What am I missing...?

Paying for College
1

<p>My oldest of 4 kids is entering college in the Fall. We just received the financial "packages" and they are not that helpful or significant - he is an average student. </p>

<p>On average, the remaining cost is about $35k for the schools he is interested in. So I am supposed to borrow that amount through a PLUS loan at 7.9% that begins accruing interest on day 1? Multiply this out by 4 kids and 4 years each and that's $560k in loans, if in fact I could borrow that much.</p>

<p>Our household income is about $200k. It might sound like a lot to some, but with 4 high schoolers and crazy high NY State property taxes, it goes fast. EFC is about $40k</p>

<p>The average household income in the US is less than $60k. How does the average, or above average middle class family make this work? </p>

<p>If borrowing to the hilt for a bachelor's degree at those rates is what is happening, IMO it is foolish at the individual level, and unsustainable at the system level. This bubble is going to burst.</p>

<p>I have about $100k saved for all 4, but that's a drop in the bucket. I'm thinking of stopping any 401k contribution and using that in the meantime.</p>

<p>What am I missing?</p>

<p>"frustrated"...</p>

2

<p>If you live in NY, you have some very good, relatively inexpensive state schools. You need to focus on these schools, rather than the unaffordable, more expensive schools. Most of us do.</p>

3

<p>Yes, I’m guessing they will all end up at a SUNY. Even so, $20k = $80k for a degree… guess I’m old 'cause it seems unreasonable. I am a graduate of SUNY schools and it was about $5k/year at that time.</p>

4

<p>“End up” at SUNY schools? I hope you realize that folks from other states are very interested in your SUNY schools. They are a great bargain, relatively speaking, for even OOS students. And they are fine schools. You are fortunate to have them. The instate costs of about $20,000 a year are very modest these days.</p>

5

<p>You’re right. We take them for granted because they are so familiar and close. I’m just shocked at the total cost and was hoping to afford an OOS experience. </p>

6

<p>nickkom27:</p>

<p>That’s the way it is now. High end schools are only accessible to the super rich or the poor. Yes, the education bubble is going to burst. You want be as far away from it as possible when it blows.</p>

<p>Think salmon. They use every bit of energy in their bodies, often killing each other in the chaos, on a final journey upstream. They lay their eggs and die. May as well take a smaller side stream with less fish and enjoy the swim. </p>

7

<p>Alternate view. There are plenty of folks who view some of these SUNY schools as excellent. And they certainly have excellent value for the money, especially at instate rates. These are wonderful options. </p>

8

<p>If your children have the stats for merit scholarships for OOS schools, then that should be their/your goal.</p>

<p>Frankly, rarely can American families send their kids away to college. That is a luxury. Most kids commute to their local schools so that they dont have to pay for room and board. And, when families have 4 kids, it becomes even less likely that they can afford the “sleep away” experience.</p>

<p>You/ve been asking similar questions since last fall and the answers aren’t going to change:</p>

<br>

<br>

<p>My daughters are “just” B+ students so WVU seems within reach. I’ve read most of the reference threads and it seems that OSU, Penn State, UVA, etc. do not offer merit to out of staters unless applicants are academic elites, relatively speaking. Is this conclusion accurate?</p>

<p>Assuming so, does anyone have similar schools (to WVU) to recommend? NYS doesn’t have a “flagship” school like other states with all that school spirit. The smaller SUNY campuses (and climate) are less inviting.</p>

<p>This does get to the question about schools that are generous with merit aid, but I’m looking for a more focused response – around location, size, setting, etc.
<<<<<</p>

<p>since your twins are B students getting enough merit to get costs down to what you may want may be very difficult. Yes, with strong test scores, there may be some merit awards for B students, but the remaining costs may still be too high. A $10k award for a $55k school still leaves you a lot to pay…and multiply that by the number of kids.</p>

<p>Your twins stats may not be high enough for schools that “meet need” so depending on discounts for multiples in college may not happen.</p>

<p>You were waiting for PSAT scores…what were they?</p>

9

<p>OP, most of the parents on the boards understand your surprise at the price of college now. But SUNYs are relative bargains, and it is worse in some states which charge more for their in-state students (like Illinois or PA).</p>

10

<p>

See <a href=“http://studentaid.ed.gov/types/loans/plus#what-is-the-current[quote]The”>http://studentaid.ed.gov/types/loans/plus#what-is-the-current

Very few families have that much saved for colleges.</p>

11

<p>Think of it this way…you have $25,000 per kiddo saved. That is about $6000 a year. Add to that the Direct Loan your student can take…$5500 as a freshman, and you have $11,000 covered. That leaves $9000 to fund. If your kiddo gets a job during the summer and earns $1500, now you are down to $7500. Your student can also plan to have a school year job to fund spending money. $7500 a year sounds more manageable. Is that possible for you?</p>

12

<br>

<br>

<p>In your other thread you mention that one twin has “declared” that she is going OOS. Since she is junior now, you need to make it clear to her and the other twin that you can only spend XX amount per twin. You need to “do the math” and determine if YOU (the parents) are going to borrow for each child (most parents do NOT do this). </p>

<p>You can tell each twin that THEY can each borrow $5500 for frosh year and that they can work over the summers and save/put about $2k each towards college (essentially paying for books/fees). They can each work part-time during the school year for pocket money, entertainment, extra clothes, make-up, personal expenses, etc…guessing each would need to net about $80 a week for that.</p>

<p>they can also practice for the SAT and ACT to bring up their scores.</p>

<p>what are their GPAs…tell them to Finish Strong this year to bump their GPA. Senior year grades wont count much or at all for merit. </p>

<p>Lay it on the table for them. Tell them what YOU can do, and tell them what they can do to try to get what they want. Do the math with them. Kids often dont figure out how much it all costs for 4 years, nor do they often consider that there are other kids in the family. </p>

<p>You also need to consider what careers/incomes your kids will likely have upon graduation. A teacher, nurse, or engineer doesn’t need to go OOS and rack up debt. That goes for many other careers as well. </p>

<p>Obviously, even with a $200k income, you dont want to end up with a couple hundred thousand in debt (or more). Even if you were to borrow $10k per child per year, you’d end up with $160k in debt with huge monthly payments for a very long time!</p>

<p>We often mention here on CC that a family should never stretch the budget too tightly because each family is going to have 2-4 unexpected large expenses every year (dental, medical, major appliance, car, furnace, roof, etc), so when you’d have 4 kids in college over a period of 10+ years, you’re going to have 20-40 of those unexpected expenses in addition to college costs.</p>

13

<p>It is a bit of a mess isn’t it? Our D will be going to an OOS LAC because she got enough merit and aid to make it comparable to living at one of our state schools (though certainly more than living at home and commuting.) We all recognize that an LAC is the better place for her and she applied to 6 highly selective ones with great financial aid to make that happen (got into 1, wait-listed at 3 and rejected from 2.) D will be borrowing a little and working but as parents, we are not borrowing at all. Perhaps if she were an only child, we could consider it but we have S who will be entering as she graduates. If we take out loans for her we’d never be able to make college payments AND pay off outstanding loans. In our case, our EFC actually matches what we can afford in cash but I know many others handed numbers they can’t possible manage.</p>

14

<p>I also think we take a lot for granted living in NYS; with 64 college, SUNY is the largest comprehensive college system(universities, LACs, Community colleges) in the country. If you live in NYC, you can add the 24 CUNY, schools (the largest Urban university system in the country), you have 88 colleges in your own back yard. You can’t say that about other states. If money is your primary concern, look into the qualifications and perks of the Honors colleges at various schools. </p>

<p>Most of SUNY schools also give merit money.</p>

<p>for example:</p>

<p>

</a></p>

<p>Start from a bottoms up approach and look for schools where your S can get guaranteed merit $$ (University of Alabama offers a number of full tuition scholarships, leaving you with room and board).</p>

<p>look at the sticky thread on the top
The McCauley Honors program at Hunter includes 2 years room and board</p>

<p>Start looking, start building your list making sure that you have a wide choice of schools at the price point you are willing to pay.</p>

15

<p>"“Perhaps if she were an only child, we could consider it but we have S who will be entering as she graduates. If we take out loans for her we’d never be able to make college payments AND pay off outstanding loans.”"</p>

<p>^^^ the above is so true and it highlights a mistake that some parents make with Child #1. They’ll borrow for Child #1 and payments begin immediately…and those payments are still going on when it’s time for the younger ones to go to college, so the college money that would be coming out of the family budget for Child #2 is still being spent on loan payments for Child #1.</p>

<p>I don’t know how old the OP is, but if he plans on retiring sometime in the future, then getting bogged down with $100k of debt will make retiring more difficult. </p>

<p>I understand that it’s frustrating that the costs are so much higher than when we went to college. I still chuckle at my neighbor’s belief that room and board would be about $1500 because that’s what it was when he went to school. Now, R&B can be $15k per year…with twin, it could be $30k per year. </p>

<p>A friend of mine is sending his 3 daughters to the same flagship. He bought a 3 bedroom garden home near the campus and the girls will all live there while in college. It also gives the parents a place to bunk for visits. He spent $120k for this small home, but the alternative was $15k X 4 X 3…$180k. This way he pays for their groceries and he’ll sell the house when the last D graduates. he rented out one bedroom when #1 was in school alone, and he’ll do the same when #3 is in school alone.</p>

16

<p>We are lucky as NYers. My son had the choices of three of the main universities and the smaller college for about $20K a year. A CUNY offered free tutition, and a local Catholic school, a private offered free tuition. Those were the best deals in terms of price for our last college kid who was a fair to middling prospect. </p>

<p>Yes, $80K for college, you have, what $25 K saved? That brings it down to $55K over the 4years. Borrow the student Direct loans which brings it down by another $27K. Summer job and a little work during the school year brings the cost down even more. Should be affordable. You do save a little with them being gone. That’s for in state U. </p>

<p>For a lot of the OOS publics we are talking $35-40K a year. That’s a bit of stretch. That or a private that will cut their price down by about half. </p>

17

<p>Thanks for all the great advice – especially Captain of the House and Thumper. Breaking it down makes it less daunting, for sure.</p>

18

<p><<<
My oldest of 4 kids is entering college in the Fall. We just received the financial “packages” and they are not that helpful or significant - he is an average student.</p>

<p>On average, the remaining cost is about $35k for the schools he is interested in. So I am supposed to borrow that amount through a PLUS loan at 7.9% that begins accruing interest on day 1? Multiply this out by 4 kids and 4 years each and that’s $560k in loans, if in fact I could borrow that much.</p>

<p>Our household income is about $200k. It might sound like a lot to some, but with 4 high schoolers and crazy high NY State property taxes, it goes fast. EFC is about $40k</p>

<br>

<br>

<p>To be honest, when money is an issue and you have four kids to put thru college, to spend $140k on an average student’s education just isn’t a good investment. What are his career goals? What major? </p>

<p>Did he apply to any sunys? I agree with Cpt’s idea of putting part of his $25k towards each year at a suny. Have him take out a student loan, work over summers, and get your contribution down to less than ten thousand per year.</p>

19

<p>The reason in-state tuition is usually quite a bit lower is because you’ve ‘pre-paid’ for tution over the years of paying taxes in the state. It’s a benefit for you, but if you don’t want it, you’re going to have to pay full price at another school. Usually, not always, states with high real estate taxes have lower tuition rates (California) and those with low tax rates don’t subsidize the tuition as much (Colorado).</p>

<p>College tuition is a purchase, just like purchasing any other major life need. If a house is for sale it is unlikely (and maybe even illegal) to offer it to different buyers at different prices. How people pay for the house is up to them, and some can pay cash, some get help from their parents, some get very low interest rates from an organization (VA, resident of a state) but others have to pay the full asking price. Many times, the buyers decide they can’t afford that house and must choose another. The second house will still have electricity and bedrooms, but the counter tops might not be granite and the location might not be as ‘dreamed’ of. Others will decide to wait until they can afford the ‘better’ house and will rent for another 2 years (go to community college) to save up.</p>

<p>People think it is unfair that middle class is expected to pay full price. I think it is unfair that EVERYONE is not expected to pay full price. If the school has the money to reduce tuition for some, why not reprice tuition to the real cost? </p>