Cashing out home equity to pay for college

[Anonymous]

Anonymous wrote:OP here.
PP asked about any college savings. I have $18k put away in DC college savings plan.
PP asked about retirement savings. I am over 40 and have $50k put away. I will not borrow against this.
PP wondered about maturity issue due to low gpa. I am not concerned wether DD has the drive to apply herself to college work. Her high-school is considered a grind and it was. I expect DD is ready to take on college work. She is not a people pleaser and is pretty tough. Does not intimidate easily. I think she will be fine advocating for herself in school. Her SAT was 1440, I think that is what has gotten her admitted and her gpa has barred merit aid. Maybe?
A PP mentioned that for a driven person a gap year may not make sense. I think DD is the “driven” type (unlike everyone else in my family and personal circles, we have been content managing used book stores or always being in a office support role ... DD does not give off those vibes).
To PPs who felt some kind of way about my comment about her graduating to get a $40k job, I understand how dismissive and narrow that comment was. I do not scoff at working ones way up at all.... in fact I am quite familiar with getting a foothold and showing my superiors that they need me. And progressing on their timeline. I don’t think I will view my DDs twists or turns on her journey as failures. I live in a very glass house.
As a DC resident we don’t have a state flagship but we do have DC tuition assistance grant which can give $10k towards a state school elsewhere.
She does want to go into computer science but I do not think cyber security was considered much yet.
I will call the schools for information on why full need was not met. I will look into FAFSA rules.
We will continue to look for other ways to pay for school.
Thank you DC Mum for the input!

I personally hate the idea of gap years or starting at a weak community college for good students. Maybe some common colleges are good at helping students get four-year degrees, but I worry many students will end up without even a master’s degree.

It sounds as if you could probably pay about $30,000 a year without using home equity — $4,000 from savings; $10,000 from
DC; $6,000 from you paying cash; $4,000 from your kid working; and $6,000 in loans.

I think you should cap annual spending at $30,000.

It looks as if there are a lot of respectable schools here, including the University of Alabama and South Dakota’s public universities, that cost only about $25,000 per year, all in:

https://www.bestcolleges.com/features/lowest-out-of-state-tuition/

Note that tons of fairly high-income people here with terrific, high-scoring kids are having their kids use Alabama as a safety.

Maybe some of these schools are the kinds that would have rolling admissions.

Another thing to think about is that these schools really want your kid and will nurture her. If Vassar expects you to pay $50,000, it just wants your money. It doesn’t actually care about your kid.

[Anonymous]

Anonymous wrote:
It looks as if there are a lot of respectable schools here, including the University of Alabama and South Dakota’s public universities, that cost only about $25,000 per year, all in:

https://www.bestcolleges.com/features/lowest-out-of-state-tuition/

Note that tons of fairly high-income people here with terrific, high-scoring kids are having their kids use Alabama as a safety.

Alabama gives great out of state merit aid scholarships but your GPA needs to be 3.5 or above.

Presidential
A student with a 32-36 ACT or 1420-1600 SAT score and at least a 3.5 GPA will be selected as a Presidential Scholar and will receive $104,000 over four years ($26,000 per year). Students graduating with remaining scholarship semester(s) may use these monies toward graduate school and/or law school study at UA.

https://scholarships.ua.edu/types/out-of-state.php

GPA is 9th-11th grade only but they do not have rolling admission. Deadline was Dec.

[Anonymous]

Anonymous wrote:No! If you only make $100k, then she should be getting almost a full ride at certain schools.

And five years for undergrad? Just no. Make her take community college courses each summer for credit.

No, this would imply a family of four making $150k - $200k would get a free ride - not true.

[Anonymous]

OP, you sound like a great and loving mom. Much worse than you not funding DD at an expensive college is that you don't have enough money to take care of yourself as you get older and you become a burden on her. At your income level and skyrocketing health care costs, that is a real worry, so concentrate on that first. Your DD needs to go to a state school. Do you get in-state tuition at state schools around the country, plus $10,000 off, or do you have to pay the OOS tuition and get $10,000 off? If the latter, ask DCUM advice on names of colleges in states with low tuition for OOS students. Also, ask DCUM advice on schools with rolling admissions that you could still apply to. Your kid will be fine as long as she has a college degree. If it's too late for this year, community college for a year seems the way to go.

[Anonymous]

OP, you wrote: "Her top choices at this point would be between $34k - $46k a year."

You need to have a conversation with your kid and reset expectations. Take a look at your in-state public colleges and universities and see which ones line up with your daughter's field of study and interests.

Also, research available scholarships for your particular state. For example, if you're in NY, there's the Excelsior Scholarship, which pays full tuition for NY families with an AGI of $110k or less. In some states, you can go tuition free if your DD has a certain GPA or certain SAT or ACT stats (Alabama and Florida come to mind).

[Anonymous]

I’m sorry, I have a hard time feeling sorry for people who only apply to schools that are not financially feasible.

[Anonymous]

Anonymous wrote:I’m sorry, I have a hard time feeling sorry for people who only apply to schools that are not financially feasible.

OP only recently started earning her $100,000 salary. She she might have been earning much less, and would have expected to qualify for more aid.

Also, while it is true that a lower income might give you a lower EFC, the fact is that for students who don't have high GPA /test scores, that might not translate into actual financial aid. Just because you get into a school doesn't mean the school will commit to meeting your need. OP might not have realized that, as many people don't.

[Anonymous]

absolutely NO on borrowing

your daughter is academically marginal student. she will attend mediocre college that will confirm this to employers. she will not significantly benefit from college connections. she will be lucky if she makes $40k from the start.

you will do your daughter a much bigger favor by paying off the house and leaving it to her as inheritance. do not let her take on significant debt for a college degree and do not take on yourself.