Recommendations for Funding College

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP are you insane or just stupid? You make $400k, have $2m+ in retirement accounts, and you're stumped about how to pay for college for your kids? You've been banking on the (mistaken) assumption that your kids would get merit scholarships to Ivy League and near peer schools?

I've got to say, as a two-nonprofit household that has forgone every luxury to be able to afford the best schools that our two kids might be able to get into, people like you just blow my mind.

OP again. I’m definitely not stupid nor am I insane, but I do appreciate your candor. We’ve programmed a great deal of discretionary spending into our budget. We have no debt with the exception of our mortgage, which is less than 20% of our base take home pay. I think we can make some significant spending cuts to make this work and augment, if necessary, with temporary cuts to our retirement contributions. Sort of feels like colleges expect parents to liquidate all savings and take out both loans and second mortgages, which is something I just didn’t see coming when we started putting money into 529 plans 16+ years ago.

And, yes, I was definitely surprised to learn that merit-based scholarships are not available at Ivy League and comparable schools.

OP, you are clearly not stupid or insane, but perhaps a bit narrow in your goals? Public schools are excellent sources of education. I wouldn't look past them to chase prestige. In the end, that $80K/year may not be worth more than a degree at UVA, UMD, or other state school. I can say that if you can fully fund a public school education but would defer to loans for private school, pick the former. Speaking from experience, encumbered by the weight of student loans is a crappy way to start a young career. I went to a great private school from K-12 and public for college/law school. I am endlessly thankful that I did because my law school loans are paid and I can now focus on savings. I also do not believe that my peers from HS who attended elite private schools are more highly educated or better situated in their careers.

All this is to say that you may want to think about what $80K will really bring them - particularly if they are taking out loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP are you insane or just stupid? You make $400k, have $2m+ in retirement accounts, and you're stumped about how to pay for college for your kids? You've been banking on the (mistaken) assumption that your kids would get merit scholarships to Ivy League and near peer schools?

I've got to say, as a two-nonprofit household that has forgone every luxury to be able to afford the best schools that our two kids might be able to get into, people like you just blow my mind.

OP again. I’m definitely not stupid nor am I insane, but I do appreciate your candor. We’ve programmed a great deal of discretionary spending into our budget. We have no debt with the exception of our mortgage, which is less than 20% of our base take home pay. I think we can make some significant spending cuts to make this work and augment, if necessary, with temporary cuts to our retirement contributions. Sort of feels like colleges expect parents to liquidate all savings and take out both loans and second mortgages, which is something I just didn’t see coming when we started putting money into 529 plans 16+ years ago.
And, yes, I was definitely surprised to learn that merit-based scholarships are not available at Ivy League and comparable schools.

Different poster here and, sorry OP but you are definitely coming across as stupid, or at best mind boggling naive. I think many of us are struggling to understand how you and your husband can make the salaries you claim and yet be so financially/socially inept. I find it particularly hard to believe that your alleged T-20 graduate husband was unaware that ivys don’t give merit aid (and haven’t for at least the last 40 years).

NP. I think OP is sitting at a NW of some $3.2M+ in their mid-40s. I hardly think that constitutes being financially/socially inept! Maybe a little unbalanced distribution across financial instruments. Also, why would OP’s DH be aware that Ivys don’t give merit aid if he went to college as a student in financial need? Ivys DO give a ton of merit-based scholarships, but only to students that also exhibit a financial need. And no one getting a Ph.D. applies for or needs financial aid. It is all paid for out of research grants. How would the DH have acquired first-hand knowledge of this nuisance?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP are you insane or just stupid? You make $400k, have $2m+ in retirement accounts, and you're stumped about how to pay for college for your kids? You've been banking on the (mistaken) assumption that your kids would get merit scholarships to Ivy League and near peer schools?

I've got to say, as a two-nonprofit household that has forgone every luxury to be able to afford the best schools that our two kids might be able to get into, people like you just blow my mind.

OP again. I’m definitely not stupid nor am I insane, but I do appreciate your candor. We’ve programmed a great deal of discretionary spending into our budget. We have no debt with the exception of our mortgage, which is less than 20% of our base take home pay. I think we can make some significant spending cuts to make this work and augment, if necessary, with temporary cuts to our retirement contributions. Sort of feels like colleges expect parents to liquidate all savings and take out both loans and second mortgages, which is something I just didn’t see coming when we started putting money into 529 plans 16+ years ago.
And, yes, I was definitely surprised to learn that merit-based scholarships are not available at Ivy League and comparable schools.

Different poster here and, sorry OP but you are definitely coming across as stupid, or at best mind boggling naive. I think many of us are struggling to understand how you and your husband can make the salaries you claim and yet be so financially/socially inept. I find it particularly hard to believe that your alleged T-20 graduate husband was unaware that ivys don’t give merit aid (and haven’t for at least the last 40 years).

NP. I think OP is sitting at a NW of some $3.2M+ in their mid-40s. I hardly think that constitutes being financially/socially inept! Maybe a little unbalanced distribution across financial instruments. Also, why would OP’s DH be aware that Ivys don’t give merit aid if he went to college as a student in financial need? Ivys DO give a ton of merit-based scholarships, but only to students that also exhibit a financial need. And no one getting a Ph.D. applies for or needs financial aid. It is all paid for out of research grants. How would the DH have acquired first-hand knowledge of this nuisance?

Sorry. Nuance, not nuisance. It is a also a nuisance, though.

[Anonymous]

Anonymous wrote:op, my household makes 110k but used to make more like ninety and we currently have sixty thousand saved for our ninth grader and sixty five thousand saved for our tenth grader. Which we are now realizing isn’t enough. We are going to have each kid go instate, take the maximum of 5k per year of loans, and tighten our belts and cash flow the rest.

The fact that you have saved so little while making 400k and assumed your kids would get scholarships to cover much of the costs is just insane. Why should YOUR kids get scholarships to places like Cornell?

Unlike OP, your kids are well positioned to get financial aid so I wouldn’t write off non state options. Congrats on saving so much relative to your hhi and best wishes for your kids!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP are you insane or just stupid? You make $400k, have $2m+ in retirement accounts, and you're stumped about how to pay for college for your kids? You've been banking on the (mistaken) assumption that your kids would get merit scholarships to Ivy League and near peer schools?

I've got to say, as a two-nonprofit household that has forgone every luxury to be able to afford the best schools that our two kids might be able to get into, people like you just blow my mind.

OP again. I’m definitely not stupid nor am I insane, but I do appreciate your candor. We’ve programmed a great deal of discretionary spending into our budget. We have no debt with the exception of our mortgage, which is less than 20% of our base take home pay. I think we can make some significant spending cuts to make this work and augment, if necessary, with temporary cuts to our retirement contributions. Sort of feels like colleges expect parents to liquidate all savings and take out both loans and second mortgages, which is something I just didn’t see coming when we started putting money into 529 plans 16+ years ago.
And, yes, I was definitely surprised to learn that merit-based scholarships are not available at Ivy League and comparable schools.

Different poster here and, sorry OP but you are definitely coming across as stupid, or at best mind boggling naive. I think many of us are struggling to understand how you and your husband can make the salaries you claim and yet be so financially/socially inept. I find it particularly hard to believe that your alleged T-20 graduate husband was unaware that ivys don’t give merit aid (and haven’t for at least the last 40 years).

NP. I think OP is sitting at a NW of some $3.2M+ in their mid-40s. I hardly think that constitutes being financially/socially inept! Maybe a little unbalanced distribution across financial instruments. Also, why would OP’s DH be aware that Ivys don’t give merit aid if he went to college as a student in financial need? Ivys DO give a ton of merit-based scholarships, but only to students that also exhibit a financial need. And no one getting a Ph.D. applies for or needs financial aid. It is all paid for out of research grants. How would the DH have acquired first-hand knowledge of this nuisance?

Ivys give financial aid to those with a demonstrated need but do not give merit based scholarships. As the beneficiary of a 100% financial package from one (having grown up on welfare) I am intimately aware of the process and find it hard to believe that op’s husband wouldn’t be as well. Our HHI is less than OPs but we have prioritized college savings because I am well aware that we make far too much for financial assistance and it’s important to me that my children have the option to go to the college that is the best fit for them.

[Anonymous]

Anonymous wrote:op, my household makes 110k but used to make more like ninety and we currently have sixty thousand saved for our ninth grader and sixty five thousand saved for our tenth grader. Which we are now realizing isn’t enough. We are going to have each kid go instate, take the maximum of 5k per year of loans, and tighten our belts and cash flow the rest.

The fact that you have saved so little while making 400k and assumed your kids would get scholarships to cover much of the costs is just insane. Why should YOUR kids get scholarships to places like Cornell?

Can you step through the math on this for us? How have you been able to amass $125K for college savings over the course of about 15 years on a $90-$110K HHI? Even at an aggressive ROI of 8%, this means you’ve been saving $5K of your net HHI per year on average. But, you wouldn’t be doing this unless your were first contributing 20% of your gross HHI to retirement savings, as all financial advisors recommended. So, on a $110K HHI, you’ve been operating on a MAGI of $88K, a take home of maybe $72K and then an available budget of roughly $67K after your college savings. So all your remaining expenses are covered by $5,600/month, including your mortgage and/or rent?!? Seems unlikely. Explain it to us.

[Anonymous]

Anonymous wrote:Does anyone have any tips or recommendations for funding what will sure to be an expensive college experience for our kids?

We have two kids in high school, rising senior and rising sophomore. We’ve got $90K and $83K in 529 plans for them each, respectively. There is no chance we will qualify for need-based financial aid, even when both are in college at the same time. Several of the schools we’re contemplating are places like Cornell and Carnegie Mellon that no longer or simply don’t offer merit-based scholarships. So, we’re looking at $80K+ per year. 529 will cover about a fourth of the cost, but this is still $450K or so over 6 years. Kind of a lot to absorb as part of our monthly budget. What do most people do?

Outside, independent scholarships? Bonuses from work? Exercise stock options? Kids get student loans? Parents get loans? Refinance or second mortgage? Temporarily halt retirement contributions?

You obviously underfunded the 529 if you want them to go private. Your funding is for public. That was your mistake.

If you want them to go private, you will have to cash flow the difference and something has got to give.

Honestly, I don’t understand with how much your HHI and your expectations of private, why you did not fund the 529 more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Does anyone have any tips or recommendations for funding what will sure to be an expensive college experience for our kids?

We have two kids in high school, rising senior and rising sophomore. We’ve got $90K and $83K in 529 plans for them each, respectively. There is no chance we will qualify for need-based financial aid, even when both are in college at the same time. Several of the schools we’re contemplating are places like Cornell and Carnegie Mellon that no longer or simply don’t offer merit-based scholarships. So, we’re looking at $80K+ per year. 529 will cover about a fourth of the cost, but this is still $450K or so over 6 years. Kind of a lot to absorb as part of our monthly budget. What do most people do?

Outside, independent scholarships? Bonuses from work? Exercise stock options? Kids get student loans? Parents get loans? Refinance or second mortgage? Temporarily halt retirement contributions?

Are your kids rockstars or just regular DCUM smart? If the latter, then your state school, lower tier state schools that give you merit (Alabama, Kansas etc), or low tier privates that heavily discount. You choose which environment you want. This advice has been repeated nine thousand times on this forum.

Don’t know, but my rising senior has taken nearly every AP class available and has an unweighted GPA of 3.98 and a weighted one a lot higher. Took the SAT as a junior and got a 790 on math and a 740 on reading / writing on his first attempt. These seem like Cornell-worthy results.

Ok I’m calling troll on OP. No one could be this clueless.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Does anyone have any tips or recommendations for funding what will sure to be an expensive college experience for our kids?

We have two kids in high school, rising senior and rising sophomore. We’ve got $90K and $83K in 529 plans for them each, respectively. There is no chance we will qualify for need-based financial aid, even when both are in college at the same time. Several of the schools we’re contemplating are places like Cornell and Carnegie Mellon that no longer or simply don’t offer merit-based scholarships. So, we’re looking at $80K+ per year. 529 will cover about a fourth of the cost, but this is still $450K or so over 6 years. Kind of a lot to absorb as part of our monthly budget. What do most people do?

Outside, independent scholarships? Bonuses from work? Exercise stock options? Kids get student loans? Parents get loans? Refinance or second mortgage? Temporarily halt retirement contributions?

Are your kids rockstars or just regular DCUM smart? If the latter, then your state school, lower tier state schools that give you merit (Alabama, Kansas etc), or low tier privates that heavily discount. You choose which environment you want. This advice has been repeated nine thousand times on this forum.

Don’t know, but my rising senior has taken nearly every AP class available and has an unweighted GPA of 3.98 and a weighted one a lot higher. Took the SAT as a junior and got a 790 on math and a 740 on reading / writing on his first attempt. These seem like Cornell-worthy results.

Ok I’m calling troll on OP. No one could be this clueless.

+10 too stupid to be true

[Anonymous]

Anonymous wrote:

Anonymous wrote:op, my household makes 110k but used to make more like ninety and we currently have sixty thousand saved for our ninth grader and sixty five thousand saved for our tenth grader. Which we are now realizing isn’t enough. We are going to have each kid go instate, take the maximum of 5k per year of loans, and tighten our belts and cash flow the rest.

The fact that you have saved so little while making 400k and assumed your kids would get scholarships to cover much of the costs is just insane. Why should YOUR kids get scholarships to places like Cornell?

Can you step through the math on this for us? How have you been able to amass $125K for college savings over the course of about 15 years on a $90-$110K HHI? Even at an aggressive ROI of 8%, this means you’ve been saving $5K of your net HHI per year on average. But, you wouldn’t be doing this unless your were first contributing 20% of your gross HHI to retirement savings, as all financial advisors recommended. So, on a $110K HHI, you’ve been operating on a MAGI of $88K, a take home of maybe $72K and then an available budget of roughly $67K after your college savings. So all your remaining expenses are covered by $5,600/month, including your mortgage and/or rent?!? Seems unlikely. Explain it to us.

Funny that you’re choosing to criticize/question this rather than the op with a hhi of 400k+ who is whining about not being able to afford top colleges

[Anonymous]

Anonymous wrote:

Anonymous wrote:op, my household makes 110k but used to make more like ninety and we currently have sixty thousand saved for our ninth grader and sixty five thousand saved for our tenth grader. Which we are now realizing isn’t enough. We are going to have each kid go instate, take the maximum of 5k per year of loans, and tighten our belts and cash flow the rest.

The fact that you have saved so little while making 400k and assumed your kids would get scholarships to cover much of the costs is just insane. Why should YOUR kids get scholarships to places like Cornell?

Unlike OP, your kids are well positioned to get financial aid so I wouldn’t write off non state options. Congrats on saving so much relative to your hhi and best wishes for your kids!

Thank you. Surprisingly, our expected family contribution, when we enter into net calculators in CSS, is usually somewhere between 38 and 45k per kid. Meaning we have to come up with that much on our own per year, and then get an aid package which might be partial loans for the rest.

In state we only get a few hundred dollars, so basically nothing. Since state school is a little less than thirty thousand, it’s cheaper. We can’t cash flow enough to pay for the css schools. So that’s an extra almost one hundred thousand a year for the kids to go private. I don’t think we can or should take on that amount in parent plus loans.

I am surprised it’s not more, to be honest but oh well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Does anyone have any tips or recommendations for funding what will sure to be an expensive college experience for our kids?

We have two kids in high school, rising senior and rising sophomore. We’ve got $90K and $83K in 529 plans for them each, respectively. There is no chance we will qualify for need-based financial aid, even when both are in college at the same time. Several of the schools we’re contemplating are places like Cornell and Carnegie Mellon that no longer or simply don’t offer merit-based scholarships. So, we’re looking at $80K+ per year. 529 will cover about a fourth of the cost, but this is still $450K or so over 6 years. Kind of a lot to absorb as part of our monthly budget. What do most people do?

Outside, independent scholarships? Bonuses from work? Exercise stock options? Kids get student loans? Parents get loans? Refinance or second mortgage? Temporarily halt retirement contributions?

If your kids are "that" good, they can get merit aids from state flagships/lower level privates. I'd not worry. If they are not "that" good, then you got a big problem

No, most state flagships will not offer merit. They are public institutions. Only second and third drier flagships might offer merit but only if OP’s kids offer something critical to the flagship in exchange like a 36 ACT

[Anonymous]

Anonymous wrote:Does anyone have any tips or recommendations for funding what will sure to be an expensive college experience for our kids?

We have two kids in high school, rising senior and rising sophomore. We’ve got $90K and $83K in 529 plans for them each, respectively. There is no chance we will qualify for need-based financial aid, even when both are in college at the same time. Several of the schools we’re contemplating are places like Cornell and Carnegie Mellon that no longer or simply don’t offer merit-based scholarships. So, we’re looking at $80K+ per year. 529 will cover about a fourth of the cost, but this is still $450K or so over 6 years. Kind of a lot to absorb as part of our monthly budget. What do most people do?

Outside, independent scholarships? Bonuses from work? Exercise stock options? Kids get student loans? Parents get loans? Refinance or second mortgage? Temporarily halt retirement contributions?

Check out the military. You need to talk to the different branches. Each branch will have different plans/offers to pay for college.

[Anonymous]

Anonymous wrote:$20,000/year from your 529
$30,000 parent cashflow (from a $400,000 HHI is not unreasonable)
$15,000/ from parent savings
$ 5,500/year student loan
$ 5,000/year student earnings (summer and school year)

$75,000/year

This. But you will have two in college for two years. Which means you need to start the $30k per year parent cashflow THIS YEAR so you have that additional $60k for one of the years when you've got two there. Then you'll probably have to take out a parent plus loan for the other double year. So the parent cashflow really looks like:

10th grade/12th grade - save $30k
11th grade/Freshman - $30k cash flow
12th grade/Sophomore - $30k cash flow
Freshman/Junior - $30k cash flow and spend the $30k that you saved that first year
Sophomore/Senior - $30k cash flow and a $30k parent plus loan
Junior - $30k cash flow
Senior - $30k cash flow
First year of no college bill - $30k from budget pays off the plus loan in its entirety.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:op, my household makes 110k but used to make more like ninety and we currently have sixty thousand saved for our ninth grader and sixty five thousand saved for our tenth grader. Which we are now realizing isn’t enough. We are going to have each kid go instate, take the maximum of 5k per year of loans, and tighten our belts and cash flow the rest.

The fact that you have saved so little while making 400k and assumed your kids would get scholarships to cover much of the costs is just insane. Why should YOUR kids get scholarships to places like Cornell?

Can you step through the math on this for us? How have you been able to amass $125K for college savings over the course of about 15 years on a $90-$110K HHI? Even at an aggressive ROI of 8%, this means you’ve been saving $5K of your net HHI per year on average. But, you wouldn’t be doing this unless your were first contributing 20% of your gross HHI to retirement savings, as all financial advisors recommended. So, on a $110K HHI, you’ve been operating on a MAGI of $88K, a take home of maybe $72K and then an available budget of roughly $67K after your college savings. So all your remaining expenses are covered by $5,600/month, including your mortgage and/or rent?!? Seems unlikely. Explain it to us.

Funny that you’re choosing to criticize/question this rather than the op with a hhi of 400k+ who is whining about not being able to afford top colleges

I’m not the OP and I’m not this PP either, but OMG the OP never whined about not being able to afford top colleges. The post was asking how people end up funding college when there is a 529 shortfall? Sounds like the answers range from picking a cheaper college to taking it from monthly cash flow with substantial trimming of unnecessary or optional expenses vs. from home equity or new loans. No reason to be so judgy and pretentious. FWIW, OP has a ton more saved in 529 plans than the average American.