Reply to College applications -- apply to $$$$ schools or not?

Forum Index » Money and Finances

Reply to "College applications -- apply to $$$$ schools or not?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous]Somehow over the past few years, our net worth has skyrocketed. We are early-mid 50s and current net worth is about $4.35 million.  This includes about $1m in home equity and $2.4m in retirement. The remaining approx $900k includes around $300k in earmarked college savings. Most of the rest is in brokerage accounts -- and is about 80% gains (so capital gain tax would be due on sale).

Our income has gone up considerably in the past few years, and is now around $280k, including dividends, W2 income and 1099. Mortgage is very low ($1k a month) but property tax is high ($20k per year) and we put about $75k a year into retirement.

Our oldest child will be applying to college in the fall. He is a very high achiever and very interested in Ivy league schools. Realizing that despite his achievements, admission to Ivies is always tough, what I'm trying to work out is whether we discourage his application to highly selective schools that do not offer merit aid where if successful we'd be expected to pay $95k per year. Clearly we won't get any needs based aid.

Everytime I run the numbers -- looking at likely growth of our funds while our kids are in college, only withdrawing 4% or less, possibly diverting money from retirement to college or cashflowing a portion -- it looks like it's doable for us to spend that kind of money, at least for one kid. But what if there is a catastrophic drop in the market? Or if I (the primary earner) lose my job?

Essentially would it be worth the investment? Potentially $400k per kid is more than we've ever spent on a house, for example, and I grew up without much money. If he instead goes to our state flagship it would be one third of the cost. Wouldn't that be a better investment?  [b]My husband thinks he should apply to the pricey colleges and then if he gets in, we decide, but I think it makes more sense to work out how much we are prepared to pay in advance.[/b][/quote]

You do both. [/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics