Paying for College Chat

10 thoughts on “Paying for College Chat”

1. “Do you have any money saved for your kids’ college education?”
   Not yet, but we haven’t bought our first house yet. Once the dust settles on that in another year or so, we can start running the numbers on that. My husband says that we don’t do any major renovation until we have the kids’ college money. Very sensible, but boo hoo all the same! (If you could see my future master bath, you’d pass me Kleenex.)
   UT Austin runs about $20k a year these days, so that’s about what I’m figuring on. There is also some sort of consortium for allowing professors’ kids to attend different colleges within the consortium at a reduced rate, but I’m not counting on that to be around in exactly the same form in 10 years. I think I would put my foot down if one of my kids did what two of my younger WA relatives have and decided that they need to go to school in Colorado for the skiing. I’m also hostile to creative writing programs (Tolstoy and Pushkin managed just fine without one). Any school that the kids attend and that we pay for would need to offer the same per-dollar value as UT Austin or better.
   We already spend about $6k per kid on private school per year, so we’re used to spending a fair bit on tuition.
   “Is the system fair?”
   I have no idea.
   “How can middle class families afford it?”
   Back in the day, I made out very well because of the Robin Hood financial aid setup at my private college. I don’t know to what extent that still exists, but these days, I’m quite aware that we belong to the financial category that subsidizes rather than being subsidized. It’s the circle of life, I suppose.

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2. I’m going to try to move the discussion over here.
   Yes we’ve saved money for our kids’ college. We will be full pay, so I see that as our only alternative. I don’t see taking on significant debt as a reasonable alternative, but, in revisiting, I can imagine that if your house is paid off, taking debt on it to pay for college is not different from not having accelerated your payments (saving less, and gaining equity).
   Whether the system is fair and how the middle class pays depends on what’s happening to our state university systems. The good ones are becoming privatized, increasing their tuition, making the option that Laura describes, of an affordable education, as long as you don’t expect the luxury good, less tenable. For undergraduate, there are still good public options that cost a lot less than private ones (though not less than aid-based Ivy’s or merit aid). For professional schools, that option has largely disappeared: Columbia, Fordham, and Berkeley all cost the same. Back in the day, I know someone who chose Berkeley over Columbia because it was affordable. Now, he’d have to take loans for either.
   I, like BI, paid for college through hefty aid (though I did take on 7K in debt, I didn’t have any money saved, and I didn’t work for pay during school). My back up plan, though was the perfectly reasonable state university which was very affordable (even regular summer jobs would have paid tuition; I could live at home). So, we could aim for the private institutions that met our financial needs, but also have the financial backup that was affordable. That option still needs to exist, and I don’t know if it does.

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3. Hmm, slight shift of focus.
   I think I made my affection for 529 plans clear in the previous post. We have saved enough to pay for college. Of course, we only have one child, but we have enough savings to pay for some more, if we had any more.
   Is the system fair? I don’t know. I feel like lots of academic types think that a fair system is one that gives opportunities to people solely because of their grades and test scores, not because of their money. As one who had both growing up (though more of the former, actually), I don’t find that position intuitively obvious, and I note that it seems to be held mostly by people who have good grades and test scores.
   How can middle class families afford it? By shopping around and finding the best deal for your child. Of course, a system that privileges shrewd negotiators and manipulators isn’t necessarily fair either, although said negotiators and manipulators (who inhabit my Manhattan neighborhood in abundance) seem to think it is.

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4. We are saving money for college (we contribute enough each year to fully take advantage of our state tax breaks), and we expect to be full pay where ever the children go to school.
   I don’t really have a problem with how financial aid is calculated right now as I do think it does a pretty good job of determining how much money students need for college without subsidizing affluent families and their consumption choices.
   I went to a top 10 school, had full tuition scholarship and took out about 20K total in stafford loans (subsidized and unsubsidized) during my 4 years, as I had to cover the parent EFC as well as my student portion.
   20K is definitely the upper range of what I would consider to be reasonable debt now as I still remember how painful it was to write those monthly checks – when I knew what I was paying for was Aramark meals eaten literally years before. I cringe when I see 18 year olds write on College Confidential that 80K worth of debt seems reasonable to them. They are in for a world of hurt when it comes time to pay the piper.
   I think the biggest tip I would give middle class families is to be smart when constructing the college list. Find colleges where your child’s stats are in the top 10-25% for that school’s applicants. That is one of your best chances to get merit aid when it comes to colleges. I would also caution families making more than 60K a year that they need to really figure out their EFC and their college list early. Paying for bragging rights is expensive – there are many great smaller schools not as well known where your child can get an amazing education and those schools do get recruited by employers as well. Those schools are more likely to give your child merit aid and often have smaller classes and more opportunities.

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5. “I cringe when I see 18 year olds write on College Confidential that 80K worth of debt seems reasonable to them. They are in for a world of hurt when it comes time to pay the piper.”
   I wonder how you get that point across to the young people before they do that?
   “Find colleges where your child’s stats are in the top 10-25% for that school’s applicants. That is one of your best chances to get merit aid when it comes to colleges.”
   Good point. When they see your kid coming, do the admissions people see “BRAINS!” or “$”?

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6. “I wonder how you get that point across to the young people before they do that?”
   I think the best course of action parents can pursue is to have conversations about college cost well before their child’s senior year in high school. We have started talking to our rising middle schooler about the facts of college preparation and cost. For me, it is no different than talking about puberty or any other big topic. Early, often and honest.
   As for what college admission officers see when our children’s application hit their desk…well, I think that depends. If you are looking at Ivies and other highly selective schools – after deciding whether or not to admit the child which is need blind – I think they would look at our particular children as $ (over 50% of admitted students to the Ivies and other top schools are full pay). I think smaller schools looking to increase their stats to rise on the USNWR list would look at the same kids as BRAINS!.
   We are creating our college lists concentrating on those smaller schools and schools that cost less in general. Right now, my oldest really wants to study marine biology. We aren’t looking at Wood Hole or Scripps. Or Stanford or Cornell. Our list holds University of Florida, University of Hawaii and University of Texas – Galveston. All three have good programs, are reasonably priced, are known for giving good to excellent aid for OOS students who are in the Top 10% of their applicants. All three have exceptional internship programs. When we have shown her information about those programs she is really excited. She doesn’t care about brand name at this point. So, it is easier to show her non brand name places that will give her a great education and have her buy in.
   If and when she changes her mind about what she wants to study – then we will do another search. But having these conversations now also allows us to talk to her middle school about what classes she needs to take in 7/8th grade so that she is positioned to be able to take AP classes early during high school in order to give her the most options going forward. And to give her a better idea of how she needs to prepare for college.

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7. Good point. When they see your kid coming, do the admissions people see “BRAINS!” or “$”
   Both.
   The standard advice is to apply to colleges where your test scores and grades would put you well within the top 25% of the student body to improve your odds for receiving aid. Your statistics are viewed as a way to boost the school’s prestige.
   “Schools compete with each other to attract talented students… “If you want to recruit some of those kids, one way to do it is through merit aid.”
   … “Universities compete based on prestige, so if they want to increase their rankings in U.S. News & World Report, an easy way to do that is to bribe high-scoring students to come to your university with non-need-based aid,”…
   In addition to boosting prestige, colleges know that relatively small tuition discounts that attract higher-income talented students often yield them more net revenue than the more generous scholarships they offer to lower-income students.
   Your chances for merit aid are better at less selective schools

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8. We’ve saved, yes, but not nearly enough if Eldest wants to go away and doesn’t get some sort of regular scholarship money each year. She can attend my institution with a full tuition grant plus an annual scholarship for a good GPA. But away sounds so much more attractive to her, especially since her two best friends (whose families are far more flush) are intending to go away. . . .

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9. Until my husband inherited his parents’ mostly unused retirement money (sorry–still bitter that my MIL died on the day her retirement took effect. Life isn’t fair), my college plan was the same as my dad’s–assume that my kids would get need-based scholarships. Hey, it worked for him. Between work-study, loans, and scholarships/need-based aid, tuition was covered, and he only had to pay for my room and board and books, which he could barely do. He was lucky in that my sisters didn’t have college ambitions as I did. 2 were clearly not ready after HS graduation, and the other went to a SUNY but didn’t have big ambitions.
   Nowadays, thanks to the inheritance, we have mainly eliminated debt and can concentrate on building retirement and college funds. The kids have 529s and IRAs plus we get benefits from work (my university has a tuition exchange program, for example). Given our improvement financially, I am assuming we will pay the full amount for college, but by no means will I be pushing my kids to go anywhere specific. Aspie kid won’t be allowed too far away from me until I’m sure he has decent self-care skills, and I don’t anticipate he will by age 18. But living in MA as we do, we have lots of options college-wise. My daughter will make her way. She will have excellent grades and test scores, but I don’t think she will have the spectacular resume for most elite schools (so far, she’s not extracurricular girl), but I think she will be in demand in maybe the second tier and will probably figure out what she wants and be happy with it. But it’s all moot because she’s planning to move to England anyway and write for Doctor Who.

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10. We have saved up enough money to send both our kids to state school in Texas for four years. That is the extent of what my husband and I are willing to pay. My eldest would like to and probably could attend Stanford. He won’t go there unless he gets a scholarship. I won’t pay for it. You might think that is horrible. But can you honestly tell me that the education he would get there would be any better than the education he would get at one of the great Texas schools. And if it is a little better, is it worth twice as much.
    We have also made it very clear that we believe a college education is a privilege and not a right. If my kids want to take advantage of our generosity, they will have to maintain grades and stay out of trouble. We have also explained to them that they will not live like we do. Hell, they probably won’t even live like they do now.
    We also expect them to get JOBS … during school and upon graduation. I understand that jobs for political science or communication majors (like myself) are few and far between, but I know of at least three companies that I could walk to from my husband’s office in downtown Houston that are actively searching for engineers and scientists.
    Want to be a history major and live on a little, that is their choice. Want to live a little better and have a major corporation pay for advanced education … get a STEM degree.
    Might not be a popular opinion, but it is reality. Want a job? Get a degree that is in demand. Women engineers these days can write their own ticket.

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