Reply to Advice re underfunded college savings & well funded retirement

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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.[/quote]
OP is 58.  This is terrible, terrible advice.[/quote]
+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.[/quote]

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

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. [/quote]

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.[/quote]

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

[/quote]

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.[/quote]

I thought this too, because I borrowed more than the $25k limit, but it looks like the change happened for loans disbursed after July 1, 2008.  Also, that applies only government loans.

FWIW, there is always the possibility that schools will offer "merit" aid or other scholarships with nebulous qualifications.  At the end of the day, particularly among top colleges, tuition payments are only somewhat relevant to their operation.  And it is generally a better deal for them to capture extra students that either won't hurt or will help their entering class stats.  Assuming that there are a dozen kids in a similar boat as your son (able to pay $30K+7K in student loan per year) that's at extra $1.75M less the small marginal costs of having an extra 12 students. Yes, there will be demand from others that can pay full-freight, but that may or may not impact the all-important USNWR rankings via incoming class stats.  Which is to say, have the conversation about what you can contribute, let kid apply where he wants, then haggle.  If it doesn't work out, then it's done.  And there are a lot of great schools that aren't in the Top 30.  Schools that will still set you up for prestigious graduate degree programs.  It's not Ivy league or community college.  Or even Ivy league or state school.  But if you are a well-qualified applicant, good schools will fight for you.[/quote]

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