Advice re underfunded college savings & well funded retirement

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My assumption is the family had a major medical situation for one of the income earner when the oldest child was in Middle School.

The plan prior to this was to continue on the path where they had 2 incomes - one that could easily cover college costs wherever they decided to go. The plan was thrown off track and now there needs to be a new plan.

These things happen - and life assumptions need to change. Talk to a financial advisor - and talk to your children. You are raising them to be adults - this is an adult conversation they need to be a part of.

OP again. PP is correct. Thank you. The kids have had a lot of anxiety around the health issues and realisation that there will be no return to a six figure income. It is a delicate subject, don’t want to worry them too much.

NP here. I am sorry for your health situation; that has to be stressful on top of difficult physically. However, please broach this with your eldest- he is old enough to be able to hear that you don’t have an unlimited college budget. You can reassure him that your finances are fine, you won’t lose your house or anything but the reality of your college savings is what it is. Please don’t avoid the topic with him- be direct and honest so that he is prepared now. He can still apply to his dream school but he will need to get strong aid or outside scholarships. And he will also need to be prepared for the reality that he may have to go to another school.

+1, this is also the reality for most of our kids. State school or scholarships.

[Anonymous]

Talk to the air force recruiter to get a sense of drone flying and ADHD meds. (It is a big thing - high demand in Air Force and beyond)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So you have about 16 months before your first starts school and five years before the second? Stop all retirement saving now and pad that 529 while you can. You may actually get some aid considering your spouse's high medical needs. Then do a cash out refinance or home equity loan to cover the gap.

OP is 58. This is terrible, terrible advice.

+1 OP should absolutely not stop saving for retirement. With a disabled spouse and sky high medical bills (that will not go down) they need MORE for retirement.

OP, I understand you say you can afford ~25k per year. But with your situation, you need to be considering community college only for the first two years and a state school for the last two. If your child can gather the scholarships/aid to attend a different school at the same cost as CC/State school then great.

You need to have a serious conversation with your children about what you can afford. And they need to be more aware of what is going on in your family. It seems they don’t have a clue about how ill/costly the treatments are for the disabled spouse.

Actually, they might have a clue and be afraid to bring up the subject. Talking about it with your kids would probably alleviate a lot of stress all around and add needed clarity, Please have this talk, OP.

Doubtful. The OP stated “Kid does not understand reality; will reach out to school college counselor.” How would the kid not understand reality of finances and have a clue at the same time?

OP again. Kid thinks that banks will loan to him the delta between what we can contribute and the cost. Haven’t many others on this board experienced times when their teenage boy lost touch with reality? Unfortunately he got the message from school counselor that merit awards would be unattainable. Perhaps counselor assumed he was going after merit at reach schools. There are schools that are lower ranked but where he could have a shot at their Honors College or merit aid. This could equal in-state tuition, which would be doable. All of kids friends are aiming for top 30 schools, he is having difficulty accepting he can’t count on attending same type of school due to finances, esp given this is a change from several years back.

I posted previously that child can take out loans. Top 30 schools should be worth it. This is your child’s life and future. I would make damn sure he has a major that could easily pay off those student loans.

[Anonymous]

I just checked the us news rankings for first time in 20 years. NYU is 30th. That may be my cut off for worth it for loans.

Your kid should probably just go to UVA.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So you have about 16 months before your first starts school and five years before the second? Stop all retirement saving now and pad that 529 while you can. You may actually get some aid considering your spouse's high medical needs. Then do a cash out refinance or home equity loan to cover the gap.

OP is 58. This is terrible, terrible advice.

+1 OP should absolutely not stop saving for retirement. With a disabled spouse and sky high medical bills (that will not go down) they need MORE for retirement.

OP, I understand you say you can afford ~25k per year. But with your situation, you need to be considering community college only for the first two years and a state school for the last two. If your child can gather the scholarships/aid to attend a different school at the same cost as CC/State school then great.

You need to have a serious conversation with your children about what you can afford. And they need to be more aware of what is going on in your family. It seems they don’t have a clue about how ill/costly the treatments are for the disabled spouse.

Actually, they might have a clue and be afraid to bring up the subject. Talking about it with your kids would probably alleviate a lot of stress all around and add needed clarity, Please have this talk, OP.

Doubtful. The OP stated “Kid does not understand reality; will reach out to school college counselor.” How would the kid not understand reality of finances and have a clue at the same time?

OP again. Kid thinks that banks will loan to him the delta between what we can contribute and the cost. Haven’t many others on this board experienced times when their teenage boy lost touch with reality? Unfortunately he got the message from school counselor that merit awards would be unattainable. Perhaps counselor assumed he was going after merit at reach schools. There are schools that are lower ranked but where he could have a shot at their Honors College or merit aid. This could equal in-state tuition, which would be doable. All of kids friends are aiming for top 30 schools, he is having difficulty accepting he can’t count on attending same type of school due to finances, esp given this is a change from several years back.

I posted previously that child can take out loans. Top 30 schools should be worth it. This is your child’s life and future. I would make damn sure he has a major that could easily pay off those student loans.

Kid cannot take out loans for the $160K delta. The maximum amount a student can borrow is $25,500 over four years.

[Anonymous]

Anonymous wrote:I just checked the us news rankings for first time in 20 years. NYU is 30th. That may be my cut off for worth it for loans.

Your kid should probably just go to UVA.

UVA is ranked higher, if you care about this sort of thing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I just checked the us news rankings for first time in 20 years. NYU is 30th. That may be my cut off for worth it for loans.

Your kid should probably just go to UVA.

UVA is ranked higher, if you care about this sort of thing.

I am not as familiar with majors and rankings nowadays. I was one of the NY posters and never heard of UVA before moving to DC. I did know a girl at Yale who went to UVA undergrad but I didn’t know UVA from Penn State or Rutgers.

Once upon a time, NYU was at the top for finance and law.

I also dont hear about Columbia or Cornell around here. I am sure it is geographic.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So you have about 16 months before your first starts school and five years before the second? Stop all retirement saving now and pad that 529 while you can. You may actually get some aid considering your spouse's high medical needs. Then do a cash out refinance or home equity loan to cover the gap.

OP is 58. This is terrible, terrible advice.

+1 OP should absolutely not stop saving for retirement. With a disabled spouse and sky high medical bills (that will not go down) they need MORE for retirement.

OP, I understand you say you can afford ~25k per year. But with your situation, you need to be considering community college only for the first two years and a state school for the last two. If your child can gather the scholarships/aid to attend a different school at the same cost as CC/State school then great.

You need to have a serious conversation with your children about what you can afford. And they need to be more aware of what is going on in your family. It seems they don’t have a clue about how ill/costly the treatments are for the disabled spouse.

Actually, they might have a clue and be afraid to bring up the subject. Talking about it with your kids would probably alleviate a lot of stress all around and add needed clarity, Please have this talk, OP.

Doubtful. The OP stated “Kid does not understand reality; will reach out to school college counselor.” How would the kid not understand reality of finances and have a clue at the same time?

OP again. Kid thinks that banks will loan to him the delta between what we can contribute and the cost. Haven’t many others on this board experienced times when their teenage boy lost touch with reality? Unfortunately he got the message from school counselor that merit awards would be unattainable. Perhaps counselor assumed he was going after merit at reach schools. There are schools that are lower ranked but where he could have a shot at their Honors College or merit aid. This could equal in-state tuition, which would be doable. All of kids friends are aiming for top 30 schools, he is having difficulty accepting he can’t count on attending same type of school due to finances, esp given this is a change from several years back.

I posted previously that child can take out loans. Top 30 schools should be worth it. This is your child’s life and future. I would make damn sure he has a major that could easily pay off those student loans.

Kid cannot take out loans for the $160K delta. The maximum amount a student can borrow is $25,500 over four years.

I don’t think that is true. We know recent med school grads with 500k debt. 200 was from undergrad.

The girl I’m thinking of was from a family who earned 150k and did no quality for much aid so it was mostly loans. She did go to very prestigious top 5 schools.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So you have about 16 months before your first starts school and five years before the second? Stop all retirement saving now and pad that 529 while you can. You may actually get some aid considering your spouse's high medical needs. Then do a cash out refinance or home equity loan to cover the gap.

OP is 58. This is terrible, terrible advice.

+1 OP should absolutely not stop saving for retirement. With a disabled spouse and sky high medical bills (that will not go down) they need MORE for retirement.

OP, I understand you say you can afford ~25k per year. But with your situation, you need to be considering community college only for the first two years and a state school for the last two. If your child can gather the scholarships/aid to attend a different school at the same cost as CC/State school then great.

You need to have a serious conversation with your children about what you can afford. And they need to be more aware of what is going on in your family. It seems they don’t have a clue about how ill/costly the treatments are for the disabled spouse.

Actually, they might have a clue and be afraid to bring up the subject. Talking about it with your kids would probably alleviate a lot of stress all around and add needed clarity, Please have this talk, OP.

Doubtful. The OP stated “Kid does not understand reality; will reach out to school college counselor.” How would the kid not understand reality of finances and have a clue at the same time?

OP again. Kid thinks that banks will loan to him the delta between what we can contribute and the cost. Haven’t many others on this board experienced times when their teenage boy lost touch with reality? Unfortunately he got the message from school counselor that merit awards would be unattainable. Perhaps counselor assumed he was going after merit at reach schools. There are schools that are lower ranked but where he could have a shot at their Honors College or merit aid. This could equal in-state tuition, which would be doable. All of kids friends are aiming for top 30 schools, he is having difficulty accepting he can’t count on attending same type of school due to finances, esp given this is a change from several years back.

I posted previously that child can take out loans. Top 30 schools should be worth it. This is your child’s life and future. I would make damn sure he has a major that could easily pay off those student loans.

Kid cannot take out loans for the $160K delta. The maximum amount a student can borrow is $25,500 over four years.

I don’t think that is true. We know recent med school grads with 500k debt. 200 was from undergrad.

The girl I’m thinking of was from a family who earned 150k and did no quality for much aid so it was mostly loans. She did go to very prestigious top 5 schools.

It is absolutely true. I was wrong, though-the amount is now $31,000. For amounts beyond that, the parents take out loans (typically Parent Plus loans), and the student: co-signs.

The federal loan program does not permit a student to take out more than $31,000 over four years in his own name. That is a fact.

https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized#how-much

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I just checked the us news rankings for first time in 20 years. NYU is 30th. That may be my cut off for worth it for loans.

Your kid should probably just go to UVA.

UVA is ranked higher, if you care about this sort of thing.

I am not as familiar with majors and rankings nowadays. I was one of the NY posters and never heard of UVA before moving to DC. I did know a girl at Yale who went to UVA undergrad but I didn’t know UVA from Penn State or Rutgers.

Once upon a time, NYU was at the top for finance and law.

I also dont hear about Columbia or Cornell around here. I am sure it is geographic.

I'm curious, how large was the rock under which you lived?

I have always lived on the east coast, and yet somehow the knowledge that the University of California is a fine school has penetrated my consciousness. I also have managed to become aware of the University of Washington, Cal Tech, Arizona State, Univ. of Michigan, and quite a few other schools more that 200 miles away.

And you don't hear about Columbia or Cornell here? Do you not know *any* high school kids?

I find it very difficult to believe you went to Yale. Or do you mean you worked on the line at Yale forklift?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I just checked the us news rankings for first time in 20 years. NYU is 30th. That may be my cut off for worth it for loans.

Your kid should probably just go to UVA.

UVA is ranked higher, if you care about this sort of thing.

I am not as familiar with majors and rankings nowadays. I was one of the NY posters and never heard of UVA before moving to DC. I did know a girl at Yale who went to UVA undergrad but I didn’t know UVA from Penn State or Rutgers.

Once upon a time, NYU was at the top for finance and law.

I also dont hear about Columbia or Cornell around here. I am sure it is geographic.

Honestly? It boggles my mind that anyone would choose NYU (much less over over the University of Virginia, or for that matter the University of Maryland). Big classes, very high tuition, expensive housing, all about the rankings, lack of focus on undergraduate teaching. If you’re going to a larger research university as an undergrad, then pay in-state tuition and be done with it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I just checked the us news rankings for first time in 20 years. NYU is 30th. That may be my cut off for worth it for loans.

Your kid should probably just go to UVA.

UVA is ranked higher, if you care about this sort of thing.

I am not as familiar with majors and rankings nowadays. I was one of the NY posters and never heard of UVA before moving to DC. I did know a girl at Yale who went to UVA undergrad but I didn’t know UVA from Penn State or Rutgers.

Once upon a time, NYU was at the top for finance and law.

I also dont hear about Columbia or Cornell around here. I am sure it is geographic.

I'm curious, how large was the rock under which you lived?

I have always lived on the east coast, and yet somehow the knowledge that the University of California is a fine school has penetrated my consciousness. I also have managed to become aware of the University of Washington, Cal Tech, Arizona State, Univ. of Michigan, and quite a few other schools more that 200 miles away.

And you don't hear about Columbia or Cornell here? Do you not know *any* high school kids?

I find it very difficult to believe you went to Yale. Or do you mean you worked on the line at Yale forklift?

Actually I don’t know any high school students. We know toddlers and preschoolers. College isn’t a topic we talk about often at play dates.

And of course I heard of UC schools. UMich was a popular back up school. I lived in an affluent neighborhood in NY. Sorry, I never heard of UVA. That isn’t to say it isn’t an excellent school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I just checked the us news rankings for first time in 20 years. NYU is 30th. That may be my cut off for worth it for loans.

Your kid should probably just go to UVA.

UVA is ranked higher, if you care about this sort of thing.

I am not as familiar with majors and rankings nowadays. I was one of the NY posters and never heard of UVA before moving to DC. I did know a girl at Yale who went to UVA undergrad but I didn’t know UVA from Penn State or Rutgers.

Once upon a time, NYU was at the top for finance and law.

I also dont hear about Columbia or Cornell around here. I am sure it is geographic.

Honestly? It boggles my mind that anyone would choose NYU (much less over over the University of Virginia, or for that matter the University of Maryland). Big classes, very high tuition, expensive housing, all about the rankings, lack of focus on undergraduate teaching. If you’re going to a larger research university as an undergrad, then pay in-state tuition and be done with it.

Pp here. My kids are still young. I will support my kids where they want to go. It doesn’t really matter if tuition is 100k of 20k per year for us.

[Anonymous]

OP if your kid is aiming for a top 30 school then he is likely to go to graduate school. I encourage you to insist on no loans for the undergraduate degree which is reasonable given that you can afford to spend approximately $30k a year.
You did not mention your state or what your kid wants to study. If VA, UVA, VT and W and M are all fine options depending on his interest. If he is interested in a small liberal arts college there are a number of SLACs (Denison, Kenyon, Oberlin, Earlham to name a few that are great and many are mid priced and many offer generous merit based aid.
Don’t jeopardize your retirement security or your spouse’s medical care or your child’s financial future because it is tough to have these conversations with him. Tell him the truth with love and empathy. You are actually doing really well financially given your ability to maintain a robust retirement account, take care of significant medical bills and afford $30k a year for 8 years. There is no need for your children to feel financially insecure unless you jeopardize this to pay $75k for 8 years

[Anonymous]

Anonymous wrote:OP if your kid is aiming for a top 30 school then he is likely to go to graduate school. I encourage you to insist on no loans for the undergraduate degree which is reasonable given that you can afford to spend approximately $30k a year.
You did not mention your state or what your kid wants to study. If VA, UVA, VT and W and M are all fine options depending on his interest. If he is interested in a small liberal arts college there are a number of SLACs (Denison, Kenyon, Oberlin, Earlham to name a few that are great and many are mid priced and many offer generous merit based aid.
Don’t jeopardize your retirement security or your spouse’s medical care or your child’s financial future because it is tough to have these conversations with him. Tell him the truth with love and empathy. You are actually doing really well financially given your ability to maintain a robust retirement account, take care of significant medical bills and afford $30k a year for 8 years. There is no need for your children to feel financially insecure unless you jeopardize this to pay $75k for 8 years

Thank you, pp. OP here.