Ahh…that’s a very different kind of typical. You’re asking how to pay for college when you don’t have the savings or earnings (or both) to cover what the kid wants. This typical is, sadly, far more typical. So,
Figure out what you can contribute per year. Do not rob your retirement to build up this number and make sure you allow for some space for at least one big unplanned expense (for me, it was my parked and unoccupied car getting hit and totaled by a distracted driver–hello car payment).
Give your child that number. That is her budget. I caution against adding the student loan amount to that as loans are generally the first piece put into the financial aid offer.
Limit your search to A. colleges that will cost that number or less (at least 2) either because of guaranteed merit or because that’s just the price of those schools and B. colleges that could cost that number if your daughter receives some competitive merit, with the understanding that those will be off the table if not in budget.
A lot of us here followed the money. Not saying it’s easy, but really, set the budget early so the kid has time to adjust before spending a lot of time and money on applications for schools that can’t work out.
If you have a kid with the profile for prestigious schools, then she’s a good candidate for merit at lower ranked schools. If she’s a junior or below, help her to understand the benefits of attending college on huge merit. There is so much to like about so many colleges other than the few most students hear about often. Focus on those things as a family instead of prestige. My D didn’t look at a single prestigious school yet loved so many schools that offered huge merit. She had great choices in April of her senior year, is having a great experience in college, will be debt free with money in the bank when she graduates, and really doesn’t understand why anyone in a similar position would choose debt.
If prestigious schools are way beyond your means, then you have to tell your kid what you can afford before they apply. I don’t think it’s a good idea for kids or parents to be saddled with large loans. Especially with people my age, I’ve seen unexpected illness or job loss decimate their savings and plans for working longer.
We saved some money by living in a tiny house for our kids early years. (They shared a bedroom until they were 10.) We buy used cars and drive them for 10 to 15 years. But even then we still didn’t have enough for full tuition. Sadly an inheritence was a big help.
If you can’t afford the high price schools or don’t want to pay the cost of the high price schools, then you must find some schools that fit in your budget and that your kid would like to attend.
If you think you might qualify for some need based financial aid at the higher cost schools you can run the NPC from that school to give you an estimate of what you might pay there.
If your kid has very good grades and testing stats they may qualify for some merit money at certain schools and this can sometimes bring the cost down to close to what a state university might cost.
Don’t take out a bunch of loans to go to a higher priced school because of the prestige factor.
We saved a bunch of cash for 20 years in 529 plans and then set aside additional money as well. This plan works well as we can afford to send the kids to school. The downside to this plan ( not really a downside, just reality) is that because we have a large nest egg of cash to spend on education costs means we are not eligible for one dime of financial aid at schools that only offer need based aid. So, if we want to send 2 kids to the school of their choice means we shell out $140k per year and basically drain all of the savings we have for them. That’s what we saved for and we are happy to use it, but I admit it is a somewhat harsh reality to write that check.
What grade is the student currently in? What state? What are her stats (ACT or SAT, GPA)? What major or field is she interested in? Does she prefer urban, suburban, or rural? What’s a rough estimate of what you could afford? Remember, by posting these, it’s still anonymous as long as you don’t attach local or personal information. There are a lot of people in your state and a lot of students with the same stats/affordable figures, etc.
Pending those answers, CC parents can likely point you to some more affordable schools to check out. If she has the stats to be considering prestigious, there could be decent options - just not those without merit aid.
Definitely run a NPC at one or two of the prestigious colleges she likes because many parents can be amazed at what some offer if an income is <200K. Of course, the “trick” is getting in to any of these colleges, so you’ll want others on the application list too - even if you could be full pay.
Please please tell us your daughter is not a HS senior now.
ETA…it looks like she IS a senior this year. So changing my comment to…please tell us that she has affordable colleges on her application list as well as those expensive ones.
The most important conversation to have with college bound kids is about finances…and how college will be paid for…and how much you can contribute annually.
I would urge you parents to discuss your finances…and look at the whole picture. Think about current living expenses. Think about retirement contributions. Think about what will happen if a parent loses a job. Think about how much you can reasonably contribute towards your kid’s college education each year…and assume a minimum of four years.
Then set a budget…and start looking at colleges. Your kid can attend any college where she is accepted that comes in with a net cost within your price point.
Every college has a net price calculator. I would urge you to use these…and believe them. Are you divorced? Self employed? Own your own business? Own real estate other than your home? If NO to all of these and you have salary income from jobs…then the net price calculators will be a decent estimate anyway.
If you can’t afford a $70,000 a year college with no aid provided…then you need to tell your kid that.
Start looking at the characteristics of the colleges she likes…and start looking for colleges with similar characteristics that are within your price point.
My suggestion…if you think you can contribute $4000 a month out of current income…start saving that in a dedicated account right now. Do that for about 6 months…and decide if it’s sustainable for four years…or not. Of course…if the college is $70,000, then you also need a way to pay the balance.
Please, please be honest with your student and yourselves. It is far better to find an affordable for you option now than to cobble together one year…and then have to have your kid transfer because the finances are not working.
Adding…in looking at your other posts…you are inquiring about paying for BS/MD programs as well. Did your daughter get accepted to a guaranteed admission BS/MD program? Or not?
Agree with Thumper.
Hope your daughter has some affordable options, and has applied where she can get Merit aid.
FAFSA EFC is different from the college Net Price Calculator (NPC). Many elite schools give generous need based aid even for families making 200k, so make sure you run NPC on their website.
If you do not get any Fin aid from the expensive college, and have no college savings, then she needs to go to an affordable in-state or big merit school. (she can still apply now)
She may be disappointed at first but kids get over it, and it is better in the long run, than taking out huge loans for undergrad.
We weren’t eligible for FA. I paid it out of my current salary. Their college tuitions were about 10K more than their private secondary school tuitions, so it wasn’t a significant increase for me. Now they are out of college I feel like I got a huge raise.
We had two “going to get in AND affordable” options for each kid. It took a while to find them…but we did. We also had the money talk up front…and then again and again. And again and again. Both boys knew that money was a factor. Fortunately both also chose affordable options.
We were a two parent income family. My DHs income paid all of our family living expenses…and my income paid for college. For seven years, my entire take home pay went auto withdrawal to some college or two.
But we knew my income could cover college costs…and we knew DHs income could pay everything else.
Like @oldfort when we made the last college payment, we felt like we had won the lottery.
We got two thru undergrad degrees using mainly our savings and current income but also contributions from grandparents that covered about 25% of total costs. The kids made nominal contributions based on summer jobs.
This worked for us. But one of them decided a few years after graduating that she wanted to earn an MBA. For that we paid about 90% of the cost.
As I’ve written before, We had not one cent of college savings before second semester of Happykid’s senior year of high school when we committed to clawing $500 out of our budget each month. Her options were the local CC or any place she could get down to that same cost. She only applied to the CC. She also picked up a full-tuition and fees merit scholarship there that mean we could save those two years of expenses to put toward the last two years at a state U. She graduated with just the junior and senior year federal loans which she has on autopayment.
Here is the kicker: Both Happykid and her BFF who were in high school, CC, and the same state U together, and then worked for three years before applying to grad school, received multiple admissions offers with full support for their MFAs. Each is now at her dream school, fully funded.
You do not need to go into debt for your kid to reach her goals. If she has the drive and focus necessary for medicine, she can be a pre-med wherever it is that your family finds affordable.
You need to figure out the answers to two questions:
Will you be eligible for need-based financial aid at the colleges she is looking at.
How much will you be able and/or willing to contribute.
If the answer to #1 is yes, then you need to run the NPC’s at the colleges your daughter is looking at and see whether need-based aid will mesh with the answer to #2. (“Full need” does NOT mean “what you want” or “what you think you need”. It’s just a formula the college applies based on its own internal rules, which may be quite different than your financial reality. For example, a lot of colleges seem to think that home equity is a ready reserve of cash).
In either case you are going to tell your daughter what #2 is. You can’t pay for what you can’t afford.
I’ve always had a hard time understanding why this is so hard for parents. Surely most parents have been telling their children “no” to requests for expensive and impractical items since early childhood. (as in, “no, we are not going to buy you a pony.”) So why do so many think they now must indulge the desires of their kids for an unaffordable school?
If your D wants to attend med school, then she needs to REALLY focus on schools that will enable her to graduate with no debt and merit if possible.
Both sons took Staffords, worked on campus and over the summers, and one had a year’s worth of COA covered by scholarships. I somewhat regret not pushing the merit packages harder, but am thankful we could do what was needed. Best strategy for us was buying less house than we could afford. Having a small mortgage made college much easier.
One option is to figure out what you can pay out of college savings and current income, add the ~$5500/year federal student loan and maybe $3k if she works summers and that’s her budget. You should give her that number and let her know anything over that has to come off the list unless she’s given enough merit to cover the gap.
The other option is for you to cosign loans, but I wouldn’t recommend it.
Every family is different. Daughter got a merit scholarship at a private, which brought the cost within $10K per year of our flagship public. We didn’t have much savings, but were able to live off husband’s salary, and have the bulk of the college costs covered by my salary. Son got a merit scholarship at an out-of-state public, which made the cost less than our in-state flagship. We also paid through my salary, living off husband’s earnings.
My H and I put ourselves through both college and law school, where we met. We both worked, had student loans and I had scholarships to law school, while H went at night to spread out the payments. We finished up with a combined total of $50K in loans (in 1970’s - 198’s dollars), which we eventually paid off. Unfortunately, that debt load didn’t really allow for a lot of college savings, particularly when you have 5 children.
For years, my mantra was that my kids were going to do the same as H and I. However, it became clear 10 years or so ago, when my oldest were getting ready to graduate HS, that it was not really possible to do that any longer. H and I then decided that we would cover a SUNY tuition for each child. If they wanted to attend a different school, they had to figure out how to fund the difference. I didn’t know about chasing merit at that time, but frankly, the type of schools at which my D would have achieved full merit were probably not as good as the SUNY she attended. The same thing with S17. He did get some merit money, but it wasn’t enough to beat a SUNY tuition. I live in an ultra-rich area (we have the starter home) and many kids go to private colleges as full pay. Knowing I was up against that, I told my kids from childhood that that was not happening for them, unless it was a SUNY.
@MKurianMathew - not quite clear what you are asking. It looks like you’ve been following CC since your DD was in 8th grade. Lots of great advice here on selecting affordable schools, etc. Is this your only child? Do you have other significant financial commitments? As others have said, hopefully you have looked at/run NPCs and also have an idea what your EFC will be. Will you be helping cover costs if your DD attends med school as well? Lots of things to consider in allocating funds.
Hopefully you have savings, a 529 or other resources to help pay for her college without taking private loans or tapping into retirement funds, etc. Like others here, we started saving for our kids’ college when they were born so choices were available when they were applying. If you don’t qualify for need based aid, hopefully your DD applied to school that might offer merit aid and also schools that are instate and/or affordable. Good luck.