Tough Financial Situation (I Need advice)

Paying for College
1

I have pretty good test scores and all of that good stuff. I’ve applied to 15 great colleges, and I will probably get into a few good ones. The problem is finances. I will not receive much financial aid if I even receive any at all because of my parents’ income. My dad owns a business, and everything is paid off. Our family net worth is around 750,000 to 1,000,000. My dad will give me 100,000 for education and not a penny more. This includes living costs as well. I estimate that 22,000 - 24,000 will go to tuition/room&board/fees per year for 4 years. Of course I have talked to my dad about finances, but he will not budge. We have filled out various schools’ financial aid calculators, the fafsa, and the CSS. In general, most of them agree that my parents contribution should be at 40k to 42k. Ughh, why is college so expensive:(

I already have a presidential scholarship at the University of Iowa (in state). I want to be thankful for the money my dad is dedicating toward my college education, but it is hard to be thankful when he previously promised that he would pay for all of my college when I was young. He says that the amount of money in the 529 plan was meant for a state school in Iowa. I feel like $100,000 exact is very uncalculated. When I try to talk to my dad about finances, he often says that I should be thankful because 100,000 is more than he wants to give me. My mom is no help given that she doesn’t even want me to attend a great college because it is too far away from home. My mom didn’t even want to support my education if I chose an OOS school. My dad quickly stopped that though. My dad is a definitely a good person and all, he just really is not willing to give any more than 100,000 to my education. I still have hope though.

It’s very abnormal for a student in my area to strive for competitive private school, so my parents do not see my vision. If my parents could see my vision, I feel like they would dedicate more money towards my education. It’s hard when I explain it to them, though, because I am in a position that has a large bias. Things will be much clearer once acceptances come back with financial aid packages. I need to be prepared though.

If I go to the University of Iowa with the big scholarship, I feel like my education will be limited. It’s just not what I desire from my college. I want to develop as an individual, and I would develop so much more at other colleges. Also, I’ve lived in Iowa for 18 years, and I’m not a fan of Iowa. I like that people are friendly, but I struggle to find things that interest me in Iowa. Everything seems so bland and unattractive. If I go to the school that I want, my future will be weighed down by being tens of thousands of dollars in debt. I really need some help. I will probably get 5k in local scholarships, but that doesn’t cover a steep 50k per year tuition for most of the schools I am looking at. If I get good financial aid, it will be about 40k per year. I would pay about 17k per year out of my pocket which is $63,000 in debt after local scholarships. I really don’t want to graduate college with that much in debt. Is my dad being stingy? Am I not being thankful enough? I’m 18 and pretty convinces by my own opinions…so am I being stupid in any way? What do I need to do?

As a side not, I’ve been heavily involved in the stock market. Over 3 years, I transformed $3,000 of savings money into $26,000. As you probably know, things have not been good in the stock market lately. I now have $8,000 after taking an unfortunate loss in a certain stock. I’m pondering with the idea of taking a gap year to strengthen my own finances, and be a WWOOFer where I can travel the country and only have to pay for plane tickets since working on the organic farm takes care of housing and food. At this point, it’s just a small thought.

Please share all advice. There’s a student behind the screen who really needs it.

2

I have to admit that I doubt your situation is one that will garner much sympathy. Sell your car.

3

“Please share all advice. There’s a student behind the screen who really needs it.”

Your situation sounds fine to me. In fact, remarkably privileged. Millions of students would kill to be you.

Pick cheaper schools. CC and transfer is a fine option.

4

@lostaccount That’s part of the problem since we easily get by. A lot of families have trouble paying their next bill, but those kids get a lot of financial aid. I’d liquidate my assets if I could, but I don’t have many assets other than cash and stock.

5

I can’t believe you just put “we easily get by” and “problem” in the same sentence.

From one student to another, you have a very serious entitlement problem.

6

I agree with @CourtneyThurston, you need to find cheaper schools or go to CC first and then transfer.

I disagree that “families who have trouble paying their next bill, get a lot of financial aid”. Most families take out loans to fund their children’s colleges. The students work and take out loans, since financial aid dollars are limited. The colleges disburse need based aid according to what they think the students need, not the other way around.

If your family is at $700K, you are looking at school loans.

7

Adam- first, stop trading stocks. You didn’t transform 3,000 of savings into 26,000- you had a brief paper gain which has now fallen back to earth. Find a no or low fee mutual fund which focuses on growth and stash your money there. Do you think you can do better than a 55 year old professional money manager who has seen four recessions in his or her career?

Second, stop beating up on your dad. He is funding your education- 100K worth- and the only response to that is “Thank you Dad, love you back”.

Now it’s your turn to find an affordable option. Once your acceptances are in and you’re dealing in actual admissions (not what if’s and maybes) you can lay out what each option will cost you and figure out if it’s “worth it” to you to take out loans. Without your parents taking on a Parent Plus loan you can’t borrow more than the Federal limits per year… so no danger of you being saddled with 100K in loans- that can’t happen, you have no credit history, no bank is lending you that kind of money.

So relax and wait for your acceptances. Once you’ve got everything set out on a spreadsheet, staying in Iowa might look pretty tempting. Do your junior year abroad, spend two summers teaching English in China or Peru, and you’d be surprised how broadening those college years might become.

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@CourtneyThurston You’re right, I am privileged. Privileged should not be looked down upon, though, just like poor should not be looked down upon. Privileged people have problems, too. lol I’m pretty dead set on going to one of the better schools if I don’t have to pay too much. I really don’t want to have to pay over 45k per year.

9

This is quite late to be discovering this.

You didn’t share stats, but depending how good they are, you may have been able to get good merit money from certain privates and OOS flagships, which would have at least gotten you out of Iowa, since that seems important to you.

You can’t graduate with $67k in debt, because the loans you can take out personally each year are far below that. That are capped between $5500-$7500 per year depending on your grade.

You are very lucky to have parents who have saved and are willing and able to pay $100K for your college. Very lucky.

10

Get a summer job. Supplement w a federal student loan. Pick a cheaper school initially then transfer to a pricier school. Pick a school within the budget. Consider ROTC. Take a gap year and reapply next year to generous merit aid schools.

You’ve got PLENTY of options that poor kids don’t have. There’s nothing “Tough” about your financial situation.

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Thanks for the opinions. I don’t want to paint this picture that I am this brat kid who wants everything he can get. I’ve been looking at these private colleges as I grew up, and they all said that I would be paying nowhere near the sticker price. It comes from disappointment from the realization that private colleges really do cost that much money.

@blossom Regarding the stocks - It may be hard to believe, but multiplying my money over and over again was not even close to luck. I worked my ass off to do that. I took calculated risks knowing that I was young. I multiplied my money by trading options. And yes, I truly believe that I can beat most professional managers over a long period of time. I don’t intend to be snarky, its just my honest opinion.

Thanks for the advice. I may need a good dose of perspective.

12

You are so off base that I can’t tell if you are being genuine or are really kidding. But I will assume that you are being genuine and not putting this site’s readers on. Your dad may be suggesting that you don’t know the value of money. If he makes nearly a million dollars and, assuming you are not one of 10 offspring, then he can well afford to pay whatever college costs and whatever college you choose. So he is letting you know he does not want you to go to a private school. Do you go to a private high school?

But your post reveals how out of touch you are with the realities of most students. No, most students don’t get financial aid that allows them to go to whatever school they want. Many parents put limits on where their kids can apply.

To give you a sense of how far off you are, imagine this. Imagine someone goes into a coma in 1958. He wakes up and you are hired to teach him about the world today and especially computers. You take out your laptop and explain that you first have to turn it on. And he asks “Well do you have to crank it up?”

In other words, it is hard to know where to start. You can work, take out loans, etc if you can’t cover all your expenses. But here is an idea. Why don’t you spend one week in a competitive magnet school in a low SES district. Talk to the students who are every bit as strong a student as you are. Ask them where they intend on applying.

Your parents are obviously wealthy. And yes, I would view them as being stingy towards you. But you seem out of touch too so it might be that your dad is trying to reign you in some. Your dad could not have thought that you’d be eligible for need based aid. It is a little surprising he even completed the FASFA. Did he wait to tell you this until after you’d applied?

And no, you don’t have a tough financial situation. How big is your family. Any siblings?

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@lostaccount I’m not joking at all. I may be very bad with words or just very mistaken. My parents do not make 1M per year. Their NET WORTH is 750,000 to 1M which INCLUDES my dad’s business. I definitely do not live a pampered life. Throughout my college search process, I’ve primarily focused on doing my best in school so I would likely get accepted into good colleges. To anser your questiom, I have one younger brother. Please refrain from posting anything too extreme. Like I said in my initial post, it is abnormal for students in my area to apply to competitive schools. It may be hard to swallow, but my teachers and counselor know nothing about this entire process. My counselor isn’t even a real counselor, he’s a football coach with the job title as a counselor which allows him to coach. The area I live in is very isolated from the real world, so yes, I am probably very off on a few of my presumptions. You cannot blame me for trying to educate myself though.

14

No one is blaming you for wanting the best education you can get. However, you don’t seem to equate what you can get with what you can afford.

This is my recommendation: wait until your acceptance letters and financial offers are in. Then, look at the aid for each school and add what your father is giving you – which is quite generous – plus what you are able to borrow in federal loans, if you like. The total is what you have to work with. Find a school within that total and accept their offer. If there is none that you feel comfortable with, work for a year or two, save money, and repeat the process when you have more funds to devote to your education.

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@adamfromiowa I don’t think you sound entitled. Yes, you may not be completely correct about what poorer families go through, but clearly you are open to listening to others here and you’re only trying to get some help.

Here’s what i think anyway

Your dad is being pretty reasonable and you can’t really expect more money from him. So with 100,000 dollars, you have a few options. The first is to settle for your flagship. Second is to go to CC and then transfer to a better school. Third, you can go to U of Iowa for your first couple years (which should cost you only around $40,000, maybe less with your scholarship) and then transfer to one of your better universities. Since you still have $60,000 left, and you said the schools will hopefully cost about $40,000 a year, then you only have to come up with another $20,000 (maybe a little more with tuition increases, but it shouldn’t be that much). Since you already have $8,000 saved, you’re already down to $12,000. So if you could earn that $12,000 either working summers or part time during your first three years of school, then it shouldn’t be hard to come up with the money. (You could do it in the stock market too, but it’s risky no matter how good you are at it and i wouldn’t recommend betting your college education on it). Also if you ever needed a little more money, you can always take out a little (idk how much, i think it’s around $20,000 OVER 4 years) if you absolutely need to.

PS. a net worth of $750,000 is probably not as much as you think it is. Most parents would never spend 1/7th of their net worth for their kid’s college.

16

I’m sorry I misread that as your father making nearly one million in which case it seemed like he could afford to pay more. As it stands then, it is hard to know what his income is so it isn’t really possible to speculate about what he can or can’t afford. At what point did your father let you know that there were limitations on what he was willing to spend? The issue of merit aid is relevant-but you have not included information about your academic credentials.

And, Copperrrrrr, yes many parents would and do spend at least 1/7th of their net worth or more on their child’s or children’s education. And $750K is a decent amount and it probably does not include things like retirement which is not factored in.

17

I think you should take a year off and go work on those farms (although I don’t see how this would be more interesting than Iowa). See how hard your father works for his money and maybe you’ll see that $25k per year is a lot and asking your father for $70k to go to some dream school is unreasonable.

If going to these dream schools is so important to you, tell your father why. Why is the program at Dream School so much better than Iowa? How is going to school in PA or MA going to show you the world when you could do a year abroad from Iowa? What is different about taking American Lit at Princeton than taking it at Iowa? You need to prove your case because I think your father is right, there is a whole lot less difference than you think, and he’s just trying to spend HIS money wisely.

You are still young. He is paying for all your college, just not at the college you want him to pay for.

You can go to Iowa with a great scholarship and great opportunity and be happy about it, or you can go to Iowa angry and disappointed. Your choice.

18

Utterly and completely serious question for the OP: What the [insert bad word of choice here] is wrong with the University of Iowa (or Iowa State, for that matter)? They’re both pretty decent schools—better than decent, for some programs. Why the horror at attending a good school for an excellent price?

19

It breaks my heart to read posts like this written by a 17/18 year old does not believe that $100,000 given to them is not generous enough, no matter what his/her parent’s income. $100,000 is a chunk of change. It takes a lot of time and effort to save that much money. And I totally agree with @dfbdfb, there is NOTHING wrong with the University of Iowa, four more years in Iowa to earn a degree debt free is a gift.

20

What is your intended major?

Why must you go to a pricey private to accomplish your unnamed goals?