College Expenses

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
KandT
Posts: 130
Joined: Sun Mar 26, 2017 2:32 am

College Expenses

Post by KandT » Sat May 04, 2019 10:02 pm

We have a 7 and 12 year old with roughly $80K and $90K put away so far for college.

My question - How do I "guess" REAL college expenses? I know the costs of the state schools.

Private schools seem to have an "advertised rate" of around $60-$75K/year but of my colleagues with kids in those schools it seems no one is paying sticker. Quite frankly it seems like a scam in that if you handled your money well and have 529's they will be happy to let you in and you can pay more. If not then they are happy to let you in and you can pay less.

I am considering giving each kid $125,000 which is about enough for our state schools and let them kick in a little. If they want to go to a private school they will have incentive to seek out al the school "scholarship" money and discounts they can find.

Thanks!

growingup
Posts: 22
Joined: Thu Aug 06, 2015 6:21 am

Re: College Expenses

Post by growingup » Sat May 04, 2019 10:44 pm

I am saving to cover in-state university tuition costs for my kids (which I anticipate will rise by ~4% per year)

User avatar
beyou
Posts: 2844
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: College Expenses

Post by beyou » Sat May 04, 2019 11:26 pm

No the private schools are not a scam. The "discounts" are for kids they really want.
Based on MERIT, some schools will give large scholarships to top applicants, less to good but not top students, and nothing to borderline students.
Comes down to whether your kid goes to the best school for this grades (without merit scholarship) or a school well below his grades (possibly with full merit scholarship) or somewhere in the middle.

The issue of whether you saved up is related to NEED not MERIT. Yes if you need less you get less, why is that so strange ?
If you don't save up you are taking away certain options from your kids. Some are OK with that, others not.
But if you kid gets into Harvard, MIT etc, you will need that money unless your income is low.
They take a % of income and a % of savings, to figure your contribution. If your income is high and you just choose not to save for college,
fine but you may still have to pay based on your income.

The most common (good) advice here is max out retirement accounts first, 401k, IRA, and then if your income is high enough to save more,
then use 529. Personally I would also pay off my own debts before 529 deposits. But if you have the cash to ALSO make the 529 deposits, you will save on Federal taxes (maybe state depending on your state).

NJdad6
Posts: 196
Joined: Thu Mar 23, 2017 8:51 am

Re: College Expenses

Post by NJdad6 » Sun May 05, 2019 8:05 am

Be careful listening to those blanket statements. Cost depends on school. Top private schools do cost $65-70k. Many of these schools do not offer merit scholarships or they are very limited. They do provide need based aid if you qualify. Many kids at these schools were top performers in HS and pay the full amount.

Jack FFR1846
Posts: 10491
Joined: Tue Dec 31, 2013 7:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: College Expenses

Post by Jack FFR1846 » Sun May 05, 2019 8:28 am

Ask those who tell you about reduced cost what the reductions were. Merit aid is common and is great because it does not require "need". Private scholarships typically require something and they can be all over the map: "parents be a member of the credit union for at least 2 years" or "relative be a Knights of Columbus member in good standing" or "be of Polish decent with no prior family members who have gone to college". It's worth looking to see if one of these fit your kid. Most require a form and essay. Many are pointed towards what the kid will major in.

On top of these, there are what I call "random" scholarships. My son was accepted to Boston University and was offered 2 of these totaling $13k. One appeared to be because he planned to get housing on campus and the other was named after someone. There was no explanation why he got these and he only applied to the college.

Understand that most colleges give no merit aid to transfer students, so sticking with a college, even a more expensive college might be cheaper than moving from an expensive one with merit aid to another.

I know I'm not alone......I pay full price at an expensive Northeast Engineering college. This fall, that would be $70k but son is heading to another school for grad school. We have received nothing but Stafford loans. Son transferred in his 2nd year.

A strategy that we found late in the game, but are using is to find courses that can be transferred in from cheaper colleges. My son has found and taken courses at a local community college and a state college at greatly reduced cost. He went from full time to part time to take advantage of this as his core in-subject courses were complete and he only needed some basic science and humanities to fill his requirements.
Bogle: Smart Beta is stupid

User avatar
TomatoTomahto
Posts: 9547
Joined: Mon Apr 11, 2011 1:48 pm

Re: College Expenses

Post by TomatoTomahto » Sun May 05, 2019 8:40 am

Well put and concise, although I’ll disagree slightly with a couple of details in blue
beyou wrote:
Sat May 04, 2019 11:26 pm
No the private schools are not a scam. The "discounts" are for kids they really want.
Based on MERIT, some schools will give large scholarships to top applicants, less to good but not top students, and nothing to borderline students.
Comes down to whether your kid goes to the best school for this grades (without merit scholarship) or a school well below his grades (possibly with full merit scholarship) or somewhere in the middle.
Some merit scholarships are for parental bragging rights (“Johnny got a 50% scholarship to DarnedGoodSchool”) and don’t necessarily apply to each year of college. When the time comes, double check.

The issue of whether you saved up is related to NEED not MERIT. Yes if you need less you get less, why is that so strange ?
If you don't save up you are taking away certain options from your kids. Some are OK with that, others not.
But if you kid gets into Harvard, MIT etc, you will need that money unless your income is low.
Although HYPMS (Harvard, Yale, Princeton, MIT, Stanford) have very generous need determinations, you’re unlikely to get much if income is over $250k.
They take a % of income and a % of savings, to figure your contribution. If your income is high and you just choose not to save for college,
fine but you may still have to pay based on your income.
And, they will count both parents’ income in case of a divorce. Many sad cases where one parent declined to pay their “share,” leading to an unfortunate outcome. I’m not suggesting anything about OP’s situation, just general comment.

The most common (good) advice here is max out retirement accounts first, 401k, IRA, and then if your income is high enough to save more,
then use 529. Personally I would also pay off my own debts before 529 deposits. But if you have the cash to ALSO make the 529 deposits, you will save on Federal taxes (maybe state depending on your state).
In any case, have your kids maximize their talents. In the end, the most important thing is getting them into a need based school or being very attractive to a merit based school.
Okay, I get it; I won't be political or controversial. The Earth is flat.

User avatar
Michael Patrick
Posts: 88
Joined: Wed Dec 19, 2018 10:25 am
Location: Madison, WI

Re: College Expenses

Post by Michael Patrick » Sun May 05, 2019 8:44 am

Are the funds you've saved in a 529?

Topic Author
KandT
Posts: 130
Joined: Sun Mar 26, 2017 2:32 am

Re: College Expenses

Post by KandT » Sun May 05, 2019 9:02 am

Yes the funds I saved are in 529's.

The older kid qualified to skip a grade and is another 2 years ahead and in the advanced class for math. Also, another year ahead in science and could sleep through it.

The younger is only in first grade but appears to be at least above average.

I would feel confident saying that if the parents are on bogleheads then their kids are probably above average :happy

User avatar
ram
Posts: 1331
Joined: Tue Jan 01, 2008 10:47 pm
Location: Midwest

Re: College Expenses

Post by ram » Sun May 05, 2019 9:03 am

I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
Ram

Topic Author
KandT
Posts: 130
Joined: Sun Mar 26, 2017 2:32 am

Re: College Expenses

Post by KandT » Sun May 05, 2019 9:40 am

ram wrote:
Sun May 05, 2019 9:03 am
I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
Please dispute this with me but if a kid can go to an Ivy League school like Harvard then I think it is worth the money. To go to a small unheard of private school they would probably be better off going to a state school.

Unless, of course they are going to Harvard and getting their degree in some obscure non paying field.

User avatar
beyou
Posts: 2844
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: College Expenses

Post by beyou » Sun May 05, 2019 9:48 am

ram wrote:
Sun May 05, 2019 9:03 am
I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
This anecdote fits what I have heard from others. Vandy and many other excellent schools will give good merit. Harvard and peers have the cash and while more generous for need aid than most, you still have to demonstrate need, which heavily depends in income, not just your 529. 20% of income is expected at many schools, regardless of savings. Not sure if same at Harvard etc, but true of most colleges.

My formula was save enough in 529 for 2 state school educations, and wait to see what happens when the time comes. Due to my 3 fund portfolio and success in income, ended up not applying for finaid. Both kids got 15-20k merit from multiple privates and half/full merit from lower priced state schools. The 529 was all spent after 2 years of private college for each kid. If they had not excelled in high school, they would have gone to state college (and without those merit offers).

User avatar
beyou
Posts: 2844
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: College Expenses

Post by beyou » Sun May 05, 2019 9:55 am

KandT wrote:
Sun May 05, 2019 9:40 am
ram wrote:
Sun May 05, 2019 9:03 am
I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
Please dispute this with me but if a kid can go to an Ivy League school like Harvard then I think it is worth the money. To go to a small unheard of private school they would probably be better off going to a state school.

Unless, of course they are going to Harvard and getting their degree in some obscure non paying field.
Kids change their majors, so how can you decide ahead of time ? Either you value the experience or not. I do but many do not. College for most people is NOT career training. It is about growing up, and demonstrating ability to be organized hard working people. You can get that basic benefit at most colleges. But at a top school you can get positive influence amd competition from more people who will excel. Some benfit from the perr influence/networking, some do not. I feel my kids did benefit from the expensive elite schools they attended. But no guarantees they will be any better off than if they had attended elsewhere. In fact, for some paths, like med school, may be better to be a big fish in a small pond (and take the merit to a less competitive school).

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 10:04 am

KandT wrote:
Sun May 05, 2019 9:40 am
ram wrote:
Sun May 05, 2019 9:03 am
I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
Please dispute this with me but if a kid can go to an Ivy League school like Harvard then I think it is worth the money. To go to a small unheard of private school they would probably be better off going to a state school.
KandT,

<< if a kid can go to an Ivy League school like Harvard then I think it is worth the money.>>

I disagreed. It does not make any sense to pay that much for an undergraduate degree. If the kid is good, he/she can get the employer to pay for the Harvard MBA. If the kid is not good enough to get the employer to pay for the Harvard MBA, why spend the money for the Harvard undergraduate degree?

KlangFool

HereToLearn
Posts: 558
Joined: Sat Mar 17, 2018 5:53 pm

Re: College Expenses

Post by HereToLearn » Sun May 05, 2019 10:21 am

beyou wrote:
Sun May 05, 2019 9:48 am
ram wrote:
Sun May 05, 2019 9:03 am
I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
This anecdote fits what I have heard from others. Vandy and many other excellent schools will give good merit. Harvard and peers have the cash and while more generous for need aid than most, you still have to demonstrate need, which heavily depends in income, not just your 529. 20% of income is expected at many schools, regardless of savings. Not sure if same at Harvard etc, but true of most colleges.

I am full pay for two at Ivies. $70K this year for tuition, room & board. Costs have increased 3.5-3.75%/year since I started paying six years ago.

I quoted the above just to say that Vanderbilt is one of the most generous private universities for merit aid. I believe they have 100 full tuition students enter each year. USC has close to the same number, and then perhaps another 100 half-tuition. After that, the # of full tuition scholarships falls off, but they are out there. Wash U has Rodriguez, Duke has six full ride Robertson scholars, and then so many others where I do not have details: Fordham, Tulane, Northeastern, BU, etc. There are a handful of public universities that will offer full rides to National Merit Finalists, but those are students who score in the top 1/2 of 1% of all SAT takers. Even for the full tuition merit awards, parents still need to pay room & board, which is $16K of that $70K bill I am paying.

So, merit aid is out there, but as beyou said:
"Comes down to whether your kid goes to the best school for this grades (without merit scholarship) or a school well below his grades (possibly with full merit scholarship) or somewhere in the middle."

stoptothink
Posts: 6528
Joined: Fri Dec 31, 2010 9:53 am

Re: College Expenses

Post by stoptothink » Sun May 05, 2019 10:24 am

beyou wrote:
Sun May 05, 2019 9:55 am
KandT wrote:
Sun May 05, 2019 9:40 am
ram wrote:
Sun May 05, 2019 9:03 am
I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
Please dispute this with me but if a kid can go to an Ivy League school like Harvard then I think it is worth the money. To go to a small unheard of private school they would probably be better off going to a state school.

Unless, of course they are going to Harvard and getting their degree in some obscure non paying field.
Kids change their majors, so how can you decide ahead of time ? Either you value the experience or not. I do but many do not. College for most people is NOT career training. It is about growing up, and demonstrating ability to be organized hard working people. You can get that basic benefit at most colleges. But at a top school you can get positive influence amd competition from more people who will excel. Some benfit from the perr influence/networking, some do not. I feel my kids did benefit from the expensive elite schools they attended. But no guarantees they will be any better off than if they had attended elsewhere. In fact, for some paths, like med school, may be better to be a big fish in a small pond (and take the merit to a less competitive school).
This is a big can of worms, and it has been debated ad nauseum here. It can just be searched. I'm firmly in the camp that paying full freight for an expensive private is only "worth it" in very specific situations.

User avatar
TomatoTomahto
Posts: 9547
Joined: Mon Apr 11, 2011 1:48 pm

Re: College Expenses

Post by TomatoTomahto » Sun May 05, 2019 10:26 am

KlangFool wrote:
Sun May 05, 2019 10:04 am
<< if a kid can go to an Ivy League school like Harvard then I think it is worth the money.>>
I disagreed. It does not make any sense to pay that much for an undergraduate degree. If the kid is good, he/she can get the employer to pay for the Harvard MBA. If the kid is not good enough to get the employer to pay for the Harvard MBA, why spend the money for the Harvard undergraduate degree?
This is a perennial discussion, so maybe I'll try a different tack this time.

Every time I mention my one data point (a son whose ROI is a slam dunk), someone will point out that my son is extraordinary, an outlier, an exception, etc. While that's ego gratifying to a parent, I think that 95% of the kids who are accepted at HYPMS are extraordinary, and that furthermore, they will get an extraordinary education there, will form extraordinary networks, etc.

I also think that at schools somewhat lower in rank than HYPMS, say UChicago or Cornell, a large percentage of students will be extraordinary, and those students will benefit from the opportunity.

To KF's particular example, for many students, especially STEM students, 4 years is the optimal investment in undergraduate. My son happened to pick up an MS in the process, but had he not, I think he would have chosen not to get an advanced degree. The economics argue against it. He, and many of his colleagues, plan on possibly going back to get a PhD "after they get their nestegg."
Okay, I get it; I won't be political or controversial. The Earth is flat.

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 11:04 am

TomatoTomahto wrote:
Sun May 05, 2019 10:26 am
KlangFool wrote:
Sun May 05, 2019 10:04 am
<< if a kid can go to an Ivy League school like Harvard then I think it is worth the money.>>
I disagreed. It does not make any sense to pay that much for an undergraduate degree. If the kid is good, he/she can get the employer to pay for the Harvard MBA. If the kid is not good enough to get the employer to pay for the Harvard MBA, why spend the money for the Harvard undergraduate degree?
This is a perennial discussion, so maybe I'll try a different tack this time.

Every time I mention my one data point (a son whose ROI is a slam dunk), someone will point out that my son is extraordinary, an outlier, an exception, etc. While that's ego gratifying to a parent, I think that 95% of the kids who are accepted at HYPMS are extraordinary, and that furthermore, they will get an extraordinary education there, will form extraordinary networks, etc.

I also think that at schools somewhat lower in rank than HYPMS, say UChicago or Cornell, a large percentage of students will be extraordinary, and those students will benefit from the opportunity.

To KF's particular example, for many students, especially STEM students, 4 years is the optimal investment in undergraduate. My son happened to pick up an MS in the process, but had he not, I think he would have chosen not to get an advanced degree. The economics argue against it. He, and many of his colleagues, plan on possibly going back to get a PhD "after they get their nestegg."
TomatoTomahto,

1) I am Asian. Asians are overly represented in the HYPMS. So, the value of HYPMS for Asians is less.

<<, a large percentage of students will be extraordinary,>>
<< they will get an extraordinary education there, will form extraordinary networks, etc.>>

2) Which I disagree. In a subset of career, it might help. There are more ordinary people out there than extraordinary people. The ability to socialize and work with ordinary people is a lot more useful than extraordinary people. The in-state flagship state public university has better diversity and representation of the society as a whole.

3) I live in an affluent neighborhood with an annual median household income of 150K. If my kids go to HYPMS, they will be studying with the same group of people in their neighborhood. There is no life-changing experience here.

<<will form extraordinary networks, etc.>>

4) Versus people that they grew up in the same neighborhood since elementary school? There is no new social network for people in an affluent neighborhood.

KlangFool

User avatar
beyou
Posts: 2844
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: College Expenses

Post by beyou » Sun May 05, 2019 11:04 am

Is a Porsche or Mercedes “worth it” ?
We all make our choices where to splurge on what we feel is “worth it”. I chose education, not a car or fancy vacations. If you cant afford ANY luxuries, no harm, life can be great anyway. I would not sacrifice having food on the table for Harvard, but then again Harvard probably wont make you choose between food and attendance. If you can afford both, you dont need people here to tell you what to do, it is a mattet of opinion not fact if it’s “worth it”. College is an investment with intangible outcomes.

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 11:13 am

beyou wrote:
Sun May 05, 2019 11:04 am
Is a Porsche or Mercedes “worth it” ?
We all make our choices where to splurge on what we feel is “worth it”. I chose education, not a car or fancy vacations. If you cant afford ANY luxuries, no harm, life can be great anyway. I would not sacrifice having food on the table for Harvard, but then again Harvard probably wont make you choose between food and attendance. If you can afford both, you dont need people here to tell you what to do, it is a mattet of opinion not fact if it’s “worth it”. College is an investment with intangible outcomes.
beyou,

There are two separate levels of affordability here:

A) As per my family member, he gave 200K to 300K to each of his kids before they graduated college and paid for a private college education.

Versus

B) It is a choice between.

i) Pay for private college education and no money for graduate education

ii) Pay for the in-state public university and extra money for a graduate degree

iii) Pay for the in-state public university and extra money for the kid's car and the house down payment.

Most people are in case (B). So, there will be a tradeoff. And, the parent has to ask whether it is worth the tradeoff.

KlangFool

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 11:16 am

OP,

I essentially made the same decision as you. I would only pay for the college education when my net worth excluding the house exceed 1 million. And, I would only pay for the in-state public university. If my kids want to go somewhere else, they would have to fund the difference.

KlangFool

Topic Author
KandT
Posts: 130
Joined: Sun Mar 26, 2017 2:32 am

Re: College Expenses

Post by KandT » Sun May 05, 2019 11:40 am

beyou wrote:
Sun May 05, 2019 9:55 am
KandT wrote:
Sun May 05, 2019 9:40 am
ram wrote:
Sun May 05, 2019 9:03 am
I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
Please dispute this with me but if a kid can go to an Ivy League school like Harvard then I think it is worth the money. To go to a small unheard of private school they would probably be better off going to a state school.

Unless, of course they are going to Harvard and getting their degree in some obscure non paying field.
College for most people is NOT career training. It is about growing up, and demonstrating ability to be organized hard working people. You can get that basic benefit at most colleges.
As someone with a marketing degree and a logistics minor I wish I had a license degree like accounting or an engineering degree that separates me from the crowd. A marketing degree is about worthless so with all do respect, I agree college is about more than the courses but given the option leave with a valuable degree rather than telling an employer that you are all grown up now!

Grt2bOutdoors
Posts: 21495
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: College Expenses

Post by Grt2bOutdoors » Sun May 05, 2019 11:48 am

KlangFool wrote:
Sun May 05, 2019 11:04 am
TomatoTomahto wrote:
Sun May 05, 2019 10:26 am
KlangFool wrote:
Sun May 05, 2019 10:04 am
<< if a kid can go to an Ivy League school like Harvard then I think it is worth the money.>>
I disagreed. It does not make any sense to pay that much for an undergraduate degree. If the kid is good, he/she can get the employer to pay for the Harvard MBA. If the kid is not good enough to get the employer to pay for the Harvard MBA, why spend the money for the Harvard undergraduate degree?
This is a perennial discussion, so maybe I'll try a different tack this time.

Every time I mention my one data point (a son whose ROI is a slam dunk), someone will point out that my son is extraordinary, an outlier, an exception, etc. While that's ego gratifying to a parent, I think that 95% of the kids who are accepted at HYPMS are extraordinary, and that furthermore, they will get an extraordinary education there, will form extraordinary networks, etc.

I also think that at schools somewhat lower in rank than HYPMS, say UChicago or Cornell, a large percentage of students will be extraordinary, and those students will benefit from the opportunity.

To KF's particular example, for many students, especially STEM students, 4 years is the optimal investment in undergraduate. My son happened to pick up an MS in the process, but had he not, I think he would have chosen not to get an advanced degree. The economics argue against it. He, and many of his colleagues, plan on possibly going back to get a PhD "after they get their nestegg."
TomatoTomahto,

1) I am Asian. Asians are overly represented in the HYPMS. So, the value of HYPMS for Asians is less.

<<, a large percentage of students will be extraordinary,>>
<< they will get an extraordinary education there, will form extraordinary networks, etc.>>

2) Which I disagree. In a subset of career, it might help. There are more ordinary people out there than extraordinary people. The ability to socialize and work with ordinary people is a lot more useful than extraordinary people. The in-state flagship state public university has better diversity and representation of the society as a whole.

3) I live in an affluent neighborhood with an annual median household income of 150K. If my kids go to HYPMS, they will be studying with the same group of people in their neighborhood. There is no life-changing experience here.

<<will form extraordinary networks, etc.>>

4) Versus people that they grew up in the same neighborhood since elementary school? There is no new social network for people in an affluent neighborhood.

KlangFool
I didn't attend a HPYMS, but for those I know who did, what it did buy them besides the education is access. Access to a well developed and connected alumni network, access to opportunities that will not be extended to those who attend other academic institutions, as highly ranked as they may be. Maybe it's not talked about widely, but alumni networks can open doors, whereas those like myself who attended little known city colleges for undergrad have to work much smarter and harder to get those same doors open. Don't get me wrong, you can be successful in life - go to college, don't go to college, but if you want to know the difference between a HYPMS and everyone else, this should be one of the deciding factors to take into account. But first you have to get in - this year's freshman Princeton class the admittance rate of all applicants was only 4%. Think about that - everyone who applied was the best in their class, highest ranked, high achievers, high everything - yet only 4% are admitted. But if you do get in, saying "no" could very well be a big mistake. The value is there, irrespective of nationality.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 12:12 pm

Grt2bOutdoors wrote:
Sun May 05, 2019 11:48 am
KlangFool wrote:
Sun May 05, 2019 11:04 am
TomatoTomahto wrote:
Sun May 05, 2019 10:26 am
KlangFool wrote:
Sun May 05, 2019 10:04 am
<< if a kid can go to an Ivy League school like Harvard then I think it is worth the money.>>
I disagreed. It does not make any sense to pay that much for an undergraduate degree. If the kid is good, he/she can get the employer to pay for the Harvard MBA. If the kid is not good enough to get the employer to pay for the Harvard MBA, why spend the money for the Harvard undergraduate degree?
This is a perennial discussion, so maybe I'll try a different tack this time.

Every time I mention my one data point (a son whose ROI is a slam dunk), someone will point out that my son is extraordinary, an outlier, an exception, etc. While that's ego gratifying to a parent, I think that 95% of the kids who are accepted at HYPMS are extraordinary, and that furthermore, they will get an extraordinary education there, will form extraordinary networks, etc.

I also think that at schools somewhat lower in rank than HYPMS, say UChicago or Cornell, a large percentage of students will be extraordinary, and those students will benefit from the opportunity.

To KF's particular example, for many students, especially STEM students, 4 years is the optimal investment in undergraduate. My son happened to pick up an MS in the process, but had he not, I think he would have chosen not to get an advanced degree. The economics argue against it. He, and many of his colleagues, plan on possibly going back to get a PhD "after they get their nestegg."
TomatoTomahto,

1) I am Asian. Asians are overly represented in the HYPMS. So, the value of HYPMS for Asians is less.

<<, a large percentage of students will be extraordinary,>>
<< they will get an extraordinary education there, will form extraordinary networks, etc.>>

2) Which I disagree. In a subset of career, it might help. There are more ordinary people out there than extraordinary people. The ability to socialize and work with ordinary people is a lot more useful than extraordinary people. The in-state flagship state public university has better diversity and representation of the society as a whole.

3) I live in an affluent neighborhood with an annual median household income of 150K. If my kids go to HYPMS, they will be studying with the same group of people in their neighborhood. There is no life-changing experience here.

<<will form extraordinary networks, etc.>>

4) Versus people that they grew up in the same neighborhood since elementary school? There is no new social network for people in an affluent neighborhood.

KlangFool
I didn't attend a HPYMS, but for those I know who did, what it did buy them besides the education is access. Access to a well developed and connected alumni network, access to opportunities that will not be extended to those who attend other academic institutions, as highly ranked as they may be. Maybe it's not talked about widely, but alumni networks can open doors, whereas those like myself who attended little known city colleges for undergrad have to work much smarter and harder to get those same doors open.
Grt2bOutdoors,

Which may be a big deal for those do not have access to that social network before they attended the HPYMS. But, for those that have access before they attended college, it may not matter.

KlangFool

HereToLearn
Posts: 558
Joined: Sat Mar 17, 2018 5:53 pm

Re: College Expenses

Post by HereToLearn » Sun May 05, 2019 12:27 pm

KlangFool wrote:
Sun May 05, 2019 11:04 am
TomatoTomahto wrote:
Sun May 05, 2019 10:26 am
KlangFool wrote:
Sun May 05, 2019 10:04 am
<< if a kid can go to an Ivy League school like Harvard then I think it is worth the money.>>
I disagreed. It does not make any sense to pay that much for an undergraduate degree. If the kid is good, he/she can get the employer to pay for the Harvard MBA. If the kid is not good enough to get the employer to pay for the Harvard MBA, why spend the money for the Harvard undergraduate degree?
This is a perennial discussion, so maybe I'll try a different tack this time.

Every time I mention my one data point (a son whose ROI is a slam dunk), someone will point out that my son is extraordinary, an outlier, an exception, etc. While that's ego gratifying to a parent, I think that 95% of the kids who are accepted at HYPMS are extraordinary, and that furthermore, they will get an extraordinary education there, will form extraordinary networks, etc.

I also think that at schools somewhat lower in rank than HYPMS, say UChicago or Cornell, a large percentage of students will be extraordinary, and those students will benefit from the opportunity.

To KF's particular example, for many students, especially STEM students, 4 years is the optimal investment in undergraduate. My son happened to pick up an MS in the process, but had he not, I think he would have chosen not to get an advanced degree. The economics argue against it. He, and many of his colleagues, plan on possibly going back to get a PhD "after they get their nestegg."
TomatoTomahto,

1) I am Asian. Asians are overly represented in the HYPMS. So, the value of HYPMS for Asians is less.

<<, a large percentage of students will be extraordinary,>>
<< they will get an extraordinary education there, will form extraordinary networks, etc.>>

2) Which I disagree. In a subset of career, it might help. There are more ordinary people out there than extraordinary people. The ability to socialize and work with ordinary people is a lot more useful than extraordinary people. The in-state flagship state public university has better diversity and representation of the society as a whole.

3) I live in an affluent neighborhood with an annual median household income of 150K. If my kids go to HYPMS, they will be studying with the same group of people in their neighborhood. There is no life-changing experience here.

<<will form extraordinary networks, etc.>>

4) Versus people that they grew up in the same neighborhood since elementary school? There is no new social network for people in an affluent neighborhood.

KlangFool
Klang,

I live in a town with a median household income over $200K. There absolutely is a new social network at HYPMS. My children have been exposed to so many new people and ideas at college.

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 12:32 pm

HereToLearn wrote:
Sun May 05, 2019 12:27 pm
KlangFool wrote:
Sun May 05, 2019 11:04 am
TomatoTomahto wrote:
Sun May 05, 2019 10:26 am
KlangFool wrote:
Sun May 05, 2019 10:04 am
<< if a kid can go to an Ivy League school like Harvard then I think it is worth the money.>>
I disagreed. It does not make any sense to pay that much for an undergraduate degree. If the kid is good, he/she can get the employer to pay for the Harvard MBA. If the kid is not good enough to get the employer to pay for the Harvard MBA, why spend the money for the Harvard undergraduate degree?
This is a perennial discussion, so maybe I'll try a different tack this time.

Every time I mention my one data point (a son whose ROI is a slam dunk), someone will point out that my son is extraordinary, an outlier, an exception, etc. While that's ego gratifying to a parent, I think that 95% of the kids who are accepted at HYPMS are extraordinary, and that furthermore, they will get an extraordinary education there, will form extraordinary networks, etc.

I also think that at schools somewhat lower in rank than HYPMS, say UChicago or Cornell, a large percentage of students will be extraordinary, and those students will benefit from the opportunity.

To KF's particular example, for many students, especially STEM students, 4 years is the optimal investment in undergraduate. My son happened to pick up an MS in the process, but had he not, I think he would have chosen not to get an advanced degree. The economics argue against it. He, and many of his colleagues, plan on possibly going back to get a PhD "after they get their nestegg."
TomatoTomahto,

1) I am Asian. Asians are overly represented in the HYPMS. So, the value of HYPMS for Asians is less.

<<, a large percentage of students will be extraordinary,>>
<< they will get an extraordinary education there, will form extraordinary networks, etc.>>

2) Which I disagree. In a subset of career, it might help. There are more ordinary people out there than extraordinary people. The ability to socialize and work with ordinary people is a lot more useful than extraordinary people. The in-state flagship state public university has better diversity and representation of the society as a whole.

3) I live in an affluent neighborhood with an annual median household income of 150K. If my kids go to HYPMS, they will be studying with the same group of people in their neighborhood. There is no life-changing experience here.

<<will form extraordinary networks, etc.>>

4) Versus people that they grew up in the same neighborhood since elementary school? There is no new social network for people in an affluent neighborhood.

KlangFool
Klang,

I live in a town with a median household income over $200K. There absolutely is a new social network at HYPMS. My children have been exposed to so many new people and ideas at college.
HereToLearn,

I disagreed. For example, how many homeless people have your children met at college?

KlangFool

HereToLearn
Posts: 558
Joined: Sat Mar 17, 2018 5:53 pm

Re: College Expenses

Post by HereToLearn » Sun May 05, 2019 12:36 pm

KlangFool wrote:
Sun May 05, 2019 12:32 pm
HereToLearn wrote:
Sun May 05, 2019 12:27 pm
KlangFool wrote:
Sun May 05, 2019 11:04 am
TomatoTomahto wrote:
Sun May 05, 2019 10:26 am
KlangFool wrote:
Sun May 05, 2019 10:04 am
<< if a kid can go to an Ivy League school like Harvard then I think it is worth the money.>>
I disagreed. It does not make any sense to pay that much for an undergraduate degree. If the kid is good, he/she can get the employer to pay for the Harvard MBA. If the kid is not good enough to get the employer to pay for the Harvard MBA, why spend the money for the Harvard undergraduate degree?
This is a perennial discussion, so maybe I'll try a different tack this time.

Every time I mention my one data point (a son whose ROI is a slam dunk), someone will point out that my son is extraordinary, an outlier, an exception, etc. While that's ego gratifying to a parent, I think that 95% of the kids who are accepted at HYPMS are extraordinary, and that furthermore, they will get an extraordinary education there, will form extraordinary networks, etc.

I also think that at schools somewhat lower in rank than HYPMS, say UChicago or Cornell, a large percentage of students will be extraordinary, and those students will benefit from the opportunity.

To KF's particular example, for many students, especially STEM students, 4 years is the optimal investment in undergraduate. My son happened to pick up an MS in the process, but had he not, I think he would have chosen not to get an advanced degree. The economics argue against it. He, and many of his colleagues, plan on possibly going back to get a PhD "after they get their nestegg."
TomatoTomahto,

1) I am Asian. Asians are overly represented in the HYPMS. So, the value of HYPMS for Asians is less.

<<, a large percentage of students will be extraordinary,>>
<< they will get an extraordinary education there, will form extraordinary networks, etc.>>

2) Which I disagree. In a subset of career, it might help. There are more ordinary people out there than extraordinary people. The ability to socialize and work with ordinary people is a lot more useful than extraordinary people. The in-state flagship state public university has better diversity and representation of the society as a whole.

3) I live in an affluent neighborhood with an annual median household income of 150K. If my kids go to HYPMS, they will be studying with the same group of people in their neighborhood. There is no life-changing experience here.

<<will form extraordinary networks, etc.>>

4) Versus people that they grew up in the same neighborhood since elementary school? There is no new social network for people in an affluent neighborhood.

KlangFool
Klang,

I live in a town with a median household income over $200K. There absolutely is a new social network at HYPMS. My children have been exposed to so many new people and ideas at college.
HereToLearn,

I disagreed. For example, how many homeless people have your children met at college?

KlangFool
What does that have to do with anything? How many homeless people do most students meet at college? Or while living in a town with HH income above $150K?

User avatar
TomatoTomahto
Posts: 9547
Joined: Mon Apr 11, 2011 1:48 pm

Re: College Expenses

Post by TomatoTomahto » Sun May 05, 2019 12:39 pm

OP, I apologize. It’s become the same old same old. For my part in that, I’m sorry.
Okay, I get it; I won't be political or controversial. The Earth is flat.

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 12:45 pm

HereToLearn wrote:
Sun May 05, 2019 12:36 pm
KlangFool wrote:
Sun May 05, 2019 12:32 pm
HereToLearn wrote:
Sun May 05, 2019 12:27 pm
KlangFool wrote:
Sun May 05, 2019 11:04 am
TomatoTomahto wrote:
Sun May 05, 2019 10:26 am

This is a perennial discussion, so maybe I'll try a different tack this time.

Every time I mention my one data point (a son whose ROI is a slam dunk), someone will point out that my son is extraordinary, an outlier, an exception, etc. While that's ego gratifying to a parent, I think that 95% of the kids who are accepted at HYPMS are extraordinary, and that furthermore, they will get an extraordinary education there, will form extraordinary networks, etc.

I also think that at schools somewhat lower in rank than HYPMS, say UChicago or Cornell, a large percentage of students will be extraordinary, and those students will benefit from the opportunity.

To KF's particular example, for many students, especially STEM students, 4 years is the optimal investment in undergraduate. My son happened to pick up an MS in the process, but had he not, I think he would have chosen not to get an advanced degree. The economics argue against it. He, and many of his colleagues, plan on possibly going back to get a PhD "after they get their nestegg."
TomatoTomahto,

1) I am Asian. Asians are overly represented in the HYPMS. So, the value of HYPMS for Asians is less.

<<, a large percentage of students will be extraordinary,>>
<< they will get an extraordinary education there, will form extraordinary networks, etc.>>

2) Which I disagree. In a subset of career, it might help. There are more ordinary people out there than extraordinary people. The ability to socialize and work with ordinary people is a lot more useful than extraordinary people. The in-state flagship state public university has better diversity and representation of the society as a whole.

3) I live in an affluent neighborhood with an annual median household income of 150K. If my kids go to HYPMS, they will be studying with the same group of people in their neighborhood. There is no life-changing experience here.

<<will form extraordinary networks, etc.>>

4) Versus people that they grew up in the same neighborhood since elementary school? There is no new social network for people in an affluent neighborhood.

KlangFool
Klang,

I live in a town with a median household income over $200K. There absolutely is a new social network at HYPMS. My children have been exposed to so many new people and ideas at college.
HereToLearn,

I disagreed. For example, how many homeless people have your children met at college?

KlangFool
What does that have to do with anything? How many homeless people do most students meet at college? Or while living in a town with HH income above $150K?
HereToLearn,

Bingo! My daughter studied at VCU of Richmond, VA. She had to walk past many homeless people on her way to classes. It was a life-changing experience for her.

KlangFool

User avatar
TomatoTomahto
Posts: 9547
Joined: Mon Apr 11, 2011 1:48 pm

Re: College Expenses

Post by TomatoTomahto » Sun May 05, 2019 12:48 pm

HereToLearn,

Bingo! My daughter studied at VCU of Richmond, VA. She had to walk past many homeless people on her way to classes. It was a life-changing experience for her.

KlangFool
Have you been to New Haven lately? Plenty of homeless people on Yale campus also, not that it’s a selling point.
Okay, I get it; I won't be political or controversial. The Earth is flat.

HIinvestor
Posts: 1833
Joined: Tue Apr 08, 2014 3:23 am

Re: College Expenses

Post by HIinvestor » Sun May 05, 2019 1:03 pm

Beware — if your older child gets into private U with s nice merit package, younger child may also wish to apply and join older child and may get NO money so you are full pay. This happened to both our family and s good friend. It was a very expensive surprise to both of us! Fortunately both families were able to work things out.

Private Us are running pretty expensive, in general but may offer good merit aid.

We were only able to save enough for both to live in dorm and attend state U in our Coverdell IRA. Older child got >50% tuition merit award to private U. He attended. Younger child wanted to apply to transfer there, do we consented and she was admitted with no merit so we were full pay for her. Ouch!

We paid via the the monthly payment system for a small fee so we could stretch payments over 10 months instead of just 2 huge payments. It was a huge relief when they were done!

HereToLearn
Posts: 558
Joined: Sat Mar 17, 2018 5:53 pm

Re: College Expenses

Post by HereToLearn » Sun May 05, 2019 1:07 pm

TomatoTomahto wrote:
Sun May 05, 2019 12:48 pm
HereToLearn,

Bingo! My daughter studied at VCU of Richmond, VA. She had to walk past many homeless people on her way to classes. It was a life-changing experience for her.

KlangFool
Have you been to New Haven lately? Plenty of homeless people on Yale campus also, not that it’s a selling point.
I don't think that walking past homeless people is the same as meeting them. I walked past MANY homeless people when living in NYC years back.

How was walking past life-changing for your daughter?

We encountered homeless people when touring colleges in Berkeley, Evanston and Pittsburgh, and I am sure they are in Cambridge in addition to New Haven. I still do not see how the presence of homeless near a college campus has anything to do with the expanded 'social network' of HYPSM.

Grt2bOutdoors
Posts: 21495
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: College Expenses

Post by Grt2bOutdoors » Sun May 05, 2019 1:08 pm

College model is ripe for disruption. Move everything that does not require "hands-on" learning to an online setting, cut costs by 75%. If that were to happen, maybe capital would stop being misallocated. Pipe dream, right?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 1:13 pm

Grt2bOutdoors wrote:
Sun May 05, 2019 1:08 pm
College model is ripe for disruption. Move everything that does not require "hands-on" learning to an online setting, cut costs by 75%. If that were to happen, maybe capital would stop being misallocated. Pipe dream, right?
Grt2bOutdoors,

Willing buyer, willing seller.

If folks want to pay for luxury college education, who are we to stop them? We just need to make sure that we as parents do not overpay/overspend on our children's college education.

KlangFool

bluebolt
Posts: 993
Joined: Sat Jan 14, 2017 9:01 am

Re: College Expenses

Post by bluebolt » Sun May 05, 2019 1:16 pm

Turns out it might not matter so much which school you go to unless you are black, latino, low-income, or your parents didn't go to college:

https://economix.blogs.nytimes.com/2011 ... -colleges/

"A decade ago, two economists — Stacy Dale and Alan Krueger — published a research paper arguing that elite colleges did not seem to give most graduates an earnings boost. As you might expect, the paper received a ton of attention. Ms. Dale and Mr. Krueger have just finished a new version of the study — with vastly more and better data, covering people into their 40s and 50s, as well as looking at a set of more recent college graduates — and the new version comes to the same conclusion."

"It’s important to note, though, that a few major groups did not fit the pattern: black students, Latino students, low-income students and students whose parents did not graduate from college. “For them, attending a more selective school increased earnings significantly,” Mr. Krueger has written. Why? Perhaps they benefit from professional connections they would not otherwise have. Perhaps they acquire habits or skills that middle-class and affluent students have already acquired in high school or at home."

camper1
Posts: 80
Joined: Wed Jan 01, 2014 12:39 pm

Re: College Expenses

Post by camper1 » Sun May 05, 2019 1:20 pm

OP, we did the same thing- planned on cost of in-state tuition and told our kids that they are welcome to attend other schools as long as they can afford the additional costs through scholarships, grants, etc...

Our 3 oldest boys chose to attend local state school. Our daughter had her heart set on a local private school with a "sticker price" 4 times the state school. They initially offered a grant cutting the cost in half and continually sent emails asking her to commit. She responded letting them know that she could only afford to go to the state school and would need additional grants to change her mind. On the day before the required commitment day to accept the grant offers, they emailed and said they "were able to find" additional money and matched the state school tuition! I think, at least in this case, private schools are very willing to work with students/families who are not able or willing to pay "sticker price".

anil686
Posts: 938
Joined: Thu May 08, 2014 12:33 pm

Re: College Expenses

Post by anil686 » Sun May 05, 2019 1:30 pm

Just responding to the cost of the education being proportional to the value of the education piece - recommend reading David and Goliath by Malcolm Gladwell and How to raise an Adult - emphasis on the college prep area of that book - both were eye opening on:

a) relative deprivation theory (Gladwell) in which we often take our self assessment not from the *objective* but from the relative standing amongst others (in this case other super talented students with drive and motivation as well). Hence you can be exceptional in an area nationally and go to an Ivy league school where your score is really still outstanding but is in the bottom third of entrants. There is a pretty good chance that a student may develop an assessment of themselves as not good in a certain area because they are not as good as their peers despite them being better than maybe 95% of all students in that area and change their major.

b) Many of the statistics of the most selective colleges and universities have not changed in 30 years - the only things that have changed are the number of applications being submitted - not because they are valid applications, but rather because many counselors may tell students/parents the chance to get into prestigious college x,y or z is 5-10% and since the application barrier is not high - they do that. This is fundamentally different than in the 1970s and 1980s where the difficulty in applying to multiple colleges and increased costs of doing so seemed to limit applications to such selective schools. Of course, since selectivity is one of the metrics used to determine how good a school is, colleges are happy to engage in encouraging such applications whether warranted or not.

c) much of the comments in this thread are fairly ancedotal - when research is used to look at raw numbers, it is clear many of the advantages discussed here have failed to materialize over flagship state universities and lesser known, but academically rigorous, small colleges. Why that is may be a topic for discussion, but clearly it is not a straight line - prestigious university to unbridled opportunities and success.

JMO though...

dannyboy
Posts: 35
Joined: Tue May 17, 2016 10:51 pm

Re: College Expenses

Post by dannyboy » Sun May 05, 2019 1:40 pm

My two cents as a college student who (somewhat recently) watched all his friends go through the college application process: if you're rich, pay for your kid's college. If you're not rich, and your child is smart enough to get into a good university, they will get aid anyway.

If you have a smart child and your family doesn't save for full college costs or isn't willing to pay them, your kid will be left in a lurch. All financial aid depends on need (which your child won't have), and most merit aid is also somewhat needs-based, so 99% chance your kid will get no third-party financial support. This leaves them with two options: 1). go to a "top-tier" school they worked hard to get into but face unnecessary crippling debt; 2). go to a "low-tier" school with fewer opportunities because it's the only place they can afford.

Anecdotal example: a close friend of mine (who is an excellent student) comes from a wealthy family, who sent one child to a four-year private college and could afford to do it again. However, they told their son they would only pay $20k a year for school. When he got accepted into "top" schools (UCLA, Northwestern) and was given neither financial nor merit aid, he was faced with $150k+ in student loans if he chose the schools he really wanted. In the end, he chose to attend a "bottom-tier" state university (think Animal House) on a full ride, because it's the only place that offered him aid. To be clear, I have no problem with so-called "low-tier" colleges since much of the rankings system is nonsense, but this brilliant friend is unhappy at his school and finds his cohort unintellectual. He has asked me multiple times about transferring to a more "well renowned" university, where his fellow students will be more motivated.

As a disclaimer, I'm currently attending a "well renowned" university with my parents paying full cost. I turned down a full ride at my state university because I wanted to chase better career prospects, more accomplished professors, and motivated students. Is my experience worth $250k? Who knows. But my parents were generous enough to pay it, and I'm extremely happy surrounded by brilliant people. I have not questioned my decision once since arriving here.

TLDR: if your child is smart and will get into good schools, pay for their college if you can; otherwise, they're more likely to end up unhappy.

inbox788
Posts: 6661
Joined: Thu Mar 15, 2012 5:24 pm

Re: College Expenses

Post by inbox788 » Sun May 05, 2019 1:48 pm

HIinvestor wrote:
Sun May 05, 2019 1:03 pm
Beware — if your older child gets into private U with s nice merit package, younger child may also wish to apply and join older child and may get NO money so you are full pay. This happened to both our family and s good friend. It was a very expensive surprise to both of us! Fortunately both families were able to work things out.

Private Us are running pretty expensive, in general but may offer good merit aid.
Never thought about that, but that's probably by design. I wonder if more expensive schools target wealthier families with multiple children specifically for this effect. A business would absolutely take advantage of this type of opportunity and in today's data intensive environment track the success. If you're granting "aid" to 2 similar students, but one is a single child while another has 3 younger siblings, do you discriminate against the single child?

Repeat business is good and you want to target customers with more purchase power.

And once you've hooked the customer, you don't need to give them additional new customer incentives, which leads some companies to treat new customers better than old ones.

And they say education isn't a business. At some levels it is, just not that blatant.

NotWhoYouThink
Posts: 2755
Joined: Fri Dec 26, 2014 4:19 pm

Re: College Expenses

Post by NotWhoYouThink » Sun May 05, 2019 1:51 pm

dannyboy wrote:
Sun May 05, 2019 1:40 pm
My two cents as a college student who (somewhat recently) watched all his friends go through the college application process: if you're rich, pay for your kid's college. If you're not rich, and your child is smart enough to get into a good university, they will get aid anyway.

If you have a smart child and your family doesn't save for full college costs or isn't willing to pay them, your kid will be left in a lurch. All financial aid depends on need (which your child won't have), and most merit aid is also somewhat needs-basedno, it isn't, so 99% chance your kid will get no third-party financial support. This leaves them with two options: 1). go to a "top-tier" school they worked hard to get into but face unnecessary crippling debt; 2). go to a "low-tier" school with fewer opportunities because it's the only place they can afford.

Anecdotal example: a close friend of mine (who is an excellent student) comes from a wealthy family, who sent one child to a four-year private college and could afford to do it again. However, they told their son they would only pay $20k a year for school. When he got accepted into "top" schools (UCLA, Northwestern) and was given neither financial nor merit aid, he was faced with $150k+ in student loans if he chose the schools he really wanted. No, he wasn't. Students can't take out loans that big without co-signers, which is a good thing. In the end, he chose to attend a "bottom-tier" state university (think Animal House) on a full ride, because it's the only place that offered him aid. To be clear, I have no problem with so-called "low-tier" colleges since much of the rankings system is nonsense, but this brilliant friend is unhappy at his school and finds his cohort unintellectual. He has asked me multiple times about transferring to a more "well renowned" university, where his fellow students will be more motivated.

As a disclaimer, I'm currently attending a "well renowned" university with my parents paying full cost. I turned down a full ride at my state university because I wanted to chase better career prospects, more accomplished professors, and motivated students. Is my experience worth $250k? Who knows. But my parents were generous enough to pay it, and I'm extremely happy surrounded by brilliant people. I have not questioned my decision once since arriving here.

TLDR: if your child is smart and will get into good schools, pay for their college if you can; otherwise, they're more likely to end up unhappy.Not necessarily. Professors at all schools will work with students who show interest and promise. Opportunities are out there. Moping and self-pity won't help anyone find them.

KlangFool
Posts: 14167
Joined: Sat Oct 11, 2008 12:35 pm

Re: College Expenses

Post by KlangFool » Sun May 05, 2019 1:56 pm

dannyboy wrote:
Sun May 05, 2019 1:40 pm

As a disclaimer, I'm currently attending a "well renowned" university with my parents paying full cost. I turned down a full ride at my state university because I wanted to chase better career prospects, more accomplished professors, and motivated students. Is my experience worth $250k? Who knows. But my parents were generous enough to pay it, and I'm extremely happy surrounded by brilliant people. I have not questioned my decision once since arriving here.

TLDR: if your child is smart and will get into good schools, pay for their college if you can; otherwise, they're more likely to end up unhappy.
dannyboy,

<< Is my experience worth $250k? Who knows.>>

It costs you nothing. Hence, it is a no-brainer for you. But, if you were given the choice of receiving the full 250K from your parent instead of going to this school, will you make the same decision?

KlangFool

Topic Author
KandT
Posts: 130
Joined: Sun Mar 26, 2017 2:32 am

Re: College Expenses

Post by KandT » Sun May 05, 2019 1:59 pm

Grt2bOutdoors wrote:
Sun May 05, 2019 1:08 pm
College model is ripe for disruption. Move everything that does not require "hands-on" learning to an online setting, cut costs by 75%. If that were to happen, maybe capital would stop being misallocated. Pipe dream, right?
+1 On ripe for disruption. Probably one of the biggest industries that will be disrupted in the next decade or two.

HereToLearn
Posts: 558
Joined: Sat Mar 17, 2018 5:53 pm

Re: College Expenses

Post by HereToLearn » Sun May 05, 2019 2:00 pm

inbox788 wrote:
Sun May 05, 2019 1:48 pm
HIinvestor wrote:
Sun May 05, 2019 1:03 pm
Beware — if your older child gets into private U with s nice merit package, younger child may also wish to apply and join older child and may get NO money so you are full pay. This happened to both our family and s good friend. It was a very expensive surprise to both of us! Fortunately both families were able to work things out.

Private Us are running pretty expensive, in general but may offer good merit aid.
Never thought about that, but that's probably by design. I wonder if more expensive schools target wealthier families with multiple children specifically for this effect. A business would absolutely take advantage of this type of opportunity and in today's data intensive environment track the success. If you're granting "aid" to 2 similar students, but one is a single child while another has 3 younger siblings, do you discriminate against the single child?

Repeat business is good and you want to target customers with more purchase power.

And once you've hooked the customer, you don't need to give them additional new customer incentives, which leads some companies to treat new customers better than old ones.

And they say education isn't a business. At some levels it is, just not that blatant.
I am guessing here, but I don't know that colleges are thinking far enough ahead to rope in the second or third child. Many are just struggling to fill seats today so that they can keep the doors open another year. Also, while they can make assumptions about the academic stats of the second child, they don't know if that child is a stronger or weaker student.

I agree that schools target families who would otherwise be full-pay by offering discounts off the rack rate, knowing that even if they offer $20K, that family will be able to pay the remaining $50K, and will be thrilled at the thought of a $20K merit award, which will then be referred to as a merit scholarship.

It is prudent to be aware that merit aid will not be awarded to all and that awards change from one graduating year to the next. As in, the merit award that was available in 2019 may not be available for identical stats in 2021. The school's institutional priorities may have changed in the interim. Understanding this before the first child embarks on his college search is important so that the family can communicate ability to pay to each child.

inbox788
Posts: 6661
Joined: Thu Mar 15, 2012 5:24 pm

Re: College Expenses

Post by inbox788 » Sun May 05, 2019 2:07 pm

KandT wrote:
Sat May 04, 2019 10:02 pm
We have a 7 and 12 year old with roughly $80K and $90K put away so far for college.

My question - How do I "guess" REAL college expenses? I know the costs of the state schools.
You're in good financial shape, so I assume need based scholarships are going to be ruled out. I wouldn't count on merit based scholarships.

Since you have 2 kids in college, you can cascade the funds, overfunding the older student and any excess can be used by the younger one.

snowman
Posts: 970
Joined: Thu Jan 31, 2013 12:59 pm

Re: College Expenses

Post by snowman » Sun May 05, 2019 2:49 pm

KandT wrote:
Sat May 04, 2019 10:02 pm
We have a 7 and 12 year old with roughly $80K and $90K put away so far for college.

My question - How do I "guess" REAL college expenses? I know the costs of the state schools.

Private schools seem to have an "advertised rate" of around $60-$75K/year but of my colleagues with kids in those schools it seems no one is paying sticker. Quite frankly it seems like a scam in that if you handled your money well and have 529's they will be happy to let you in and you can pay more. If not then they are happy to let you in and you can pay less.

I am considering giving each kid $125,000 which is about enough for our state schools and let them kick in a little. If they want to go to a private school they will have incentive to seek out al the school "scholarship" money and discounts they can find.

Thanks!
Estimating "real" college costs is actually not hard since NPCs became mandatory. Unless you have specific situation like self-employment or divorced parents, those NPCs are quite accurate. You can plug in your real numbers, plus you can play with them based on certain assumptions like change in salary, savings, unemployment, HE, etc. That should be your baseline. Yes, the cost will increase annually, but so will your income and savings (hopefully).

Investigate any and all scholarship opportunities. Many states are trying to retain their best students by showering them with merit (and sometimes need) based scholarships. Many public flagships will offer additional merit scholarships to STEM majors, mostly engineering. I would not overlook NMF scholarships.

Ultimately, your kids' award will depend on many variables - your income and savings, kid's income and savings, potentially HE, HS grades, test scores, extracurricular activities, essays, intended major, etc. Your actual OOP cost can range from zero to $300K, so it's anyone's guess as to what the actual number is going to be. Having your kids excel in HS will provide you with most options. That coupled with your current savings gives you solid foundation.

Enjoy the ride while it lasts. They grow up fast and will leave the nest before you know it.

Grt2bOutdoors
Posts: 21495
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: College Expenses

Post by Grt2bOutdoors » Sun May 05, 2019 4:06 pm

KandT wrote:
Sun May 05, 2019 1:59 pm
Grt2bOutdoors wrote:
Sun May 05, 2019 1:08 pm
College model is ripe for disruption. Move everything that does not require "hands-on" learning to an online setting, cut costs by 75%. If that were to happen, maybe capital would stop being misallocated. Pipe dream, right?
+1 On ripe for disruption. Probably one of the biggest industries that will be disrupted in the next decade or two.
I hope it disrupts in the next decade or less. Academia has gotten way out of control.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

stoptothink
Posts: 6528
Joined: Fri Dec 31, 2010 9:53 am

Re: College Expenses

Post by stoptothink » Sun May 05, 2019 5:02 pm

bluebolt wrote:
Sun May 05, 2019 1:16 pm
Turns out it might not matter so much which school you go to unless you are black, latino, low-income, or your parents didn't go to college:

https://economix.blogs.nytimes.com/2011 ... -colleges/

"A decade ago, two economists — Stacy Dale and Alan Krueger — published a research paper arguing that elite colleges did not seem to give most graduates an earnings boost. As you might expect, the paper received a ton of attention. Ms. Dale and Mr. Krueger have just finished a new version of the study — with vastly more and better data, covering people into their 40s and 50s, as well as looking at a set of more recent college graduates — and the new version comes to the same conclusion."

"It’s important to note, though, that a few major groups did not fit the pattern: black students, Latino students, low-income students and students whose parents did not graduate from college. “For them, attending a more selective school increased earnings significantly,” Mr. Krueger has written. Why? Perhaps they benefit from professional connections they would not otherwise have. Perhaps they acquire habits or skills that middle-class and affluent students have already acquired in high school or at home."
That's interesting data. FWIW, myself and my siblings mark all the boxes for individuals who would benefit from "elite" universities: latino, very low income, parents did not graduate from high school. 5 of 7 are college graduates (the youngest is a freshman now, oldest got a GED and went into military), and 3 of us have graduate degrees. The one who has a CV littered with "elite" universities (Brown, Oxford, NYU) is, by a huge margin, the least professionally successful.

Topic Author
KandT
Posts: 130
Joined: Sun Mar 26, 2017 2:32 am

Re: College Expenses

Post by KandT » Sun May 05, 2019 5:26 pm

stoptothink wrote:
Sun May 05, 2019 5:02 pm
bluebolt wrote:
Sun May 05, 2019 1:16 pm
Turns out it might not matter so much which school you go to unless you are black, latino, low-income, or your parents didn't go to college:

https://economix.blogs.nytimes.com/2011 ... -colleges/

"A decade ago, two economists — Stacy Dale and Alan Krueger — published a research paper arguing that elite colleges did not seem to give most graduates an earnings boost. As you might expect, the paper received a ton of attention. Ms. Dale and Mr. Krueger have just finished a new version of the study — with vastly more and better data, covering people into their 40s and 50s, as well as looking at a set of more recent college graduates — and the new version comes to the same conclusion."

"It’s important to note, though, that a few major groups did not fit the pattern: black students, Latino students, low-income students and students whose parents did not graduate from college. “For them, attending a more selective school increased earnings significantly,” Mr. Krueger has written. Why? Perhaps they benefit from professional connections they would not otherwise have. Perhaps they acquire habits or skills that middle-class and affluent students have already acquired in high school or at home."
That's interesting data. FWIW, myself and my siblings mark all the boxes for individuals who would benefit from "elite" universities: latino, very low income, parents did not graduate from high school. 5 of 7 are college graduates (the youngest is a freshman now, oldest got a GED and went into military), and 3 of us have graduate degrees. The one who has a CV littered with "elite" universities (Brown, Oxford, NYU) is, by a huge margin, the least professionally successful.
I believe that in the end it is GRIT and determination along with a distinct and focussed vision that will cause you to succeed. No, going to an elite university doesn't do it for you but it don't hurt neither. (Purposeful use of poor grammar there :wink: )

User avatar
beyou
Posts: 2844
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: College Expenses

Post by beyou » Sun May 05, 2019 5:51 pm

KandT wrote:
Sun May 05, 2019 11:40 am
beyou wrote:
Sun May 05, 2019 9:55 am
KandT wrote:
Sun May 05, 2019 9:40 am
ram wrote:
Sun May 05, 2019 9:03 am
I paid the full "advertised rate" at Harvard for my daughter.
My son attended Vanderbilt University on full tuition scholarship (merit based). I only paid for room and board. This turned out to be cheaper than the instate premier school.
Please dispute this with me but if a kid can go to an Ivy League school like Harvard then I think it is worth the money. To go to a small unheard of private school they would probably be better off going to a state school.

Unless, of course they are going to Harvard and getting their degree in some obscure non paying field.
College for most people is NOT career training. It is about growing up, and demonstrating ability to be organized hard working people. You can get that basic benefit at most colleges.
As someone with a marketing degree and a logistics minor I wish I had a license degree like accounting or an engineering degree that separates me from the crowd. A marketing degree is about worthless so with all do respect, I agree college is about more than the courses but given the option leave with a valuable degree rather than telling an employer that you are all grown up now!
Well most people just dont have the skills and effort level to get an engineering degree. You have no idea how difficult it is if you have not done it. And accounting is not for everyone. Some might find it challenging or boring, and regardless, should the entire world be full of accountants ? That would devalue the degree (supply and demand imbalance). You listed among the very few college degrees that have any direct career training aspect to them. So are you saying colleges should eliminate all other majors ? Do you recommend those that do not major in engineering or accounting just not attend college ?

User avatar
beyou
Posts: 2844
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: College Expenses

Post by beyou » Sun May 05, 2019 6:08 pm

Son 1 transfered from one of our highly regarded public schools to an Ivy. The peers were 100% better influence and competition at the Ivy. The professors were top academics in their field at the Ivy, part time adjuncts who could not answer simple questions at the public school. Extra curricular opportunities were endless at the Ivy, very limited at the public u. Health center with top quality medical care at the Ivy, not even a first aid kit at the local public uni. Broken elevators to get to classes at the public uni. Amazing cafeteria with healthy food options at the Ivy, a vending machine and fast food at the public uni. I know some public schools are excellent, but the best of them can be very difficult to gain attendance. So go to the best school admitted (if you can afford). But many colleges are terrible, and the lowest cost option may be so for a reason. Our lousy public uni has a good “reputation” and gave my son full tuition, and it was worth what we paid.

Son 2 went to top private tech school. Took a required science course over the summer at a local comm college. The “professor” was like a high school teacher. The course was the easiest course he had in college, a course that would be challenging back at his own school. He learned nothing and got a good grade.

You get what you pay for, or the fin aid office pays for, if you can’t afford to pay. Arguing it is not “worth it” is like arguing that your Kia is just as good as a Lexus. You may be able to get to the supermarket in your Kia, but they are NOT the same, and some people find a Lexus worth it.

NJdad6
Posts: 196
Joined: Thu Mar 23, 2017 8:51 am

Re: College Expenses

Post by NJdad6 » Sun May 05, 2019 6:30 pm

inbox788 wrote:
Sun May 05, 2019 2:07 pm
KandT wrote:
Sat May 04, 2019 10:02 pm
We have a 7 and 12 year old with roughly $80K and $90K put away so far for college.

My question - How do I "guess" REAL college expenses? I know the costs of the state schools.
You're in good financial shape, so I assume need based scholarships are going to be ruled out. I wouldn't count on merit based scholarships.

Since you have 2 kids in college, you can cascade the funds, overfunding the older student and any excess can be used by the younger one.
+1. Merit is great but don’t count on it. Many of the top rated private schools do not offer merit (all Ivies and Georgetown for example). Some of the college message boards are indicating that more of the top private schools are moving toward a need based only approach. With acceptance rates in the teens and below they can afford to do that.

Post Reply