Donut family: Pay for T10 or go to state for almost free

Anonymous
Anonymous wrote:
Anonymous wrote:Talk to her but I'd pick UMD and pay for graduate school. Where is all your money going?


We just made it to this income level after climbing for the last ten years. Got out from under student loans and saved the cash and retirement. Started late obviously. Here we are! Just in time to jump into the donut hole.


And you haven't learned from past experience? You know what they call that, right?

Anonymous
OP easy solution have your daughter get married. Once married it will be based off her and her husband’s income.

Have her marry another 18 year old and he will also have zero income or assets.

The T10 will be free basically
Anonymous
Anonymous wrote:
DC was accepted to a T10, her dream school, but we ended up with little financial aid. We would have to pay about 60k per year. DC can go to UMD CP for at least a third of that and will likely have other lower cost options at less competitive schools. DC is in the arts but otherwise undecided. She may pursue arts or museum work down the line.

We are in our early fifties with relatively low retirement savings (300k). We have a down payment saved up for a house (about 250k). No other debt or money. We live in the DC area. We rent a small house.

HHI is now about 200k, in public service careers. It took us a while to get to this level. No inheritances or major increases in salary expected.

She is our only. We want to set her up as well as possible, especially since she is leaning towards a soft major. We want her to have the benefits of a strong degree down the line. We are struggling with whether to pay for the T10. We don’t want her taking on the debt. But we know retirement needs to be our priority.


No. Go with something affordable. Pay for her masters.
Anonymous
She may pursue arts or museum work down the line.


Don't do it. The ROI even at a T10 in the arts or museum work is low. Do not jeopardize your retirement.

We were sort of in the same boat. DC wanted to ED to a T10 expensive school; I said not to ED.

We are also in our late 50s. House is yet to be paid off, and we have a younger DC.

DC is now at a state flagship with some merit aid and is pretty happy there.
Anonymous
A debt free education is the best gift. Have her go to UMD or similar. And save money and offer to support her while she does free or low pay internships.
Anonymous
Anonymous wrote:PP here, to clarify I mean that the student takes out the loans with low interest rates.


Students can take out very little now -- something like 27K in total over all four years. The rest is high interest Parent Plus loans, which are uncapped, though they are eligible for loan forgiveness if you work for the government for 10 years. If you're able to buy a house, then there's a chance that you'd get more financial aid in years 2-4, but probably too risky to take that chance.
Anonymous
Anonymous wrote:It doesn’t sound like you can afford the T10. Did you run the aid calculator before she applied?


Why do people ask this? Apply widely, see what the offers come in at, and then decide. You only need to run the calculator if you apply ED.
Anonymous
Anonymous wrote:I can’t tell you what to do, but I can tell you what my family will do.

We have decided college debt for undergrad is a bad investment, and to send DC to the best school we can afford from savings and cash flow. We have a designated college fund. It can pay for an in-state public.

We have also decided that other investments like retirement and housing and savings need to happen too, so we won’t be selling the house to pay for a Bachelors Degree.

We have decided that we would like our only child to have an inheritance if possible and that includes things like real estate and cash.

We have decided not to set limits on courses of study, if you want a puppetry degree or whatever that’s fine since the plan is to come out of undergrad with no debt and there is always grad school for a professional degree.

Finally, we have decided to be honest and open about these goals with our child and let them know exactly what we have to spend.

I wish you calm and peace when making this decision with your child.





Love this kind and caring response!!
Anonymous
Anonymous wrote:
Anonymous wrote:It doesn’t sound like you can afford the T10. Did you run the aid calculator before she applied?


Why do people ask this? Apply widely, see what the offers come in at, and then decide. You only need to run the calculator if you apply ED.



Because it is a bit cruel to have student apply to a school you can’t afford. The school op’s child applied to doesn’t give merit, so the cost of attendance with aid could have been determined before applying.
Anonymous
It honestly doesn't matter that much in terms of name. UMD is really good. Folks know it. It'll open plenty of doors, without being saddled with debt. This seems like an obvious call to me. You will set up your child so much better if you send her to a great school with little debt. I would not take on a $160K difference over 4 years for a great name over a very very good name.
Anonymous
Anonymous wrote:
Anonymous wrote:It doesn’t sound like you can afford the T10. Did you run the aid calculator before she applied?


Why do people ask this? Apply widely, see what the offers come in at, and then decide. You only need to run the calculator if you apply ED.


Because you end up like OP, with a kid who got into Brown and will have to turn it down and will resent her parents for the rest of her life over it.
I’d go to the financial aid office one more time before you have her commit to UMCP. It’s not unheard of for them to find more aid.
Anonymous
Anonymous wrote:
Anonymous wrote:Talk to her but I'd pick UMD and pay for graduate school. Where is all your money going?


We just made it to this income level after climbing for the last ten years. Got out from under student loans and saved the cash and retirement. Started late obviously. Here we are! Just in time to jump into the donut hole.


I’m the same boat as above. We worked out butts off and lived super frugally to pay off student loans (both attended state schools undergrad, both private grad). Finally got out from under loans just in time for kids to start college and are barely over the financial aid level threshold.

We tried to be clear about finances with the kids as they consider college. They also saw how long it took is to pay off loans. As a result they worked super hard at school and activities to earn grades that resulted in merit aid at state schools.

Good luck.
Anonymous
How much is in her 529? Why do yiu have 250k for a down payment? Are you planning on buying a 1.25m house. Maybe use some of the down payment to offset college.
Anonymous
Anonymous wrote:
Anonymous wrote:It doesn’t sound like you can afford the T10. Did you run the aid calculator before she applied?


Why do people ask this? Apply widely, see what the offers come in at, and then decide. You only need to run the calculator if you apply ED.


Also I’d assume a student with stats to get into a top tier school will also be a student for whom state schools would offer merit aid. My kid got it on a top school, chose to attend went to a lower-ranked state school because they offered decent financial aid.
Anonymous

You're both in your 50s, do not own your home, and only have 300K for retirement?

State college it is.

And get going on the retirement!
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