My HS senior knows what we've saved for him (and his sister). So when we have all of his acceptances, he'll know realistically what we can contribute. With the scholarship offers he's received so far, we can cover all four years. But if he has his heart set on a school where we can't cover the costs, he will know that he has to pay the difference.

Anonymous wrote:DS is a Junior with great stats - he talks of going to schools like UNC, Wake Forest, Case Western (sort of mid-sized schools), where the tuition is $50K plus R&B. We live in Maryland and I'm confident he will be accepted to UMD CP. Quite simply, by the time college rolls around, I'll have somewhere between $275-300K saved for college, to be split between him and his younger sibling. If he chooses to go to UNC, Wake, etc., it will require some merit aid or loans, and he'll still definitely blow through his share of the funds, with nothing left over for grad school, if he chooses to pursue it. If he goes to UMD CP, he'll likely have $50K or so leftover for graduate school or whatever. DS's main gripe with UMD is that it's too large, and too much of a rah-rah football/basketball school, which is not his thing. I don't want to force him there, but think it's the best move and it's diverse enough that he'll find his smaller tribe. He has many friends with more well-off families that are willing to pay full freight to wherever, so he is a little bummed that we aren't that flush with cash.

Anyway, the question is, whether I should just tell DS what's available, and the consequences of his decision, and let him decide? It may mean that he doesn't go to his dream school, which makes me sad because he's worked so hard, but this is also life and for him to understand that we can't always get what we want.

Thanks for listening.

is the alternative not telling him and just having the money run out while he's in college? Of course you have to tell him. Unless you include your kid in budgeting, they probably have no idea just how much college costs or that there isn't wiggle room in mom and dads' budget to cover an extra 40k a year of expenses - they need to know before applying- hopefully early in high school at the latest.

Just another vote in favor of telling him. I don't actually understand what the argument against telling him would be. At some point he will learn because if he got into a more expensive school but didn't get merit aid, he will have to not go or take out loans. Why would you wait to have that conversation when it is maximally disappointing?

Agree that you shouldn't discuss it as a lump sum for both kids. Tell him how much you have for him and discuss other funding options. Leave the sibling out of it.

Yes - of course you tell him as part of a larger conversation about financing higher ed. Be honest about what you have saved for him (no discussion of sibling whose funds should be separate) and what you think you can contribute each year. Tell him to set up a spreadsheet tracking the costs of each school he's considering and find the difference that he'll need from scholarships, loans, or his own funds from work. It's eye opening for kids but a good life lesson. Both of my kids really changed up their application lists to include new options when they realized they could get merit aid to fill that gap.

Of course tell him. He is almost an adult, and this impacts his future, so you owe him the full facts.

It also models for him how we live within our means, and make tradeoffs.

For example, he may choose to apply to second tier schools that offer more aid, in addition to big name places. My child got over 25K in merit aid (per year) at 6 schools, but going a little further down in the USNWR ranking. You can also read together about student loans, in case that turns out to be a tool he needs. He should also take into account whether his career path will include grad school, which is pricey and only covered in certain fields. Budget realities could also help him take travel costs/distance into account when he makes his list.

I also continued putting money into the 529 the whole time my kid was in college, so you might take that into account.

You have saved a lot for your child, which is wonderful. He is luckier than most. Don't think of this conversation as a letdown. You should frame it as a nod to his maturity and the fact that he will be making adult decisions in the coming years, and you want to talk to him in that vein.

Good luck!

Anonymous wrote:

Anonymous wrote:Yes but don’t say 300 that he needs to share. Just say it’s 150 (or 130) that you have saved up for him.

Oh, yes. He’ll resent the sib if he has to share 300. Not an issue if you tell him he gets 130all to himself. Definitely, 100% tell him at least $10,000 less than you actually think you’ll have. It’s better to be pleasantly surprised, than disappointed. Also, go over the finances of loan repayment in painstaking detail. Include scenarios where the economy tanks, and he’s under-employed for a year. My SIL’s parents never talked to her about that and she’s absolutely buried in debt, with huge regrets.

To OP - be conservative with whatever you tell him. I had trusts set up for our children's college educations (this was pre-529s so we just stayed with the trusts) and they were absolutely hammered by the 2007-09 recession. There may be another big dip coming in the stock market - assuming you have this money invested.

My parents could not pay for nearly that much of my college, but they didn't restrict me from going where I chose. They were just transparent that I would have to have loans to cover the difference, and I would be the one to eventually pay them off.

Has he applied to UMBC or Frostburg also, just for smaller school options?

Anonymous wrote:

Anonymous wrote:Yes but don’t say 300 that he needs to share. Just say it’s 150 (or 130) that you have saved up for him.

Oh, yes. He’ll resent the sib if he has to share 300. Not an issue if you tell him he gets 130all to himself. Definitely, 100% tell him at least $10,000 less than you actually think you’ll have. It’s better to be pleasantly surprised, than disappointed. Also, go over the finances of loan repayment in painstaking detail. Include scenarios where the economy tanks, and he’s under-employed for a year. My SIL’s parents never talked to her about that and she’s absolutely buried in debt, with huge regrets.

To OP - be conservative with whatever you tell him. I had trusts set up for our children's college educations (this was pre-529s so we just stayed with the trusts) and they were absolutely hammered by the 2007-09 recession. There may be another big dip coming in the stock market - assuming you have this money invested.

Anonymous wrote:Yes, of course you should tell him. He may want to apply to some less competitive mid-size schools where he can get merit scholarships to bring the cost down. He might prefer those to UMD-CP. Are you willing to pay for one of his top picks if he gets in? It sounds like you'd rather not, and I think you need to be clear in your own mind about what your upper limit is.

+1

Tell him you have $150K to pay for his undergraduate education, and nothing beyond that.

FWIW, Case Western gave my DC with great stats $30K/year in merit money (no need-based aid).

While I am no expert because this is my first experience too, I would be very up front with what you will pay and how that impacts his plans. My twins (yes twins lucky me) are seniors and I have told them both what I can afford for them per year best case scenario and that I strongly believe that they need to get their undergrad with no debt, if at all possible, because they both plan on graduate study which will be on their dime entirely. The amount i can (will pay) is about what my EFC has been calculate as.

We are fortunate to live in VA where we have lots of great state schools and i've simply told them if they choose a non-state school it has to be equivalently priced after merit etc.

+1000

We showed our kids the finances and explained that we would not allow debt for either student or parents -

We told DS (with 1400 plus SAT and good grades) that in state would be easy to cover and have money left over (VA for us) and that he could apply to private but with understanding that without merit aid that would not be an option.

I also told DS, who was mature enough to understand, that for many professions (I am a lawyer, husband is in public policy, sister in economics), your grad school mattered much more than your college long term in your career, so saving some $ for that, instead of blowing it all on undergrad, was a better plan.

Yes, tell him so you both can make an informed decision. Lay out pros and cons.

Anonymous wrote:Yes for sure tell him. He needs a frank conversation to know the impact of his choices on his loans/future budget.

I had a full ride to a top 10 public university, but really wanted to go to a private college (Duke- don't ask me why because looking back I think I just liked the idea of it). My parents told me how much they'd spend vs how much in loans I'd need. My dad had spreadsheets prepared. And then I had final options to choose from:
-Public university for free + live in house my parents bought in the college town(they made a ton of money when they sold it 4 years later)= 50k for gradschool plus a new car
-public university for free + dorms= 50k for gradschool
-Duke= no money for grad school and about 75k in student loans from undergraduate.

It was so helpful. My sister had a similar conversation years later and she chose to live at home and then they paid for all of grad school.

This^^^ Our oldest had the choice of a couple of expensive prestigious privates and state flagship full ride. His ultimate goal was to attend medical school and we had enough for four years of an expensive tuition saved. We laid it out by the numbers and had an honest conversation about it. He chose in-state and is now in a great medical school with us footing the bill. He'll graduate and start his career with minimal debt. It was a hard decision for him at the time because it was a lot of hard work to achieve getting into the private schools and it the fact that the flagship is a top public helped but had we not had the honest frank discussion I think his economic future would be quite different.

Absolutely. With my kids:

During freshman year of HS, I sit them down and explain that we can pay in state VA college, no debt for them. But, if they want to go OOS, they will probably need to get some merit based aid. So, work hard in school.

Junior year, before we start the college search, I literally review their UGTMA and 504 accounts with them. Show them how much we put in each month (about $1500/kid, we started late). And show them the projection for what they will have if we keep contributing at that rate through college. Divide by 4 and give them the number we can pay for college (for DS 1, it was $50k/ year). They can take out Stanford’s only ($5500 a year). Beyond that, no student loans.

Then, as we college search, we look at whether it is possible to get the college into our financial limits, because it is state, or the range of merit looks possible. If it’s an Ivy or NEASEAC or other no merit schools, then it doesn’t make the list. Because we just can’t afford it.

Once all college decisions are in, we make an excel sheet showing net cost per school; whether it exceeds what we can pay with only Stanford’s, or what is left for grad school, a down payment, etc.

When it’s time to pay tuition, I sit down with my kid every semester and transfer the tuition into his bank account. And then I sit there and make him pay his tuition.

I feel strongly that kids need to know how to make business decisions and weigh finances as part of a serious decision. And that it’s cruel to let your kid get attached to a “dream school” get in, and them say no or saddle them and you with huge loans you wouldn’t normally take out, but feel like you must. Because, dream school.

I think that actually transferring over $20,000 of “his” money over to the school each semester makes my kid take college more seriously.

BTW— I went to Wake Forest. On a full academic scholarship. These have become almost impossible to get. I think something like 4% of kids without need get some merit. And several of those scholarships are devoted to URMs or NC residents. It’s a great school. But it’s expensive AF, and I would not count on merit aid.