college debt s/o question - hypothetical

[Hoggirl]

This has to be a hypothetical question b/c it is hard to imagine that cost would not be somewhat of a factor for everybody. BUT, hypothetically, if you had enough money SAVED that your dc could attend a college that cost $50 - $60K per year to attend (say $200,000 - $250,000 in SAVINGS SET ASIDE FOR COLLEGE - not just "savings" in general) how would the cost of a college factor into the decision-making process. No two schools will be identical, so there certainly would be many factors one would consider, but IF the money were there to go anywhere, how would you factor cost into the equation?

 

I ask this b/c for so many people cost seems to be the number one factor (or at least a top one) in choosing a school. What if it really weren't? If the money were there for that purpose, would you consider cost at all, and, if so, how?

[lionfamily1999]

If money wasn't a factor...

 

This is like, "What would you do if you won a billion dollars?"

 

Of course, dd would continue to look at art schools (so, schools that focus on their interest).

 

We would demand a higher quality of school (right now online/mail schools are possibilities).

 

We would be a lot more stringent about the school's party reputation (as it is, we just try to look away from affordable 'party schools,' but have to keep them in mind, because they ARE affordable).

 

We could look further away (distance is a factor, because closeness to home means lower tuition, less driving, more reliance on coming home to do things than spending more money).

 

If we had the money, dd would be off to Savannah in three years.

Edited January 19, 2012 by lionfamily1999

[memphispeg]

We would look for a school that "fit":

A school that was the right size.

Had the right philosophy of education.

A school with rigorous, interesting, and challenging academics.

A school with a high graduation rate.

A school that had extra-curricular activities that fit our kid's passions.

A school that had a strong mentoring program for all 4 years.

A school that had a good variety of classes in our kids' academic interests, plus plenty of scope outside of their interest b/c w/ teens you never know.

A school where the majority of the people - staff, professors, students are happy to be there and love it.

More.....

[regentrude]

This has to be a hypothetical question b/c it is hard to imagine that cost would not be somewhat of a factor for everybody. BUT, hypothetically, if you had enough money SAVED that your dc could attend a college that cost $50 - $60K per year to attend (say $200,000 - $250,000 in SAVINGS SET ASIDE FOR COLLEGE - not just "savings" in general) how would the cost of a college factor into the decision-making process. No two schools will be identical, so there certainly would be many factors one would consider, but IF the money were there to go anywhere, how would you factor cost into the equation?

 

I ask this b/c for so many people cost seems to be the number one factor (or at least a top one) in choosing a school. What if it really weren't? If the money were there for that purpose, would you consider cost at all, and, if so, how?

 

If I was rolling in money, you mean? I would choose the school that offers the best academic program in the area DD is interested in.

Even with our current, realistic financial situation, I do not see cost as the number one factor for our decision. Some of the most prestigious and selective schools have the most generous scholarship programs - it is much cheaper to attend Princeton than an out of state public university.

For us, the most important factor is academic quality. Plus the area where DD will want to live.

[choirfarm]

FIT.

 

Our goal when we started saving was to pay for 4 years at our alma-mater. I figured they would get some kind of scholarship and then some of that money could be used for graduate school/law school/med school etc. ( I have no idea if they will want that or not.) We liked the 529 plans because you can switch beneficaries once a year. So if oldest gets big scholarships, we can switch his leftover money to my daughter's account and help get her through med school if she desires. Or we can switch it to me and I can get my master's degree or go back and get a music degree. Or we can switch it to a grandchild or a neice or nephew.

 

So it is all about fit for that particular student. There is a big thread on college confidential right now about how a valedictorian from Michigan with great stats chose Baylor over a free ride at Harvard and other top schools. Many people thought she was being stupid by not going to a more prestigious school. They also criticized my son for having his test scores and wanting to go to Baylor or TCU since we all know that Christian schools cannot be intellectual. :tongue_smilie:

 

I know we are blessed. Part of it is family culture. My husband's father saved and put him through school. We believe that is our responsiblity. My parents were not so good about it, but my grandfather helped me finish Baylor when my dad lost his job. He had money saved that he was going to leave me when he died. He decided I could make better use of it then. I had over half of Baylor paid for with scholarships however, and it wsa less than 7,000 a year when I went!!!

 

Our middle child may very well finish his associate's degree at the community college and then transfer somewhere... I don't know. If my child wants to go to a state school, then I think that is great!!! If they want to go to Yale, that is fine as well... Though I'm not sure we have enough saved up for that since I doubt they would not get merit aid and might not even get in!!! They may use the money in the 529 account if they are going to school and getting decent grades. If not, they may get a job. If it isn't enough, they can help out and get a job.

 

I ask this b/c for so many people cost seems to be the number one factor (or at least a top one) in choosing a school. What if it really weren't? If the money were there for that purpose, would you consider cost at all, and, if so, how?

Edited January 21, 2012 by choirfarm

[Janice in NJ]

Oops... misread the question....

[Brenda in MA]

If the money were there ($200K - $300K) to send the dc anywhere he/she wanted for undergrad, then "fit", as others said, would be really important. If the student was not in a field requiring grad school, then I'd want to look at job placements and the school's reputation in the chosen field. I think I'd aim for the best school the student could get into for his/her field, considering the student's desired location.

 

If the student found his/her best fit school by fall of senior year, I would strongly consider having him/her apply Early Decision, because it's often easier to get admitted ED, and most schools will also give an admissions boost to those students who don't need financial aid.

 

However -- if the dc was looking to go into a field where he/she might need major $$ for grad school, then what was spent on undergrad might be more of an issue.

 

For example, if the student was looking at law school or med school, or grad school in an area where fellowships/teaching assistantships are not common, then it might make sense to try and find a cheaper alternative for undergrad, or do what you can to help the child find a merit scholarship to reduce the cost of the undergrad degree so the remaining funds can be used towards grad school. In the end, when the student finally graduates with that MD or Law degree, it will be more important which graduate school he/she went to than where he/she went for undergrad.

 

If the student is not aiming for grad school, another thing to consider might be that every $ not spent on tuition might be used to buy a house, car, etc. after the student graduates. If the student has high test scores & excellent grades, he/she might get a very good scholarship at a fairly prestigious school that would reduce the overall 4-year cost. If the same student were to get into an Ivy (or other need-based aid only school), he/she wouldn't get any kind of scholarship, and all the funds would be spent on tuition. So there is a possible trade-off there.

 

If this were my family, I think the decision would really be an individual one that would depend heavily on what kind of major/career the student was interested in. There are pluses & minuses to all of these different scenarios, so you'd have to weigh those for your own family/child.

 

Brenda

[creekland]

If we had enough that college education and all sorts of extras were no big deal (beyond just 200 - 250K), then I'd tell my boys to look wherever based upon fit and education, etc.

 

However, if it were just 200 - 250K saved (each, of course) then I'd tell them to keep in mind that if they don't spend that much on their education, they could have it to start life after they graduated. That could be grad/med school, it could be a house, or it could be starting a business - who knows? I still feel there are "buys" to be had in education - especially for high stat kids - that they wouldn't necessarily need prestige at a full pay place.

 

I just don't see where many full pay places are worth that amount unless one is rather unlimited monetarily at all (has money to burn). Of course, in our case, we'd probably donate the extra to charity somewhere rather than "burn" in, but that's just us.

[Running the race]

For me, money would always be a factor, even if a lesser factor.

[Hoggirl]

If I was rolling in money, you mean? I would choose the school that offers the best academic program in the area DD is interested in.

Even with our current, realistic financial situation, I do not see cost as the number one factor for our decision. Some of the most prestigious and selective schools have the most generous scholarship programs - it is much cheaper to attend Princeton than an out of state public university.

For us, the most important factor is academic quality. Plus the area where DD will want to live.

 

Really??? When you say "generous scholarship programs" you mean need-based, right? I though Ivies didn't give any merit-based aid? So, in my hypothetical, Princeton would not be cheaper than an OOS public, right?

[Hoggirl]

 

If the student is not aiming for grad school, another thing to consider might be that every $ not spent on tuition might be used to buy a house, car, etc. after the student graduates. If the student has high test scores & excellent grades, he/she might get a very good scholarship at a fairly prestigious school that would reduce the overall 4-year cost. If the same student were to get into an Ivy (or other need-based aid only school), he/she wouldn't get any kind of scholarship, and all the funds would be spent on tuition. So there is a possible trade-off there.

 

Brenda

 

Someone else mentioned a house. So, if you had saved $$ for college costs and dc didn't use that designated money (or at least didn't use all of it) b/c of scholarships, you would give them that money to put toward a house?

[regentrude]

Really??? When you say "generous scholarship programs" you mean need-based, right? I though Ivies didn't give any merit-based aid? So, in my hypothetical, Princeton would not be cheaper than an OOS public, right?

 

Absolutely, at least for families with normal income.

http://www.princeton.edu/admission/financialaid/how_it_works/who_qualifies/

Below 60k family income, tuition and room+board is covered in full, and 100% of students who applied for this aid package got it.

At 119 k, full tuition and 12% of room+board are covered.

[Brenda in MA]

Really??? When you say "generous scholarship programs" you mean need-based, right? I though Ivies didn't give any merit-based aid? So, in my hypothetical, Princeton would not be cheaper than an OOS public, right?

 

Yes, regentrude must mean generous need-based aid. Several of the Ivys say that it will cost you only 10% of income to attend for families making up to $180K in income with typical assets. So if your state flagship costs somewhere between $20K & $30K per year, then it would be cheaper for a middle-income family to send their child to one of the generous ivys.

 

However, the catch is the "typical assets" part. IMHO, any family that has managed to save $200 - $250K for college would not be considered to have "typical assets". Almost all of the most generous colleges require the CSS/Profile financial aid form, which asks a lot more questions than the FAFSA. For example, the FAFSA does not consider the value of a family's primary residence as an asset, but the Profile asks for that information as well as the value of your vehicles and how much your mortgage is. The FAFSA does not ask how much you have in retirement savings. The Profile does. Unlike the FAFSA, which has a formula for figuring out who qualifies for Federal Grants, the Profile is used by each school in whichever way it chooses.

 

You asked, "Would I give the leftover money to my dc for a house." I would say yes that I would give him/her the money towards a house down payment as long as I thought he/she was responsible and not living outside of his/her means. If that extra money allowed the child to take a 15 yr instead of a 30 yr mortgage, it would be a huge blessing to the child years down the road. You might also think about saving the $$ towards a grandchild's college costs, another way to ultimately help future generations of your family.

 

Brenda

[Kathy in Richmond]

Yes, regentrude must mean generous need-based aid. Several of the Ivys say that it will cost you only 10% of income to attend for families making up to $180K in income with typical assets. So if your state flagship costs somewhere between $20K & $30K per year, then it would be cheaper for a middle-income family to send their child to one of the generous ivys.

 

However, the catch is the "typical assets" part. IMHO, any family that has managed to save $200 - $250K for college would not be considered to have "typical assets". Almost all of the most generous colleges require the CSS/Profile financial aid form, which asks a lot more questions than the FAFSA. For example, the FAFSA does not consider the value of a family's primary residence as an asset, but the Profile asks for that information as well as the value of your vehicles and how much your mortgage is. The FAFSA does not ask how much you have in retirement savings. The Profile does. Unlike the FAFSA, which has a formula for figuring out who qualifies for Federal Grants, the Profile is used by each school in whichever way it chooses.

 

Yes, this is basically how it works. Only need-based aid is offered.

 

Besides the value of your home & retirement funds, the finaid calculations also consider family size, number of siblings in college, and the age of older parent (some parental assests are protected; more with age). Princeton does not require CSS/Profile, but does require its own in-house finaid form. It also asked about student's income and savings (they take a larger % from the student than the parent).

 

That Princeton link above listing typical grants given per income range is interesting, but will vary (sometimes a lot) by family circumstances. In my daughter's case, Princeton gave her about $7000 less per year in grants than that chart would indicate. And that was when my dh had lost his job & had been searching for a new position for several months (and we documented the unemployment in her finaid application). Probably what hurt her a bit is that our house is paid off and we have greater than average savings, though by no means in the range being discussed above.

[regentrude]

Someone else mentioned a house. So, if you had saved $$ for college costs and dc didn't use that designated money (or at least didn't use all of it) b/c of scholarships, you would give them that money to put toward a house?

 

No, probably not. It will be many years before my kids will buy a house. With their chosen career path, they will attend college, graduate school, one or two two-year postdoctoral positions, possibly in other countries, before they will for the first time be in a position to think about buying a house.

At that point, we will be retired, and the best gift we can give our kids will be not to be a burden to them in our old age, but to be able to support ourselves financially. Should we be in a position to do so, we would help if help is needed, but it is far more important to provide for retirement. There are loans you can get to pay for a house, but there are no loans to pay living expenses for old people.

 

Btw, I would not have wanted my parents' help to pay for my house. We saved until we could afford one.

[choirfarm]

Someone else mentioned a house. So, if you had saved $$ for college costs and dc didn't use that designated money (or at least didn't use all of it) b/c of scholarships, you would give them that money to put toward a house?

 

I don't know. We haven't discussed it. However, I did want to bring up the perception that I am seeing that you have to be rich to do this. My grandparents were school teachers. He taught high school math and chemistry, and she taught elementary school. My grandfather was one of 8 children. He wanted to go to college and worked for a couple of years before he joined my grandmother at Southwestern. ( They were high school sweethearts but didn't get married until they were 28 and 30 when my grandmother put her foot down.) He played football, was a teaching assistant in Chemistry, sang in the glee club and worked at Oshmans as well as working odd jobs to attend. ( I have no idea when he slept.) These two people had $10,000 saved for each grandchild. That was a lot in the 80's. It helped me pay my last two years at Baylor.

 

My husband's grandparents were also teachers. They saved their money as well and helped grandchildren with downpayments on houses..

 

These couples lived simply and in the same houses for 50 years and 60 years respectively. My grandparents had only one car as my grandmother didn't drive. They seemed to "need" a lot less than we do today. Education was valuable to them. My grandparents had 3 children and my dad was the black sheep. ( His bipolar disease was part of the reason.) The other two children are currently working at universities: one as a Vice-Provost and the other is the Dean of a Business School. My dad only had a bachelor's degree... My husband's parents both have masters as well as both of his sisters.. I am the uneducated one around here!!!

 

It is family culture.

[TravelingChris]

I can answer this is real life, though not because we have that kind of money- we don't. But dd18 had a four year GI Bill scholarship so she could have gone to a lot of schools for no money. This included small and large schools. She applied to ten schools. She went to one where she isn't using the scholarship because it was the one she felt most at home. She has a full tuition scholarship there and she may even have no lodging costs next year if she is chosen to be an RA. There was zero pressure for her to go here. She chose on her own. We think she made the right choice.

[creekland]

Someone else mentioned a house. So, if you had saved $$ for college costs and dc didn't use that designated money (or at least didn't use all of it) b/c of scholarships, you would give them that money to put toward a house?

 

If it had been money saved for them, we would most likely still use it to support them in the way that would best fit them at the time. It might be a house. It might be start up money for a business. It might be a fund to start saving for my grandkid's college. It might be something I'm not even thinking of now. Who knows? But it would be there...

[creekland]

Yes, regentrude must mean generous need-based aid. Several of the Ivys say that it will cost you only 10% of income to attend for families making up to $180K in income with typical assets. So if your state flagship costs somewhere between $20K & $30K per year, then it would be cheaper for a middle-income family to send their child to one of the generous ivys.

 

However, the catch is the "typical assets" part. IMHO, any family that has managed to save $200 - $250K for college would not be considered to have "typical assets". Almost all of the most generous colleges require the CSS/Profile financial aid form, which asks a lot more questions than the FAFSA. For example, the FAFSA does not consider the value of a family's primary residence as an asset, but the Profile asks for that information as well as the value of your vehicles and how much your mortgage is. The FAFSA does not ask how much you have in retirement savings. The Profile does. Unlike the FAFSA, which has a formula for figuring out who qualifies for Federal Grants, the Profile is used by each school in whichever way it chooses.

 

Brenda

 

Yale's info to us this year was that typical assets had to be < 100K. For most people owning a house, this doesn't = free ride.

 

My guy opted not to apply to Yale, so we haven't pursued it any further. My info came from that book they sent my guy (and probably everyone else with his stats).

[Hoggirl]

At that point, we will be retired, and the best gift we can give our kids will be not to be a burden to them in our old age, but to be able to support ourselves financially. Should we be in a position to do so, we would help if help is needed, but it is far more important to provide for retirement. There are loans you can get to pay for a house, but there are no loans to pay living expenses for old people.

 

Btw, I would not have wanted my parents' help to pay for my house. We saved until we could afford one.

 

I agree with this. If saved money (whether $1,000 or $100,000) designated for college was not used for college or graduate school, I think it would stay with us for retirement purposes.

[Medstudent]

Money was never a factor in my college choice. We didn't have that kind of money saved- I don't think we had ANY money saved- so I gambled a bit on myself eventually making enough money to pay back any loans I took out. I had good grades, great SAT scores, great ACT, all that good stuff, so I knew I'd get some money wherever I went, and we didn't have much in the form of assets or savings so I figured some need-based money was coming my way regardless. I applied to 19 colleges, most of which were reaches with a couple of safeties I hoped I wouldn't have to rely on cause I barely knew what they were about. My requirements were (in no particular order): a nice, comfortable campus (I like grass, not asphalt), a big beautiful library, an excellent national reputation, a great premed program (possibly with a med school associated with the university), location in a city I liked that was not within 2 hours of my house but no more than 6ish hours away, medium-sized student body, and a good "feeling" about the students who went there. I visited all my top 6ish choices and essentially ranked them in my own mind based on those criteria. I applied to a few because my mom wanted me to, and then the safeties. Ultimately I chose my school because of all the ones I got into, it was the one where I felt the happiest and most comfortable. It wasn't the highest ranked, and it was one of the most expensive, but it was also the one where I had gotten along with every student I'd met. Ultimately I did get some need-based aid and some merit-based aid, but yes, I got out of college with some loans (not sure how much, I think 50ish?).

 

A couple of things: I took the risk of taking out a lot of loans because I KNEW I'd be going into medicine. If I had thought I'd want to go into something in which the salary is more variable/risky or if I had had no idea of what I wanted to study, I might have been a little more cautious when it came to my choice of school. I'm really glad that my mom never pushed me to pick a cheaper school- ultimately, it is my responsibility to pay that money back, so I don't think it should have been my mom's choice. She gave me whatever amount of money she could afford every month, and the rest was my responsibility. But yeah, I gambled on myself because I've always been an academic and I knew what I wanted to go into.

 

Second thing: someone mentioned how grad school should be a factor: I agree, except for a different reason. Because I knew I'd have to someday apply to med school, it was doubly imperative that I pick a school with a good (national) reputation. A regionally respected school or a little, unknown school would have given me a much steeper uphill battle to fight. My premed adviser knew the admissions officers of most med schools in the country, she knew how to argue for each student, and we churn out numerous premeds every year, so the med schools know us well. We have our own med school, too, so that helped a ton as far as volunteering/ shadowing/ research opportunities. My school ended up being a really fantastic choice for my interests. Additionally, you'll be hard-pressed to find too many med school/law school grads with no debt- it's just part of the deal. I have a full tuition scholarship and I still have debt for cost of living. Ultimately, it's hard to get out of a med/law school education completely debt free- so to some extent, college seemed like a no-brainer. A school that increases your chances of getting into a good law/med school in the first place + you'll have a ton of debt no matter what after grad school is done...it just made sense to me. I realize some wouldn't agree, but this was my philosophy.

[distancia]

My stepdaughter was in this exact situation. She applied to numerous schools--our highly-regarded state flagship school and some other private semi-Ivies among them [Tulane, Vanderbilt, Emory].

 

She ended up going to Emory and, although she made a couple of friends, hated the experience. It was "too rich for her blood". StepD was raised uppermiddle class--her mom could afford full tuition at Emory!--but the mindset and lifestyle of the students did not work for SD. So instead of going the Buckhead and country club route, getting her mani/pedis every weekend, SD went counterculture. Does she regret her choice? I think to some degree, yes. She says she got a fabulous education, but everything else was meh. She never attended her graduation, has no contact with the school or reunions, etc.

 

Our DD has lamented that she did not have the same opportunity. However, knowing what we do about private schools, we would be very particular about the private school DD went to, because many of them which have her desired major and the classes she wants seem to be slightly below her academic level. In fact, some of our state schools have higher admission standards,

 

But if we had unlimited funds then we would send our DD to a private college in Lugano, Switzerland http://www.fc.edu/that has her choice of major, is in a culturally-stimulating environment (we visited the town while on holiday), and we wouldn't have any worries about safety, etc. Oh, and airfare back- and forth- would be of little concern.

Edited January 21, 2012 by distancia

[Muttichen]

Yale's info to us this year was that typical assets had to be < 100K. For most people owning a house, this doesn't = free ride.

 

 

My son was accepted to Yale and they gave excellent financial aid, the best we've been offered anywhere. Harvard, Yale, and Princeton do not take the value of your house into account. This is good for us because our house is paid off and we live in an area where values are fairly high, but it's not like the money's sitting there -- we need a place to live!

 

My kids applied to lots of schools and the best aid (aside from full merit scholarships) came from Harvard, Yale and Princeton. We currently have one at Harvard and one at Princeton and the total we pay (for both of them!) is about $24 k a year. It would be hard to beat that at a state school!