@notveryzen agreed.
There are many different paths to a given income level. So some families, income at college time may well be less than it had been historically. For some, incomes increased leading up to college but at steady pace. For others increase was quick and late. In each case for varying reasons. All viewed through same window.
I always laugh at the high income comments, I don’t consider us high income at all making 350k in Southern California in a very high COL area with a bunch of kids. I don’t think we should be eligible for more need based aide than we are though. One of my kids is doing public with a small athletic scholarship, one applying widely and we may be full pay private if it’s the right school, or we may go down the rankings a bit and take the merit offers she’s gotten. I can see doing full pay, or near full pay, if it’s a top 25 school. Schools lower than that I think you have to weigh the value of that degree compared to lesser schools offering substantial merit.
150-200k, NYS pretty high COL, Moderately well funded, an old Defined benefit and a 401 should be fine. No family money, no savings, My kids are first generation college. We decided to pay as we go, 2 kids were told state school cost on us. They had good offers from privates that matched state, but then got merit at state and chose it. I don’t regret it, but do sometimes get drawn into the private U good…state U bad comments.
I thought we were doing well - Mid Atlantic region - expensive suburb of Philadelphia (but no NYC type costs). Combined pretax income $180K (both have advanced degrees and over 20 years with same employer - income has slowly but steadily grown but is maxing out) Mid 40s - no generational transfer of money yet or expected. One pension - plus funded retirement assests >$800K plus $500K + house almost paid off in 6 more years. We are savers and I have no idea how we could have possibly saved any more - but it’s not enough to fund free choice dream schools for 3 kids.
Full pay expected by schools - yes - Willing/able to full pay anywhere – no way.
Had the talk with D17 in junior year. Gave her the budget that we could afford from her college savings and our income ($30 -$33K/year). Showed her debt tables and explaind the federal borrowing limits for a student and let her make the decisions about where to apply. She realized quickly that her “reach” schools might be worth the lottery ticket application but she could never afford if she were to get in. All “dream” schools were dropped. She only looked at schools where she was reasonably confident of being awarded merit to meet her budget. She will go to a great school with wonderful opportunities but not impressive on any rankings.
Regrets - I have a few…but then again… I do feel badly now that she is crossing of schools that she felt were great fits - and she was excited about attending - because the tuition increased dramatically or the merit was under projections. In those cases the “gap” is small enough that we could find a way to make it work somehow but with 2 kids following it is not reasonable. There has to be a limit when funds are not unlimited. Grandparents do not feel the same way and feel we are being selfish for not upping the limit if we can make it work in anyway (they are not offering to pay - nor should they with this being the first grandchild on both sides to face this and many other cousins following).
I also feel badly that when our youngest goes to school there may be more money (higher salaries, no other kids at home, larger retirement accounts) and she will have opportunities that her sister doesn’t have. Admittedly a little jealous of the college opportunities that others can afford but then snap out of it and realize that we are beyond fortunate and have choices that most others could only dream of. She could get into some high caliber schools and do amazing things but it just isn’t in the budget and with 3 kids it is not a matter of just working a few more years.
I’m always intrigued by the comments about simply working longer. How can one know if that is possible? Health issues could arise, lay-offs could occur. Ageism is VERY real.
OP - no, you are not the only ones. Full pay here in pricey Northern California. Salary poor (less than 100K/year) and asset rich (own home, healthy savings and retirement funds) - we qualify for $0 in need-based aid. The little to $0 merit aid made privates non-starters - D is going to the top UC, which, for in-state, is the best bang for our buck. We pay for tuition/room and board/health insurance; D’s nice little nest egg of work savings/modest scholarships and birthday and Christmas $ pays for books and other living expenses we don’t cover (and she will always be working summers, minimum). We didn’t want her saddled with debt for an undergrad degree; graduate school may mean loans for her. We have lived in the same house for 26+ years and live well within our means.
One of the best decisions we made years ago was to stay in our “starter” home. We live in an area with relatively low housing prices but very high property taxes. We decided instead of handing over even more money to the government, we would stay in our very modest house and that gave us the ability to allow our two kids to go where they wanted. My husband is an attorney (but not making big city money) and I am a college professor who has worked at least part-time for the past 16 years. We lived below our means for years and are now able to even go on vacations with two in college (one private, one pricey OOS). No family money, which actually helped us live frugally since that’s what we were used to.
I got diagnosed with breast cancer over the summer and was SO, SO grateful that we had hedged our bets to not stretch the absolute max to pay for a high price tage undergrad. My ability to work (self-employed, client and project-based) was vastly reduced during the treatment period, from which I am just emerging. I’m fine and dandy now, God willing, but in retrospect it was a HUGE weight off my shoulders to direct son to merit-aid and state schools.
We did consistently ask the counselor to recommend Us that offered significan merit aid for students with stats like S’s. He did get 50% merit award for tuition which was huge for us (tho he rejected a U that was public OOS and offered 100% tuition). We would have had to really stretch even more to have paid 100% for both kids, especially since they overlapped 3 terms.
OP - You are not the only ones. My husband and I are in our early 50s and have a combined income ~225K. We have always lived well below our income (perhaps ridiculously so) so we have very large 401(k)s and about 500K in non-retirement and 70K in a 529 account. Son (only child) is currently a sophomore at Brandeis, where the total cost is ~64K per year. We do not pay that amount because he was fortunate to receive a merit scholarship from them that covers $17,500 per year, so we are only (!) paying around 46K per year. We do it out of current earnings and 529 withdrawals. It’s turned out to be much easier than we thought. As I said, we have always lived well below our income - we each put the maximum 24K (18K + 6K because we are over 50) per year into our 401(k)s, and save an additional $4000+ per month, so it was not a hardship to channel the savings to the University. We have been blessed with good health, continuous employment, and cars that last forever.
What does one expect to get from a more expensive (or more prestigious) college?
For every HYP graduate who lands an investment banking job, there’s probably another who pursues a relatively low-paying public service job. If you’d be happy with either outcome, and wouldn’t regret the expense in either case, fine. Otherwise, your state flagship may be a better focus point in your college search.
First and second child were full pay, third now waiting to hear from colleges. It is a rare gift to a child to be told that he/she can look at any college/university and that there will be money available; the choice will be entirely his/hers without regard to cost. Wish all families were able to do this. Full support college; borrow for grad school is our house rule. So far so good. PhD in one case and DDS on the way in the other.
A look at the Common Data Set for schools of interest will tell you what percentage of students are full pay. More than one would think in most cases.
@blossom wrote:
I love this! Completely agree that what your kid wants and would benefit from in terms of academic environment can be a good guidepost for whether to stretch for full pay.
Neither of my kids is what you would call “intellectual.” One is an A student who enjoys her college courses, and they are definitely building her analytical and writing skills; but she’s not a kid who wants to sit around thinking or having “deep” conversations during her free time. She looked for schools with a good balance of academics and fun, and, yes, merit opportunities, and ended up at a top OOS public Honors College. We never had to consider the full pay issue because of the schools that ended up on her list. It won’t surprise me if she ends up in grad school or law school, but at 18 she was not ready for a “life of the mind” environment.
Kid #2 was a B/C student for first two years of HS, A/B since then. Much less academically-focused than his sister, he’d like a school with a good business program and basketball and/or football teams (to watch). Again, no need to consider full pay based on his abilities/interests. He wants to get a degree, have some fun while doing it, and then get a job. Even with average stats, he’s found several nice merit options.
It’s one of those “apple doesn’t fall far from the tree” things, I think; H and I read a lot, are interested in current events, are intelligent and well-educated–but we are simply not very intellectual. And that’s OK.
One other thing I’d point out: Some kids thrive when surrounded with a lot of really bright kids, and others would prefer a mix of abilities. Lots of merit is available at schools that aren’t composed of primarily high-stats kids. It might be worth the sacrifice if the environment and peers are critical to your kid’s enjoyment of and success in college; but that will depend on him.
“One of the best decisions we made years ago was to stay in our “starter” home.” - @blprof
This is so true. “One spouse, one house,” goes a long way toward the ability to increase wealth.
As our D16 was applying to colleges we, as a family, decided that we will only full pay for two schools if she gets accepted, and she is attending one of those schools now. Her intended major has an excellent earning potential and this was another thing we considered. She is our youngest child. From her prospective, since she attends probably one of the most intense schools in the world, she told us going into her first semester that is she can’t handle the workload she is not worth investing that much money into and she will transfer to our state school. She survived her first semester and is extremely happy with the school she attends.
Time will tell if this was a wise decision since she had acceptances to the best California public ivys where we would pay a fraction of what we pay now. Another thing we considered was for her to graduate debt free. Now we both pray that we will keep our current jobs for the next 4-5 years to achieve that goal. Good luck with your decision. It is not an easy one.
Very interesting thread. For us the decision is based on the kid. Daughter slacked off in HS and didn’t study well for her SATs She’s living at home and going to a state school - by choice. But she understands that if she wanted to go away she would have a problem. 90% of her part time and summer working income goes to us to pay for her car/insurance/phone She takes max college loans that cover 40% tuition and we pay the rest.
Son works hard - 4.0 studies for SATs make academics a priority. He wants a private school that could cost 60K
He will cover half his tuition with merit money and small loans. We will pay the rest. I told him that we would help him go to his top choice school if he worked hard in HS. He worked hard. He earned it. Life Lesson
Specifically, I would like to know
- What is/was your income?
- What geographic location do you live in?
- What is your retirement funding situation?
- Were there any special circumstances that allowed you to decide to go full-pay at $50K+/year? (you are expecting a large inheritance down the line, a rich uncle partly funded, etc)
- Any specific regrets/advice?
Let me put our situation
- Combined income $150K (married couple)
- NYC suburbs (high cost-of-living)
- We had about $700K in our 401K/IRAs (we are in late fifties) at the time. We do have about $500K equity on our house now - despite 2008 it's appreciated quite a bit.
- We inherited enough money for college expenses just before the first one went off and chose to spend it on college. I have to say the guys who managed our money did an amazing job. Even though we paid for college out of that money the balance never went down much. The year we paid for two kids we paid for one out of current income. College education was our number one priority. We drive old cars, had an old TV, no cable etc. We knew we'd be getting more money when my mother died, but had no idea how much.
- No regrets. Our oldest IMO needed to be at a place where he would be challenged and be able to be part of a flourishing nerd culture where he could finally have friends. Carnegie Mellon was a great place. He's at his dream job. I think he makes more than us now. Younger son got a great education at Tufts though IR doesn't lead to the same monetary benefits as computer science. He spent a year in Jordan which cost us considerably less than Tufts did. He's planning on a career in Navy Intelligence.
We were pretty much in the same situation as you. If my eldest DD had gotten into Princeton then we would have thought hard about paying that full pay tuition.
She applied to Princeton, NYU, some State Us including our Flagship and Binghamton, WPI and I think RPI.
The colleges she got into were the State Us…all under 30K and WPI/RPI which were like $45K after scholarships.
She was majoring in Math and I told her to pick any of the 30K ones…the extra 15K didn’t seem worth it to us compared tothe value. She chose SUNY BInghamton which was the most expensive of the State Us but gave her the most IB credit.
For my youngest, I was more involved in the college selection. I, of course, want a good value and based on the close but not too close to home distance, price, size, major, campus, I thought The College of New Jersey was the best for her…we looked at others but she ended up applying ED because she was comparing the other options to TCNJ. Also under 30K per year.
So my suggestion is to talk to your son about what he wants in a college and start finding reasonably priced colleges for him or ones he can get merit scholarships at. Say that you don’t want him to have to take out loans, but you want to have savings for your retirement as well and woudl like to find a good value.
It is very important to give them a budget to work with when they start looking at colleges.
I can work for longer because I’m a self employed architect. In this area people are always renovating their houses. DH is a tenured professor, but that means less and less these days. Also, his mother had early onset dementia, so we are all too aware that while he’s fine now, it could all change. We’ve got long term care insurance, but there’s no way it would cover the costs if anything happens to us too soon.