I genuinely don't get saving for college for kids

[Anonymous]

Anonymous wrote:

Anonymous wrote:My HHI is 105k. My expected family contribution is 24k. My son could take a 5500 loan (not Pell Grant), and then I was responsible for the rest, either through savings or a Parent Plus Loan.

That's the difference. If I hadn't saved he would have to take out private loans with huge interest rates. Your kid won't be playing on the same field as you did 30 years prior. State schools costs 20k with room and board. I'm not willing to tell him here's 80k debt for an average state school, with huge interest rates on top of that.

I thought the expected family contribution WAS what the parent could pay from income and savings? That's why they consider income and savings when calculating it. Right?

Or they tell you what they expect you to pay (24k) and then the amount they expect the student to take out in loans?

NP. Didn't realize it worked like that :/ I thought the rest was what they were giving in a "coupon" or "discount" off the sticker price, or whatever you want to call it.

I think they tell you the expected family contribution, and also what loans the student qualifies for. The family can get those loans, or choose to pull more from their own savings or assets. but I have not been in the situation so I'm not sure.

[Anonymous]

We prioritize college over the big house, fancy vacations and materistic things - best gift is investing in thier future.
I had loans and worked through college (since my parents were immigrants), wasn't easy. Money is too make life easier, happy to spend it on my kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My HHI is 105k. My expected family contribution is 24k. My son could take a 5500 loan (not Pell Grant), and then I was responsible for the rest, either through savings or a Parent Plus Loan.

That's the difference. If I hadn't saved he would have to take out private loans with huge interest rates. Your kid won't be playing on the same field as you did 30 years prior. State schools costs 20k with room and board. I'm not willing to tell him here's 80k debt for an average state school, with huge interest rates on top of that.

I thought the expected family contribution WAS what the parent could pay from income and savings? That's why they consider income and savings when calculating it. Right?

Or they tell you what they expect you to pay (24k) and then the amount they expect the student to take out in loans?

NP. Didn't realize it worked like that :/ I thought the rest was what they were giving in a "coupon" or "discount" off the sticker price, or whatever you want to call it.

Yes, the EFC is based on a calculation of what you *should* be able to pay from savings and income (mostly income-driven) based on the FAFSA calculation. But that doesn't mean that's what colleges will expect you to pay. Very, very few colleges are "meets need" (i.e. you only have to pay your EFC) and those that are are highly competitive for admission. Other schools don't care what your EFC is, just what their budget is for aid and how they can most effectively distribute it to yield the class they want. They may start with a sticker price of $70K, give you a little need-based aid, some merit aid (aka discount) and expect you to take loans to cover the rest.

[Anonymous]

Anonymous wrote:Everyone thinks their kid is a genius when actually, they're just dime a dozen above average.

50% of 12th graders have an A-average GPA. Your kid probably isn't a genius and you can't predict the future. As someone upthread said, depression can surface, they can fall in with the wrong crowd, a broken heart over a relationship, a parent can have a health scare--all of a sudden your kid isn't 99 percentile (if they ever were in the first place), they're dime a dozen 80th to 90th percentile.

And if your kid is 99th percentile, it's really unlikely they'll be happy and fulfilled slumming it at some third tier toilet full of underachievers because mom and dad lease a couple of Audis instead of saving a little cash for college.

You again? Your posts are so nasty.

[Anonymous]

Merit aid is dead. Weird people still don’t get it.

[Anonymous]

With the global pandemic all the rules are out of the window. What experts are saying is that colleges will prefer to get students who don't have too much financial need. It is going to suck for people who don't have that kind of cash.

[Anonymous]

Anonymous wrote:NP here. We're older parents. We started saving when our first of 3 was born. 19 years later, we have 3 generous 529s that enable all our kids to go to college more or less where they choose. The downside? Impossible to get financial aid. We also made a lot of sacrifices along the way, despite pretty well-paying jobs. We prioritized. We know we're outliers. No judgement of parents who do things differently... it's unfortunate higher education in this country comes with such a price tag.

Their “aid” was going to be loans anyway. No downside really.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm not going to read the surely inane responses on this thread.

OP I AGREE WITH YOU.

You are not missing anything. I had the same experience as you and paid for law school myself as well. There was no huge crushing debt. I took out only as much money as I needed and aggressively paid it back. My siblings all did the same. My cousins all did the same. None of our families bankrolled our education and WE VALUED IT MORE.

I love my peers who take on insane jobs and hours to make money to help their kids. You know what helps kids? Prioritizing spending time with them, being a part of raising them and teaching them responsibility and to take ownership of their lives.

OP- listen to your own good common sense. Your kid is lucky to have you.

But the rules for student loans have changed. The only loans students can get in their own name (barring some unusual situation) is the federal loan, max $31k for undergrad (which is probably a reasonable limit for most students). If you need more from that you need a parent to co-sign so it is then as much the parent's loan as the students. Is this parent who refuses to save for college going to be willing to co-sign a loan they will then be responsible for? And, likely has a high interest rate? Why would you pay so much for a loan that you could have avoided by saving when you can afford it. If you want the student to have "skin in the game", then just tell them what you are paying is a loan and work out the terms for them to pay you back. Would be a lot cheaper.

It IS possible to get through college on your own with just the federal loan limits if you go to a CC, work FT all summer and PT all school year, transfer to a local public university and live at home (assuming parents are gracious enough to let you live at home and not charge you rent). We actually worked through this option with DS as an exercise in understanding college costs and tradeoffs. For families who can't afford to save or pay for a more expensive option via cash flow, then that's their best option. Unless your child gets one of the exceedingly rare full rides -- tuition + R&B. Which is great but not an expectation you should build your college planning around.

I am the PP and don't have any problem giving my kids an interest free loan to go to college on an aggressive repayment schedule. What I don't like is this attitude that parents are expected to sacrifice for decades so their kids can have four years of extravagant living. In my opinion, fully paid for college/room and board is beyond extravagant. Our family doesn't have a huge HHI but we are comfortable. If the markets work out well for us, I would absolutely want to be generous with my kids but I still would not pay their way through school. I think someone's point earlier about properly setting expectations is great. There is nothing wrong with going to CC and then transferring to a different school later. I had a full ride for college but would have done that otherwise. Many of my cousin's who have parents that work at McDonalds or factories have taken that route and are putting themselves through graduate school now. (I also graduated ten years ago so loans may be different but I don't know.) All of us got our last degree from really prestigious universities and all three of us paid off our grad school debt less than five years out of grad school. My little sister paid off 40k in less than two years... as a social worker.

My approach has been that if we stay financially comfortable, I plan to either buy each of my kids their first house or give them the down payment for it. (Obviously am not going to tell them this.) But I believe part of my job as their parent is to help them do hard things and figure out their way in the world. If that route is going to college, I want to know that they have a good enough head on their shoulders to figure it out. If that means being an artist or businessperson or whatever, they need to show me they are responsible adults before being handed tens of thousands dollars.

Higher education is not as attainable as it should be in this country but the idea that your kids are entitled to you paying for their college/grad school is terrible. If you are super wealthy and it is no skin off your back to pay for your kids' schooling, do it! But don't guilt other people who can't do that or don't want to do that and call them bad parents. That's ridiculous.

That makes no sense to buy a house but not pay for college. They can be good kids and hard workers and have school paid for. There is no way to pay off $40K as a social worker making $40-50K in two years except if she lived at home/no expenses.

Yes, there is A Way. She lived in her own place and pays her own bills... Because our parents raised us to know how to be self sufficient adults. She took side jobs and prioritized paying off her loans above anything else like eating out and and taking vacations. She rented out one of the rooms in her condo as well. The fact that you don't think it is possible for someone to save 40k of 100k is the same type of mentality that lets people whine about their own bad choices. This is why each generation is becoming increasing more entitled and unable to handle adult life.

[Anonymous]

Anonymous wrote:With the global pandemic all the rules are out of the window. What experts are saying is that colleges will prefer to get students who don't have too much financial need. It is going to suck for people who don't have that kind of cash.

I doubt it.

Think about the kinds of people who work in college administration. They are the very definition of the liberal elite. There is no way these schools are only going to accept wealthy kids.

[Anonymous]

We had similar experiences paying for school. However, the costs for younger siblings school quickly surpassed what we paid. I’m thankful I got through before costs went up

However, in principle, I don’t think parents should be obligated to pay for school or housing downpayments but the reality is they do. If you don’t, your kid competes with everyone else who has that advantage. But it just drives up cost.

My opinion (and that of a younger sibling with 5 kids) is traditional degrees don’t make much sense right now. It’s smart to look at apprenticeships. DH even got a community college certificate recently for something high demand and doubled his income. He also has a lot more employment options now, especially combined with previous work experience in other fields.

I think it’s time to separate from the herd, basically.

[Anonymous]

Anonymous wrote:Merit aid is dead. Weird people still don’t get it.

Forgive me, but I don't think that's accurate (at least at the less-than-top-tier schools). I'm the PP who posted above about having full-funded 529s for each of our 3 kids thanks to our in-laws. (There is $350,000 in each account.) My DS is a 12th grader, and on the Common App, we clicked "no" to the question of whether we were applying for financial aid. My DS is not a super high achiever by any means. But he is still getting some merit aid offers (such as $9000 per year) to a variety of colleges (not the top-tier schools).

[Anonymous]

Anonymous wrote:Merit aid is dead. Weird people still don’t get it.

My kids are both receiving merit aid to the tune of over $20k a year - each. I guess we're weird.

[Anonymous]

Anonymous wrote:We had similar experiences paying for school. However, the costs for younger siblings school quickly surpassed what we paid. I’m thankful I got through before costs went up

However, in principle, I don’t think parents should be obligated to pay for school or housing downpayments but the reality is they do. If you don’t, your kid competes with everyone else who has that advantage. But it just drives up cost.

My opinion (and that of a younger sibling with 5 kids) is traditional degrees don’t make much sense right now. It’s smart to look at apprenticeships. DH even got a community college certificate recently for something high demand and doubled his income. He also has a lot more employment options now, especially combined with previous work experience in other fields.

I think it’s time to separate from the herd, basically.

This. I wouldn't send a child to college unless they had a really clear goal (like a kid who has always wanted to go to med school)

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP's plan might work because -- (a) she only has one child; (b) she does not seem super concerned about the prestige of the college; and (c) her daughter is a high achiever.

DH and I have 3 kids, and they do fine in school, but are not academic super stars by any means. My DS is a 12th grader, and we recently filled out the Common App that many colleges use. It asks if you plan to apply for financial aid. We figured it helped our DS that we were able to check "no" to that box because we have 529s for each of the 3 kids (thanks to my in-laws). It may help him a bit in the admissions process that he is full pay. That's not really fair to have "full pay" count toward admissions, but perhaps my DS would be subsidizing another student who is a better student but does not have the $$ to pay for this college.

Even my DS (with a 3.1 GPA and similar ACT score) is getting offered some merit aid from (not well known) colleges. So that suggests that, if you have a high-achieving child and are not too picky about the college, it might work out for OP.

You are talking about unfair when your in-laws are paying for college. Why didn't you save?

I'm the PP from above. To clarify, I said that it was not necessarily fair that my DS (a decent student but nothing spectacular) may get admitted to colleges because he is full pay, as opposed to only on merit. At the same time, a high-achieving student who has no 529 funds may not get admitted. I wish it were all on merit, even though it would put my DS at a disadvantage.

I'm not sure why you care that DH and I did not save for our children's college. When our kids were born, my in-laws offered to super-fund a 529 for each of them. There was no need to save any more for college. The fact that the 529 funds were from my in-laws is irrelevant to the fairness issue that I raised above.

[Anonymous]

Anonymous wrote:

Anonymous wrote:With the global pandemic all the rules are out of the window. What experts are saying is that colleges will prefer to get students who don't have too much financial need. It is going to suck for people who don't have that kind of cash.

I doubt it.

Think about the kinds of people who work in college administration. They are the very definition of the liberal elite. There is no way these schools are only going to accept wealthy kids.

College is a business. Full paying foreign students are avoiding USA because it is a dangerous, racist shithole country. Plus because of the pandemic. Merit aids will go to UMC kids who tend to also be high stat.

Been sitting in on tons of college admissions seminars and this is now a recognized factor.