Is there a calculator or benchmark for how much college we can afford?

[Anonymous]

Anonymous wrote:I am a stay at home mom and plan to go to work full time when my DD goes to college. I have a degree in a field that's easily employable. I will work and my paycheck will all go towards her schooling. I haven't heard of this plan elsewhere, so it doesn't really work with calculators. We do have some 529 saved and hopefully she will get some scholarships or financial aid as well.

That means that you were already in the luxury position of having one spouse support the family up to this point. Not relevant to the population that gets killed by the "EFC" and are already maxed out.

I hate the Rs, but if they do take control I hope they blow up the current higher education system. It's outrageous.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am a stay at home mom and plan to go to work full time when my DD goes to college. I have a degree in a field that's easily employable. I will work and my paycheck will all go towards her schooling. I haven't heard of this plan elsewhere, so it doesn't really work with calculators. We do have some 529 saved and hopefully she will get some scholarships or financial aid as well.

That means that you were already in the luxury position of having one spouse support the family up to this point. Not relevant to the population that gets killed by the "EFC" and are already maxed out.

I hate the Rs, but if they do take control I hope they blow up the current higher education system. It's outrageous.

They never do anything but cut taxes for the wealthy and undermine democracy (radical judges, gerrymandering, increase money in politics). They rail about healthcare, immigration, the economy, and out of control spending, but the deficit increases every year. They have no plan for replacing the ACA, just blow it up and we'll think of something later. The plan for immigration is miles of wall and kids in cages. Remember when W had a big campaign point about Social Security for his second term and did absolutely nothing? It's the same with inflation now. They rail on and on about how it's Democrats control, but no mention of what they are actually going to do to fix that problem. Other than another fight about a the debt ceiling, which will make it more expensive to shoulder the enormous burden. The Democrats have plenty of problems too, but right now very little of the Republican party is interested in making the government actually run much less in a way that actually helps people.

But I would be thrilled to see participation in the federal student loan program conditioned on certain benchmarks for affordability and tuition/fee reduction.

[Anonymous]

Anonymous wrote:Colleges and universities count on us to pay for the people who can't afford college. So they don't give any breaks and have an unrealistic idea of what people can afford -- we have two in college next year and we are not getting any breaks for this, they are still expecting us to pay full load even though we will have two in college. Yeah, no problem, even in-state that's going to come out to about $40-50K for one year.

It's back breaking.

Something’s got to give. It doesn’t seem sustainable. It’s crazy that the expectation is to save 100-200k per kid to go to school. Not even fancy schools. The middle class is getting royally screwed.

[Anonymous]

OP, back to your question--basically, once you roll in all the "rules of thumb," the "can you afford X amount" is basically a series of questions:

Can we put the EFC of $46,000 on the barrelhead without:

-Reducing our own retirement savings
-Going into debt ourselves (whether by using home equity or Parent Plus loans or w/ev--they are all bad ideas) or
-Compromising our quality of life in a way that we can't sustain for 4 years?

And basically, you're the only person who can answer those three sub-questions.

[Anonymous]

Anonymous wrote:OP, back to your question--basically, once you roll in all the "rules of thumb," the "can you afford X amount" is basically a series of questions:

Can we put the EFC of $46,000 on the barrelhead without:

-Reducing our own retirement savings
-Going into debt ourselves (whether by using home equity or Parent Plus loans or w/ev--they are all bad ideas) or
-Compromising our quality of life in a way that we can't sustain for 4 years?

And basically, you're the only person who can answer those three sub-questions.

Also, public higher education should absolutely be free (as it effectively was, measured on a tuition-to-income ratio, until the 1980s). If states reinvested to make this possible, private institutions would be forced to bring down their prices, perhaps via use of their endowments, or go out of business--many smaller private colleges would in fact close.

Other than direct investment by the federal government in instruction, the two things that would most make this possible would be

1. reducing the prison population (since most states have replaced their higher ed spending with commensurate or more expenditures on incarceration) or 2. Medicare for All (since it would substantially displace a lot of state government spending on employees, via their health benefits).

[Anonymous]

Anonymous wrote:OP, back to your question--basically, once you roll in all the "rules of thumb," the "can you afford X amount" is basically a series of questions:

Can we put the EFC of $46,000 on the barrelhead without:

-Reducing our own retirement savings
-Going into debt ourselves (whether by using home equity or Parent Plus loans or w/ev--they are all bad ideas) or
-Compromising our quality of life in a way that we can't sustain for 4 years?

And basically, you're the only person who can answer those three sub-questions.

Why not reduce retirement savings for 4 years? That could be a big chunk of the cost depending on how much you currently save each year.

[Anonymous]

OMG. Most of you know nothing about how this works.

OP, go join Paying For College 101 on Facebook and read all the posts you can stomach for about 2 months. Read the recommended books and articles. Leiber, Selingo, Colleges That Change Lives, etc...

Your EFC is irrelevant if you're middle class or earn more than that. It only matters for low income people who might qualify for a Pell Grant. Our EFC was about $65K. Sounds like a lot. But the school my kid chose only costs $50K and they got a merit award (not based on family income/assets) for $15K. So, even though our EFC is $65K we spent $35K/year.

Creating a smart and strategic list of schools to apply to will be how you set parameters on what you'll have to spend annually.

Very few people pay full price at any private school ranked below 50. Google Jeff Selingo to understand why.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Colleges and universities count on us to pay for the people who can't afford college. So they don't give any breaks and have an unrealistic idea of what people can afford -- we have two in college next year and we are not getting any breaks for this, they are still expecting us to pay full load even though we will have two in college. Yeah, no problem, even in-state that's going to come out to about $40-50K for one year.

It's back breaking.

Something’s got to give. It doesn’t seem sustainable. It’s crazy that the expectation is to save 100-200k per kid to go to school. Not even fancy schools. The middle class is getting royally screwed.

Real Middle Class aren't screwed as they are lower income and get financial aid. OP is not low income and had 18 years to save. Some of it is lifestyle choices. We choose not to live in a big or fancy house. We choose not to take vacations. We choose to keep our cars till they die. It was our priority to save and we did it on less income than OP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Colleges and universities count on us to pay for the people who can't afford college. So they don't give any breaks and have an unrealistic idea of what people can afford -- we have two in college next year and we are not getting any breaks for this, they are still expecting us to pay full load even though we will have two in college. Yeah, no problem, even in-state that's going to come out to about $40-50K for one year.

It's back breaking.

Something’s got to give. It doesn’t seem sustainable. It’s crazy that the expectation is to save 100-200k per kid to go to school. Not even fancy schools. The middle class is getting royally screwed.

Real Middle Class aren't screwed as they are lower income and get financial aid. OP is not low income and had 18 years to save. Some of it is lifestyle choices. We choose not to live in a big or fancy house. We choose not to take vacations. We choose to keep our cars till they die. It was our priority to save and we did it on less income than OP.

same here

[Anonymous]

Anonymous wrote:

Anonymous wrote:Colleges and universities count on us to pay for the people who can't afford college. So they don't give any breaks and have an unrealistic idea of what people can afford -- we have two in college next year and we are not getting any breaks for this, they are still expecting us to pay full load even though we will have two in college. Yeah, no problem, even in-state that's going to come out to about $40-50K for one year.

It's back breaking.

Something’s got to give. It doesn’t seem sustainable. It’s crazy that the expectation is to save 100-200k per kid to go to school. Not even fancy schools. The middle class is getting royally screwed.

+1

If you are lower class (50k/year salary, no assets), college is basically free. And if you are loaded, the price of tuition is basically meaningless. My household income is 80k/yr and have one rental property. My EFC is 50k!

If you were to invest the 200k in the stock market when your kid turns 18, you would have approximately 800k when kiddo is 32. If they major in engineering, maybe college makes sense. But if they are just going through the motions and major in some type of liberal arts BS, definitely a waste of money.

[Anonymous]

Anonymous wrote:Why haven't you saved more? We make less than you and saved for four years of state school.

DP +!

OP - seriously, your kid is in HS and you’re just now trying to figure this out? We’re a two fed family and knew from when our kids were born that we needed to save, and save aggressively, for college. We drove old cars, bought less house than we could afford, went on reasonable vacations etc bc 20+ years ago it was obvious college was going to cost money and baring some serious unfortune we were going to be on the hook to pay. This comes from first hand experience were both our parents encouraged called but paying for it was on us. We knew we weren’t going to do that to our kids - and this is before the insane cost increases in tuition. That said we did manage to save for 3 kids - one graduated, two still in college. Which is why I think this poster had a legit question. If you’ve got other kids coming behind, I strongly advise you to educate yourself on college options and take a good hard look at your lifestyle and what tradeofffs you’re willing to make. Good luck to you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My rule of thumb is that colleges expect you to pay roughly 25% of your income each year. At $175k that would be at least 40k. The poster above had good rough numbers on that split.

Another way to look at this is opportunity cost. Plug in the cost of four years of college into a compound interest calculator at 7% for 10 and 20 years. This gives you a sense of how much worth the education costs would be compared to future investment growth. It really reinforces the goal of trying to keep college as cheap as possible.

Trying to understand the college expectations. Are you saying that colleges expect you to pay 25% of your gross income? If that's the case, no wonder higher education is broken. That's absurd.

Colleges (including the Publics) are just giant hedge-fund cartel that pretend to be educate your kids. They have congressmen and judges in their payroll. Ever wonder why they don't pay any taxes, take your tax $$ to fund their research and yet get to decide who, how, and when they admit and at what cost? Of course, the system is broken.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My rule of thumb is that colleges expect you to pay roughly 25% of your income each year. At $175k that would be at least 40k. The poster above had good rough numbers on that split.

Another way to look at this is opportunity cost. Plug in the cost of four years of college into a compound interest calculator at 7% for 10 and 20 years. This gives you a sense of how much worth the education costs would be compared to future investment growth. It really reinforces the goal of trying to keep college as cheap as possible.

Trying to understand the college expectations. Are you saying that colleges expect you to pay 25% of your gross income? If that's the case, no wonder higher education is broken. That's absurd.

Colleges (including the Publics) are just giant hedge-fund cartel that pretend to be educate your kids. They have congressmen and judges in their payroll. Ever wonder why they don't pay any taxes, take your tax $$ to fund their research and yet get to decide who, how, and when they admit and at what cost? Of course, the system is broken.

Grr! typing from my phone on a small screen. Pardon the grammar errors.

[Anonymous]

Anonymous wrote:OMG. Most of you know nothing about how this works.

OP, go join Paying For College 101 on Facebook and read all the posts you can stomach for about 2 months. Read the recommended books and articles. Leiber, Selingo, Colleges That Change Lives, etc...

Your EFC is irrelevant if you're middle class or earn more than that. It only matters for low income people who might qualify for a Pell Grant. Our EFC was about $65K. Sounds like a lot. But the school my kid chose only costs $50K and they got a merit award (not based on family income/assets) for $15K. So, even though our EFC is $65K we spent $35K/year.

Creating a smart and strategic list of schools to apply to will be how you set parameters on what you'll have to spend annually.

Very few people pay full price at any private school ranked below 50. Google Jeff Selingo to understand why.

+1 on this and want to highlight the Book: The PriceYou Pay For College, by Ron Lieber. What kind of school does your senior want, what are their stats, what is in state (unless DC), etc. There are ways to get through this with minimal if any debt. At elite schools at your income, you will probably pay very little because they meet all need and they calculate differently than the FAFSA. Do some net price calculators at the school your child is interested in. There are MANY great colleges.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Colleges and universities count on us to pay for the people who can't afford college. So they don't give any breaks and have an unrealistic idea of what people can afford -- we have two in college next year and we are not getting any breaks for this, they are still expecting us to pay full load even though we will have two in college. Yeah, no problem, even in-state that's going to come out to about $40-50K for one year.

It's back breaking.

Something’s got to give. It doesn’t seem sustainable. It’s crazy that the expectation is to save 100-200k per kid to go to school. Not even fancy schools. The middle class is getting royally screwed.

+1

If you are lower class (50k/year salary, no assets), college is basically free. And if you are loaded, the price of tuition is basically meaningless. My household income is 80k/yr and have one rental property. My EFC is 50k!

If you were to invest the 200k in the stock market when your kid turns 18, you would have approximately 800k when kiddo is 32. If they major in engineering, maybe college makes sense. But if they are just going through the motions and major in some type of liberal arts BS, definitely a waste of money.

4X your money in 14 years? What stock are you investing in?