8filltheheart Posted March 20, 2014 Share Posted March 20, 2014 I don't pretend to understand the ins and outs of this and since, by the grace of God (literally), we have never taken any college loans, I have no personal experience with the loan process and have zero plans to find out. But thought I'd share the article in case others found it informative. http://www.dailyfinance.com/2014/03/19/student-loan-crisis-worse-than-you-think/ Quote Link to comment Share on other sites More sharing options...
OneStepAtATime Posted March 20, 2014 Share Posted March 20, 2014 Ugh...While my kids hopefully will not have to take out huge student loans for higher education, this situation doesn't just affect individual parents/students. Honestly, the affects can spread out like ripples in a pond. Thanks for sharing. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted March 20, 2014 Share Posted March 20, 2014 The NY Fed has been analyzing the student loan situation for several years now. I have read bits and pieces of their reports but one thing that I have wondered has not surfaced in their analysis--at least to my knowledge. Prior to the '08 debacle, many parents contributed to their kids' college funds by using home equity. I have wondered if Parent Plus loans have increased because of this. The median amount of student debt, a fact reported by the NY Fed, is roughly $25K. For many students this is manageable debt. I'm a broken record on this one. Parents need to open those college savings accounts when a child is born. Quote Link to comment Share on other sites More sharing options...
Lori D. Posted March 20, 2014 Share Posted March 20, 2014 … The median amount of student debt, a fact reported by the NY Fed, is roughly $25K. For many students this is manageable debt. I'm a broken record on this one. Parents need to open those college savings accounts when a child is born. I wish this WAS the solution, Jane! But there is NO way most parents can save enough to cover the cost, especially if they have more than 1 child! Starting the month that each of our 2 DSs was born, we have monthly set aside money for college with what options were open to us -- first through savings bonds, then through ESA accounts. We are a single-income family by choice so our children could have a parent at home to raise them. DH worked for the Fire Dept, so a comfortable but not large salary (well under $100,000). We have had to save for our own retirement out of that as well, and we have been frugal with our daily living expenses. The only debt we've had has been the mortgage -- we saved and paid cash for older vehicles and paid off credit card purchases with no interest accrued. We do not live in a new, large home, but bought older and with poured sweat equity into it to renovate and raise the value. We frequent the used bookstores and the second hand clothing shops, we rarely eat out, and no one has any expensive hobbies. We've done a lot of low-cost camping as vacations, and the few big trips we've taken, we saved several years for and I did a ton of research to save us even more on the cost. And the best we were able to do (depending on how the market fluctuates), is about $18-20,000 for each DS. And that is nowhere NEAR enough. Even at a moderate state university, living at home and assuming being able to finish in 4 years, would cost over $40,000 in tuition alone -- easily add another $1000 each semester for fees, transportation, books, supplies, etc. Sadly, this University does NOT have a lot of $$ to give out -- at best, IF they were lucky enough to get a scholarship, it would only have been about $2500 per year. Our DSs do their best, but they don't have spectacular SAT/ACT scores to pull in huge scholarships. So, we've made use of the community college, which runs about $2400/year for a full load, compared to the $10,000+ of the university. DSs have managed to pull in partial scholarships at the community college through hard work, which is helping to protect some of their college funds for when they transfer to 4-year schools for Bachelor degrees. DS#1 is graduating with his AAS in May, and will be going to a LAC out of town, but is getting enough merit aid to cut the $27,000/year (tuition, fees, room & board) down to about $17,000/year, and we're hoping for some work study to drop that down a bit more. Even so, he will need to go for 2 years, and even if he gets all that aid again for the second year, he's easily looking at $30,000 that will NOT be covered for 2 years, which uses up all of our savings in his college funds, AND still leave about $12,000-$15,000 debt. :sad: DS#2 will likely be able to get his Bachelor's via a distance program, so it will likely run him about $15,000, plus the $2400 for another year at the CC to finish his AAS -- so he will very likely just break even. There is nothing more we could have done, because we cut every corner we could. We got hit at the wrong time -- in the past 10 years, due to the housing bubble bursting and our state universities losing virtually all of their State funding, the University tuition for in-state students increased over 250%. :ohmy: Our college funds, meanwhile, do to market plunges, did NOT fair so well, and are only now starting to earn some interest. Alas, not 250% interest to match the tuition rate jump. And, neither DS is going into a high-paying STEM field -- they just aren't wired that way. DS#1 is Film/Video Production and Humanities based; DS#2 is going into Interpretation for the Deaf. They will be lucky to make about $45,000/year once they have their degrees. So ANY amount of debt is going to be fairly significant for them. And what debt might future wives be bringing to the marriage…??? Again so NOT ranting at you, Jane. :) But I know many MANY homeschool families here where I live who are in this same position -- and most are MUCH worse off, because the single income was much lower, or the job was less stable, and the families had NO way of saving for college, in spite of living frugally and responsibly. :( A 4-year college is NOT EVEN anywhere on the radar; they are lucky if they can pull off part-time CC, with the student working to pay for it all. Many have gone straight into entry-level jobs, and have had to completely set aside further education as a distant dream. I have been trying to help families as much as possible with scholarship info, and with sessions on alternatives to 4-year college to help increase their options. SO much of that info and help has come from these boards, for which I am eternally grateful! Anyways, I don't know what the answer is. But our reality is that even doing our best and doing all we CAN do is turning out to not be quite enough. :( Hoping for better things for us all with college costs! Warmest regards, Lori D. Quote Link to comment Share on other sites More sharing options...
Ravin Posted March 20, 2014 Share Posted March 20, 2014 I'd say it's the second biggest debt problem in the country. The biggest is child support arrears, much of which is piled on the heads of parents based on presumed (but actually non-existent) income who will never be able to pay it off. Quote Link to comment Share on other sites More sharing options...
Gwen in VA Posted March 20, 2014 Share Posted March 20, 2014 But there is NO way most parents can save enough to cover the cost, especially if they have more than 1 child! Thank you for your post, Lori. I second that completely. The top private colleges all cost over $50K per year (and in many cases over $60K). As the parent of four kids, the total COA for my kids' 16 years of college (all attended or will attend private) would have been over $1M. Obviously saving that is not feasible. Once upon a time, state colleges were more affordable -- my father is one of those who worked his way through college with zero financial assistance from his parents. Nowadays, however, the idea of paying for one's own college education is not realistic. The COA of the "Public Ivy" down the street from us is over $25K per year for in-state residents. Over four years that totals to over $100K, which is definitely more affordable than the $250K total cost of many private colleges but nonetheless is an amount of money that most people cannot save -- and that is only for one child!.(Even if a kid lives at home, the COA is about $15K per year -- which is still a lot of money!) Saving for college is laudable, but at the end of the day most people can't save enough to put a real dent in the college expenses, especially if they have more than one or two children. I am so very very VERY thankful for merit aid! Quote Link to comment Share on other sites More sharing options...
8filltheheart Posted March 20, 2014 Author Share Posted March 20, 2014 Lori, I deleted a post earlier this yr saying essentially the same thing. My dh has a great job and a good income for living off of with a family our size. But, we live off of it. we don't vacation--we make day trips-- we drive our non-special cars until they die. All of them with the except 1 have over 200,000 miles on them. We encourage our children to become involved in activities we can realistically afford. We have been blessed with the older 3 college-bound children finding affordable college options. Our 9th grader will probably earn her undergrad locally since they are currently developing a Russian major. The rest we'll cross the bridge as we get there. But our food bill is way bigger than our mortgage payment. Our power and water bills reflect 9 people living in our house. Yes, we made a life choice to have a large family and a single income. But they are receiving a better education at home and I am sure that our younger 6 are glad that they exist and face the stress of finding affordable college options considering the alternative. :) And to echo Gwen.........we are incredibly thankful for merit aid! And to add,,,,,that our kids recognize their responsibilities in their choices and work hard bc they are the ones earning the scholarships. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted March 20, 2014 Share Posted March 20, 2014 And the best we were able to do (depending on how the market fluctuates), is about $18-20,000 for each DS. And that is nowhere NEAR enough. Even at a moderate state university, living at home and assuming being able to finish in 4 years, would cost over $40,000 in tuition alone -- easily add another $1000 each semester for fees, transportation, books, supplies, etc. Sadly, this University does NOT have a lot of $$ to give out -- at best, IF they were lucky enough to get a scholarship, it would only have been about $2500 per year. Lori, As usual you spent a great deal of time on a thoughtful post. I always enjoy having your input in our conversations. As you have noted, the cost of public universities has grown beyond the wallet of most people. Here in NC, our state constitution says that higher education is to "as far as practicable, be extended to the people of the State free of expense." And tuition is lower than in many states. Nonetheless, College Navigator gives an in-state total cost of $23,095 for tuition, fees, room, board and other expenses ($13,361 if living off campus with one's family) for UNC-CH. NCSU is less expensive, $20 855. The tuition component in these figures was closing in on $8000 in 2012. On campus living and dining have become very expensive but as posters regularly note living and dining are expensive for their own families--period. In my state, few students earn merit scholarships to the public universities. The complete free ride, the Morehead and Park Fellows at these schools, are elusive indeed. No parent or student can count on them! Having been part of the system before children, I was fully aware of the sacrifices of middle class families who were attempting to send their kids to UNC schools. As a graduate student and later an instructor within the system, I had crying students in my office regularly, students who families could no longer afford to pay for their college bills. This despite the constitutional mandate "as far as practicable, be extended to the people of the State free of expense." Let's dismiss the easy idea that students can live at home and attend college. Anyone living in Eastern NC or the mountains of NC cannot commute to a university with an engineering program. College down the road does not mean appropriate college. Period. The $1000 Lori lists for books and transportation is insufficient in my opinion. The true cost of car ownership (depreciation, insurance, fuel, maintenance) is much greater than $1000. We here on the boards often advise parents to have their students seek merit scholarships. As Lori notes, not every school has an endowment that offers generous merit aid and not every student qualifies. What is a middle class family to do? Meet with legislators who are raising tuition rates and ask where the dollars are to come from! I met with my state legislators last March while they were in the budget process. Also, I'm sticking to my mantra on saving for college, despite the fact that many are frustrated by it. By having $18-20K on hand for your boys, Lori, they have options which others don't have. So I say job well done even if you feel that you have not done enough. (I will add that starting life with Stafford loans is not the end of the world.) Parents may need to help their kids find options to college or perhaps traditional college. I think we need to be upfront with our kids about our finances and spending priorities so that they know at which schools they may have a chance for financial or merit aid. I don't want to deny anyone their vacations or expensive hobbies, but we know people--and I am not saying it is anyone reading this --who make annual pilgrimages to Disney and have gadget filled boats yet are surprised when a college expects them to pay for tuition since they don't have any money in savings. (I know I am going to get in trouble for saying that but there it is.) My real point is that thoughts about college funding start long before high school. I tip my hat to Lori as she helps other families find solutions. Jane Quote Link to comment Share on other sites More sharing options...
JeanM Posted March 20, 2014 Share Posted March 20, 2014 The part that I find very frustrating is that the parents who sacrifice to save for college are penalized by the financial aid system. I'm finding out now that 529 saving plans, which both of my kids have, will decrease their financial aid eligibility. Quote Link to comment Share on other sites More sharing options...
creekland Posted March 20, 2014 Share Posted March 20, 2014 Thank you for your post, Lori. I second that completely. The top private colleges all cost over $50K per year (and in many cases over $60K). As the parent of four kids, the total COA for my kids' 16 years of college (all attended or will attend private) would have been over $1M. Obviously saving that is not feasible. Once upon a time, state colleges were more affordable -- my father is one of those who worked his way through college with zero financial assistance from his parents. Nowadays, however, the idea of paying for one's own college education is not realistic. The COA of the "Public Ivy" down the street from us is over $25K per year for in-state residents. Over four years that totals to over $100K, which is definitely more affordable than the $250K total cost of many private colleges but nonetheless is an amount of money that most people cannot save -- and that is only for one child!.(Even if a kid lives at home, the COA is about $15K per year -- which is still a lot of money!) Saving for college is laudable, but at the end of the day most people can't save enough to put a real dent in the college expenses, especially if they have more than one or two children. I am so very very VERY thankful for merit aid! And this is why I tend to recommend doing what one can to study and prepare for the ACT or SAT. Many on here don't care to because it's "teaching to the test" or "joining the system" rather than being the rebellious homeschooler that many of us are. Yes, and yes to those questions/comments... but getting good merit aid to assist with college is FAR easier with high test scores. BTDT. Getting into colleges that are super good with need-based aid is FAR easier with high test scores. We had saved for our guys - not enough to pay their whole way, but enough to make a serious dent. We lost a super high amount (to us) in the economic downturn - some purely lost - some used to pay the bills, etc, when the income dropped to around half (or less) of "normal." Getting high scores to be desirable to colleges definitely helped my older two. Youngest may turn out to be fortunate that our income has been returning to normal. It doesn't replace lost savings, but it might help him afford school - if not this year, then next. AND, we're not opposed to basic student loans (the roughly 25K total deal). Hubby had them. Others I know had them. They're not too difficult to pay off as a young, working adult (about a car payment, but worth more in value IMO). We've been reaping rewards since. Saving is good (even if you lose it as we did). Knowing the system and how it works is good. Doing general homework to find the best option to fit the student and family is good. A lot of advice for all of the above is often shared on here. It's one of the great aspects of the Hive IMO. Quote Link to comment Share on other sites More sharing options...
FaithManor Posted March 20, 2014 Share Posted March 20, 2014 There is nothing more we could have done, because we cut every corner we could. We got hit at the wrong time -- in the past 10 years, due to the housing bubble bursting and our state universities losing virtually all of their State funding, the University tuition for in-state students increased over 250%. :ohmy: Our college funds, meanwhile, do to market plunges, did NOT fair so well, and are only now starting to earn some interest. Alas, not 250% interest to match the tuition rate jump. Bingo, this is where a HUGE number of families are getting hit. DD's 529 had to be cashed out the year of the bubble burst. We lost 3/4ths the money we put into it. Our house lost 75% of it's value. Repossessions, bankruptcies were everywhere. Michigan pulled nearly all of it's funding to the state U's, and couldn't make due on the scholarships tied to the MEAPS. DD lost her $3500.00 promised state scholarship to any school of her choice for her high MEAP scores. It was simply a, "So sorry we can't pay this even though we promised it". Due to the loss of funding and with only a couple of months notice before the start of the fall semester, huge loads of kids received letters from the schools they had accepted that said, "You are losing X dollars of state aid, and due to loss of operating funds, you are losing X scholarship". This mess was a true educational disaster. Too late to do anything about it. Just stuck! And yes, schools that were $6500.00 a year became schools that were $13,000.00 a year. Room and Board that had been $5000.00 a year, became $9,000.00 and the rates have been skyrocketing ever since. U of MI and MSU which had both been receiving approximately 30% of their operating budgets from taxpayers, were cut to 9%. To be honest, that is down to about 7%. If governor Snyder does not do something, they'll soon receive no public funds as it gets cut every year. At this point, there is so little public funding anyway, they should actually be renamed as private colleges. Except for CC's, Michigan really doesn't have public U's anymore. They are in name only. So much for your tax dollars at work. There isn't any way for a family to recover that. Our retirement accounts tanked, they've never really recovered, but they are now starting to grow some again thank goodness. It was like this all over the Midwest. The private schools, seeing an excuse to jump on the "raise tuition exponentially bandwagon" did so. My Midwestern alma mater upped it's tuition 35% each year for four years running. I don't know a single family who received 35% pay raises each year while that went on, much less increases in interest rates on their savings, so what we have in this region is tuition, room, and board that is so far out of sync with median family income, that it staggers the imagination and high unemployment rates, state governments eliminating good paying jobs, and an awful lot of families that had some savings, being wiped out BUT not getting help of any kind when the FASFA is filled out. On top of which, none of the losses from the 529 or the retirement accounts could be claimed in order to lower our taxable income. I know tons of professors that lost the discount for their own children to attend the college they teach at, and their kids had to drop out. I'm not complaining, just stating facts. Life is NEVER fair, ever. I do think that it is no longer a simple equation of saving from birth and especially in a system that has zero safety net so if you end up having $200,000.00 in medical bills and have to use savings to pay it, you are out to lunch. I have known 11 families that filled out the CSS and appealed for lower EFC's based on losing their homes due to job loss or having to pay massive medical bills that insurance wouldn't cover, and they were turned down. The schools do not have a vested interest in helping anyone. With a record number of students applying to college, there is always someone out there that can either write the check or will loan their lives away, or a really, really low income kid who will get a lot of federal or state grant money. They don't need to help middle class kids go to school because they aren't having trouble filling their freshman classes at the moment, though times are changing. This kind of thing does have a tendency to come back to haunt you. The middle class, right now, is being alienated and finding it difficult to participate in college, and especially the traditional four year plan. Over time applications will probably go down as more and more families are discouraged by the ever rising price tags while their income stagnates or decreases. More and more kids who used to go straight to four year uni's will head to community college and NOT move on due to costs. Slowly, freshman classes will become harder to fill. I am already seeing this just a little. My sister's alma mater last year admitted 3500 freshman and could handle 1400. They enrolled only 850. DD's first choice school wanted 1000, accepted 3500, and enrolled only 750. The regional crappy U about 50 minutes from here expected to enroll 1700 freshmen, and only had 1300. Meanwhile, the very good CC down the road from them 10 minutes, had record enrollment and had to hire professors...still ended up with tons of courses having wait lists, and some freshman being told they couldn't start until January because there weren't ANY freshman courses that had a seat open. When they can't fill their halls anymore, they'll either do more to help middle class families, or they'll have to start scaling back what they offer and lose more students due to less reputation, less status, fewer course offerings, fewer majors. My guess is that they'll come on board and figure, "Hmmm....when you raise tuition and R&B, that much faster than wages while the state has high unemployment numbers to boot and is nearly bankrupt and your largest major city IS bankrupt, you can't expect families to have the savings under those circumstances to manage such a huge financial crisis, so maybe we'll have to get reasonable if we want to compete for students". The ones that get reasonable about it will be the ones that fill their halls. I think we'll also see a little world of hurting in the tier one status and especially the most expensive schools in that tier. Yes, a lot of families do want their kids to graduate from tier 1's because they worry about the job future and being competitive. They are worried about a small regional U looking bad on the resume, and in particular, in specific fields. But, the rubber is going to meet the road, and if the tier 1's are not going to be competitive with merit scholarships and aid, then the small, regional, commuter university down the road is going to win over for sheer sake of finances, a large number of academically competitive and talented students. This is going to help those schools reputations grow. Meanwhile, U of MI Ann Arbor ends up having to accept more and more students who may not have been competitive but who have the luxury of families with the dollars. What that will do to their world class science departments, English departments, etc? I don't know. I would imagine that those majors will suddenly not be very well filled because the pool of applicants will be much smaller. Possibly, they'll get smart and again start throwing money at the talented, but underfunded, middle class kids. At the present time, U of MI's regional campuses are doing a much better job of helping students afford school than the main campus is, and well, in the case of the Flint campus...that reputation just keeps growing and growing. There is no longer any shame in graduating from that particular satellite, and their medical school is doubling in size in the next few years. Lots of exciting announcements, cost of attendance - half the cost of the main campus! Oakland U, growing due to affordability...students aren't worrying quite so much about reputation. It's a matter of survival. Some of U of MI's brightest law school applicants last year ended up at a small law school called Cooley Institute in Lansing due to affordability issues or were snapped up by out of state institutions on the coasts that decided to be more generous. The economics will eventually, probably right itself, though no guarantees. Until that happens though, a lot of middle class families particularly in the midwest and south are paying a dear price they really can't afford or opting out of the dream and especially if they don't live near a good CC, which is the case for many people in the Midwest where regulation of these institutions are spotty at best. I'm all for saving from birth when possible. But, there is no safety net for the middle class when the big life events suck away every cent you've got, or the market completely tanks and you aren't independently wealthy enough to withstand the losses. Of course the lack of affordability or access to good post-high school education and training then contributes to the shrinking of the middle class which is the largest pool of taxpayers. It's bad across the board. As for studying for merit scholarship, yes, my kids work their tails off towards excellent ACT scores. Still, what we are finding is that generous merit aid still doesn't come close to the price tag...not even close and often times, even full scholarships are tuition only and do not cover fees - schools are very sneaky with these and fees can number in the thousands of dollars - books, room and board. So I am ALLLLLLLLLL for getting good grades, studying for those tests, and working on extra curriculars that might help a student get merit aid, but the scholarship pool has definitely dwindled in size and one is still likely to have a $10,000.00-20,000.00 a year bill for the other half of what isn't covered WITH a full tuition scholarship and those are not plentiful. The boys are working very hard to hopefully be in the top 100 applicants at MTU so they can compete for the full ride which is literally, full everything. But, that's like banking on finding the needle in the haystack when you consider the sheer number of applications they will receive. They will probably receive merit aid at every college they apply to as they are really good students with excellent references and some serious accomplishments. Their sister was awarded numerous scholarships at all twelve of the institutions she applied to and yet ended up as a commuter student to U of MI which was not her first choice. Then again, not a slouch uni since it remains in the top 50 in the nation. At any rate, we don't see them having a bill of less than $12,500.00 a year per boy that needs to be funded no matter where they go except if they do land one of those rare, true full rides. They'll each take out a $5500.00 student loan every year leaving them with a $22,000.00 debt, manageable, when they graduate, and dh and I will find the other $7000.00 someplace even though the 529 is empty. Probably, now that that the 401K is recovering, we'll borrow from that and make payments back to it through payroll deduction. As soon as that last one has graduated homeschooling, I'm back in the work force full time to bank my entire paycheck for college, grad school help, and retirement. Maybe then, dh will be able to consider retirement before he turns 80! :001_smile: At my niece alma mater, tuition, room and board, and fees will top $32,000.00 a year for 2014/15. Their TOP merit scholarship - awarded to 50 students, is $10,000.00. They have a couple of smaller, $1000.00 to $2000.00 a year scholarships than can be stacked on that, but the average student loan debt is $85,000.00 for their graduates. My niece, 33 on the ACT, 4.0, AP's, excellent references and accomplishments, graduated from there $80,000.00 in debt for a, are you ready for this, Pre-K through 3rd grade teaching degree. It's a slightly expanded degree over early childhood education which is normally Pre-K/K only. She works as the preschool director of an Episcopal church for $23,000.00 a year. Entry level teacher pay in her state is $25,000.00. We tried to talk to her. But it was her parents' alma mater, and her grandmother sits on the board of trustees there, so there was HUGE pressure to attend that school, HUGE...as in, "You can't even visit home ever again if you choose to go anywhere else because we aren't going to upset grandma!" kind of thing. Soooooo stupid. She cannot afford an apartment, car, utilities, car insurance, food, and student loan payments on her salary since much of her student loan bill is Sallie Mae at 12-14% interest. I think her monthly bill is $750.00 a month spread over something like 20 years. She'll be okay. She married an engineer this summer who went to Clemson which is a top school, commuted, had no debt, and a starting salary of $65,000.00 plus benefits. Whew! Not the best plan in the world however. Quote Link to comment Share on other sites More sharing options...
Nan in Mass Posted March 20, 2014 Share Posted March 20, 2014 Lori - I haven't read past your post explaining your finances. It sounds like your children are going to be stuck with some loans and graduating incomes that will make it very hard for them to pay back those loans. We let ours take out loans, as well, although with tech jobs, they probably will be able to pay them off. There is nothing we can do to reduce the loans while the children are in college, but we are doing two things to make those loans more managable AFTER they graduate: We are encouraging them to live at home for a few years, room and board free (and vacations : ) ), and put as money as possible towards their loans to reduce them. With luck, by doing this, oldest will have his loans paid off in three years. The other thing we are planning on doing is continuing to help the ones with less income pay their loans off. Their brothers have also offered to help. At that point, we won't be paying tuition anymore and the "extra" that we have been putting into college savings or out-of-pocket tuition payments won't be happening anymore. We'll just continue to do that for awhile more. Just in case this hasn't occurred to you... Nan Quote Link to comment Share on other sites More sharing options...
G5052 Posted March 20, 2014 Share Posted March 20, 2014 Yes, the whole thing is disturbing. I'm not anti-loan, but I want to do everything I can to avoid that for mine. Even $25,000 can be burdensome. I've seen how others lives are affected by education loans for many years. I have a friend who had $60,000 in loans when she married right out of graduate school, and they had children right away. It has choked them for years and years. We have enough set aside for tuition at the local community college and 4-year schools, and no more. DH likely will retire soon, and my work goes up and down because I do contract work from home. I can't predict how much I'll earn in a particular year, and being away all day is impossible with DH's needs. If they ended up having to go away for school, we'll have to weigh the options, and perhaps make tough decisions, perhaps including moving. Quote Link to comment Share on other sites More sharing options...
Lori D. Posted March 20, 2014 Share Posted March 20, 2014 Dear Jane, you are SO gracious! :) THANK you for adding all the extra info in your second post. What a kind response, esp. when the first post after yours (my post) must have felt like being the innocent victim in the line of fire… :tongue_smilie: I think the stress I've been carrying around these last few years about the finances and college just unexpectedly burst forth upon reading that article… One other stressor has been the forced furlough days DH had to take for several years, because the City budget was so tight. That was about a $4000/year pay cut :eek: -- and we somehow managed to absorb that and still kept up with our college fund and retirement fund contributions. Our State also keeps eyeing the pension fund that the Fire Dept. is part of, trying to find legal means of raiding it. That would destroy us financially, as the way the Fire Dept. works is that you pay into the pension fund, not Soc. Sec. -- so DH would have nothing except the personal retirement fund he additionally paid into. It is SO hard not to feel bitter about the promises the City made to these men and women in emergency services who put their lives on the line, and whose bodies take a real toll (my DH is old before his time because of his job), and then have them say, "Oh well! Unlike you, we didn't budget and save for the lean times to fulfill our promises. Sorry about that!" And really, I AM grateful DH didn't lose his job -- so many people did! :( And I am VERY grateful for the merit aid DSs have had so far. re: books & transportation -- you are right, it would be more than $1000 for those with cars; our DSs don't have vehicles, and ride the bus 50 minutes one-way to get to the CC. Up until this semester, there was a student bus pass option: buy the $175 semester bus pass, ride as much as you wish. Now it's a pre-pay card you reload as needed and it is the single ride cost each swipe... sigh... I'm also thinking books would likely be more in there, too. We've been mostly lucky, and have largely been able to buy used from online vendors. But sometimes you get caught in that crunch of every 2-3 years a new edition comes out and have to pay full price -- OR, you can't resell because your semester was the last one to use the "older" edition. And, we didn't have a lot of expensive science texts -- those run MUCH more than the Humanities-based books for our DSs' classes. Jane, thanks again for all YOUR contributions on this Board! All of you ladies in this thread -- such a HUGE, valuable wealth of wisdom and kindness to share and help others along the way. I am so blessed to be able to participate in this special online community. :) Quote Link to comment Share on other sites More sharing options...
FaithManor Posted March 20, 2014 Share Posted March 20, 2014 Lori - I haven't read past your post explaining your finances. It sounds like your children are going to be stuck with some loans and graduating incomes that will make it very hard for them to pay back those loans. We let ours take out loans, as well, although with tech jobs, they probably will be able to pay them off. There is nothing we can do to reduce the loans while the children are in college, but we are doing two things to make those loans more managable AFTER they graduate: We are encouraging them to live at home for a few years, room and board free (and vacations : ) ), and put as money as possible towards their loans to reduce them. With luck, by doing this, oldest will have his loans paid off in three years. The other thing we are planning on doing is continuing to help the ones with less income pay their loans off. Their brothers have also offered to help. At that point, we won't be paying tuition anymore and the "extra" that we have been putting into college savings or out-of-pocket tuition payments won't be happening anymore. We'll just continue to do that for awhile more. Just in case this hasn't occurred to you... Nan Nan, I think that's great! Very wise! We would definitely do the same if the kids were facing it being difficult to get ahead. DD's husband has quite a significant loan debt, very hard to manage, from the Art Institute in Philadelphia. They are a two income household so they are able to pay plus some extra, but until their incomes go up significantly, they are looking at some pretty steep payments for about 15 years. We worry about that for their sakes, but he did not receive any assistance from his parents - 18, don't let the door hit you on the way out - kind of thing and the financial aid people were slick...at one point he said he was signing for what he thought was the dispensation of pell grant money and the financial aid person had her hand resting on the paperwork OVER the top of the document so he couldn't see what it really said. She refused to move it, and he was desperate to get into his courses for his senior year, so he signed. Not a wise thing to do, but he was young, had literally never seen legal documents before, had no guidance from his parents, and no older, wiser adults in his corner offering him advice or telling him about the scams out there and that yes, there are unscrupulous employees at colleges that will take advantage of you. It turned out to be a $20,000.00 Sallie Mae loan at 14% interest. So, they know they can move home anytime if they want to save rent and pay down faster. DD also got a lot of scholarships, commuted, and just did a huge amount of being an ultra responsible student and will graduate this May with no debt. Since college tuition keeps rising and merit aid keeps getting more and more scarce, we expect that we'll end up paying more on her three brother's educations individually than we ever did for hers. It feels a little "unfair", though dd is a wonderful kid who doesn't expect things to be fair or equal because circumstances change. However, dh is considering the possibility that since he receives merit based bonuses at work now that he is with a different company, that normally these would be funneled into his 401K, he may dedicate them or a portion thereof, to helping dd and hubby climb out from under those payments. Maybe we'll be able to surprise them by paying back a Sallie Mae or two which would ease the pressure and make it financially possible for dd to take some time off from work when the time comes to give us a grandchild or two! :D She'll never be able to be a SAHM mom, sad to say, I don't think her hubby's income will ever be that high and especially in conjunction with COL on the east coast and no jobs in his lower COL areas, but she'll need to be able to take more time off than what paid vacation will allow...so a little loss of income there. Hopefully, we can help them with that. Don't take that as a sign that I'm ready for grandmother hood. I'm willing to wait a while! :lol: Quote Link to comment Share on other sites More sharing options...
Lori D. Posted March 20, 2014 Share Posted March 20, 2014 … There is nothing we can do to reduce the loans while the children are in college, but we are doing two things to make those loans more managable AFTER they graduate: We are encouraging them to live at home … and put as money as possible towards their loans to reduce them... …. The other thing we are planning on doing is continuing to help the ones with less income pay their loans off. Their brothers have also offered to help. At that point, we won't be paying tuition anymore and the "extra" that we have been putting into college savings or out-of-pocket tuition payments won't be happening anymore. We'll just continue to do that for awhile more. Thanks so much Nan! Your family has a great plan going, and your "esprit de corps" of everyone helping one another is SO refreshing to hear! :) Yes, I think that's the pill we're having to swallow; realistically, there WILL have to be loans. Hopefully, we can keep them to a minimum. Our family has always tried so hard to avoid debt. But, I'm trying to view this as an opportunity for learning and for responsibility… ;) I think we will be able to work out a similar sort of "loan management" plan here. Quote Link to comment Share on other sites More sharing options...
FaithManor Posted March 20, 2014 Share Posted March 20, 2014 I'd also like to state here that all of this homeschooling through high school and launching young adults research that we've had to do has really opened our eyes to how much has changed from what our own generation experienced. It does seem to be MUCH harder now than then when funds were more flush, pay raises more regular, tuition more in line with median, middle class income, state governments more generous with aid, etc. I worry about my grandkids' educations. ALOT! My dd isn't going to be able to stay home to homeschool her children, nor will her husband. What will happen to them? I don't hear very good things about the schools in their area? Will they be able to find jobs and move to better districts? Will my grands get bullied and abused? Will they be able to find challenging coursework? I worry about it. I don't know if as part of my going back into the workforce full time in four years, I should be saving for their college graduations or saving for private school tuition? I don't think I can make enough to bolster our retirement funds AND pay for both. I do know that there will be a grandchild fund, if I can possibly help it, and however many of those little precious persons come along, they'll split what we do have amongst them and hopefully, somehow, some way, they'll get educated. I hope and pray this is so. Honestly, sometimes I think it would be better if my adult children found jobs in other countries with better education systems and better university funding systems, move, and have their babies overseas. I'd miss them terribly, but the future of my grandchildren is more important than missing out on grandpa and grandma. I really don't like the way things area headed educationally K-12 in this nation. I fear that homeschooling will become a thing of the past when families just simply can't find any way to be single income. Quote Link to comment Share on other sites More sharing options...
MysteryJen Posted March 20, 2014 Share Posted March 20, 2014 This is a most stressful topic for everyone. Everyone is in different financial and family circumstances and it is hard to generalize. For us, we are still paying grad school loans which has limited our ability to save. We prioritized retirement savings. The downturn hurt, a lot. We had more kids than we had planned. Then one kid (it is turning into two) turned out to be gifted athletically. That costs money in the here and now. We will not get back what we have spent though she will get a scholarship. But what can you do? I would not be able to look myself in the mirror if we didn't do all that we could to develop this gift. And even so, we cannot give her what her competitors are getting from their wealthier parents. I lived at home, went to the local public University and graduated with no debt. I am grateful for that but I missed out on many things. And I missed out on opportunities that will never come my way again, mostly because I was afraid to have loans and I had no support from my parents. I have told my kids that the door is always open for them to live here, to take that free place to pay loans back. This time in your life, young and free, doesn't come again and they should take the opportunities when they come. The whole thing is hard and frustrating and has given us tears and sleepless nights. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted March 20, 2014 Share Posted March 20, 2014 Thank you for the interesting conversation. One of the things that is disturbing me beyond the ongoing trend for states to give less money to public unis and CCs is what is happening with hiring. Most of the CCs in NC have few full time faculty. Most instructors are adjuncts, literally paid peanuts. For some retirees, this works out well. They carry on in the classroom two days a week or whatever, doing what they love. But for newly minted MAs, MSs and PhDs, prospects are slim. I cannot tell you how many young people I have met who piece together an income from here and there--no benefits of course. How they are paying back their graduate school loans is beyond me! The solution of seeking merit aid is a good one--but remember the back end. Those who receive also need to give back so that the next generation of students can receive aid. I write checks annually to my undergrad and my husband's undergrad--both private colleges. Now there is a third check to be written--to my son's LAC. (Interestingly I don't feel the same love for the uni where I attended grad school. Our teaching assistantships were a bargain for them!) I would love to know what ideas some of you as parents have for reducing the costs of college. When I taught on various campuses, I often felt that the deans operated little fiefdoms--certainly much nicer offices and technology than the rest of us had. Some of the top tier campuses have rock star profs. They and their entourages cost a staggering sum. Did any of you catch the Planet Money piece on Duke? Universities are building fancier dorms--do you have a problem with that? I don't have a problem with the improvement in food quality. My son's dining facility buys a number of locally produced products (milk from the Amish, apples from an orchard down the road, etc.) and offers foods for a variety of diets. I don't mind paying more for good quality food. (That said, I was rather stunned when attending a conference at the regional university recently. We had wonderful food at our conference but when I walked through the student dining space all I saw were chain fast food places. I am getting old...) There are some very smart people on this board. Tell me how you would make college affordable if you could be in charge of the master plan. Quote Link to comment Share on other sites More sharing options...
Dana Posted March 20, 2014 Share Posted March 20, 2014 Thank you for the interesting conversation. One of the things that is disturbing me beyond the ongoing trend for states to give less money to public unis and CCs is what is happening with hiring. Most of the CCs in NC have few full time faculty. Most instructors are adjuncts, literally paid peanuts. For some retirees, this works out well. They carry on in the classroom two days a week or whatever, doing what they love. But for newly minted MAs, MSs and PhDs, prospects are slim. I cannot tell you how many young people I have met who piece together an income from here and there--no benefits of course. How they are paying back their graduate school loans is beyond me!. And with state budget cuts, the cc I adjunct at has FT faculty teaching 18 credit hours a semester. It's especially onerous for English instructors and others who give significant feedback to students. Quote Link to comment Share on other sites More sharing options...
snowbeltmom Posted March 20, 2014 Share Posted March 20, 2014 Tell me how you would make college affordable if you could be in charge of the master plan. I would make it possible to discharge student debt in bankruptcy. Right now, there is no incentive for the colleges to try to contain their costs because banks are willing to loan large sums of money for college because they have little risk of nonpayment. Quote Link to comment Share on other sites More sharing options...
Anacharsis Posted March 20, 2014 Share Posted March 20, 2014 Might credit through examination help? In addition to AP and IB credit, many universities also accept CLEP and DSST scores for credit, up to a certain percentage of total credits that varies by university. Quote Link to comment Share on other sites More sharing options...
8filltheheart Posted March 20, 2014 Author Share Posted March 20, 2014 What absolutely astounds me is the attitude that pervades CC about how parents that don't fork over the $$ for the best school, regardless of cost, are somehow depriving their child of their best possible future. Comments like---Penny wise, pound foolish. Send your kids to the school they'll be the most successful at. Money should not determine where they go. I don't know what reality these parents live in, but we have to be able to afford to pay our bills. Cost impacts all our decisions. Quote Link to comment Share on other sites More sharing options...
8filltheheart Posted March 20, 2014 Author Share Posted March 20, 2014 Also, I think costs are influenced by the amenities students expect. Fabulous dorm rooms, workout facilities, etc. what you see on campuses today is nothing like when we were in school. Not to mention living in a dorm back in the day when window fans were your best friend. Definitely no air conditioning (and in the south, no less!) Quote Link to comment Share on other sites More sharing options...
8filltheheart Posted March 20, 2014 Author Share Posted March 20, 2014 I agree. I think it would far more horrible for my kid to graduate $200K in debt than to go to a less than perfect school. Who wants to start their life with that kind of debt?! Ummmm, in today's world it does not work that way. The student doesn't graduate with that kind of debt. Mom and dad have to foot the bill, not the student. Students are limited to $5500 freshman yr, $6500 soph and jr and $7500 sr. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted March 20, 2014 Share Posted March 20, 2014 Yeah along with their retirement savings accounts, accounts for braces, accounts for emergencies, etc. etc. etc. I used our Roths as a savings vehicle for college since one can withdraw deposits (not accrued interest) without penalty Turned out I did not need to withdraw money from the Roths--but it was there if needed. Now the money is a supplement to our other retirement investments. I would make it possible to discharge student debt in bankruptcy. Right now, there is no incentive for the colleges to try to contain their costs because banks are willing to loan large sums of money for college because they have little risk of nonpayment. Interesting idea. Student debt could once be discharged. I am going to have to read about why Congress changed this. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted March 20, 2014 Share Posted March 20, 2014 What absolutely astounds me is the attitude that pervades CC about how parents that don't fork over the $$ for the best school, regardless of cost, are somehow depriving their child of their best possible future. Comments like---Penny wise, pound foolish. Send your kids to the school they'll be the most successful at. Money should not determine where they go. I don't know what reality these parents live in, but we have to be able to afford to pay our bills. Cost impacts all our decisions. Parents in my world are not forking over dollars for the "best" schools. The CC solution is problematic though. Our local CC has highly limited offerings; the one in a nearby town is better but it is nothing like Wake Tech. Not everyone has easy access to a good CC. If I were paying for an apartment in Raleigh, I think I would encourage my kid to attend NCSU over Wake Tech--unless Wake Tech had some special program. The point is that not all CCs are created equal. Also, I think costs are influenced by the amenities students expect. Fabulous dorm rooms, workout facilities, etc. what you see on campuses today is nothing like when we were in school. Not to mention living in a dorm back in the day when window fans were your best friend. Definitely no air conditioning (and in the south, no less!) The new trend is to have private rooms--and I think a lot of parents seem to approve of this. My son has enjoyed having roommates. But he is an only who has spent summers in a cottage commune---bunk beds lined up in a row for the kids! Parents of kids with respiratory conditions would probably want to provide window air units and I suspect that air conditioning in the building may be cheaper than every room having a separate window unit. Or would you say no window units, period? Quote Link to comment Share on other sites More sharing options...
Vida Winter Posted March 20, 2014 Share Posted March 20, 2014 I would make it possible to discharge student debt in bankruptcy. Right now, there is no incentive for the colleges to try to contain their costs because banks are willing to loan large sums of money for college because they have little risk of nonpayment. This. It would force them into the real world. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted March 20, 2014 Share Posted March 20, 2014 So I have a question. I guess I don't know how this works. Someone told me to try out a financial aid calculator at Cornell (I live in NY). So I did. It says our expected contribution is $5900. The tuition to that school is around 45K. So what does that mean? Does that mean I have to borrow all the money in between? I don't get it. I cannot afford to borrow that kind of money. Your EFC is the amount of money that the feds determine is reasonable for you to pay. Whether Cornell agrees is another issue. Theoretically Cornell would offer your child a financial aid package for the difference ($39,100) that would include grants and loans. Definitely Staffords. Quote Link to comment Share on other sites More sharing options...
Pawz4me Posted March 20, 2014 Share Posted March 20, 2014 Also, I think costs are influenced by the amenities students expect. Fabulous dorm rooms, workout facilities, etc. what you see on campuses today is nothing like when we were in school. Not to mention living in a dorm back in the day when window fans were your best friend. Definitely no air conditioning (and in the south, no less!) Duke still doesn't have air conditioning in its dorms. Or at least not in the freshman dorms--I'm not positive if that's true of all their dorms. You can get a window unit if you provide a note from a doctor saying it's medically necessary. Quote Link to comment Share on other sites More sharing options...
8filltheheart Posted March 20, 2014 Author Share Posted March 20, 2014 Duke still doesn't have air conditioning in its dorms. Or at least not in the freshman dorms--I'm not positive if that's true of all their dorms. You can get a window unit if you provide a note from a doctor saying it's medically necessary. Really? Even my oldest ds's dinky little dorm room at his public u had air conditioning (and I have never seen worse dorm rooms than on that campus.) The dorm rooms where our 12th grader will be going next yr are absolutely amazing. Quote Link to comment Share on other sites More sharing options...
Arcadia Posted March 20, 2014 Share Posted March 20, 2014 The part that I find very frustrating is that the parents who sacrifice to save for college are penalized by the financial aid system. I'm finding out now that 529 saving plans, which both of my kids have, will decrease their financial aid eligibility. Bank accounts under their names would decrease financial aid too. I had wanted to open up bank accounts for my boys savings. I ended up having the accounts under my name. There was a library book I read was my kids were toddlers that explained about 529, bank accounts, assets and financial aid. The other thing that turn me off 529 was that I intend for my kids to have the option of going overseas for universities and I don't wish to limit their choices to those that accept 529. Honestly, sometimes I think it would be better if my adult children found jobs in other countries with better education systems and better university funding systems, move, and have their babies overseas. I'd miss them terribly, but the future of my grandchildren is more important than missing out on grandpa and grandma. Better education systems is so hard to judge. My kids may not fit well with the public education system back home, but it would be a better fit for them than here. It is $9k per annum for my alma mater back home for engineering so it is easy for my relatives to pay up less than $50k all in per kid for a Bachelors in Engineering. My kids just learn some of their Asia's geography from flying since now it is harder for my elderly parents to fly. We just try to chalk up as much frequent flyer miles from hubby's business trips. I think the college debt and the housing debt has the same issues, the loans are too easily offered and there is no incentive to adjust the price down. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted March 20, 2014 Share Posted March 20, 2014 Really? Even my oldest ds's dinky little dorm room at his public u had air conditioning (and I have never seen worse dorm rooms than on that campus.) The dorm rooms where our 12th grader will be going next yr are absolutely amazing. Most campuses have older dorms and newer ones with better amenities. For example, at Chapel Hill, some of the old dorms on north campus were falling apart--but students wanted to live there because of the location. My son's first year dorm room was tiny. The room had been constructed as a double but became a single. When there was an increase in enrollment, the former singles became tiny doubles. Fortunately he and his Vietnamese roommate were minimalists. The dorm he lives in now is lovely. A major foundation funded the dorm to create foreign language suites. His double room is spacious as is the shared living area. Another popular trend is the private dorm near a public campus. Chapel Hill and Raleigh have had these for a while, but the latest version offers upscale amenities. This I can't quite fathom but note that states are not necessarily building upscale dorms. They are private entities. Quote Link to comment Share on other sites More sharing options...
8filltheheart Posted March 20, 2014 Author Share Posted March 20, 2014 Or would you say no window units, period? Oops, I deleted the part about CCs. I don't think CCs are a real solution, either. I agree there. But, $250000 for 4 yrs at the other end isn't either for the avg family. Honestly, I feel like it is Twilight Zone where somehow there doesn't need to be a distinction between the haves and the have-nots. We are not Rockefellers and I find it bizarre that somehow we are all supposed to pretend like we are for meeting college tuition prices. As far as air conditioning, I simply suspect that those sort of amenities do contribute to the higher costs. I know that most dorms now do have air conditioning. They had to pay for the instillation and now the power bill. Ditto to all the other on campus amenities. Quote Link to comment Share on other sites More sharing options...
Pawz4me Posted March 20, 2014 Share Posted March 20, 2014 Another popular trend is the private dorm near a public campus. Chapel Hill and Raleigh have had these for a while, but the latest version offers upscale amenities. This I can't quite fathom but note that states are not necessarily building upscale dorms. They are private entities. If DS goes to UNC he'll be staying in Granville (private dorm). I wouldn't call it upscale by a long shot, but OTOH it's a good bit nicer than the traditional freshman dorms we've seen on south campus. But what sold us on it is the location. It's SO much more convenient to the main campus. And as best we can figure it's not really much more than staying on campus. A few hundred dollars a year, if that. But that's a shared room (his choice). If he'd wanted a private room at Granville it would be significantly more expensive than a traditional freshman dorm room on campus. Quote Link to comment Share on other sites More sharing options...
Jane in NC Posted March 20, 2014 Share Posted March 20, 2014 If DS goes to UNC he'll be staying in Granville (private dorm). I wouldn't call it upscale by a long shot, but OTOH it's a good bit nicer than the traditional freshman dorm rooms on south campus. But what sold us on it is the location. It's SO much more convenient to the main campus. And as best we can figure it's not really much more than staying on campus. A few hundred dollars a year, if that. But that's a shared room (his choice). If he'd wanted a private room at Granville it would be significantly more expensive than a traditional freshman dorm room on campus. Granville is one of the older private dorms. Far from upscale and much more convenient than Hinton James! Quote Link to comment Share on other sites More sharing options...
FaithManor Posted March 20, 2014 Share Posted March 20, 2014 One of the things that we are considering is if eldest and middle boy land at the same university, this is a very real possibility, then we may purchase a small cottage for them to share. It will double as a summer vacation home for us since we really like the areas that they are considering. Since we own it, they can become commuters saving $10,000.00 a piece in dorm costs while living close enough to campus to take part in the college experience. DD missed out on this because her commute was so long. She did nothing but go to school. No friends, no fun. She was content; that is her personality. But, we know this would be really discouraging for the boys. The payment would be much lower than the dorm costs and especially if they only had scholarships to cover tuition. When they graduate, we either love it and the area enough to keep it, rent it to other students, or sell it and even if we don't break even - not that likely in a good college town since usually property appreciates at least at the same rate as interest if not more - we'll still be ahead. But, the reason we can afford this is that we decided to live, house wise, a few notches down from what our income level indicates and renovated a property in a low COL, instead of having a much larger mortgage. We paid the mortgage off last October. It was a comfortable payment for us, and if nothing else, we'd be able to put the amount of that payment every month to a college bill. We are willing to borrow from our Roth IRA and our 401K based on the fact that dh can afford payroll deduction for the payments to the 401K, and I'm going back into the workforce in four years when the youngest graduates and will bank every penny I bring home. That's going to help with getting retirement where it needs to be. I am all for the food being improved on campus and whatever funds need to be dedicated to that process spent in that manner. Excellent produce and proteins is vital to health. Let's feed that to them while their young if we can as good preventative medicine HOPEFULLY for the future. But, if my kids were at a school with limited offerings or low quality even if there is variety, I'd also be more inclined to try to buy a property or have them rent in the area if we can get around the on campus requirement in order for them to be able to eat meals off campus. If living on campus, since the one only likes yogurt and fruit for breakfast, I'd be inclined to not buy the 3 meal per day plan and save the funds. We can send him the money to keep his dorm fridge stocked with breakfast food. Also, he is a light eater at lunch too. He prefers a salad, some turkey, and a piece of fruit. Again, if the school offers just one meal per day plans, it might be worthwhile for us to do that and make sure he keeps his fridge full. He's a pretty responsible kid, and would likely manage this just fine. I'm totally against the expansion of sports stadiums and facilities at the expense of proper funding of academics. I think it's out of hand. Dorms do not need to be palaces, just warm, dry, safe, and comfortable. I haven't been in favor of the elaborate suites that have been popping up on many campuses. I am against federal direct subsidized student loans being discharged through bankruptcy because those are paid for with tax dollars. They are also limited to about $20,000 to 23,000 for this so on a ten year repayment plan at 4% interest is around $230.00 a month. That is manageable for most college graduates. I am ALL FOR Sallie Mae losing it's shirt if a LOT of students could discharge those loans because they have TERRIBLE predatory loan practices that make some of the big banks during the housing bubble scandal look positively virtuous! They either need to start having good loan practices or go under. No bailouts! This will also force colleges to work harder on their costs because they will have a much smaller pool of students who can get big loans to go to school on, and without that constant flow of loan cash, they have to consider how to contain costs. I would like to see Congress stop worrying about everyone else in the world and start worrying about our kids. There should be more financial aid, pell grants, etc. and the income limits on those should be much higher given the ratio of college tuition/R&B to middle class income. I think if you have graduated college, you feel your alma mater is worthy of support, and you have the income to do so, contribute if you went their on merit scholarships. Be a part of the solution. Dh and I are concerned about some unethical practices at our college so have stopped contributing. But we each toss $100.00 in the pot at another college of choice that we think very highly of...yes, that $200.00 a year could go to our kids. But, we've only been able to afford to do that for the last five years and in the grand scheme of things $1000.00 really won't change my kids college choices. So, we are willing to help grow a scholarship pool for some other kid. In and of itself, it's not much, but pooled with a lot of people who feel the same way, it does add up! I think that an educated public is important to the maintenance of a free and democratic republic. Therefore, I believe that both college tuition and trade school costs, professional licensing programs, etc. should be tax deductible or at least a fair portion of it. I think our country can afford this if we stop all of the pork barrel spending that gets attached to every single piece of legislation that comes out of Washington. I know, this is a big fantasy! I think that the faculty ratio of full to part time should be published every year in every state...maybe even in all the major newspapers, for their public universities. If your tax dollars support it, you should know what the kids in your community are getting. I do not believe any public U should be allowed to have less than 65% of their faculty as full time employees with benefits because tax dollars are paying for the citizen's of this nation to have access to quality education and to the professors that guide it. Failure to comply means a significant dip in the amount of federal funding such as federal subsidized student loans that the institution can receive, thus lowering the student pool from which they draw. States may institute a penalty at their leisure since I am still a believer in states' rights. Community Colleges should have at least 55% of their faculty as full time professors. They may pay at a lower rate, but they should at least employ someone enough to be able to live on the salary and benefits without apply for food stamps, or juggling three college schedules to part time it all over the region. Again, penalties or funding cuts that make it worthwhile to keep one's hiring practices above board. This is the beginning of where I'd go with it if in my fantasy world I could make these decisions and implement them. Aside from maintaining appropriate accreditations and health and safety oversight, I'd let private colleges be private colleges, provide their infinite variety at whatever cost they deem fit, and let the chips fall where they may. They'll stay open, or they'll close. They'll maybe get creative about helping students afford their price tags since they'll be limited in what the student can borrow if Sallie Mae and the others can be discharged in bankruptcy thus a much more conservative loan practice ensues. I will now go eat some chocolate and leave my fantasyland! :D Quote Link to comment Share on other sites More sharing options...
Pawz4me Posted March 20, 2014 Share Posted March 20, 2014 Granville is one of the older private dorms. Far from upscale and much more convenient than Hinton James! My niece has been in Hinton James this year. Seems to me that area is so far away from the main campus they probably have a different zip code. ;) Quote Link to comment Share on other sites More sharing options...
8filltheheart Posted March 20, 2014 Author Share Posted March 20, 2014 Yeah I'm pretty depressed over that thought. I can't believe costs like that. My house did not cost that.You don't have to be completely depressed. It doesn't have to come down to the 2 extremes. It means that your child will probably not get that "perfect fit dream school" education, but that isn't the end of the world. My mantra from everything we went through during this college application season is that they need to make the most of the opportunities on the campus they can afford to attend. Our oldest attended a not well-known at all state tech university (very small, only around 8-9000 students) The COA was very low. He graduated near the top of his class and now works alongside grads from top "name" engineering schools with the same pay and the same level. The idea that name means everything is simply not true in a lot of fields. I think this is where everything goes haywire. I know that I got sucked into it this yr with ds. It was not like this with our older 2 college bound students and I will not go the route I took this yr again. It was too stressful and simply not realistic for us to begin with. Getting accepted into top schools we can't afford to pay for is simply a waste of time and energy. Ds could have applied to 2 or so completely affordable options and we would have ended up exactly where we are and with more money in our pocket vs. CB. Quote Link to comment Share on other sites More sharing options...
Anacharsis Posted March 20, 2014 Share Posted March 20, 2014 Ummmm, in today's world it does not work that way. The student doesn't graduate with that kind of debt. Mom and dad have to foot the bill, not the student. Students are limited to $5500 freshman yr, $6500 soph and jr and $7500 sr. Maybe they were thinking about graduate school? The federal loan limit for graduate school students is $138,500, with certain medical school students capped at $224,000. Quote Link to comment Share on other sites More sharing options...
FaithManor Posted March 20, 2014 Share Posted March 20, 2014 Maybe they were thinking about grad school? The loan cap for graduate school students is $138,500, with certain medical school students capped at $224,000. They are talking about total loan amounts from private sources not just federally subsidized which are the good ones with really low interest rates and decent repayment terms. There are a LOT of large banking corporations, Sallie Mae being the biggest, that offer private loans and these are foisted off on unsuspecting or desperate students. Interest accrues during the deferred period so they have four years of interest tacked onto their freshman loans and so on, and the interest rates run the gammet of 8-19%. You read that last number correctly. Since private student loans cannot be discharged in bankruptcy, they have no vested interest in making the rates and terms reasonable nor working with the student to consolidate and lower the rate and payment. So let's say a student borrows $10,000.00 in the freshman year at 12% - a typical Sallie Mae amount. That would incur $1200.00 in interest the first year, added to the balance which means 12% on $11,200 the second year (these are rough estimates, not actual amortized amounts) which is $1120 in interest, new balance $12,220 which earns another $1222 in interest bringing the balance to $13,442 which earns another $1344 in interest during the senior year. So, the original loan is $14,786 or so when the payments begin. Do that every year and your debt is $59, 144 or more at the end of four years and probably you also took out $20,000.00 in federal subsidized loans. The federals will run $200 and change every month. The Sallie Mae will require a $591.00 payment just to pay the interest and another $300-400 in order to pay down the principle over ten years or less. Total for a $79,000 debt would run $1000.00 or more a month. Some private loans are as low as 6-8%, most of Sallie Mae's are 12%-15%. I think that when you see the big numbers in these articles they are including a LOT of private loans. I don't know that many parents taking out parent pluses. Most of the parents in my area have hit bad financial times and lost a lot in home value, lost 401K value, lost pensions when companies went bankrupt, have taken pay cuts, etc. So, the kids who aren't low income and qualifying for a huge amount of financial aid are either going part time, getting a lot of merit aid (not common in this neck of the woods but an occasional kid manages it like my dd), or are getting high amounts of private loans unless they have a family that will let them live at home and commute to Cheap Crappy U whose diploma is hardly worth the paper it's printed on and whose name does NOT impress future employers, or better...to the CC down the road from that school IF they can get into classes because that place is stuffed to the brim, or even better yet, have scores high enough to get into U of MI's extension campuses like the Flint campus that offers a huge amount, is in the cultural center of town so lots of music and art (not the place to go if you value sports), and is only $11,000.00 a year for tuition and fees and gives you the U of MI reputation when you graduate. For kids who can't go the whole way at the extension, they can transfer no problems to campus for their last two years, but still save during those first two years. State has a few extension campuses that are cheaper, but I don't think they are nearly as good as U of MI, Flint. Quote Link to comment Share on other sites More sharing options...
creekland Posted March 20, 2014 Share Posted March 20, 2014 So I have a question. I guess I don't know how this works. Someone told me to try out a financial aid calculator at Cornell (I live in NY). So I did. It says our expected contribution is $5900. The tuition to that school is around 45K. So what does that mean? Does that mean I have to borrow all the money in between? I don't get it. I cannot afford to borrow that kind of money. This would mean, if you can afford your EFC (and that is a rather low amount for an EFC), that you'd be looking for schools that tend to meet 100% in need with low loan balances among graduates. There are a few schools that will meet need without loans, but they tend to be TOP schools and difficult to get into (like Harvard, Yale or Vanderbilt). At these schools the $5900 is all you would pay - if that - some will actually assess your need lower pending how it is calculated. Some could also assess it higher if you have extra in assets that FAFSA doesn't account for. However, there are many schools that meet 100% need and still expect the student to have skin in the game too - they will want the student to take on the federal loans. U Roc - where middle son goes - is one of these schools - we essentially pay our EFC, he has basic loans, his merit aid, and the rest in a UR grant that doesn't have to be repaid. The grant has been higher than our EFC... it makes a 60+K school affordable for us and a great opportunity for him. We'd be paying roughly the same amount at PA state schools or U Alabama (a great merit aid school). URoc actually came in a grand or two lower than either of those two, but it was all in the same ballpark. As I said before, I'm ok with my guys having basic student loans. Hubby had them (I didn't due to AFROTC scholarship). Others I know have had them. They have been a worthy investment and can generally be paid off not too long after graduation if one lives frugally for a few years. To us, it's not unlike borrowing to have a reliable car - except the education lasts longer and tends to pay off better (statistically), esp the way the US is turning to requiring degrees more, not less, even for jobs that shouldn't require them. With a $5900 EFC, many will be envious of options, BUT your kids have to do well enough in academics and standardized tests to get admitted to schools that do a great job of meeting need. To me, it would be worth it to have them try for it if they are at all academically capable. Quote Link to comment Share on other sites More sharing options...
FaithManor Posted March 20, 2014 Share Posted March 20, 2014 Beware of another scam...college backed and owned credit cards. They offer them to the student with a limit high enough to cover a substantial portion of tuition, fees, and books. The college backs this with their endowment funds because they charge anywhere from 9-29% on the balance plus annual fees and that's a lot more than the investment of those funds will make anywhere else. The payments can be quite large and since it's revolving credit, the interest works against you even more than in a regular loan because of how it is accrued. IF you want your student to have a credit card for unexpected expenses, get a decent one from your credit union or a credible bank such as Capitol one with a low, low limit that will accrue travel rewards you can use, or an Amazon Chase card if your student will purchase or rent books from them. (We do this for my sister as contribution to helping her through grad school....it's all we can afford with three boys soon to be in college, and we have saved a bundle on her books!) Don't get a college owned card and charge tuition or room and board. The payments could be a never ending crushing, financial suffocation unless the student or parent declares bankruptcy and the institution makes out like a bandit at the student's expense. We Quote Link to comment Share on other sites More sharing options...
Teachin'Mine Posted March 21, 2014 Share Posted March 21, 2014 SparklyUnicorn, if you want to have some fun, go to Columbia's net price calculator and see what you get. You'll be inspired to give your children the best education you can. If that level of academics is attainable for them, the financial aid available is incredible. Cornell is excellent and Columbia is even better. As has been said, the hard part is getting admitted. Quote Link to comment Share on other sites More sharing options...
Barbara H Posted March 21, 2014 Share Posted March 21, 2014 So I have a question. I guess I don't know how this works. Someone told me to try out a financial aid calculator at Cornell (I live in NY). So I did. It says our expected contribution is $5900. The tuition to that school is around 45K. So what does that mean? Does that mean I have to borrow all the money in between? I don't get it. I cannot afford to borrow that kind of money. At Cornell it means that the university will give you most of that in grant money. They place limits on loans based on income. Under $60,000 family income and the student has no loans, in between $60,000 and $75,000 it is limited to $2,500. Between $75,000 and $120,000 it is limited to $5,000. Here's a link that explains how it works at Cornell. http://www.finaid.cornell.edu/cost-attend/financial-aid-initiatives What you need to know going into this college planning business is that it is primarily at these most selective schools where financial need is well met. Sometimes parents new to this assume that when people want their kids at top ranked schools that's all about prestige... In reality a lot for a lot of middle income families is that it is less expensive to go to a more expensive school that meets financial need well than it is to go to a less selective school that doesn't. Quote Link to comment Share on other sites More sharing options...
Teachin'Mine Posted March 21, 2014 Share Posted March 21, 2014 University of the People may become our best option. http://news.yahoo.com/shai-reshef-bringing-university-people-192543885.html Quote Link to comment Share on other sites More sharing options...
Barb_ Posted March 21, 2014 Share Posted March 21, 2014 Have you guys seen this book: Is College Worth It?: A Former United States Secretary of Education and a Liberal Arts Graduate Expose the Broken Promise of Higher Education (link because iPad: http://www.amazon.com/Is-College-Worth-Secretary-Education/dp/1595552790). I picked it up because Bill Bennett is one of my guilty pleasures, but I was riveted because it was just that good. Spoiler: yes, college is worth it, but only certain schools and they may not be the schools you think. Quote Link to comment Share on other sites More sharing options...
8filltheheart Posted March 21, 2014 Author Share Posted March 21, 2014 At Cornell it means that the university will give you most of that in grant money. They place limits on loans based on income. Under $60,000 family income and the student has no loans, in between $60,000 and $75,000 it is limited to $2,500. Between $75,000 and $120,000 it is limited to $5,000. Here's a link that explains how it works at Cornell. http://www.finaid.cornell.edu/cost-attend/financial-aid-initiatives What you need to know going into this college planning business is that it is primarily at these most selective schools where financial need is well met. Sometimes parents new to this assume that when people want their kids at top ranked schools that's all about prestige... In reality a lot for a lot of middle income families is that it is less expensive to go to a more expensive school that meets financial need well than it is to go to a less selective school that doesn't. For Sparkly, it may be that simple bc her EFC is so low, but the above scenario is not the complete picture for the avg middle class family. Cornell does not make decisions strictly on income. It also factors in home equity, investments, bank acct info and the given loan amt does not negate that depending on the given scenario, the parents are still expected to make a financial contribution. In this example: Chandra is one of four children in a family in upstate New York, with a sibling enrolled full-time in college. Her father is an engineer, and her mother is not employed outside the home. Along with an annual total family income of $130,000, the Novaks have house equity of $100,000, investments of $50,000 and a savings account of $2,000. Chandra has $6,000 in a trust fund established for her by a great aunt. She will be attending the College of Agriculture and Life Sciences. Estimated Cost of Attendance $43,451 Less Chandra’s contribution - 4,000 Less her parents’ contribution -16,000 Financial Need $23,451 Cornell is offering Chandra the following financial aid package: Federal Work-Study $2,500 Student Loans $7,500 Cornell Grant $13,451 That family is really basically expected to be contributing $32,000/yr (guessing) bc note that there are 2 full-time college students. They don't specify how the 2nd college student impacts it, but I am assuming it does bc In the single student with combined income, assets, and savings of $117,000, the parental contribution is expected to be $25,000. The loan cap is still just a loan cap. It isn't the entire picture. Quote Link to comment Share on other sites More sharing options...
Barbara H Posted March 21, 2014 Share Posted March 21, 2014 Cornell does not make decisions strictly on income. It also factors in home equity, investments, bank acct info and the given loan amt does not negate that depending on the given scenario, the parents are still expected to make a financial contribution. In this example: That family is really basically expected to be contributing $32,000/yr (guessing) bc note that there are 2 full-time college students. They don't specify how the 2nd college student impacts it, but I am assuming it does bc In the single student with combined income, assets, and savings of $117,000, the parental contribution is expected to be $25,000. The loan cap is still just a loan cap. It isn't the entire picture. This example is for a family with an annual income of $130,000 though. The Expected Family Contribution for an income of $130,000 is usually around $25,000. So, what the student is being expected to pay in this situation is right around what the EFC would be. In other words, while they offer this asset information in the example, I don't think they are posing a significant reduction to the financial aid being offered this hypothetical family. For a family that is looking at a much lower EFC (I think Sparkly said $6,000) typically assets exceeding the allowable limits isn't usually an issue. Most often when poses a problem is in the case of a small business or farm, but even then institutional judgement can come into play. The biggest challenge with financial aid is that it is hard to speak in generalities and to compare individual circumstances. But, I hate to see families writing off options that may end up being more affordable without really investigating. Quote Link to comment Share on other sites More sharing options...
creekland Posted March 21, 2014 Share Posted March 21, 2014 Good need-based aid schools are only "good" for those whose EFC is affordable whether that is 6K or 25K. For those where it isn't, one has to look for good merit aid schools. Some schools have automatic merit aid based upon scores. For others, it's competitive. One will most likely have to "step down" from the highest schools the student could get into as merit aid tends to go to the "top" students at any school (and many tippy top schools do not give any merit aid), but it goes along with those who feel that a "good" education with small (or no) debt is likely to be better than a "great" education with tons of debt. To be honest, sometimes one can get the "great" education at a "step down" school anyway, but it does take doing some guidance counselor homework. I'm thoroughly happy with the schools my guys have chosen even though they weren't the top schools they potentially could have gotten into. We opted to keep merit aid on the table as we knew our income could be variable. It was a worthy choice for us. Need-based aid changes as income changes. Merit aid is (often) dependent upon GPA. Quote Link to comment Share on other sites More sharing options...
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