And yet FAFSA doesn’t factor in COL

[sassenach]

My friend jokes that this is the only place you can make 6 figures and still not afford shoes for your kids. Low income in my county is 117k. 

https://apple.news/Ae5qTHdyRQnSaBjElzh9wYg

[nixpix5]

This has always been my big issue with not only FAFSA but also student loan income based repayment programs. While Seattle is no where near San Fran in their COL struggles, it is definitely heading in that direction. We are a six figure family even without me working right now due to homeschooling and my DH and I joke about this all of the time. We were first generation college graduates in both of our families so student loans were the only way we were getting through grad school. We are saddled with quite a bit of debt and will be for a while. Without my income, which cut our household income by half of what it was before, it feels very tight. We have to make hard calls all of the time. We often joke that we were able to take more vacations and have nicer things when we were poor college students than now making 6 figures. If we could move somewhere with a lower COL we would but DH has what I call a niche career. Only so many places do the research he does and each of those places are high COL. I don't know how people are making it in San Fran if they aren't in tech fields. 

[freesia]

Yep. This boggles my mind. i have no idea why COL isn't factored in

[gardenmom5]

there are many things for which col should be considered (like minimum wage - rural areas in WA don't cost nearly as much for housing, and can't support the wages the seattle area does).

ds got more aid/student loan money living at dd's house than living at our house - as far as they were concerned,  he wasn't living at home.   then he moved back here and they lowered his aid.  at least this upcoming year, between his aid and scholarships - he won't need any loans.  (if he's frugal - he might even have money leftover to pay down his loans.) 

[PerfectFifth]

We live in So. Cal, make less than 6 figures and still didn't get any FAFSA help!!! We have three kids....what the heck?!?! She got a lower interest on her loan payment and I guess that's something, but its darn expensive to live here. 

[catz]

Another 6 figure urban family who can't figure out how we can be full pay everywhere.  Our COL is probably near Seattle's - similar size metro.  If we weren't in a metro, we probably wouldn't be 6 figures.   I'd much prefer EFC to be something like 10%-12% of your average salary over the last 10 years.  I don't even think cost of living computation is always super meaningful either.  Like one of our first ring suburbs shows this astronomical cost of living.   Well our urban one looks lower, but that's taking into account subsidized housing, etc.  For day to day expenses, our cost of living is much closer to the high end suburb.  

 

[Lanny]

OT but regarding High COL areas... Several months ago, there was a news story about a young man who is a Software Engineer in San Francisco.  To paraphrase him: "I didn't go to school and become a Software Engineer to have so much trouble supporting my family on $150K per year".    My guess is some of those high tech companies will begin moving some of their employees to lower COL areas. 

[KungFuPanda]

DH broke from site-specific work and has been working from home for about three years now. WHY are we still living in this HCOL area?!?!? I think it’s because we like everything but the price tag. With Dd in college and ds about to graduate high school, we could move further out in the same area and not have it impact our quality of life. I’m just not the raging extrovert I once was and could be fine with only the grocery store being very near. We DO the Fafsa forms, but we get nothing out of it. 

[Liz CA]

There are many facets of the kind of "boom" the SF Bay Area boasts.

When I lived there it was already expensive but it has exponentially increased since then. As mentioned in the linked article, fewer young people decide to have children because it's a simple cost issue. Retirees have been fleeing the area for a long time. I wonder if it will turn into a young adult stopover for getting started in a job, make some money, then hightail it out of town so you can afford a place to live and a family. 

[Dmmetler]

2 hours ago, Lanny said:

OT but regarding High COL areas... Several months ago, there was a news story about a young man who is a Software Engineer in San Francisco.  To paraphrase him: "I didn't go to school and become a Software Engineer to have so much trouble supporting my family on $150K per year".    My guess is some of those high tech companies will begin moving some of their employees to lower COL areas. 

Microsoft has a pretty big and fairly new campus in Reno.  Reno isn't super-low COL, but it's a LOT lower than the Bay area of CA or Seattle. A few years ago when we were considering moving there, one statement made was that a lot of IT firms were planning Reno offices due to COL while still being able to bring employees into HQ for a meeting fairly easily.

[Lanny]

40 minutes ago, dmmetler said:

Microsoft has a pretty big and fairly new campus in Reno.  Reno isn't super-low COL, but it's a LOT lower than the Bay area of CA or Seattle. A few years ago when we were considering moving there, one statement made was that a lot of IT firms were planning Reno offices due to COL while still being able to bring employees into HQ for a meeting fairly easily.

 

By coincidence, I lived in Reno when I was very young.  One of my friends and co-workers there was, like me, from the L.A. area. He moved there from Iowa.  He married a woman there, raised their kids there and lived there the rest of his life.   Reno is not perfect, but it has a lot going for it. 

[Arcadia]

1 hour ago, dmmetler said:

 A few years ago when we were considering moving there, one statement made was that a lot of IT firms were planning Reno offices due to COL while still being able to bring employees into HQ for a meeting fairly easily.

 

Unfortunately my husband was “offered” a pay cut of $20k to $30k if we relocate to Seattle/Bellevue (because no state tax and housing is supposedly cheaper) or Upstate NY (housing is much cheaper at that particular zip code) and worse pay cut if we relocate to Reno. That’s why we are wavering on the relocation offers as there is no pay increment after relocation due to maxing out on his pay scale as an engineer. 

Reno from where I am is approximately a 5hrs drive including a pit stop for food and restroom.

[gardenmom5]

32 minutes ago, Patty Joanna said:

 

When I worked at Microsoft a thousand years ago, they moved their manufacturing people to Nevada (I can't remember location) because the tax structure and cost of living here *even back then* made it cheaper to pay for the entire division to move to NV, including paying expenses for anyone who moved.  Everyone who moved essentially got a big raise because the COL was so much less and they could buy houses with the equity in their houses here.  

A young couple is friends of mine; they had moved from here to Colorado a few years ago to be near her family but they moved back here and rented out the Colorado house for 7 years.  They bought a house here and put their elbow grease into it.  The property values increased so much here that they were able to sell their house here, pay off the mortgage, and with the equity, pay off their house in Colorado and their car loan.  They are now debt free and so their work-life balance is fantastic.  

Another friend lived here for 8 years; they bought a house right off the bat.  By the time the guy took another job in Texas, he paid off his mortgage and with the equity bought a house in Texas--a house that was much larger, better made, with property, with a view.  And he bought property so a church could be built.  That is now a thriving community.

THAT is the kind of decision we are debating.  But we are largely retired.

 

we have some friends who came here  from the bay area a mere few years ago.  they bought immediately.  he had a coworker who came up at the same time, but wanted to wait a year to think about exactly where he wanted to live. . . . he waited too long.  now he can't afford to buy. and it just gets worse.

 

just like anywhere - the prices from area to area vary greatly.   even neighborhood to neighborhood where I live- varies greatly.

I have an engineer graduating next year - he may work at boeing and be stuck with seattle area prices (but can live with us to save money for a down payment), or go somewhere else.   his specialty is more limiting about where he'll go. while CA is higher, most of the other places are lower col. 

[Lanny]

I suspect the schools that use the CSS  Profile will be more helpful to families with higher incomes and/or who live in a High COL area than the FAFSA. I'm not sure about that, but I believe it goes deeper into the finances of a family.

    https://cssprofile.collegeboard.org/

[catz]

Or the CSS can hurt you if you have a diversified portfolio and a lot of equity in your house.   I haven't seen it as particularly helpful to us in running NPC's.  

[Crimson Wife]

32 minutes ago, Lanny said:

I suspect the schools that use the CSS  Profile will be more helpful to families with higher incomes and/or who live in a High COL area than the FAFSA. I'm not sure about that, but I believe it goes deeper into the finances of a family.

    https://cssprofile.collegeboard.org/

No, it's the complete opposite because FAFSA doesn't consider home equity at all and CSS Profile does. CSS assumes that people are going to be willing to jeopardize keeping the roof over their head by cashing out their equity just to send their child to college. After having almost bought a house at a "short sale" where the owners had done a cash-out refi to pay their child's college tuition but then the Great Recession hit and they could no longer afford the mortgage payments, there is NO WAY we would ever do that.

[goldberry]

20 minutes ago, Crimson Wife said:

 After having almost bought a house at a "short sale" where the owners had done a cash-out refi to pay their child's college tuition but then the Great Recession hit and they could no longer afford the mortgage payments, there is NO WAY we would ever do that.

 

That's horrible!  How very sad...

(Congrats btw!  I didn't catch you have a baby coming!)

[freesia]

The one school that used CSS gave us a laughable EFC. Really, it was half dh's actual income ( which doesn't include the house, but since the social security we pay on the houses fair market rental value is higher than the mortgage we payed on our last house, it is a wash as actual income benefit--not a free house I mean, we do have to pay a lot to live in it)

[goldberry]

I have a friend in the bay area, and often have asked her why they don't get out.  She just loves it there.  It's her home, where her roots are, and now her kid's roots are, etc. It's easy to say it's smarter just to get out, but I understand why some people feel attached.  They rent right now because they can't afford to buy, in spite of having very comfortable incomes otherwise.

Fortunately her DH is retired military and has college benefits for the kids.

[freesia]

I agree Patty. The loss of community is huge. I would love to return to the area I grew up in-where my mom and a brother live--but we got priced out when dh went to grad school. There is no way we can retire where we are now. Hopefully one if the kids will live somewhere affordable when we are ready to retire. Starting over makes me tired and sad that there will be no one around who raised kids with me 

although I don't actually like where I live at all. I just think community ties are really important particularly as we age. 

[LucyStoner]

4 hours ago, Patty Joanna said:

See, this is what bugs me.  I don't have a big solution to it or anything, and I know the attachment thing varies among people.  I know that there are good and legitimate reasons for wanting to be far away from where you grew up.  But it just seems sad to me that people are put in the position of HAVING to move because of the COL changes in their community, whether due to high-tech moving in (which has been a benefit in some ways, too--I know that) and increasing the property values in a way that no one EVER expected (so taxes go up) or whatever reason. 

I don't favor rent controls or some government program coming in to fix it all.  I'm just saying that when people want to stay near family and friends and community built up over time, to not end up lonely or in a social wilderness (to them, not that it is a wilderness in reality), it's worth a pout.  

 

1

 

And there are very real costs associated with not having those social connections.  Senior care.  Infant care.  Helping keep people stably housed/fed/supported while they are experiencing a range of challenges.  One example for us is caring for my mom.  Besides allowing me to spend time with my mom while she was living with cancer and needed an increasing amount of care, not moving away meant that mom had someone with her to make sure she got a second opinion, drive her to appointments, care for her at home until hospice was needed, help her get medication etc.  Had we not been there to do that, some of it would have gone undone and a lot of it would have cost the state money- medical transportation and nursing homes are not free.  

[Faith-manor]

Patty Joanna, I hear you! I am not a caretaker either. I seriously do not do well with the medical stuff, and am now on anxiety and panic attack meds to get me through it. 

And there is no deduction for all of that care-taking, and no way to claim the expenses of the elders that you end up paying for to keep them alive. FAFSA is insane. 

I get depressed thinking about it.

I am going back to work. The rubber has met the road, and I am committed to our kids not being in debt up to their eyeballs for college, nor being at a huge disadvantage by only going part time and not graduating until they are 26. A lot of young persons in the area have done that, work full time, go to school part time, try to stay out of debt. Sounds like a good plan until you go on job interviews and everyone else has the same qualifications you do but are four years younger, or you fill out grad school applications and everyone else if four years younger, or.....the assumption is you couldn't hack being a full time student, failed classes, etc. That is what employers think. So the student who does this ends up on the bottom of the resume pile. I will work and put the money to college. How she will get to her medical appointments, I do not know. But there isn't any choice in the matter and no public transportation out here. One of the three positions I am looking at is a little bit flexible. Not a lot flexible, but some. That one might allow me to work it out to still do a little bit of her driving. The state/county does provides pretty much zero help in this regard. Can't make your appointments? Stay home and die or go live in a nursing home where they will be forced to provide transportation. (A truly stupid policy, but they figure that as long as it is in place, it will discourage people from going to nursing homes and save the state money.) At least for mother in law, dh's brother and sister have agreed - not happily, but not angrily either - that they need to pitch in X dollars per year to hire drivers for her since that is the only thing that would keep her from living independently. This was unexpected, normally his sibs don't agree on anything and can't stand each other enough to make decisions, and I am thankful it isn't all falling on dh's shoulders.

 

[Tsuga]

20 hours ago, Lanny said:

OT but regarding High COL areas... Several months ago, there was a news story about a young man who is a Software Engineer in San Francisco.  To paraphrase him: "I didn't go to school and become a Software Engineer to have so much trouble supporting my family on $150K per year".    My guess is some of those high tech companies will begin moving some of their employees to lower COL areas. 

Now they finally understand why teachers, social workers, professors and other highly educated, highly skilled and essential workers are so furious about gentrification in Seattle and San Francisco. They have been treated like this, as though they are lazy and undeserving of a life, for a long time!

I am trying really hard to feel sorry for a class of people that as a group complained about whiny teachers, civil servants and others that also do important work and have MAs and phDs. Some of them GASP even take math. But they work with children and the poor so apparently a two hour commute each way was what they deserved. /s

In Seattle if you want to survive, everyone works. That's the solution. We have six heads and three full time workers. We can't be full pay private but will work for full time public because if we can't pay, who can pay? We just have to work harder.

[Tsuga]

@Faith-manor I do want to say that the age thing, in our area, is not an issue. You don't get bonus points to grad school at 21. On the contrary, it is preferred that you are older. Have your kids faced age discrimination in their 20s? I would suggest rethinking the resume and application because normally being 25 is not looked on as "old" except at the most select undergrad colleges IME.

[DawnM]

1 hour ago, Tsuga said:

Now they finally understand why teachers, social workers, professors and other highly educated, highly skilled and essential workers are so furious about gentrification in Seattle and San Francisco. They have been treated like this, as though they are lazy and undeserving of a life, for a long time!

I am trying really hard to feel sorry for a class of people that as a group complained about whiny teachers, civil servants and others that also do important work and have MAs and phDs. Some of them GASP even take math. But they work with children and the poor so apparently a two hour commute each way was what they deserved. /s

In Seattle if you want to survive, everyone works. That's the solution. We have six heads and three full time workers. We can't be full pay private but will work for full time public because if we can't pay, who can pay? We just have to work harder.

 

Not only that, but pay has stagnated for many professionals, particularly those who are paid by the State (teachers, state colleges, etc...) for the past 10 or so years.  Meanwhile, the cost of living has gone up and up.  

I said years ago, when I started teaching, that I didn't want to marry an educator.  At that time, it was more about not wanting to talk shop at home, but I am SO GLAD I married someone in the business world.  I watch other educators who are married to educators and they are STRUGGLING big time just to make ends meet.  No way they could survive on one salary, no matter how hard they tried.

(however, my husband is facing a lay off, so we are going to have to make some decisions soon!)

[Bluegoat]

16 hours ago, Patty Joanna said:

See, this is what bugs me.  I don't have a big solution to it or anything, and I know the attachment thing varies among people.  I know that there are good and legitimate reasons for wanting to be far away from where you grew up.  But it just seems sad to me that people are put in the position of HAVING to move because of the COL changes in their community, whether due to high-tech moving in (which has been a benefit in some ways, too--I know that) and increasing the property values in a way that no one EVER expected (so taxes go up) or whatever reason. 

I don't favor rent controls or some government program coming in to fix it all.  I'm just saying that when people want to stay near family and friends and community built up over time, to not end up lonely or in a social wilderness (to them, not that it is a wilderness in reality), it's worth a pout.  

 

 

It shows there is something unbalanced in the economic element of the community.  If you have a city, the people who work in the city, make it run, should be able to find a place to live in the city.  It really makes no sense for a city to need to import people.

I agree that the mobile workforce is bad for communities, but it's a situation that has been purposefully created because it is believed to be good for business and industry.

[Murphy101]

Fafsa doesn’t facfor anything that matters. 

The very expensive cronic disease requiring hundreds or thousands of $

The debts required to give a disabled sibling care.

Issues with elder care. 

That the degree is basicly not possible for anyone on family resources alone. 

That the degree won’t pay diddly but yet we still things like teachers and counselors. 

[gardenmom5]

I guess there are advantages to 1ds buming around for a while trying to figure out what he wanted to do. he's old enough  he doens't have to give our income or financials for his fafsa - only his.

[FairProspects]

I've always said that I can afford to teach because my husband makes a real wage. And in the teacher's lounge another teacher mentioned that the best thing he ever did was work in a high paying business job as a first career so he could afford to teach later as a second career once he was financially stable.

I'm so not looking forward to this FAFSA deal in a few years. We are going to get screwed too. Everybody works, but in HCOLA greater Seattle/Tacoma area it will just not be enough to easily cover our EFC. Ugh.

[regentrude]

6 hours ago, Faith-manor said:

And there is no deduction for all of that care-taking, and no way to claim the expenses of the elders that you end up paying for to keep them alive. FAFSA is insane. 

Actually, it is possible to claim an elder as a dependent for your taxes (and hence the FAFSA), if the person is low income and if you pay more than half the elder's support.  You may deduct medical cost from your taxes and may claim a dependent care tax credit. Details are here - it may help to look into that.

https://turbotax.intuit.com/tax-tips/family/steps-to-claiming-an-elderly-parent-as-a-dependent/L34jePeT9

[Faith-manor]

We don't pay more than half, about 1/3 of what she needs.

[regentrude]

1 minute ago, Faith-manor said:

We don't pay more than half, about 1/3 of what she needs.

does that include non-monetary forms of material support? I forget whether she is living with you - those costs would count. I'd look more into this and perhaps consult a tax specialist to see if there is anything that can be done.

[Faith-manor]

She doesn't live with us at this time. She is determined to age in place. It would actually be a financial relief if she would move in here. I will discuss is with another tax person.

[Lanny]

7 hours ago, Tsuga said:

Now they finally understand why teachers, social workers, professors and other highly educated, highly skilled and essential workers are so furious about gentrification in Seattle and San Francisco. They have been treated like this, as though they are lazy and undeserving of a life, for a long time!

I am trying really hard to feel sorry for a class of people that as a group complained about whiny teachers, civil servants and others that also do important work and have MAs and phDs. Some of them GASP even take math. But they work with children and the poor so apparently a two hour commute each way was what they deserved. /s

In Seattle if you want to survive, everyone works. That's the solution. We have six heads and three full time workers. We can't be full pay private but will work for full time public because if we can't pay, who can pay? We just have to work harder.

 

2 hour commute? Possibly in that same article where I read about the young Software Engineer struggling on $150K USD in San Francisco, , or a different article or TV news clip, there was a story about a woman who works (I think for the Social Security Administration) in San Francisco. She lives in Fresno in the San Joaquin Valley in Central California. Check that out on the map.  I think she is close to retirement age.

[Laura in CA]

.

[Tsuga]

20 minutes ago, Lanny said:

 

2 hour commute? Possibly in that same article where I read about the young Software Engineer struggling on $150K USD in San Francisco, , or a different article or TV news clip, there was a story about a woman who works (I think for the Social Security Administration) in San Francisco. She lives in Fresno in the San Joaquin Valley in Central California. Check that out on the map.  I think she is close to retirement age.

 

Lucky her that she got in early. People buying now have trouble purchasing homes anywhere within driving distance.

[Liz CA]

1 hour ago, Lanny said:

 

2 hour commute? Possibly in that same article where I read about the young Software Engineer struggling on $150K USD in San Francisco, , or a different article or TV news clip, there was a story about a woman who works (I think for the Social Security Administration) in San Francisco. She lives in Fresno in the San Joaquin Valley in Central California. Check that out on the map.  I think she is close to retirement age.

 

That's a heck of a commute. I bet she is counting the days when she can retire and not hit the road at 4am.

[Tsuga]

5 hours ago, Murphy101 said:

Fafsa doesn’t facfor anything that matters. 

The very expensive cronic disease requiring hundreds or thousands of $

The debts required to give a disabled sibling care.

Issues with elder care. 

That the degree is basicly not possible for anyone on family resources alone. 

That the degree won’t pay diddly but yet we still things like teachers and counselors. 

Health care and dependent support definitely do count. Have you spoken to the school's financial aid office?

[Farrar]

These stories are very familiar. We're another six figure urban family, if barely, and while we're not hurting, we're not coasting either, that's for sure, and I have no idea how college will happen. If we have to do the CSS for any of the schools, we'll really be slammed because we bought our home at a good time, meaning it has tons of equity. Yet when I complained about that on this very board, I definitely got wrist-slapped. Most colleges don't care about home equity, etc. Well, some do. And it further limits our options. Plus there are zero state schools here, so we have to apply out of state everywhere.

[catz]

11 hours ago, Farrar said:

These stories are very familiar. We're another six figure urban family, if barely, and while we're not hurting, we're not coasting either, that's for sure, and I have no idea how college will happen. If we have to do the CSS for any of the schools, we'll really be slammed because we bought our home at a good time, meaning it has tons of equity. Yet when I complained about that on this very board, I definitely got wrist-slapped. Most colleges don't care about home equity, etc. Well, some do. And it further limits our options. Plus there are zero state schools here, so we have to apply out of state everywhere.

Agreed.  I would never say make it harder for lower income families.  But just because there is a magic calculator out there that says you can afford to contribute 20-40%+ of your income to 1 child's college education, heaven forbid you have other college bound kids, doesn't make it a fact.  Colleges expenses are hard at a variety of income levels and a raw number doesn't necessarily reflect life style or expenses.  We live in a modest home < 2000 sq ft and live a very middle class lifestyle.  We drive cheap vehicles into the ground.  We have done well for retirement.   No - we can't afford 60-70K per year for an undergrad degree per kid no matter what anyone else thinks.  I'm grateful we have some decent in state options that we can keep on the table.   Our public schools aren't doing a good job serving the masses and aren't affordable to everyone either.  

I would go as far as to say college options are maybe only easy for the top 1% or close.  At income at $630K or higher, you're looking at about 10% of income or less for almost any school out there.  

I also think strapping your kid with crippling debt going into adulthood is not  great idea either.  I think the federal limits are a good basic guideline.  I find it pretty appalling financial institutions will loan money to people who can get drawn into the allure of a brand name school.  Schools don't care about you personally.  They care about their bottom line.  And if it puts you in the poor house, well too bad.

https://www.chronicle.com/article/the-parent-loan-trap/134844

[catz]

I do think schools should watch their bottom line.  And I absolutely think PhD holding profs should be well compensated.

I also think much of the marketing out of colleges is dishonest and lenders are also being dishonest in allowing loans to go out to people without checking how pay back can possibly work.  On another board a while back a mom posed should her kid go to a school with full tuition paid and no loans.  Or should they take out 80K in parent plus to transfer to him after he graduates at a "bigger name" school.   I was shocked at how many people were willing to jump on that loan.  

[Murphy101]

On 6/26/2018 at 2:59 PM, Patty Joanna said:

It's so frustrating...you spend your life and time building community and then you get priced out by property taxes and other costs.  We would like to downsize but the transaction costs and taxes would chew up a big portion of the amount of money we would gain out of the deal and it's hardly worth it financially.  (We do own our house...but too much of our net worth is in it...). The only way we can make the move make sense financially is to move so far away that we lose our community and family closeness--the things that make us human persons.  Yes, we can develop new friends and so on...but the people who hold your past...they matter a lot, and it's just ... frustrating.  I don't have time to make a new friend I will have for 30 years.  KWIM?

 

 

People say you can “just make new friends” but it’s bs. It’s takes YEARS to make genuine friends. And let’s get real, the older we get, the less time we have to start that all over again.

I have friends who have moved away over the years.  And for all of them it’s taken 5+ years to feel they are starting to have some roots in their new area. And they are very extroverted people. 

[Faith-manor]

The other thing that makes the whole thing mind boggling is the difference between EFC and the actual bill. Usually there is a gap, often for middle class parents a LARGE gap. Many schools do nothing to assist with the gap. So unless your kid is in the top 2% and is awarded all the best scholarships in order to cover your EFC AND that gap, they are rather hosed. Most years, the gap between EFC and the bill minus scholarships is significantly more, and our kids did quite well on SAT/ACT and had other stackable scholarships. I can't imagine what that gap looks like for kids who don't test well, or didn't get other types of scholarships.

[Frances]

7 minutes ago, Faith-manor said:

The other thing that makes the whole thing mind boggling is the difference between EFC and the actual bill. Usually there is a gap, often for middle class parents a LARGE gap. Many schools do nothing to assist with the gap. So unless your kid is in the top 2% and is awarded all the best scholarships in order to cover your EFC AND that gap, they are rather hosed. Most years, the gap between EFC and the bill minus scholarships is significantly more, and our kids did quite well on SAT/ACT and had other stackable scholarships. I can't imagine what that gap looks like for kids who don't test well, or didn't get other types of scholarships.

But as most state schools are seriously underfunded and many private schools are struggling to stay afloat, where is the money to fill the gap supposed to come from?

[Faith-manor]

7 minutes ago, Frances said:

But as most state schools are seriously underfunded and many private schools are struggling to stay afloat, where is the money to fill the gap supposed to come from?

The magic college fairy apparently!

I have never had any kind of remotely satisfactory answer to this one. State schools and private colleges in my state are rarely struggling. Really. They just aren't. MSU, U of MI, MTU, Kettering U, Andrews U, Hope.....these places aren't having financial problems. Their issue is they want to spend the money on other things BESIDES the important ones. Now MSU is definitely going to feel the pinch over the NASSAR thing. They deserve it. Seriously, no one feels sad for that school. The thing is, they always always always have money to fund bizarre numbers of administrative positions they don't need, stadiums, luxuries for the president/chancellors and his/her buddies, you name it. They have not been motivated to spend it on professors or helping students attend their institutions because the student loan industry and parents killing themselves to make college happen has floated the whole thing along quite nicely. Most of the institutions with serious money woes are for-profits who got the rug yanked from underneath them, and just a few places with really unique woes like Sweet Briar. An awful lot of the colleges claiming money problems have it due to stupid spending and fund raising priorities, not lack of money. In my state, yes our state schools aren't getting much from the legislature, but they definitely are not hurting for dollars. If you saw what they spend money on, it would stagger the imagination. And the thing is, they don't "fund-raise" for the students. They fund-raise for pet projects that puts the president's best buddy's name on a building, and all kinds of crap like that.

They seem to assume parents have a magic money tree in the back yard. Unfortunately our house does not have a magic money tree, and if I have a fairy, she hasn't made an appearance thus far in the 50 years I have now inhabited the earth.

I predict that the college bubble will burst. It will simply be far enough out of control that something will have to give, and far fewer students will sign up. Once that happens, colleges will have to vie for a much smaller pool of students which may force them to bring prices down or get generous pretty darn quick with aid and scholarships. Seriously, the endowments at some of these schools are staggering, and it is kind of immoral how small the scholarship and grant amounts are relative to the cost to attend. It isn't going to be sustainable forever.

 

[Liz CA]

14 hours ago, Farrar said:

These stories are very familiar. We're another six figure urban family, if barely, and while we're not hurting, we're not coasting either, that's for sure, and I have no idea how college will happen. If we have to do the CSS for any of the schools, we'll really be slammed because we bought our home at a good time, meaning it has tons of equity. Yet when I complained about that on this very board, I definitely got wrist-slapped. Most colleges don't care about home equity, etc. Well, some do. And it further limits our options. Plus there are zero state schools here, so we have to apply out of state everywhere.

 

It makes no sense that they should look at equity. Equity means nothing unless you are willing to sell your home and then you have to presumably buy another or rent another house. Or are they hoping you take out a HELOC to pay for college???

[Carol in Cal.]

16 minutes ago, Liz CA said:

 

 Or are they hoping you take out a HELOC to pay for college???

Yes.  Yes, they do.

[Carol in Cal.]

1 hour ago, Faith-manor said:

 

I predict that the college bubble will burst. It will simply be far enough out of control that something will have to give, and far fewer students will sign up. 

 

Well, it's really the echo boom that has blown up the college bubble so much.  And that's almost done.  So...

[Faith-manor]

Carol is correct. Those colleges that look at the CSS profile and see equity are expecting you to borrow against it. In the case of Cedarville, though they never required the profile so had no idea what our equity was, they absolutely expected that there was the option to borrow on the house and were flabbergasted that we weren't willing. Between all four of our kids, they applied to and were accepted at 24 colleges and universities, some private, some public. Not a single college actually cared how we got the money, nor listened to any appeals. They said you could appeal financial awards, but it is pretty rare for them to up the amount offered. The assumption is you'll figure it out or your student won't attend, no skin off their nose. That works when you have a huge student body to choose from. Once the bubble bursts, that won't be so. Maybe then they'll have to rethink that.

 

[Murphy101]

I think there will be an equivalent to the mortgage crisis where people just started walking away from their houses. Only when the college bubble burst, it will be people saying basicly they no longer even plan to ever pay back their student loans. What ya gonna do? Put a lien on their house that most of them don’t even own because they are still living at home due to oppressed incomes?

And yes. They don’t care where the money comes from.  Because if you really loved your kid and wanted a good future for them well obviously you’d be willing to sell soul so what’s a 2nd or 3rd mortgage?

And just like with the banks, the colleges and banks will get crisis “to big to fail” emergency money and the students will get just as screwed as ever and no one will do squat to bail them out.