<p>DADII..hang in there until the $$$ decisions come back. edad...pretty funny.Tell daughter to keep an open mind. Son was top student and ended up with 1/2 tuition merit at Duke and lots of $$$ at others. In general as the rank of the school decreased his offers increased. He ended up choosing his SAFETY... PSU Schreyers on a full ride and couldn't be happier. Not only did they offer $$$ but the perks of the honors college have allowed him awesome opportunities. His research team is one of the 10 best (in his field) in the nation and they took him in as a freshman. I could go on but my point is she can get a great education at many schools! Keep your options open! Our EFC was $40,000.</p>
<p>My nephew also was admitted at Duke but chose U Colorado Boulder for aero enginering(instate) and was very happy with his education.</p>
<p>lol edad good points!</p>
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<blockquote> <p>If I could do it over, we would have tried to save more earlier. <<</p> </blockquote>
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<p>This is probably the best advice anyone could get about minimizing the college financing blues!</p>
<p>And the way to get the $$ to invest is to live below your means, as sueinphilly suggests.</p>
<p>We have 2 in college next year and Princeton will cost us less than a state school. We didn't get any aid at all for #1 at expensive top school. Not even an unsubsidized Stafford loan. You just never know until you are accepted and receive the FA award.</p>
<p>sue: Oh, the living below means I understand well. Or at least, living without. I mean, that's how my children are "paying" for school -- I have never had any assets, and they've lived without for most of their lives. My son says that the upside of spending his entire childhood watching his parents agonize on how to pay for even basic things is that he is incredibly appreciative of the financial situation he's in now. He recognizes being able to attend college with no loans or work study as gift that both his parents sacrificed to have. </p>
<p>But our sacrifices were entirely in the realm of not being able to afford more than $35 a week for groceries, not being able to pay for school trips, renting and living in apartments instead of nice houses like their peers. I lived like that from when I was 20 until almost 40. When my youngest starts college, I'll be less than 45 years old, and have years of my life ahead of me -- probably at least 20 before I am thinking about retirement. </p>
<p>What I can't imagine doing is taking on hundreds of thousands of dollars of debt to send your children to school, even as you're approaching retirement yourself. I understand why people do it, and though some people seem shocked to do so, others seem to be pretty much of "We always knew that some day, we'd have to take out all these loans for college". That's so frightening to me to think about. I can't imagine having to contemplate selling your house or taking retirement money to pay for college. When I look at the two paths -- live like a pauper for 20 years and then send them off to college and have less financial burden after they go, or live affluently for 20 years and then go into debt and sell the house so they can go to college -- the latter just seems to me to be more difficult, in some ways. When people talk about taking out 200K in loans or having $400 a month payments for college, I am just particularly struck by the vast divergence in our paths, I guess.</p>
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When people talk about taking out 200K in loans or having $400 a month payments for college, I am just particularly struck by the vast divergence in our paths, I guess.
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I'm assuming your reference to $400 a month is a typo? (missing 0?) -- I would LOVE to only have to pay $400/month for my kid's college. ;) </p>
<p>But there is no way that I would take out $200K in loans, even though I am borrowing for my kids. I am working with a personal budget that includes borrowing within my means. That means looking at monthly loan payments in the context of what other costs can be cut out or reduced. I am considering that PLUS loans are generally amortized over 10 years, and that in the 6 years after my younger child graduates from college, my other expenses will be greatly reduced simply because I will no longer be supporting her. So, if I had a $400 monthly payment -- but only myself to support -- I think that would be fairly easy to manage on my income -- and I will have that paid off fully by the time I hit retirement age. </p>
<p>Obviously, everyone's circumstances are different - but my point is that I definitely have a plan in mind that includes my having adequate money to manage when I am ready to start collecting social security.</p>
<p>Calmom: $400 would be a big chunk for me. Another parent was commenting earlier about monthly payments, and mentioned something in that ballpark, I think. </p>
<p>I think what I was trying to say -- and I'm trying to think of a delicate way to put this -- is that given that my earning power is probably in the realm of X, where X is a figure high enough to create a substantial EFC, but not enough to be able to afford that EFC, I made choices to manage my earnings to stay in the realm of an EFC we could afford, since doing so would mean my children wouldn't get to go to college easily. We've lived on less income, and continue to do so, because if I made more money, I would be penalizing the children. We could have some nicer stuff now, but at the cost of education later. It seems that most other CC parents go the other way -- earn a lot in the middle, and then have to cut back and deal with financial peskiness later in life. I think I would find that harder to do.</p>
<p>UnivMom: I lived with a temporary composite bridge for almost 6 years, because having a permanent one was a luxury. I kept it in place with super glue. I was <em>so</em> glad to finally be able to have a permanent bridge a couple of years ago, though I'm still paying it off.</p>
<p>TrinSF, sorry, I thought the $400 was a mistake because of the accompanying reference to $200K in loans -- for a standard 10-year payoff PLUS loan, a $400 monthly payment would translate to $32K in loans - a $200,000 loan would require a $2500 monthly payment. Of course someone might take out a different type of loan and get lower payments, but there is still no way that a $400 monthly payment is going to support anything in that neighborhood.</p>
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We've lived on less income, and continue to do so, because if I made more money, I would be penalizing the children
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I don't quite get the rationale of deliberately earning less to keep the EFC lower, because that assume that the kid will get into a college that promises to meet 100% of the EFC with a package consisting mostly of grants. My FAFSA EFC is around $8K right now -- an amount I could definitely afford to pay from current earnings -- but I've got to pay the college something like $18K this year -- which I definitely cannot come up with, hence the borrowing. And my d. is at a supposedly 100% need school, but as we all know the privates define "need" as they want. So deliberately trying to make less money to keep EFC low is risky business.</p>
<p>I think the logical thing to do, if we all had been blessed at the outset with the wisdom we have now gained in hindsight, would be to maximize earning capacity but live frugally, making appropriate contributions to college savings along the way. There are many middle class families that have done just that -- I've met a few -- they're not worried about EFC because they've got that $200K sitting in bank accounts specially earmarked for the kids' educations. Those of us who didn't plan or never had the money to save in the first place are at the mercy of the fates when it comes to financial aid.</p>
<p>In that respect, I'd point out that my son's first choice college was the same one your son now attends... only my son had to turn it down because the college sent a letter saying that although he qualified for need based aid, they did not have funds to offer -- so we would have been required to pay full freight with an offer of being placed on a "waiting list" for financial aid. So basically all we got was a mess of confetti on my living room floor and one very disappointed kid. </p>
<p>My income is around ~$50K, by the way. I have a California home that I own, I'm self employed, and I have an ex-husband who earns around ~$50K and gives me and my kids -0-. So basically I get to pay my EFC + my ex husband's EFC + 5% of the value of my home - which is how an $8K EFC is turned into something closer to $24K and why earning less wouldn't be of much use to me.</p>
<p>Calmom: I certainly agree that it's a crapshoot. I couldn't afford to own a home here and share one with my SO. I know how far 50K goes here, and it's not very. My son applied to a number of schools with the understanding that his final decision might be based on financial issues, because I could not pay anything for school. I'm glad he ended up preferring this school to his other top choice, because they were very difficult about financial aid and would have been out of the question, I think. (They never did get back to us with an award.) But all along the way, from the time he first told me he wanted to go to Stanford when he was 8th grade, I have talked over and over with him and his sister about what was and was not possible. Sometimes when I read posts about people just getting around to telling a child about money limitations after the acceptance letters come, I have to shake my head. </p>
<p>I think our bigger challenge financially will be with my daughter, who is planning to attend an art and design school. Thankfully, she is the "entreprenurial child" of the two, and has no qualms about working to afford her college dreams, or attending any school that she can afford as long as they have a program that teaches her the skills she wants to be a successfuly artisan businesswoman. If that means she moves into a shared apartment and attends community college while selling her own designs online, she'll do that. She thinks her full-ride older brother is a lazy slacker brainiac and intends to be the rich kid of the family. :-)</p>
<p>PS: There was no confetti in his package, which was neater, but also disappointing in its own way.</p>
<p>The issue of EFC always results in a heated discussion, especially among middle and upper middle class parents. For any particular income cohort, the formula does seem to discriminate against profligate savers vs profligate spenders.</p>
<p>We fall into the profligate saver category but instead of railing against the formula and system, I am contented to know that after our son graduates, we will still be far more financially secure than families which may have gotten more finaid but have not changed their way of life.</p>
<p>And of course because of the saving regimen throughout my life, our son was free to apply to almost any college he wanted to and will graduate loan free. These benefits alone more than make up for any seeming inequity in the FAFSA formula.</p>
<p>This has been a great string ... I just wanted to add one thought.</p>
<p>A few comments have hinted at an either/or retire/not retire choice that paying for a private school forces. I do not view this as black or white but as a continum and our college decisions move our retirement dates in or out.</p>
<p>For us each $2500 we save allows us to retire a month earlier. So if we did have to pay $200,000 for a kid to go to a private school it would move out our retirement by 80 months for that child. Foretunately we've already saved a pretty good chunk of each kid's college expense so if they do go to private schools the increment in time to retirement is not nearly as harsh ... but it is still there.</p>
<p>I guess my overall reaction is one of "so what if it delays retitement" ... this is a cost/benefit tradeoff decision we will make about this decision for each of our kids ... a decision like about 10 other cost/benefit tradeoffs we have made. Everytime we buy a car above the cheapest car on the market we are essentially making the same choice ... is paying more for this particualr car worth retiring later? Both houses we bought face the same choice ... is buying a house in this town with better schools worth retiring later?</p>
<p>We've faced these decisions many times with differing results (cheap about cars ... paid the piper for better schools) ... as parents we constantly face cost/benefit choices that ultimately affect our retirement date ... and paying for college is just another (really big) one of these choices.</p>
<p>congrats 3togo on thinking about your children's college early on where time is on your side. Yes, these savings will increase your EFC but the peace of mind these savings bring is of far greater value.</p>
<p>And you correctly seem to have a good handle on the balance between their ability to attend the college of their choice and a timely retirement which all parents richly deserve.</p>
<p>I also applaud your attitude about public vs private college choices. You seem to correctly appreciate the fact that some students will desire to go public while other will desire to go private and that both are totally valid and wise decisions.</p>
<p>This year my husband got an unexpected back pay check from his pension system (he is disabled) It almost doubled his nontaxable income for 2007. So while our EFC had been giving us a figure of about 10K, now it is giving us about a 27K estimate!! No way can we pay that!!</p>
<p>So we are hoping to take out a loan for the first year, and then hopefully it will go back to our normal 10K contribution. Will the EFC adjust when income adjusts???</p>
<p>Calmom hit the nail on the head a few posts ago. FAFSA doesn't take into account regional differences in the cost of living. $100,000 income means you're very well off in certain parts or the country, or just making it in the northeast and CA. When my husband and I filled out the FAFSA, we were informed our EFC was $38,000 - the only way we could afford that is if we stopped eating altogether! This system is grossly unfair and penalizes residents in high cost of living states.</p>
<p>Here we go again. There are quite literally millions of people in those area who subsist on much less than $100,000 per year. I can only say what I have said before--a private college is a luxury item. You can either choose to provide your child with that item, or not. But you have complaint if the school does not choose to give you a discount price on that item--whatever your income.</p>
<p>Beat me to it, EMM1. Most of my students (here in the NE) come from families with incomes less than 50K (sometimes much less). As far as I know, they're still eating. Our income has gotten up to around 100K, and I feel pretty rich, in comparison with my students and many of my neighbors. </p>
<p>Though if I lived in an UMC neighborhood, I might have felt differently. It's that comparison thing that can get to you, I think.</p>
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<p>LOL. Get your whip and a chair. I think you may need it. :)</p>
<p>Here is where I get depressed - not only is a private college a luxury item in the United States, but a public college is a luxury item for many, many bright students. These students don't get enough aid from the public colleges to make it affordable for them to attend.</p>
<p>I wonder why we place so little value on education, as opposed to Canada, which has a free/very affordable university system for its students.</p>
<p>WRT regional differences, there's a limit to how far you can stretch a dollar in some places. I have lived in a "reasonable" part of the country, and now I don't. For example, I could support a family of 3 on 30K in Georgia. In northern California, 30K would be close to undoable. For example, the housing shortage in nor Cal is such that even if you could qualify for subsidized housing, waitlists to actually <em>get</em> it are years long. My children go to school with families who make less, but they often live with many relatives, all earning small amounts, so that together they can afford one apartment or duplex. Even if I were comfortable living with 6 or 8 relatives in a 3 bedroom apartment, I don't <em>have</em> that many living relatives. </p>
<p>This is totally off thread, though. Bottom line, yeah, the cost of living thing is totally crappy. I was aware of it when I moved here, but I didn't understand it until I actually tried to rent a place, buy groceries, etc.</p>