Financial question--pay down debt vs. save for college??

[Guest]

Well, I meant debt, which is the same thing as loans. What debt are you needing to pay down?

Sorry, I misunderstood you. Yes, loans are our reality, they will not be the reality for our children.

[Okra]

Pay off your debt.  Students can receive merit scholarships, as well as financial aid.  You can't predict the future, but you do know that paying off your debt is important, so go with that.

[QueenCat]

As you think this through consider seriously how many hours your children would be able to work and do well in school. The above poster mentioned 30 hours a week. I think that's generally unrealistic. Colleges start with 10 hours a week. And many jobs do not pay $10.00 an hour. 

 

 

:iagree: I will add to that......... on campus jobs at the school ds goes to are limited to no more than ten hours per week. Fifteen if you get a waiver, which requires you to take 12 rather than 15 credits (12 is still considered full time). In our particular area, part time service industry jobs are not plentiful for college students as most are taken by older people who intend to stay in these jobs.

[ScoutTN]

Ok, but, realistically, can a kid working really pay for school without loans?? I really do not want my kids to start adult life with debt, kwim?

I have several friends whose kids are doing it. They save their summer earnings, work 15 hours a week during the school year, go to public universities (not necessarily in their own state) with excellent merit scholarships for grades and for extra curriculars. They carefully research the best options for housing and food. It is possible for a kid who is an excellent student with self discipline to save and live simply.

Another friend has 3 kids in ROTC, but that is a whole 'nother deal.

[regentrude]

Pay off debt.

When colleges calculate financial aid, parental assets are considered - but they do not consider whether you are in debt.

[ScoutTN]

It is good to carefully evaluate work study jobs too. They are usually convenient, but not necessarily the best choice. I made far, far more money waiting tables and teaching swimming than I ever would have in a University sponsored job. I took the work study job, got promoted and stayed with it until I was settled enough (a bit more than a year) to find something better.

[StephanieZ]

FWIW, if you are expecting or considering using financial aid for college, my understanding is that your debt is not considered in the EFC/financial aid calculations. So, for instance, say you keep 100k in student loans but save $100k for school -- that'd be worse for your calculations than if you paid off the 100k in loans but saved nothing. I don't recall the exact calculations, but it's something like this . .. 

 

They expect you to spend 6% (or something like that) of all YOUR savings (including certain college savings accounts) each year.

 

They expect you to spend 20% (or something like that) of all money in your kid's name. 

 

They don't consider your debt burden. Your debt is your stupid tax.

 

Your savings in retirement accounts might be ignored altogether. So, maybe 0% is expected to be spent each year.

 

So, if you have 100k in debt plus 100k saved, then the first year, you'd be expected to spend (from THAT pot of money) . . .

 

$0 if you paid off the debt instead of saving the cash.

$20k if you put it all in a kid's name in a savings account or similar (careful here!)

$6k if you put it in some smart college savings fund

$0 (maybe?) if you saved it in your OWN names in retirement funds.

 

All these percentages and whatnot are total rough numbers and not exact. I know enough about it to make my own decisions, but I am not an expert!!

 

That said, given the basic above principles, then IF YOU ARE COUNTING ON FINANCIAL AID AT ALL, then I'd say your smartest to simply pay off your own debt first. Then put remaining funds in your own names in retirement funds. If you want to help your kids with college beyond what you can cash-flow, then plan to slow down retirement savings then and/or borrow it against those savings (sort of reborrowing your student loans). I think it's worth talking to a financial advisor to be sure of what is best for your own situation. 

 

HTH

 

ETA: By "stupid tax" I don't mean any insult. We have tons of student debt, and it makes me steamed that they don't seem to consider it or any other "smart debt" such as business start-up debt . . . It really messes up our financial aid eligibility, which has foreclosed considering Ivies, etc. I think the tax is stupid. 

 

 

[Elisabet1]

I have my money invested where I am earning more on it than the student loans charge. So I am just making payments. My savings has now passed the student loan debt. 

 

However, I kind of wish I had taken advantage of a 529. I could have been pulling money from there now, and the earnings would have been pre-tax. Being that they are not pre-tax, I have had to declare the earnings on the FAFSA too.

 

[Ausmumof3]

http://m.bbc.com/news/business-29505582

 

I thought this article on college debt was interesting.

 

I don't have a lot of advice as the system is so different here or was when I was younger. For which I am ever grateful!

[Storygirl]

I agree with paying down debt first.

 

I also want to add that when you are looking at colleges, do not fix your eyes only on public universities, thinking they will be cheaper. Small, private liberal arts schools may have more significant merit scholarships to offer to good students, and they may offer financial aid packages based on need that result in the end costs being comparable to what one would pay at a public institution.

[Ravin]

I would start by checking to see if you qualify for any loan forgiveness programs (some are eligible to be forgiven at the 25yr mark, for example), and what the interest rates on your loans are vs. on loans you would have to take out for your kids.

 

College is going to be vastly more expensive for your kids than it was for you.

[FaithManor]

 

Sorry, you misunderstand. Loans ARE NOT our reality. We WILL NOT let our kids take out student loans. Period. I'm just trying to work out the other option]

 

Gently, you can not stop them once they turn 18. They will he able to sign for them without you.

 

Some areas do have good cc' s and low priced uni's, other places not so much. If you are in the "not so much" area and jobs.are hard to.come by - this is the reality of our state - they may not be able to go to college at all without Staffford loans, so you will have to decide what to do then.

 

Pay down your own situation because not having any savings for retirement is a real burden on the next generation. Ask me how I know! My parents have all their money tied up in their business and since the economy and property values tanked in our area and never recovered, they will get nothing for it when dad can no longer work. We have elderly parents who will need significant financial assistance and that is putting undue burden on us as our sons are now entering college. Every penny I will make in the future will end up going to mom and dad not to shore up our own retirement or help our kids significantly with college and especially since the 529 plan lost most of its value the year we had to cash out for dd. You need to take care of yourselves financially so your kids won't have to worry about that. Otherwise they could end up raising families while paying their student loans AND financially supporting you thus causing serious hardship.

[PinkInTheBlue]

I'm wondering if I'm a little confused about something. I often hear or read people talking about not discounting the cheap, public universities. I'm in Alabama. To attend the state university University of Alabama is $20,000 a year (tuition, food, room & board, books). Is that what's considered reasonable and "more affordable"? Auburn University is more like $30,000. Is this the normal amounts?

[Starr]

Those are the horrible normal amounts. Room and board are about the same everywhere. 

[StephanieZ]

 

Sorry, you misunderstand. Loans ARE NOT our reality. We WILL NOT let our kids take out student loans. Period. I'm just trying to work out the other option]

 

Gently, you can not stop them once they turn 18. They will he able to sign for them without you.

 

Some areas do.have God.cc' s and low priced uni's, other places not so much. If you are in the "not so much" area and jobs.are hard to.come by - this is the reality of our state - they may not be able to go to college at all without Staffford loans, so you will have to decide what to do then.

 

Pay down your own situation because not having any savings for retirement is a real burden on the next generation. Ask me how I know! My parents have all their money tied up in their business and since the economy and property values tanked in our area e a and never recovered, they will get nothing to it when dad can no longer work. We have elderly parents who will need significant financial assistance and that is putting undue burden on us as our sons are now entering college. Every penny I will make in the future will end up going to mom and dad not to shore up our own retirement or help our kids significantly with college and especially since the 529 plan lost most of its value the year we had to cash out for dd. You need to take care of yourselves financially so your kids won't have to worry about that. Otherwise they could end up raising families while paying their student loans AND financially supporting you thus causing serious hardship.

 

Oh, sure you can stop them!

 

Undergraduate loans are very limited. I think about 5500-7500 per year. There are not many places where that little amount of loans will get them through school. (If there are, then more power to them . . . That's really not so bad . . . If we couldn't help our kids get a 4 year degree debt free, then that low amount of student loans would be preferable to not getting a degree IMHO . . . )

 

Also, they won't be able to get loans until they are 23 or grad students unless the parents provide their financial documentation and sign a FAFSA. 

 

My kids know we will NOT allow them to go into debt for undergrad. Period. No car debt. No credit card debt. No student loans. Period. They will get a 4 year degree, debt free. Anything they want to buy before then better be paid for in cash! No debt! Period!

 

Our commitment to them is for much more than 7500/yr, and we will not be giving one penny if the plan includes debt. (And we won't be taking on debt either . . . We will cash-flow it, or it won't happen!) Nor will we sign a FAFSA if debt is on the table. So, they can -- with our help -- find somewhere they can go for 25k/yr (or so) with Mommy and Daddy footing the bill and no debt for anyone . . . Or, they can not go at all and not get a penny from us. Period.

 

Until they are at the age of majority and able to finance it 100% on their own, we hold a lot of the cards. We've made our plan clear from the get go and they all understand finances enough to understand and agree with the logic. So far, no pushback at all. Our eldest is on track to take a nearly-full-ride merit package to a state school, and she'll be looking forward to a cushy 4 years (actually 5 years of free tuition if she goes where she is right now preferring) of plenty of parental support for travel, extras, cars, whatever. . .  and money left for grad school should she want it. So far, so good. 

 

(Note that if for some reason one of our kids had some very unique need that really made it sensible to go to an outrageously expensive school, we would consider it . . .  and consider debt for ourselves for it . . . but, no, we still wouldn't let our kid go into debt for undergrad . . . Thank goodness I can't, as yet, see a reason why any of our kids' needs can't be met by a decent state school or another school that might offer big merit aid.)

 

I think the key is to explain your parameters early, clearly, and regularly over the years so that your kids know what to expect. 

 

I absolutely feel it is not only fair but absolutely responsible for parents to exert their influence to prevent their young adult children from going in to unnecessary and life-altering debt. I think it is irresponsible to enable young adult children to go into debt for something they can attain debt free with a little creativity and determination. 

 

If family circumstance is such that the only option is debt to get a degree, then I would certainly allow some flexibility in this, but I'd be ever more involved in helping my child choose their school and degree path carefully and plan for repayment as soon as feasible.

 

(Debt for a marketable professional degree is another issue . . . and may well be advisable and necessary, as it was for my husband . . . The fact that we'll be paying off our own grad school debts until well after all our kids are out of college makes us very clear about both the benefits and costs of student debt!)

[StephanieZ]

I'm wondering if I'm a little confused about something. I often hear or read people talking about not discounting the cheap, public universities. I'm in Alabama. To attend the state university University of Alabama is $20,000 a year (tuition, food, room & board, books). Is that what's considered reasonable and "more affordable"? Auburn University is more like $30,000. Is this the normal amounts?

 

Well, 20-30k/yr is a lot more affordable than 60-70k/yr. To me, 20-30k/yr is affordable for our family. 60-70k is not. That is why we aren't looking at Ivies (as they don't give merit aid, and we won't qualify for their generous need based aid). 

 

It doesn't get much cheaper than 20-30k/yr with room and board. If you happen to live near a good university, as we do near our state flagship, then kids also have the option of living at home for free. Many of our friends offer their children this option. Indeed, excellent scholars can actually make a profit living at home going to our state university, as their full ride merit packages include room and board money even if you live at home. :) That's our fall back plan for our own kids. :)

[Jane in NC]

I'm wondering if I'm a little confused about something. I often hear or read people talking about not discounting the cheap, public universities. I'm in Alabama. To attend the state university University of Alabama is $20,000 a year (tuition, food, room & board, books). Is that what's considered reasonable and "more affordable"? Auburn University is more like $30,000. Is this the normal amounts?

 

There is variation in the cost of state unis--for example compare New Jersey or Vermont to Alaska or Wyoming.  Usually though the comparisons only mention tuition and fees.  We found that room and board charges vary greatly among both the public and private schools.

 

This is why I always say that there is no one size fits all option.  Dual enrollment tuition for some is free; others not.  Community colleges vary greatly in offerings and quality.  Not everyone has a university in commuting distance from their home offering their student's major. Not everyone has an aunt in a university town willing to take in a student. 

 

Further, commutation is rarely "free".  A student uses public transit or requires a car (and someone has to pay for insurance, maintenance, fuel, and parking). The lucky few can bike from home.

 

The bottom line is that college is expensive which is why I am always advocating to start saving early and include kids in the process.

[DawnM]

Do you have local options for college?

 

As of right now, I have told my kids they can go to the local 4 year state school and live at home and we can pay for it.  If they choose any other option they will need to pay the difference.

 

HOWEVER, that said, we will try our best to help them more than that if we can.  

 

In answer to your question:

 

Can you pay down your loan sooner?   Can you make some other sacrifices to pay more?  If you are taking Dave Ramsey's class or following his plan, he talks a lot about cutting the budget to pay down debt.  Debt always has priority over new things.

 

 

 

 

Ok, but, realistically, can a kid working really pay for school without loans?? I really do not want my kids to start adult life with debt, kwim?

 

[KingM]

Pay down your debt. Hopefully, the situation will get better by the time your kids are off to college (seems it could hardly get worse!), but at the least you'll have some good life lessons to impart about the subject.

[Leav97]

Oh, sure you can stop them!

 

Undergraduate loans are very limited. I think about 5500-7500 per year. There are not many places where that little amount of loans will get them through school. (If there are, then more power to them . . . That's really not so bad . . . If we couldn't help our kids get a 4 year degree debt free, then that low amount of student loans would be preferable to not getting a degree IMHO . . . )

 

Also, they won't be able to get loans until they are 23 or grad students unless the parents provide their financial documentation and sign a FAFSA. 

 

My kids know we will NOT allow them to go into debt for undergrad. Period. No car debt. No credit card debt. No student loans. Period. They will get a 4 year degree, debt free. Anything they want to buy before then better be paid for in cash! No debt! Period!

 

Our commitment to them is for much more than 7500/yr, and we will not be giving one penny if the plan includes debt. (And we won't be taking on debt either . . . We will cash-flow it, or it won't happen!) Nor will we sign a FAFSA if debt is on the table. So, they can -- with our help -- find somewhere they can go for 25k/yr (or so) with Mommy and Daddy footing the bill and no debt for anyone . . . Or, they can not go at all and not get a penny from us. Period.

 

Until they are at the age of majority and able to finance it 100% on their own, we hold a lot of the cards. We've made our plan clear from the get go and they all understand finances enough to understand and agree with the logic. So far, no pushback at all. Our eldest is on track to take a nearly-full-ride merit package to a state school, and she'll be looking forward to a cushy 4 years (actually 5 years of free tuition if she goes where she is right now preferring) of plenty of parental support for travel, extras, cars, whatever. . .  and money left for grad school should she want it. So far, so good. 

 

(Note that if for some reason one of our kids had some very unique need that really made it sensible to go to an outrageously expensive school, we would consider it . . .  and consider debt for ourselves for it . . . but, no, we still wouldn't let our kid go into debt for undergrad . . . Thank goodness I can't, as yet, see a reason why any of our kids' needs can't be met by a decent state school or another school that might offer big merit aid.)

 

I think the key is to explain your parameters early, clearly, and regularly over the years so that your kids know what to expect. 

 

I absolutely feel it is not only fair but absolutely responsible for parents to exert their influence to prevent their young adult children from going in to unnecessary and life-altering debt. I think it is irresponsible to enable young adult children to go into debt for something they can attain debt free with a little creativity and determination. 

 

If family circumstance is such that the only option is debt to get a degree, then I would certainly allow some flexibility in this, but I'd be ever more involved in helping my child choose their school and degree path carefully and plan for repayment as soon as feasible.

 

(Debt for a marketable professional degree is another issue . . . and may well be advisable and necessary, as it was for my husband . . . The fact that we'll be paying off our own grad school debts until well after all our kids are out of college makes us very clear about both the benefits and costs of student debt!)

 

I'm not sure you understand the process very well.  First you submit the FAFSA.  Which is often required to obtain MERIT scholarships.  Then you find out the financial aid package.  By the time you know if there is "debt on the table" you've already filled out the FAFSA and your kids can sign the paperwork for Stafford loans.

[Lolly]

I'm wondering if I'm a little confused about something. I often hear or read people talking about not discounting the cheap, public universities. I'm in Alabama. To attend the state university University of Alabama is $20,000 a year (tuition, food, room & board, books). Is that what's considered reasonable and "more affordable"? Auburn University is more like $30,000. Is this the normal amounts?

 

Alabama and Auburn are not the only state universities in Alabama. To go a cheaper route, you need to look at some of the other options. Troy State is listed as under $15,000 for the year. UAB is under $18.000 for the year. Much of these costs are living expenses.

 

Found this link for Alabama. It is just for tuition, but it can give you some ideas. http://www.collegecalc.org/lists/alabama/most-affordable-in-state-tuition/?start=1

[SKL]

I would also remind everyone that there comes a time when our ability to work off our debts diminishes.  Most of us get tired, slower, less employable.  Let's be honest.  I would rather work 80 hours as a young, unmarried, childless graduate (BTDT) than worry about debt in my declining years (as my parents did / are doing - not for my education but that of my siblings).

 

I paid off my relatively high student loans in 7 years, but I have given my parents much more than that, and they are still in debt (thanks to high interest on credit cards / home equity loans, and siblings who never learned to economize).  It would be a load off my mind if they had kept their debt manageable rather than give some of their kids money they didn't really have in the first place.  At this point I feel pretty bad deciding between helping my kids, who have nobody else, and helping my parents, who are retired, in poor health, and completely unable to generate funds beyond pensions / SS.

 

Oh, and helping myself - I suppose I need to work that into the equation at some point....

[chiguirre]

Moxie, I'd pay down your own debt. Even if you could help kid 1, will you be able to give the same help to all 5 of them? I'd avoid helping #1 more than the later kids. That just creates tremendous tension.

 

If you can't afford to help them, they'll have to find another way. They can enlist, qualify for scholarships at lower ranked colleges or start at the community college (if and only if the credits are guaranteed to transfer to a 4 year school that offers the major they want). It's not the college experience either you or they might have dreamed of, but it will get the job done.

[katilac]

Moxie, I'd pay down your own debt. Even if you could help kid 1, will you be able to give the same help to all 5 of them?  .

 

I had the same thought.

 

You have one who starts college in 4 years and one who starts in 16 years, with 3 others sandwiched in between. I just don't see how it's doable. 

[ScoutTN]

I'm wondering if I'm a little confused about something. I often hear or read people talking about not discounting the cheap, public universities. I'm in Alabama. To attend the state university University of Alabama is $20,000 a year (tuition, food, room & board, books). Is that what's considered reasonable and "more affordable"? Auburn University is more like $30,000. Is this the normal amounts?

Yes, many private colleges or univesities are 40K just for tuition, not including fees, books, room and board.

[ScoutTN]

A tangent thought: My mom promised to help, to the best of her ability, to pay for one car, one degree and one wedding.

I knew this from early on and planned accordingly.

[Guest]

I had the same thought.

 

You have one who starts college in 4 years and one who starts in 16 years, with 3 others sandwiched in between. I just don't see how it's doable.

Not worried about #3,4 and 5 at all. DH has a great job and will continue to earn more as our loans are paid off (they will be paid off in 10ish years without extra payments). We'll be able to cash flow the younger kids.

 

I need to add another comment-we are putting money aside for retirement and always have. Not too worried about that.

[Catwoman]

Ok, but, realistically, can a kid working really pay for school without loans?? I really do not want my kids to start adult life with debt, kwim?

Pay down your own debts now, and then help your kids pay down their own loans later on.

[Mom23Boys]

I'm wondering if I'm a little confused about something. I often hear or read people talking about not discounting the cheap, public universities. I'm in Alabama. To attend the state university University of Alabama is $20,000 a year (tuition, food, room & board, books). Is that what's considered reasonable and "more affordable"? Auburn University is more like $30,000. Is this the normal amounts?

 

LSU is about 21,000 a year for tuition, room/board, books and food.  We live about 20 minutes away, so my kids could go for around 10,000 a year living at home. 

 

30 minutes away the other direction is Southeastern University. It is about $13,000 a year for tuition, room/board, books and food.  My kids could go for around $7,000 a year. 

 

We are lucky that we live within driving distance of 2 schools, which would save room/board in general.  I think LSU has a requirement that freshmen live on campus, but I am not sure about SELU.

 

 

Over 4 years, the difference between the two add up to a significant amount. 

[Chris in VA]

We did not do student loans, but did a home equity line of credit to pay for part of ds' tuition. The interest rate is much lower for that (in our case, anyway). We have a good retirement plan, and we do pay down our debt. No student loans anymore for dh (I got a free ride courtesy of the Bank of M and D...).

 

Anyway, just agreeing with paying your debt until college time, then pay towards college.

[Pawz4me]

LSU is about 21,000 a year for tuition, room/board, books and food.  We live about 20 minutes away, so my kids could go for around 10,000 a year living at home. 

 

30 minutes away the other direction is Southeastern University. It is about $13,000 a year for tuition, room/board, books and food.  My kids could go for around $7,000 a year. 

 

We are lucky that we live within driving distance of 2 schools, which would save room/board in general.  I think LSU has a requirement that freshmen live on campus, but I am not sure about SELU.

 

 

Over 4 years, the difference between the two add up to a significant amount. 

 

Some schools will waive the requirement for freshmen to live on campus if the parents live within a certain distance from the school.

[Lolly]

LSU is about 21,000 a year for tuition, room/board, books and food.  We live about 20 minutes away, so my kids could go for around 10,000 a year living at home. 

 

30 minutes away the other direction is Southeastern University. It is about $13,000 a year for tuition, room/board, books and food.  My kids could go for around $7,000 a year. 

 

We are lucky that we live within driving distance of 2 schools, which would save room/board in general.  I think LSU has a requirement that freshmen live on campus, but I am not sure about SELU.

 

 

Over 4 years, the difference between the two add up to a significant amount. 

 

Yep, not required for freshmen who life at home.

[Storygirl]

Here's the thing about the cost of attending any university. Unless you plan to pay 100% cash, you won't know what the costs will be for YOU just by knowing what they charge for tuition, room, and board. You won't know the costs until you receive the financial aid package. The cost of attending will be different for each student at the school, based on their family's finances and whether or not scholarships are offered.

 

So the actual costs of attending a public institution versus a private school may not be that different. Also, two schools with identical tuition fees could end up costing different amounts, because the financial aid offered will vary.

[maize]

Not worried about #3,4 and 5 at all. DH has a great job and will continue to earn more as our loans are paid off (they will be paid off in 10ish years without extra payments). We'll be able to cash flow the younger kids.

 

I need to add another comment-we are putting money aside for retirement and always have. Not too worried about that.

I'm glad to know that you have money going to retirement, I disagree strongly with DR's recommendation to wait until debt is paid off (except the house) to start funding retirement.

 

Here's the potential pitfall I see: you expect dh's earnings to go up and expenses to go down (I.e. Student loans paid off) by the time the younger kids hit college; in planning ahead, however, you need to think of contingencies. Paying off debt as soon as possible ensures that that burden is gone, come what may. There are many things that can wreak financial havoc for a family--disabled breadwinner, other disabled or seriously ill family member are two that I have personally observed.

 

In your situation, assuming your husband's employment prospects are in fact very stable, I would still not personally want to stop paying extra on your own student loans. I might however choose to open a college savings fund and reduce extra loan payments in order to fund it. So if I had been putting an extra $200 each month into paying off debt I might split that and put $100 into the college account. I would absolutely encourage the child to contribute to that account (just make sure you not the child are the account owner; come college time, the student's assets will be assessed at a much higher rate than the parents' in financial aid calculations).

[wendy not in HI]

There is a lot of great advice up there, and I just have a small thought.  We decided to have a goal of $10,000 set aside for college for our oldest dd. (She had an additional amount saved from her own earnings.) I know this is not a lot, not enough to pay even for a year of college for her, but having that cash set aside made that first year of college much smoother than it would have been otherwise.  

 

Her senior year of high school/first year of college were just expensive years.  It was a relief to know that I could dip in to my college fund for her to help pay for things like senior portraits and graduation parties if I needed to.  It also helped pay for things that aren't quite college expenses, but are sort of - like clothes she would need going to school in a place with a much colder climate than what we were used to, like a laptop and printer, like all of the little things from Target for her dorm room, like the bike she needed since she didn't have a car, like the new backpack, like the plane ticket home for Christmas, etc.  That stuff adds up!  It would be wonderful to be in a position for that stuff to not matter, but that is the kind of thing that could have killed my budget.

 

She ended up with a nice financial aid package with scholarships and grants, but before she had access to that money, we had lots of other expenses to cover.  

 

For us, we paid down our debt, and also set aside a small amount in a fund for her.  We have similar funds for each of our kids.  I wish we had more for them for college, but we do have a little and will be able to bank roll some as well.

[Mom23Boys]

Some schools will waive the requirement for freshmen to live on campus if the parents live within a certain distance from the school.

 

 

Yep, not required for freshmen who life at home.

Even better :)

[QueenCat]

I'm wondering if I'm a little confused about something. I often hear or read people talking about not discounting the cheap, public universities. I'm in Alabama. To attend the state university University of Alabama is $20,000 a year (tuition, food, room & board, books). Is that what's considered reasonable and "more affordable"? Auburn University is more like $30,000. Is this the normal amounts?

 

That's relatively normal for a state school, at least in TN. However, when you look at ds school website, it says the cost of attendance is right around 20k a year but they include quite a bit in there that we don't consider cost of attendance (such as clothing and personal items). Reality has been closer to 12k since he commutes. If he added a dorm and food plan, it'd be about 17k. The other things, such a as clothing and personal items were already being purchased before, which is why we don't consider them as costs of attendance.

 

[StephanieZ]

I'm not sure you understand the process very well.  First you submit the FAFSA.  Which is often required to obtain MERIT scholarships.  Then you find out the financial aid package.  By the time you know if there is "debt on the table" you've already filled out the FAFSA and your kids can sign the paperwork for Stafford loans.

 

For my particular family, I know the process entirely. I know my kids will not be eligible for need-based aid anywhere. That I am sure of. We and they know they can count on 25k in Mom and Dad $$ per year . . . I know that federal loans are capped at well under that per year for undergrad. So, if my kids accepted loans or otherwise went into debt, parental money would stop. They know this. It is clear. We'll help them very substantially and make sure they get a 4 year degree (at a minimum) so long as they play by our (reasonable) rules, which include no debt for undergrad. I am comfortable that for our situation, we have plenty of leverage and open communication. Our kids seem very satisfied with our plans and our offerings. If they would prefer to go into debt, well, they'd get one year of federal loans (so under 10k) and whatever other debt they could convince some bank or auto place to give them, and then we'd never complete another FAFSA for them, co-sign anything, etc. And, the pipeline of 25k/yr for education (plus various other supports) would end as well, until they corrected course. I am pretty confident that our kids are not so stupid as to make that choice. We make the choice clear from the outset (they've always heard this system), so they accept it and are good with it. 

 

Indeed, you often need to do the FAFSA even for merit aid. I don't think my dd's National Merit package requires the FAFSA, so we might escape it for our first go round. As a principle, I have no problem with filling out forms. It's what you do with the forms that matters.