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8FillTheHeart

College debt crisis

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I'd think it would be a huge risk for a bank to offer a private loan to a student.  So I understand the crappy terms.

 

Just being totally honest and outright, I declared bankruptcy when I was 23 (shortly after I graduated).  I was not allowed to discharge my college loans, but everything else.  I always worked while in school, but in order to afford to make it through and live I used a lot of credit cards.  The credit card companies are pretty slick and all over college students.  At that time credit was cheap and easy. They even offered things like not having to pay every month.  So I could go months of just charging stuff and not paying for it.  A lot of stuff I charged were honestly needs (dental work, for example). 

 

Of course that meant not having good enough credit to buy something like a house for about 10 years after.  I was able to buy a car shortly after though.  The terms were awful, but I still have that car 14 years later. 

 

It'll only be about 6 years until my oldest is college age.  I'm kinda hoping for a miracle here!  I don't want him to have the same experience.

 

 

 

 

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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.

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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 

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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.

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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.

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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.

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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.

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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.

 

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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.

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What a fascinating discussion.  We will be in a similar pickle with three kids and one (teacher's) income. It is a much different calculus than what my parents went through 25 years ago with four children and basically the same annual income.

 

I just finished reading College Unbound, which is a fascinating (and somewhat depressing) discussion of the unsustainable economic structure of the whole college system. One point he makes is that graduation rates within a reasonable time period, and employment rates also really matter. Sometimes students choose the less expensive option (more grants or scholarships at a lesser known school)  but then end up at a school with dismal 4 year graduation rates (for a variety of reasons). They might have been better taking on a bit more debt, but actually finishing more or less on time and finding a paying job. It just adds one more confusing factor to an already complicated decision. 

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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:

 

 

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.

 

The calculator asked for info on home equity, investments, bank acct info.  So those were the numbers based on that info. 

 

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The calculator asked for info on home equity, investments, bank acct info.  So those were the numbers based on that info. 

 

Then their calculator is likely based upon the CSS Profile. 

 

If your EFC is affordable, definitely see if your students are academically talented enough to try for the big guns school-wise.  Look for those 100% meets need schools, and those that do it without much debt.  If they can make it in, they are likely to be less-expensive than many of their other options including many state schools as those are NOT always good with need-based aid (exceptions being the potential for full rides at merit based schools, public and private, if they are competitive enough to get those).

 

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The calculator asked for info on home equity, investments, bank acct info.  So those were the numbers based on that info. 

Yes, very specific questions. We were able to show the loss of equity in our home, and that probably helped. We purchased the place for $36,000.00 spend $30,000.00 in materials plus our own blood, sweat, and tears to renovate it, and then Michigan tried going bankrupt, and our region of it became the repossession capitol, and voila, it's now worth $25,000.00 Not great for us, but I think that's something their calculator took into consideration because even though it's paid off, we can't borrow on it. Home equity loans do not exist in this area and that's a significant loss of equity because seven years ago with half the renovations done it was worth $100,000.00. Now with most of it done, it should be worth about $130,000.00. Plus, I think they do give more when there are multiples in college than the other schools. His older brother will already be in, and this seemed to count for a LOT more than the state U calculators here or Kalamazoo and Hope College (two highly reputed and fairly selective LAC's in western Michigan).

 

Our calculator also specifically stated that it did not include a parent loan, and only one $5000.00 student loan. The balance is definitely something DH and I can handle. Ds may have the stats - he's got a 32 on the ACT now as a sophomore so it could go up. Their high last year was 33. He'll have a 3.85 GPA - that could be a problem if they only consider 4.0 students. We will have a foreign language issue (as explained in another thread) though there is a spot on the application to explain why one might not meet the requirement (none of the kids in our area would be able to because due to funding cuts, the schools dropped the third year of Spanish and French so they could eliminate teaching positions). I'm worried about that fact that he'll only have two AP's and one college class - not DE since we do not have a community college in this county or the next one over...just a professional licensing/certificate type business school that doesn't have a single history or English course except college writing, no math over college algebra, and only whatever science oriented coursework is necessary for the nurses aid license and massage therapy. So, it will be college chemistry from U of M Flint campus. I really don't know what they look for in extracurricular activities. He has no sports, and is uninterested in music or fine arts. His passion is science and pursues it zealously. He'll have some state and national recognition from the rocket team, 4-H awards, his research project mentored by Dr. Werner, DNR volunteer time, tutoring for 4-H, and 4-H youth leadership council (these last two are thing he is not passionate about, but he is good at and does, hate to say it, to have leadership quality demonstrated on his transcript). He'll be the team captain of the TARC rocket team next year. Maybe that could count for enough that he could end his 4-H Youth Council position.

 

I don't know if he will be a strong enough candidate or not. This does possibly put Cornell back into play for him.

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I don't know if he will be a strong enough candidate or not. This does possibly put Cornell back into play for him.

 

It sounds like it'd be worth a try at Cornell or any other CSS school that is good with aid and appeals to him.  Don't fall in love, of course, but you'll never know what is possible without trying.

 

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The calculator asked for info on home equity, investments, bank acct info.  So those were the numbers based on that info. 

 

I agree with Creekland.  Look at schools that meet need and those would be very good options.

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College is one of the most over-priced products out there.  In many cases the consumer does not get even close to what they are paying for.  Hopefully there are some fiscal conservatives out there working on ideas to at least slow college inflation which has been out of control over the last few decades.

 

Please no  "you don't go to college to get a job" replies. I am from a large middle class family without a lot of extra money, I went to college to get a job and have a career.  Hopefully this will work out for my son as well in the future.

 

 

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Sometimes when I read these boards, I get unhappy and discontent that my kids have chosen a state uni. Yet, we cannot take out loans for their education, for reasons I will not go into here, primarily having to do with inability to pay them back. It doesn't matter how wonderful that school environment would be, how much better it might be in their field, etc., etc. Like 8 says, it is purely a financial decision. One of our kids really wanted to go to a small LAC. They offered merit aid of about half the tuition--a nice scholarship package really--about $17,000/year. But there was still another $17,000 to go. So she decided on the state uni after all, where, with the combination of scholarships she has and a small job, she has even been able to save some money. Then right before she started, she changed her major, which made the state uni a better choice anyway. And at orientation, both girls said that they felt very happy that it was the right place for them. Something about being on campus helped them put aside any wishes/longings for what they didn't have.

 

Our first two have graduated with no debt, and with a good education in their fields. Our next two should also, aside from some catastrophic event. When they see their friends graduating with thousands of dollars in debt, it hits them what a gift it is for them to start out without it. I know it is not possible for everyone. We have two more at home, one of whom should be able to qualify for some merit aid. Our youngest son has dyslexia and may not be able to get any merit aid. He is also more interested in a trade at this point. We will have to see what can be done.

 

I find the whole uni situation frustrating and upsetting. Yes, ideally, I would love for my kids to get the education they want from the place they want. Yet, realistically, it says a lot about their character if they are able to go to the "good enough" school and do their best, learning from the opportunities that they have available. Much of life is learning to handle graciously and gracefully what your situation actually is, rather than what you wish it were; a lesson I have to remember when I desire just as much as anybody here that my children have all the best opportunities.

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Sometimes when I read these boards, I get unhappy and discontent that my kids have chosen a state uni.

 

I don't think anyone on here is putting state schools down at all.  I graduated from one and have no regrets.  I enjoyed my time, felt I got a great education, and met hubby.

 

In some cases, esp for fields like Engineering (but others too), state schools ARE the best option, even educationally.

 

They can be different from other types of schools, but each type of school has its pros and cons.  Finding fit (including financial fit) is what it's all about.

 

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Someone asked me to pose this question for them:

 

I want to know how it is handled if a parent outright owns their house and car but has no income or an income under $10,000 a year.

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I went to a state school.  I'm not unhappy about it.  I guess my only unhappiness is that it really did not have the major I wanted so I settled for something else that was not even related to what I wanted.  It is what it is and I'm glad I at least got the piece of paper in the end because it did open doors for me. 

 

 

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Someone asked me to pose this question for them:

 

I want to know how it is handled if a parent outright owns their house and car but has no income or an income under $10,000 a year.

 

FWIW, I happened upon this Forbes article a few minutes ago - might shed some light

Paying for College - How the Financial Aid Formulas Work

 

Fafsa is the most lenient in toting up your asset pile. It excludes the value of your house, your farm, a small business you own and 529 college savings accounts not controlled by the parent or the student (for example, one controlled by a grandparent).

Fafsa also exempts a family entirely from the asset assessment if the parents are able to file a short-form tax return with less than $50,000 of adjusted gross income.

 

 

The Profile aid application does a much deeper dive into your pockets. It counts farms, businesses, home equity, annuities and those grandparent-funded 529s. The Consensus formula is very similar to Profile but counts home equity only up to an amount equal to 120% of the parents’ income. In the chapter on mortgages there’s a list of Consensus schools and an explanation of what homeowners should do if they’re sending a child to one of these schools.

 

 

eta, here's another article that might be helpful http://www.forbes.com/sites/troyonink/2013/01/02/2013-simplified-guide-to-expected-family-contribution-efc-and-college-aid/

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Someone asked me to pose this question for them:

 

I want to know how it is handled if a parent outright owns their house and car but has no income or an income under $10,000 a year.

 

It is that famous answer:  it depends.

 

FAFSA does not consider the value of a home but the CSS Profile, used by many competitive colleges, does. 

 

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The calculator asked for info on home equity, investments, bank acct info.  So those were the numbers based on that info. 

 

It is important to understand though that there is an allowance for you to have home equity, investments, and savings that are in line with where they feel the numbers should be for your income. So, it isn't the case that they don't want people to own a house or have any savings. Rather, that they are saying that the picture is bigger than just your income this year. You may not have been over the threshold for any of these questions.

 

In the example that was posted about of the student with the much higher EFC - the EFC they came up with is the same as it would have been found on the FAFSA (the federal form). They asked about savings and home equity, but her family was below the thresholds where the amount they had made a difference.

 

Sorry this stuff is all complicated and I hope my post didn't make it more confusing. Just to boil it down.. as a general thing families overestimate how they will be punished for savings or home equity. Over 90% of families do not have enough savings or investments to exceed allowances. This article may help. http://www.thecollegesolution.com/will-your-savings-hurt-your-financial-aid-chances/

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Jaybee,  I am realizing that at heart, I think we are more "state school" people anyway.  :)  

 

Yes, I find myself wavering between being defensive about the 'state school' and being a little academically snobbish. Maybe part of it comes from my own background; I graduated from a mediocre high school and then went to a mediocre state university. I started out at that uni planning to transfer when I figured out what I wanted to major in, but finally had to admit to myself that I really, really enjoyed that school and didn't want to transfer after all. It took a bit for me to overcome that native snobbishness in order to admit I loved my school. Thankfully, I stayed, because I met my husband there, and I couldn't have met anyone more suitable. :) :wub:  (I went on to graduate school in a liberal arts field, and did well there.) And honestly, like Creekland said, 'fit' includes so many things. I had some unusual experiences at my school, and didn't really want to study terribly hard after high school. :blushing:  I had poured myself into it in high school, and was ready to expand my world in other ways.

 

Yet, I want to say, "but, but, but. . ." and defend how smart and wonderful my own kids are when I read about how those who do not seem to be under the same financial constraints look at education. At the same time, there are many smart and capable students who go to the school where my kids have gone. And while I know money isn't everything, I realize what a relief it is when they graduate, that they are financially prepared and responsible, and don't have that burden over them from the start. I wanted so badly to give our daughter the LAC that she wanted. Yet, it worked out for the best when she changed her major, because she will get either comparable or better training in her field for a much lesser price at the state uni, and is happy there.

 

I still have mixed feelings about debt, as possible future sons-in-law have debt, and I understand why. But for us, our children, and our circumstances, it has definitely been the right decision.

 

Not sure this is even coherent--just a lot of thrown-together thoughts. . .

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Not sure this is even coherent--just a lot of thrown-together thoughts. . .

 

Well I liked it.

 

Hubby and I raised our kids KNOWING they would go to our Alma mater (that state school) since we loved it so much and are proud alumni (Virginia Tech!).  Oldest had to do a bit of mature talking to get us to consider a school he thought was right for himself.  THEN, it helped him that the school he wanted turned out to be more inexpensive than the state school we attended AND our in state options - plus - neither had what he specifically wanted to do at that point in his life (International Development with a Christian focus).  We ended up coming to the conclusion that it was his life - his choice - as long as the choice was financially ok (and it was).

 

Middle and youngest reaped oldest's rewards in that we were open to look at schools that fit them the best - coupled with our budget.

 

For us, it turned out to be private schools for all three, but that doesn't mean it will for all.  At school, I really encourage kids to consider all their options.  I'll continue to do the same on the Hive.

 

Had any of mine wanted to follow in hubby's shoes with engineering, they'd be going public.

 

Meanwhile, hubby and I are still amazed by the small LACs (that two of mine have attended or will attend) when we think about college.  Our large state school just had so much MORE of pretty much everything (dining to research to...).  It's hard for us to consider a small LAC as the same even when we know they have various pros to them (small classes, etc).  Middle's school comes close, so it gives us our "fix."  Hubby is rather jealous of youngest's school though - mainly due to the water location and their sailing team.  ;)  I like oldest's school's incredible view.  Would we have enjoyed small classes?  Probably so.  But we also enjoyed what we had including the oodles of options.

 

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Yes, I find myself wavering between being defensive about the 'state school' and being a little academically snobbish........

 

Yet, I want to say, "but, but, but. . ." and defend how smart and wonderful my own kids are when I read about how those who do not seem to be under the same financial constraints look at education.

 

Not sure this is even coherent--just a lot of thrown-together thoughts. . .

 

No.   You articulated the stressed mental confusion well.   I know exactly what you are saying.  :)  

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I find the whole uni situation frustrating and upsetting. Yes, ideally, I would love for my kids to get the education they want from the place they want. Yet, realistically, it says a lot about their character if they are able to go to the "good enough" school and do their best, learning from the opportunities that they have available. Much of life is learning to handle graciously and gracefully what your situation actually is, rather than what you wish it were; a lesson I have to remember when I desire just as much as anybody here that my children have all the best opportunities.

 

This is so very true, Jaybee, and is something that applies far beyond the choice of college.  Thanks for sharing your thoughts.

 

Regards,

Kareni

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Yes, I find myself wavering between being defensive about the 'state school' and being a little academically snobbish.

 

We're very fortunate in that cost doesn't have to be the top concern for our kids.  DS is likely to be in a situation of choosing between UNC and a couple or three private universities.  And even though finances aren't an overriding issue, I think UNC will be his choice.  Now we are certainly lucky that he has a "public ivy" to choose from.  But I think there are a lot of really good state schools out there, and some not-so-good private schools.  DS's cousin is going to be attending a rather pricey private LAC whose admissions criteria and academics are significantly less than UNC's.  And she will likely have significant student loans.  Should I feel she's getting something superior to DS?  Not.  Definitely, definitely not.  I look at schools on an individual basis and let them stand (or not) on their own merits.  Whether a school is state or private is irrelevant.

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Yeah, I'm generalizing in referring to 'state uni' and LAC, realizing it is a simplification, and that the state school is the better choice in some fields and the LAC is in others. Doing that mainly in reference to the higher/lower tier schools, I guess, more so than specifically state or private.

 

ETA: I want to clarify that I definitely do not want to come across as having a twisted reverse pride--like anybody should ever apologize for going to a higher tier school or having the finances or scholarships to make that choice. I think it is wonderful when a student has those options. Yet, I don't want to give in to a personal pity party when my kids really do have great opportunities too, and I don't want to be too blind to see that!

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It is that famous answer:  it depends.

 

FAFSA does not consider the value of a home but the CSS Profile, used by many competitive colleges, does. 

 

Although I'm thinking if that person has no income they probably can't take out a loan.  How would they pay it back on an income like that?

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We're very fortunate in that cost doesn't have to be the top concern for our kids. DS is likely to be in a situation of choosing between UNC and a couple or three private universities. And even though finances aren't an overriding issue, I think UNC will be his choice. Now we are certainly lucky that he has a "public ivy" to choose from. But I think there are a lot of really good state schools out there, and some not-so-good private schools. DS's cousin is going to be attending a rather pricey private LAC whose admissions criteria and academics are significantly less than UNC's. And she will likely have significant student loans. Should I feel she's getting something superior to DS? Not. Definitely, definitely not. I look at schools on an individual basis and let them stand (or not) on their own merits. Whether a school is state or private is irrelevant.

We, too, are in this position, but our state school is NOT a public Ivy. Neither is the other OOS state school that is under consideration, though it does have good programming for what ds wants to do. But, even though finances are not an overriding issue, they are still an issue - a "fancy" undergrad choice means we will not cover grad school for ds. As you say, "private" in and of itself does not equal high caliber. However, some privates definitely provide "branding." It's a matter of deciding if the "brand" is worth it or not.

 

I have been amazed at the total disregard for reality that some parents I know have had. It is almost as though they think money is going to magically appear!! They have allowed their children to apply to schools where they KNOW there are going to be significant gaps that they cannot cover. Then they are appalled that not all the money in Jr's financial aid package is grant money!! The lack of understanding that "meets full demonstrated need" can (and often DOES) include loans as part of the package is astounding to me! I suppose the good news is that these parents are NOT willing to support the "dream school" through loans, but have seen some pretty disillusioned kids because of it.

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I have been amazed at the total disregard for reality that some parents I know have had. It is almost as though they think money is going to magically appear!! They have allowed their children to apply to schools where they KNOW there are going to be significant gaps that they cannot cover. Then they are appalled that not all the money in Jr's financial aid package is grant money!! The lack of understanding that "meets full demonstrated need" can (and often DOES) include loans as part of the package is astounding to me! I suppose the good news is that these parents are NOT willing to support the "dream school" through loans, but have seen some pretty disillusioned kids because of it.

 

I agree completely Cynthia.  It is so important for parents to have financial discussions with their kids before the college application process begins. 

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I just popped in to say I don't have a dime set aside for my ds14 to go to college.  And no hope of saving a dime in the next 4 years.

 

Hope that makes the rest of you feel better.  ;)

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I have been amazed at the total disregard for reality that some parents I know have had. It is almost as though they think money is going to magically appear!! They have allowed their children to apply to schools where they KNOW there are going to be significant gaps that they cannot cover. Then they are appalled that not all the money in Jr's financial aid package is grant money!! The lack of understanding that "meets full demonstrated need" can (and often DOES) include loans as part of the package is astounding to me! I suppose the good news is that these parents are NOT willing to support the "dream school" through loans, but have seen some pretty disillusioned kids because of it.

 

Often here it's a case that the parents do not realize there's a difference among schools when it comes to financial aid.  They only know names, and for some, they will only allow schools within a certain radius (harder to get geographic bonuses that way).  I've been hearing from many disillusioned kids.  It's sad.  And our state schools are not that inexpensive, so financial safeties can be difficult to come by.

 

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Often here it's a case that the parents do not realize there's a difference among schools when it comes to financial aid.  They only know names, and for some, they will only allow schools within a certain radius (harder to get geographic bonuses that way).  I've been hearing from many disillusioned kids.  It's sad.  And our state schools are not that inexpensive, so financial safeties can be difficult to come by.

 

 

It's too bad that high school counselors are not more adept at including parents in the loop. 

 

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I have another theory about costs - IMO, parents simply do not realize how much college costs have escalated for two reasons:

1) they have NO idea how much college cost increases have outstripped inflation, and

2) they have been out of the market too long.

 

By #2 I mean...you keep buying houses, you keep buying cars, you keep buying groceries, you keep paying for gas, so you have seen this *gradual* increase in costs over time. But, you take, what? A 20+ or more (it has been 28 years since I graduated from college!!) hiatus from "purchasing" college, so I think it just sort of sneaks up on you. You just haven't thought about it, and your frame of reference is completely outdated! I really think dh's tuition at our Big State U was something along the lines of $300 per semester! Truly! That amount has increased more than 13-fold!

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Cynthia, you have a good point about college costs rising so much since many of us attended. It used to be feasible to work your way through college, or at least feasible to make a huge dent in the bill - not so now.  I get the feeling that many parents don't even try to save because the effort seems so futile.

 

There's also something else going on - people used to save up for things - cars, houses, just about everything - I mean sacrificing and saving for years. That is not popular anymore.

 

We have saved as much as we can for years for our kids. Will it be enough to cover all the costs? Maybe, when combined with merit scholarships, depending on where they go. In the meantime, tuition and other costs continue to rise. My hope is that the higher education bubble will burst sooner rather than later.

 

 

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We, too, are in this position, but our state school is NOT a public Ivy. Neither is the other OOS state school that is under consideration, though it does have good programming for what ds wants to do. But, even though finances are not an overriding issue, they are still an issue - a "fancy" undergrad choice means we will not cover grad school for ds. As you say, "private" in and of itself does not equal high caliber. However, some privates definitely provide "branding." It's a matter of deciding if the "brand" is worth it or not.

 

I have been amazed at the total disregard for reality that some parents I know have had. It is almost as though they think money is going to magically appear!! They have allowed their children to apply to schools where they KNOW there are going to be significant gaps that they cannot cover. Then they are appalled that not all the money in Jr's financial aid package is grant money!! The lack of understanding that "meets full demonstrated need" can (and often DOES) include loans as part of the package is astounding to me! I suppose the good news is that these parents are NOT willing to support the "dream school" through loans, but have seen some pretty disillusioned kids because of it.

 

We have a lot of public school friends, and it has surprised me that I'm more educated about this than they are.  And my home-brewed PSAT/SAT review program covered the same ground that the one they paid hundreds for handled.

 

Last week I was talking with a friend about our plans, and she was saying that they were going sign up for whatever it takes for their oldest to go to an "away" school and live on campus so they have that experience.  She knows how much that could be in loans (probably $50,000+ just for undergraduate for a kid who wants to be lawyer).  And she was talking about going back to work (someone who hasn't worked in 18 years).  I'm always supportive of my friends as long as it's not illegal or immoral, but I just don't agree with sending your kid on the road to that kind of debt when there are less expensive options that will get them the same place.  I'm not sure that the debt is worth the on-campus experience either.  She knows my stand on these things though.

 

And I'm feeling more optimistic about our situation :).  I landed a small 2-year contract yesterday that will start in April, and have a long-term one in the works that is 95% sure and could expand over time.  I'll know by May.  Still tight, but definitely improving.

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Cynthia, you have a good point about college costs rising so much since many of us attended. It used to be feasible to work your way through college, or at least feasible to make a huge dent in the bill - not so now.  I get the feeling that many parents don't even try to save because the effort seems so futile.

 

Yes, I put myself through undergraduate school for $6000-7,000/year with a merit scholarship.  That was tuition, lab fees, books, dorm/dining hall, extra food, gas, car expenses, phone calls, medical bills, clothing, etc. etc. 

 

Now that would be community college tuition, fees, books, and basic car expenses while living at home.  Nothing else.

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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.

 

To make college affordable:

I think I'd limit the profit that private businesses can make on the state college contracts, or tax those industries more.  Also, I'd be hiring students, who don't need pensions and medical, to do many of the unskilled or low skilled union jobs. Also, upgrade the nation's infrastructure...we need the power grid expanded to give ourselves cheap transportation and heat/light. I would boot speculators from the market..the price run-ups are beyond the 90%s ability to absorb...either that or increase their taxes and licensing fees.

 

Fancier dorms...my son's college has a dorm that is fancy-- it is green. I'm for it. In the long term, it is going to be a cheaper building to run because it doesn't use heating oil, which has tripled in price the last few years due to speculation and demand. It's about time that firms whose engineers can handle heat design efficient buildings, and those buildings get built.  We need a change on the order of the Franklin stove change to get costs back to affordable.

 

ETA: son also says - secure bike racks would be nice. Enough for everyone.  That and the local governments putting in bike lanes and the stores putting in secure bike rack areas would allow students to get to the grocery store and moving about campus without needing a bus or POV to go 1/4 to two miles. Of course, during snowy weather other arrangements would be needed.

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I just popped in to say I don't have a dime set aside for my ds14 to go to college.  And no hope of saving a dime in the next 4 years.

 

Hope that makes the rest of you feel better.  ;)

 

Scarlett, I don't know if this helps, but I just had a discussion with my son that - in a strange way - his dad's unemployment has really helped. My hubby got hit with unemployment and underemployment starting in 2007, and we've never recovered, nor is he making a wage that is manageable now. To say we're living on a financial tightrope is highly accurate. And he has no work as of September 1. . . . . . :crying: (<< that's me, trying not to stress too much about that little tidbit)

 

But it has oddly helped my kids. They have gotten a lot of aid due to our pathetic finances. Because my dh's job ends August 31, the LAC my son will be attending made a professional judgement and offered him more aid. I think if we had been a "regular" middle class family, that would not have happened.

 

I'm honestly worried for my middle dd, who is NOT a scholar. If hubby lands a decent job (highly unlikely; he's a professor/teacher) she may be in the very same predicament that many here have discussed. But our unemployment has wiped out any savings we may have had, so there's not one red cent for anything for her. And she's not likely at all to get any kind of merit aid.

 

So what, do I hope my dh never gets a decent job, so we can put our kids through college? It's crazy. Just crazy.

 

 

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To make college affordable:

I think I'd limit the profit that private businesses can make on the state college contracts, or tax those industries more.  Also, I'd be hiring students, who don't need pensions and medical, to do many of the unskilled or low skilled union jobs. Also, upgrade the nation's infrastructure...we need the power grid expanded to give ourselves cheap transportation and heat/light. I would boot speculators from the market..the price run-ups are beyond the 90%s ability to absorb...either that or increase their taxes and licensing fees.

 

Fancier dorms...my son's college has a dorm that is fancy-- it is green. I'm for it. In the long term, it is going to be a cheaper building to run because it doesn't use heating oil, which has tripled in price the last few years due to speculation and demand. It's about time that firms whose engineers can handle heat design efficient buildings, and those buildings get built.  We need a change on the order of the Franklin stove change to get costs back to affordable.

 

ETA: son also says - secure bike racks would be nice. Enough for everyone.  That and the local governments putting in bike lanes and the stores putting in secure bike rack areas would allow students to get to the grocery store and moving about campus without needing a bus or POV to go 1/4 to two miles. Of course, during snowy weather other arrangements would be needed.

 

Just last week I was driving on one of the feeder streets to our regional uni, a street that is home to a number of student apartment complexes.  Over the past year, the city has widened the street to include a turn lane and bike paths.  It was hazardous before!  Biking to the nearest grocery is still hazardous but at least the students living in this area now have a safe commute to campus. 

 

I also agree that upgrading the nation's infrastructure is a necessity.  Those of us on the East coast have seen how an abnormally cold winter has led to water main breaks. Water and gas pipes, the grid itself, will require a major capital investment though.  Congress needs to step up to the plate for this one.

 

 

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The school where I got my MS has started a campaign called "Is College worth It?"

Of course for them it is somewhat of a rhetorical question.

 

http://www.uml.edu/News/Alumni-Magazine.aspx

 

http://www.uml.edu/News/stories/2013/is-college-worth-it.aspx

 

At least that make some valid points.

 

 

Another article with some discussion by an economist:

 

http://www.richardhowe.com/2014/02/05/is-college-worth-it-by-john-edward/

 

 

 

 

 

 

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Pretty much, the EFC seems to be based on the idea that we were earning that much since our children were born, so we saved the right amount. If the government really cared that much about the student loan crisis, they would try to make college more affordable. At the state university, our need was met 100% with student loans. That meant over $20K a year. Remember that I grew up in foster care? Well, my financial aid when I was in college was 100% loans. And I did not have parents to advise me not to take them out. I thought it was my only option.

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Scarlett, I don't know if this helps, but I just had a discussion with my son that - in a strange way - his dad's unemployment has really helped. My hubby got hit with unemployment and underemployment starting in 2007, and we've never recovered, nor is he making a wage that is manageable now. To say we're living on a financial tightrope is highly accurate. And he has no work as of September 1. . . . . . :crying: (<< that's me, trying not to stress too much about that little tidbit)

 

But it has oddly helped my kids. They have gotten a lot of aid due to our pathetic finances. Because my dh's job ends August 31, the LAC my son will be attending made a professional judgement and offered him more aid. I think if we had been a "regular" middle class family, that would not have happened.

 

I'm honestly worried for my middle dd, who is NOT a scholar. If hubby lands a decent job (highly unlikely; he's a professor/teacher) she may be in the very same predicament that many here have discussed. But our unemployment has wiped out any savings we may have had, so there's not one red cent for anything for her. And she's not likely at all to get any kind of merit aid.

 

So what, do I hope my dh never gets a decent job, so we can put our kids through college? It's crazy. Just crazy.

My son and I have been through so much in the past 5 years I am just glad he is happy and healthy. It will work out one way or the other.

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For a recent look at default rates of college students, here's a good link:

 

http://www.ticas.org/files/pub/CDR_2013_NR.pdf

 

"More than 600,000 federal student loan borrowers who entered repayment in 2010 defaulted on their loans by 2012, new federal data show. The largest share of these students – 46 percent – attended for-profit colleges, which enrolled just 13 percent of students nationally. For-profit colleges also had a much higher average default rate than other types of schools: 21.8 percent, compared to 13.0 percent at public and 8.2 percent at nonprofit colleges. Across all colleges, 14.7 percent of borrowers defaulted within three years of entering repayment."

 

And this would be why I offer extreme cautions to those considering for-profit schools.  To many employers (not all) these degrees still have no value, so one can pay a fair bit and get almost nothing in return.

 

Odds-wise, college is still worth it for those who are capable academically and don't prefer another route, but one does need to be careful of debt.  85.3% are not defaulting on loans in three years - 91.8% from non-profit colleges. 

 

Stats alone - without being broken down a bit - can be misleading.

 

 

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Another article with some discussion by an economist:

 

http://www.richardhowe.com/2014/02/05/is-college-worth-it-by-john-edward/

 

"

We must also consider the expense of getting a college degree:

• At Bentley University the official price tag for one year of tuition, fees, and “typical expenses†is $56,930 for a resident student. At UMass Lowell it is $23,340 for in-state students — $12,097 without room and board.

• The annual tuition I paid in 1977 to attend UMass Dartmouth, after adjusting for inflation, would be $1,300 today (without room and board).

• According to the College Board, even after taking into account increases in financial aid and inflation, the cost of the average 4-year private non-profit college has increased by 30 percent over the last two decades.

• For the class of 2012, 71 percent graduated with student debt, with an average outstanding debt of $29,400. Within three years, 15 percent of college graduates default on their loans.

• While college students are running up debt they also pay an opportunity cost – four years when they might have been able to work in customer service or a trade and get a good head start on their lifetime earnings.

"

 

I find his last point to be less than solid.  Most young people don't simply graduate from high school and start making big bucks in the trades.  In fact, many trades require an associate's degree and/or apprenticeship. I think it is disingenuous to suggest that an eighteen year old is going to start pulling in much beyond minimum wage (unless they go off to fracking fields in ND).

 

Perhaps because the writer's focus is on business--he does teach at a business school, Bentley--that he sees life reduced to earnings.  That last line had me bristling.

 

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I find his last point to be less than solid.  Most young people don't simply graduate from high school and start making big bucks in the trades.  In fact, many trades require an associate's degree and/or apprenticeship. I think it is disingenuous to suggest that an eighteen year old is going to start pulling in much beyond minimum wage (unless they go off to fracking fields in ND).

 

Perhaps because the writer's focus is on business--he does teach at a business school, Bentley--that he sees life reduced to earnings.  That last line had me bristling.

 

I did not.  It is a pure economics statement without emotion.

 

Yes maybe some current day Jack London could head to the fracking fields and write some short stories and a book. Oh never mind, we don't read any more so you wouldn't be able to sell the stories.

 

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