or the gymnastics or dance or baseball or whatever team, they need to understand that they are making a choice about paying for their child now that may impact what they have available to fund college later. There is no right or wrong to the choice - but there should be an awareness of how all expenditures impact the long term.</p>

<p>Once the kid is applying for schools, the parents need to be honest about what they can/will pay. They should educate themselves about the cost of various college choices so they can help their child in terms of looking for appropriate schools. It is important for parents to realize how much their state school actually will cost them … the thought is that state schools are affordable, but they may not be. </p>

<p>In terms of saying no, if you have to do it, you just do it. Both of my kids had to say no to schools because the net price was more than we would pay. D said no to an elite school that met need but had too many loans in their need-meeting package; she received an affordable package from another elite school. S said no to a private school that offered a large scholarship that just wasn’t large enough … he went to a state school that cost more than we paid for his sister’s school (that’s the way aid sometimes works out). </p>

<p>Life is full of choices. Saying no to a school is not the end of the world. The time it is sad is when the parent must say no to a non-dream school … a plain old, run-of-the-mill, lesser-tier public school … because there just isn’t enough money even for that. If a student has a viable option the parent can afford, he should feel lucky, indeed.</p>

<p>We knew from the start that we would not be eligible for any financial aid. We didn’t even fill out the forms. We aren’t wealthy. We lived in the same house for 22 years and paid it off before the college years. We drove the same cars for many years. We lived fairly frugally…public schools ,no expensive EC’s, no expensive vacations or camps, both kids worked part-time jobs year round starting in soph. year of h.s. Privates were way outside of our “no debt” budget plan. We were very lucky that our sons really wanted to go to our big state u’s. so we were able to avoid any angst.</p>

<p>Not picking on this OP. I can’t help but notice how many OP’s start a thread then disappear. Does that bug anyone else?</p>

<p>Hopefully Kim will re-appear. But whether she does or doesn’t, this thread should provide a lot of useful information for people who are worried about telling their kids the realities of college finances.</p>

<p>In my house, we set our college budget as the cost of the in-state flagship. We made it clear early on, maybe high school freshman year, that our budget was the in-state flagship. We knew we wouldn’t qualify for financial aid, so anything beyond that budget would require merit awards. </p>

<p>The private and expensive “dream school” with a low acceptance rate eventually hit the radar. She applied fully understanding that if the merit awards did not appear, then she would have to go to school elsewhere. It was a miracle that she was accepted to the school with merit scholarships. The net cost is about equal to the state flagship.</p>

<p>The whole thing was further complicated by the fact that she was a National Merit Finalist, so she had a number of full rides and full tuition scholarships available. She turned down all of those to attend her dream school and completely spend the college budget. If she had taken an NMF tuition award, the remaining funds in the college budget would have been available for graduate school. However, because she skipped the NMF awards she will be on her own to pay for graduate school.</p>

<p>I think Kim’s purpose is to collect information, not to debate. I imagine she will post again if she has questions. I do hope she writes an informative article. A student poster and I were interviewed for a financial aid article about affording college last year, and the article was pointless (and the other poster and I came off as a bit less than intelligent about the subject, sadly!).</p>

<p>A few years ago, I had a plan for my son’s college education, but it wasn’t a good one! I assumed that because he was bright and talented, he would be accepted into one of our state’s summer honors programs and receive a full ride to a state school. Therefore the fact that we had nothing saved at all would not matter. As it turns out, he was not accepted into an honors program, which it turns out no longer guarantee a full ride anyway. And none of our state’s schools had the degree he wanted. </p>

<p>Fortunately, my dad gave us a generous amount of money for college, enough for in-state tuition at least. And through the Academic Common Market, the program he wants is affordable at an OOS school. But you better believe we are making sure son #2 doesn’t go down the “dream school” path.</p>

<p>We paid 20-30k per year for each of our first two kids to go to private colleges (kid #1 turned down full rides for dream school, which H allowed him to do–totally not my idea.)
Next kid took full ride as NMF with no complaints. Kid #4 is also “forced” to take that full ride. Unfortunately, his dream school is the same one we let kid #1 go to. We had to tell #4, “Sorry, we can no longer afford it.” He was a little disappointed, but realistic. He only applied to one school and is content to take the scholarship there. I got him to see that going to college for free is worth at least as much in bragging rights as going to a dream school. Totally not “fair,” as I think this kid is more deserving and the school is a better fit for him than kid #1. But the price of the school has increased a lot since #1 started there in '06, and we just can’t afford it. We went into the whole “paying for college” scene with no plan. Now we need to plan for our retirement, and plan for college for kids #5-7 who aren’t as likely to collect full rides.</p>

<p>

And, in a nutshell, that’s the fundamental problem with college education in the United States. How many parents could anticipate, budget and save for a 7-8%, year over year increase in tuition since their children’s birth?</p>

<p>Time to start treating affordable education as an investment in America’s future. The current model is not benefiting this country.</p>

<p>Put that in your article, Kim.</p>

<p>My oldest son dreamed of attending an Ivy or Duke. Certainly had the grades/SAT/extracurriculars to qualify. He was also a National Merit kid who got tons and tons of packages from schools across the country. When the economy tanked in the fall of 2008, my husband and I told our son that he had to select one school with a National Merit scholarship package, just in case things did not work out with the Ivies or Duke or any other top-ranked school that he liked. Reluctantly, he picked Alabama, because it was the closest school to home. He never had any intention on attending Alabama, and he thought we were crazy for making him select a NM package as a backup.</p>

<p>Things did not work out with the dream school. One of his elite choices would have left him to borrow about $15 to $20K a year, and he even thought that was too much.</p>

<p>He graduated from Alabama last May with two degrees and two minors. Traveled all over the world – mainly on scholarship monies. Headed up several organizations. Is debt-free (except to his mom and dad, but the interest rate is a little lower). </p>

<p>Now looking to attend law school this fall after spending a year working in the DC area.</p>

<p>His kid brother is a HS senior. He has no interest in the Ivies. He wants to use his academics and ability to run to land his school, and so far, he has been relatively successful in gaining interest from schools. He has seven acceptances, and two offered full tuition rides. A third is giving him at least 86 percent of a tuition ride. Some of his friends all but laugh at his school choices, but they are what he wanted. He dares to be different. Other friends will be borrowing lots of money to attend college. He does not want to worry about debt, and his parents are teachers. We do not make a mint each year. So he is willing to carve a different path, and he says he knows he can make it work.</p>

<p>kelsmom: I am a single mom with a low income for my area (well below median income for my state and town), and I think about that every time I write a $365 for my daughter’s voice lessons, which I do every 7 weeks. (I feel less anxious about her piano lessons, we got a discount because she gets them from a friend of the family). But she has a talent, and I want her to develop it, which I think will help her with college. </p>

<p>My sister and BIL paid off their mortgage the year before their daughter went to college, so they just shifted that money to her college, which offered a monthly payment plan. She was not a strong enough student to get merit aid and they made enough money that there wasn’t a lot of free money - there was some, for her sport, which she ended up dropping after 2 years so she could focus on her studies. But she is passionate about her major (nutrition) and I think we’re all hopeful that she will find work in her field.</p>