High income and college costs question

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am
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High income and college costs question

Post by am » Sun Dec 01, 2019 8:53 am

My basic question is what is the probability of having to pay full sticker price for university in the 35% tax bracket for my kids? I want to go part time but am hesitant because of future college costs for my kids. My oldest has another 3 years or so before college starts.

I have a 529 but anticipate “only” having about 40k/year per kid in there. This would cover our state university but come short of many private schools. I am on track with retirement savings,

Say sticker price + living expenses 80k. Will I have to come up with 40k+/yr/kid on top of 529 for most private schools or is it reasonable to expect my kids get some sort of scholarships or low interest loans? How about if my kids are good but not great students? Would they have to go to low tier schools to have any chance of scholarship or aid?

livesoft
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Re: High income and college costs question

Post by livesoft » Sun Dec 01, 2019 9:00 am

I can't say if your child will get scholarships, but I can say that you will pay full sticker price and will receive no financial aid.

OTOH, at this stage of your life, your net worth probably went up by more than half-a-million dollars in 2019, so you can easily afford it. After all, one can pay college expenses from other sources besides 529 plans.

For more details, there are web sites that let you fill out a trial FAFSA and tell you your expected family contribution (EFC).
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HoosierJim
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Re: High income and college costs question

Post by HoosierJim » Sun Dec 01, 2019 9:24 am

There is a town in Indiana that provides tuition to all residents that graduate HS with certain conditions. I looked through the requirements and don't see any income restrictions.

In some states, your children can qualify for admission to state schools by certain HS performance.

Or go part time, reduce your income, and send them to Harvard
Families with incomes from $65,000 to $150,000 pay between zero and 10 percent of their income. This means that, for 90 percent of families earning less than $150,000, a Harvard education is competitive with or less expensive than a public university in a student’s home state. Harvard stresses that most of the students qualifying for financial aid (about 60 percent of undergraduates) also receive travel allowances to keep them connected with home. Harvard also points out that a quarter of its current students come from families with less than $80,000 in annual income.
We paid full fare while kid's friends on financial aid didn't work in the summer, drove better cars than I do. Don't get me started.
Last edited by HoosierJim on Sun Dec 01, 2019 9:34 am, edited 5 times in total.

HereToLearn
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Re: High income and college costs question

Post by HereToLearn » Sun Dec 01, 2019 9:24 am

Following up on Livesoft's last comment...each college has its own NPC (Net Price Calculator) that will allow you to plug in the details of your family's income, assets, # of students in college, etc. This will be much more accurate than FAFSA.

If your children wish to receive merit aid, they will need to consider schools where their stats place them in the top 25% of the student body. That percentage varies across schools. They will need to be in the top 1% to receive merit aid at the handful of highly selective schools that offer it, while colleges in the bottom half of selectivity may offer a 'merit award' to almost every applicant, bringing the list price down closer to your in-state cost.

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Re: High income and college costs question

Post by livesoft » Sun Dec 01, 2019 9:32 am

One more thing,
FAFSA Says How Much You Can Pay for College. It’s Often Wrong [in the wrong direction]

Re: Harvard: The family with $50,000 of income and $10,000,000 in assets will not get a free ride at Harvard.
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Re: High income and college costs question

Post by HoosierJim » Sun Dec 01, 2019 9:50 am

livesoft wrote:
Sun Dec 01, 2019 9:32 am
Re: Harvard: The family with $50,000 of income and $10,000,000 in assets will not get a free ride at Harvard.
What if you have a $10,000,000 home paid off and no other assets?

Here is the Harvard cost estimator. "Harvard does not take the equity in your primary home into consideration"

Image
Last edited by HoosierJim on Sun Dec 01, 2019 9:58 am, edited 1 time in total.

livesoft
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Re: High income and college costs question

Post by livesoft » Sun Dec 01, 2019 9:54 am

HoosierJim wrote:
Sun Dec 01, 2019 9:50 am
What is you have a $10,000,000 home paid off and no other assets?
You won't get financial aid, but you will be able to declare bankruptcy since you will not be able to pay the utility bills much less the property taxes.

Those little cost estimators are not the final word. Their name even says so. I think most folks reading this forum at not that naive.
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HoosierJim
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Re: High income and college costs question

Post by HoosierJim » Sun Dec 01, 2019 10:09 am

livesoft wrote:
Sun Dec 01, 2019 9:54 am
HoosierJim wrote:
Sun Dec 01, 2019 9:50 am
What is you have a $10,000,000 home paid off and no other assets?
You won't get financial aid, but you will be able to declare bankruptcy since you will not be able to pay the utility bills much less the property taxes.
That's what the $149,999 in income is for.

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Re: High income and college costs question

Post by cshell2 » Sun Dec 01, 2019 10:55 am

You won't get need-based aid anywhere and scholarships are completely school dependent. Some of the most elite schools give 0 merit aid. They don't need to hang a carrot to get the top students. We're in the application/school selection process right now and I've found if you drop a tier from the school level your child can get into there is a lot more merit. DS got into one school "by the skin of his teeth" and we don't expect a dime from them, but a couple easier to get into schools are throwing money at him to try and lure him their way.

A lot of schools have automatic incoming freshman merit scholarships that are pretty straightforward (have this GPA and this test score and we'll give you this amount of money). University of Arizona, Iowa State, Alabama, Nebraska, just to to name a few of the big merit schools. There are a lot of options for 40K/year.

MathWizard
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Re: High income and college costs question

Post by MathWizard » Sun Dec 01, 2019 11:01 am

With income less than $100K, the only need based aid was subsidized loans for my kids, so I would expect you will pay full freight.

Remember that the American Opportunity tax credit would give you $2,500 per year for 4 years. (Check if there is a phase out, as I am not familiar with the 35% bracket.)

You kids can get scholarships as well.

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Re: High income and college costs question

Post by am » Sun Dec 01, 2019 11:09 am

MathWizard wrote:
Sun Dec 01, 2019 11:01 am
With income less than $100K, the only need based aid was subsidized loans for my kids, so I would expect you will pay full freight.

Remember that the American Opportunity tax credit would give you $2,500 per year for 4 years. (Check if there is a phase out, as I am not familiar with the 35% bracket.)

You kids can get scholarships as well.
Can’t use the credit above 180k.

I have read that most people don’t pay sticker price for college. I guess most people aren’t high bracket though. I assume scholarships will be for lower tier schools? If they are good (not great students) maybe scholarships at lower tiers will be off the table? But sounds like mid to high tier full price :annoyed

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Harry Livermore
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Re: High income and college costs question

Post by Harry Livermore » Sun Dec 01, 2019 11:23 am

am,
I can almost guarantee that you will not get any "need-based" aid. At the majority of private universities, you'd need poverty-level income and no assets. The Ivys and some other private schools might be different, with large endowments that let them give more aid based on income and assets. And community college, state regionals, and state flagships all offer very affordable choices, easily within your budget as indicated by the 529 balances in your OP. You might have to have a heart to heart with your kids and explain that an $80K per year school at full-pay is not realistic for your family. We did this with our kids, to manage expectations.
Your best bet to close the gap is "merit aid"... either directly from the school in the form of a "scholarship" or an "award" ("The Presidential Scholarship", "The insert-the-name-of-the-school-masot-here Award") or a private scholarship (from your employer, professional organization, union, etc.) There are very large scholarships that get thousands of applications per year, with big awards (Coca-Cola, IBM, etc.) but that's more like winning the lottery in my opinion. And a $40K gap is pretty huge. But you won't know if you don't apply!
Focus on your child's strengths as an applicant: high GPA? High test scores? Recruited athlete? College admission folks speak of the "hook"... as in, what is your child's "hook" that will make a school want your child badly enough to FIND the money in their budget to close your gap.
$40K per kid per year is a major accomplishment. We are in the same boat as you. This gives your child many choices, if you ask them to take out a small loan each year (we do this with our son, $2,500 per year so he has skin in the game) and you can also maybe cashflow a little bit. Let's say that all-in, you might have $50K per year to spend. That is better than more than half your fellow Americans... and there are many, many fine choices at that price point. You can also have the child apply at schools where full price is not reasonable just to see what, if any, aid pops up.
As others have said, try out the sample FAFSA, and the NPC at each school if you like. But my opinion is the whole admissions/ finaid formula is like an individual black box at each school, and you are better off encouraging the child to apply far and wide to many schools, to see what the results are.
Cheers
Last edited by Harry Livermore on Sun Dec 01, 2019 11:38 am, edited 1 time in total.

bwalling
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Re: High income and college costs question

Post by bwalling » Sun Dec 01, 2019 11:35 am

I'm going through this currently. My oldest is graduating a year early, and we've already been through a round of applications and conversations about costs. Most of the higher end private schools have some kind of offering along the lines of covering all of your need without the use of loans. Many of them base this on your FAFSA. If you haven't filled out a FAFSA, be prepared for that number to come back with much more financial responsibility on you than you might expect. You'd have to be as frugal as a Boglehead to have as much spare income as they'll tell you you have.

My kids have enough to get fully through state university without debt. Our current state has an excellent university, and they can get in state tuition in the state we used to live in because we're fully paid up in the prepaid program in that state. The choice to go to another school is one in which they'll have to weigh the costs and benefits knowing that they'll bear those additional costs themselves, either through needing to find awards, or through loans. It's not their first exposure to financial decision making, but it's undoubtedly a much more significant decision than they've made to this point.

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Re: High income and college costs question

Post by am » Sun Dec 01, 2019 11:46 am

bwalling wrote:
Sun Dec 01, 2019 11:35 am
I'm going through this currently. My oldest is graduating a year early, and we've already been through a round of applications and conversations about costs. :mrgreen: Most of the higher end private schools have some kind of offering along the lines of covering all of your need without the use of loans. Many of them base this on your FAFSA. If you haven't filled out a FAFSA, be prepared for that number to come back with much more financial responsibility on you than you might expect. You'd have to be as frugal as a Boglehead to have as much spare income as they'll tell you you have.

My kids have enough to get fully through state university without debt. Our current state has an excellent university, and they can get in state tuition in the state we used to live in because we're fully paid up in the prepaid program in that state. The choice to go to another school is one in which they'll have to weigh the costs and benefits knowing that they'll bear those additional costs themselves, either through needing to find awards, or through loans. It's not their first exposure to financial decision making, but it's undoubtedly a much more significant decision than they've made to this point.
“Most of the higher end private schools have some kind of offering along the lines of covering all of your need without the use of loans. ”

How does that work if your income and assets place you in top percentiles? My ”need” is more of a priority in that I’d rather save that money for my retirement than pay for a low ROI liberal arts degree.

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Harry Livermore
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Re: High income and college costs question

Post by Harry Livermore » Sun Dec 01, 2019 11:58 am

It's because your "need", as determined by the FAFSA (and the CSS/Profile, if your child's potential schools use that form) only identifies "financial need" for "need-based aid".
There is a whole world of opportunity for college students to get "merit-based" aid, also called "scholarships", most of which are awarded without regard to how much money you have.
Saying that "most" of the high end schools will meet all need may or may not be entirely accurate. I stand by my earlier advice, which is that college admission and finaid are like a black box. You can guess, but until your child applies, you won't know for sure.
Cheers

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Re: High income and college costs question

Post by KingRiggs » Sun Dec 01, 2019 12:04 pm

At your income/asset level, you will not qualify for merit scholarships. I am paying full freight at an elite private university for a kid with 35 ACTs who was valedictorian of his HS class and had tons of extracurriculars.

Meanwhile, my son’s roommate is on a full-ride ROTC scholarship. It’s a major time commitment and he’s up at 5am most days for Physical Training, but that work is worth about $300k.

On the plus side, seeing the amount of work his roommate does has made my son extremely appreciative of NOT having that time drain so he can focus on studies.

There are many ways to defray the cost of a college education.
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Re: High income and college costs question

Post by sport » Sun Dec 01, 2019 12:07 pm

You don't say what state you live in. Some states have some very fine public universities. A student can get a first-class education without breaking the bank. Within a given state, there can be a range of academic levels between the different state schools. If this is the case for your state, try to find one where the academic level matches your student's abilities. For very good students, some state schools have an "honors program" which can be on a par with the finest private schools.

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Re: High income and college costs question

Post by am » Sun Dec 01, 2019 12:11 pm

KingRiggs wrote:
Sun Dec 01, 2019 12:04 pm
At your income/asset level, you will not qualify for merit scholarships. I am paying full freight at an elite private university for a kid with 35 ACTs who was valedictorian of his HS class and had tons of extracurriculars.

Meanwhile, my son’s roommate is on a full-ride ROTC scholarship. It’s a major time commitment and he’s up at 5am most days for Physical Training, but that work is worth about $300k.

On the plus side, seeing the amount of work his roommate does has made my son extremely appreciative of NOT having that time drain so he can focus on studies.

There are many ways to defray the cost of a college education.
Confusing. Thought merit scholarships did not depend on financial assets/income? Are you talking about elite schools only?

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Harry Livermore
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Re: High income and college costs question

Post by Harry Livermore » Sun Dec 01, 2019 12:12 pm

KingRiggs,
Ouch! You are a good parent. I definitely give you a tip of the hat. I am surprised that nothing was offered for such a high performing student. Although, now that I think about it, our son, who is currently a Junior in college, applied to, and was accepted to, a very high end private in the northeast. Despite a 33 ACT and a 1460 SAT, and most other schools offering at least SOMETHING, this particular institution simply indicated that we were full-pay, as far as they were concerned.
$74K/ year in 2017 and only up since then. I explained to my son that this was not a realistic option for us at the time.
He seems very happy where he is, and is killing it with a GPA of 3.9, double major and extracurriculars.
Cheers

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Re: High income and college costs question

Post by mcraepat9 » Sun Dec 01, 2019 12:13 pm

Why the hate for liberal arts degrees?

Disclosure: Proud holder of a liberal arts degree with a six figure salary (soon to be seven figures) and plenty of money in the bank.
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Harry Livermore
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Re: High income and college costs question

Post by Harry Livermore » Sun Dec 01, 2019 12:13 pm

am wrote:
Sun Dec 01, 2019 12:11 pm
KingRiggs wrote:
Sun Dec 01, 2019 12:04 pm
At your income/asset level, you will not qualify for merit scholarships. I am paying full freight at an elite private university for a kid with 35 ACTs who was valedictorian of his HS class and had tons of extracurriculars.

Meanwhile, my son’s roommate is on a full-ride ROTC scholarship. It’s a major time commitment and he’s up at 5am most days for Physical Training, but that work is worth about $300k.

On the plus side, seeing the amount of work his roommate does has made my son extremely appreciative of NOT having that time drain so he can focus on studies.

There are many ways to defray the cost of a college education.
Confusing. Thought merit scholarships did not depend on financial assets/income? Are you talking about elite schools only?
The top privates, and the Ivys, generally do NOT give "merit based" aid.
Cheers

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Re: High income and college costs question

Post by am » Sun Dec 01, 2019 12:19 pm

mcraepat9 wrote:
Sun Dec 01, 2019 12:13 pm
Why the hate for liberal arts degrees?

Disclosure: Proud holder of a liberal arts degree with a six figure salary (soon to be seven figures) and plenty of money in the bank.
No hate. Your situation is far from typical. I have a liberal arts degree + professional degree, 300-400k in cost for a job that may start at 40-50k does not sound like a good deal to me. Without my professional degree, I probably wouldn’t be chatting with you here on bogleheads...

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Re: High income and college costs question

Post by am » Sun Dec 01, 2019 12:21 pm

Harry Livermore wrote:
Sun Dec 01, 2019 12:13 pm
am wrote:
Sun Dec 01, 2019 12:11 pm
KingRiggs wrote:
Sun Dec 01, 2019 12:04 pm
At your income/asset level, you will not qualify for merit scholarships. I am paying full freight at an elite private university for a kid with 35 ACTs who was valedictorian of his HS class and had tons of extracurriculars.

Meanwhile, my son’s roommate is on a full-ride ROTC scholarship. It’s a major time commitment and he’s up at 5am most days for Physical Training, but that work is worth about $300k.

On the plus side, seeing the amount of work his roommate does has made my son extremely appreciative of NOT having that time drain so he can focus on studies.

There are many ways to defray the cost of a college education.
Confusing. Thought merit scholarships did not depend on financial assets/income? Are you talking about elite schools only?
The top privates, and the Ivys, generally do NOT give "merit based" aid.
Cheers
I’d pay for top privates and ivies because they would probably open some doors. 80k for a mid to lower tier private sounds dumb when a state school would probably be equivalent for 1/2 the cost.

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Re: High income and college costs question

Post by Dregob » Sun Dec 01, 2019 12:24 pm

I work at an elite private university. Did my kids even apply? No. Would they have been competitive? Yes. Would they have been accepted? Unsure. They applied and went to the excellent state university a few miles down the road. I told them how much I could help and if they wanted to go private the difference was on them. They both graduated debt-free with my help/their jobs. One works in computers and makes more than I do and he is 25. Daughter is in Vet school. I'm always amazed/amused at the idea that an expensive private school is the best use of money/debt.

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Re: High income and college costs question

Post by TomatoTomahto » Sun Dec 01, 2019 12:30 pm

mcraepat9 wrote:
Sun Dec 01, 2019 12:13 pm
Why the hate for liberal arts degrees?

Disclosure: Proud holder of a liberal arts degree with a six figure salary (soon to be seven figures) and plenty of money in the bank.
That’s a thing with some BHs. I guess a liberal arts degree is okay if it’s a prelude to medical school or law school. :oops:

Truth be told, the STEMish kids I know earn, right out of undergrad, more than the liberal arts graduates, on average.
1. That’s not the only way to measure the value.
2. The liberal arts degrees, when earned by hard working kids, seem to work out fine.
3. Some of the liberal arts grads earn 6 digits (or high 5) right out of school, which isn’t bad.
4. My son’s friend at Yale Law School got a, shudder, liberal arts undergrad degree. I wonder what his ROI will be eventually?
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: High income and college costs question

Post by krb » Sun Dec 01, 2019 12:48 pm

mcraepat9 wrote:
Sun Dec 01, 2019 12:13 pm
Why the hate for liberal arts degrees?

Disclosure: Proud holder of a liberal arts degree with a six figure salary (soon to be seven figures) and plenty of money in the bank.
I think liberal arts degree do not require the discipline and excellence they once did. STEM degrees mean you know something nowadays. Liberal arts degrees nowadays - and my degree was in Philosophy - mean that you spent four years and a quarter million dollars to get a piece of paper. I don't want to get into politics though but I think that's the reason many hold disdain and not respect for those degrees. In the past, yes, but not now.

As an aside when I was young I had a deal with my parents - they would pay full ride in state tuition. I could go anywhere I wanted but I was on the hook for the rest. So I went in state. There is a cautionary tale about a well known TV personality - I forget who - who made a ton of money, sent his kids to private school because they REALLY wanted it even though he could not afford it on top of his Hamptons rental and living in Manhattan - and is now bankrupt despite being on top of his field and making a ton of money. I would offer them full ride in state college education if you can afford it and anything on top of that is on them.

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Re: High income and college costs question

Post by cshell2 » Sun Dec 01, 2019 12:49 pm

KingRiggs wrote:
Sun Dec 01, 2019 12:04 pm
At your income/asset level, you will not qualify for merit scholarships. I am paying full freight at an elite private university for a kid with 35 ACTs who was valedictorian of his HS class and had tons of extracurriculars.
Your kid could have certainly gotten tons of merit if you had not insisted on the "elite" part.

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Re: High income and college costs question

Post by TomatoTomahto » Sun Dec 01, 2019 1:02 pm

krb wrote:
Sun Dec 01, 2019 12:48 pm
There is a cautionary tale about a well known TV personality - I forget who - who made a ton of money, sent his kids to private school because they REALLY wanted it even though he could not afford it on top of his Hamptons rental and living in Manhattan - and is now bankrupt despite being on top of his field and making a ton of money.
If this cautionary tale is about anything, it’s not about bankruptcy caused by sending kids to private school.

Btw, what’s a “ton of money” that can’t send kids to private school, but would do fine renting in the Hamptons and living in Manhattan? Round numbers are okay.
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Re: High income and college costs question

Post by cowdogman » Sun Dec 01, 2019 1:03 pm

mcraepat9 wrote:
Sun Dec 01, 2019 12:13 pm
Why the hate for liberal arts degrees?

Disclosure: Proud holder of a liberal arts degree with a six figure salary (soon to be seven figures) and plenty of money in the bank.
As I remind my kids (very) frequently, college is about getting an education, understanding your place in the world and getting some perspective (on other people, life, culture, etc.). There is no reason a 17 or 18 year old should be looking at college as training for a job. This is especially true given that, as of right now, a college age student will be looking at a potential working life of 50+ years.

My advice is study what you're interested in, whether it's philosophy, chemistry, business or whatever, but get straight A's and LEARN something. The skill of being successful in college will transfer to other endeavors, whatever they may be.

I was a philosophy major at a small liberal arts college. I remember my mom telling me at the time that she was complaining to her doctor that I was a philosophy major ("can you believe that!?") and the doctor said "so was I." She was OK with it after that.

As to the OP's question, there is a lot of non-need scholarship money out there at a lot of very good private colleges (altho I agree the top tier private universities do not give much non-need-based aid). I did not even try for need-based aid for my older son (and I was a philosophy major!), but he got a very generous academic/music scholarship at a highly-rated liberal arts college.
Last edited by cowdogman on Sun Dec 01, 2019 1:09 pm, edited 1 time in total.

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Re: High income and college costs question

Post by TomatoTomahto » Sun Dec 01, 2019 1:06 pm

cowdogman wrote:
Sun Dec 01, 2019 1:03 pm
I was a philosophy major at a small liberal arts college. I remember my mom telling me at the time that she was complaining to her doctor that I was a philosophy major ("can you believe that!?") and the doctor said "so was I." She was OK with it after that.
Philosophy majors are well represented at law schools. At one time, perhaps still, they were the highest scorers on LSATs.
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: High income and college costs question

Post by welldone » Sun Dec 01, 2019 1:09 pm

If you have a high income, I think it is always better to assume you will not qualify for any need-based financial aid. Though it should also be pointed out that even if you don't have a high income, and do show financial need - not every college has money to give and most do not promise to meet 'full need' as they define it. I think there are fewer than 100 schools in the entire country that promise to meet full need for accepted students.

A rough rule of thumb is that the least you will (probably) be expected to pay is somewhere between 25-35% of your gross yearly income up to the cost of attendance of whatever school your child attends. If you make $150k a year, expect the FAFSA application to say you will be expected to pay about $30-45k for college each year, and that figure can rapidly climb for schools that use the CSS form as that takes into account more assets than FAFSA does.

It is important to do your research, and have a plan. Deciding on a budget is (in my opinion) the biggest part of having a plan. Don't expect 'free' money from prestigious schools, everyone who applies to those schools is highly qualified and they don't need to give "free money" unless you are talking Harvard level which have large enough endowments to be able to help families who make up to $250k a year. If you make more that $250k per year - you won't be getting any need based financial aid anywhere.

There are many very good schools out there. As cshell2 said, if you don't insist on 'elite', if merely 'very good' is good enough, there are plenty of schools offering merit awards to attract student they want. Just be careful to realize that some of those large awards ($20k+) merit award are only helpful if you can pay the remaining cost...if the school costs $80k a year, $20k merit still leaves you on the hook for $60k.

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ram
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Re: High income and college costs question

Post by ram » Sun Dec 01, 2019 1:31 pm

I would not bank on any need based aid.
Likelihood of merit based scholarships increase as one goes to a school that is lesser in reputation than where one could have gone otherwise.
I did pay $80K/yr for one of my kids to attend Harvard (includes living costs). Going to Univ of Wisconsin, Madison instead of Northwestern, Chicago resulted in more than 100K in merit scholarship.
Ram

krb
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Re: High income and college costs question

Post by krb » Sun Dec 01, 2019 1:40 pm

TomatoTomahto wrote:
Sun Dec 01, 2019 1:02 pm
krb wrote:
Sun Dec 01, 2019 12:48 pm
There is a cautionary tale about a well known TV personality - I forget who - who made a ton of money, sent his kids to private school because they REALLY wanted it even though he could not afford it on top of his Hamptons rental and living in Manhattan - and is now bankrupt despite being on top of his field and making a ton of money.
If this cautionary tale is about anything, it’s not about bankruptcy caused by sending kids to private school.

Btw, what’s a “ton of money” that can’t send kids to private school, but would do fine renting in the Hamptons and living in Manhattan? Round numbers are okay.
I tried to find the article. He is at the top of his field, makes good money, and felt like he had to live in Manhattan. He may have sent his kids to private school K-12 I don’t recall. His peers all stayed at the hamptons so he got a place there too. When his kids got to college age each really wanted to go to a private school. So he sent them there. It is a cautionary tale - don’t spend what you don’t have. Who can afford to live in Manhattan AND a place in the Hamptons AND send two kids to private schools? CEO’s of major corporations. He was not. It was a cautionary that he could have afforded any one of those things but he overspent. Figure out what you can afford and don’t spend more than that.

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Re: High income and college costs question

Post by bwalling » Sun Dec 01, 2019 1:45 pm

am wrote:
Sun Dec 01, 2019 11:46 am
bwalling wrote:
Sun Dec 01, 2019 11:35 am
I'm going through this currently. My oldest is graduating a year early, and we've already been through a round of applications and conversations about costs. :mrgreen: Most of the higher end private schools have some kind of offering along the lines of covering all of your need without the use of loans. Many of them base this on your FAFSA. If you haven't filled out a FAFSA, be prepared for that number to come back with much more financial responsibility on you than you might expect. You'd have to be as frugal as a Boglehead to have as much spare income as they'll tell you you have.

My kids have enough to get fully through state university without debt. Our current state has an excellent university, and they can get in state tuition in the state we used to live in because we're fully paid up in the prepaid program in that state. The choice to go to another school is one in which they'll have to weigh the costs and benefits knowing that they'll bear those additional costs themselves, either through needing to find awards, or through loans. It's not their first exposure to financial decision making, but it's undoubtedly a much more significant decision than they've made to this point.
“Most of the higher end private schools have some kind of offering along the lines of covering all of your need without the use of loans. ”

How does that work if your income and assets place you in top percentiles? My ”need” is more of a priority in that I’d rather save that money for my retirement than pay for a low ROI liberal arts degree.
Your "need" is really a want, and everyone wants that same thing. You're not going to see anything for it; they're going to account for people with a demonstrated financial need first.

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Re: High income and college costs question

Post by goodenyou » Sun Dec 01, 2019 1:47 pm

College is very expensive for moderately wealthy people. No aid and few scholarships. Unless you save very early and often to build up a nest egg for the eventuality that your kid will unlikely get aid, it will be painful to shell out $80k per year out of cash flow. Have 2-3 in college at the same time, and you will need to have a very good income. If you are a believer in the tenets of this forum, you will cringe at the idea of borrowing money or having them borrow money for college. I saved early and built a small fortune to send my kids to college on a merit-based free ride. Education is a priority in our family and so is fiscal responsibility.
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Re: High income and college costs question

Post by livesoft » Sun Dec 01, 2019 1:59 pm

goodenyou wrote:
Sun Dec 01, 2019 1:47 pm
College is very expensive for moderately wealthy people. No aid and few scholarships.
It is the same price for the non-wealthy. :)

My son goes to a Tier 1 no-aid state university. All in (tuition, fees, books, room, board, etc) cost is about $20,000 per year, but I get $2,500 in education tax credits and tax breaks, so the true cost is under $18,000 per year. Students can work and reduce the costs to their parents, too.
Last edited by livesoft on Sun Dec 01, 2019 2:00 pm, edited 1 time in total.
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Re: High income and college costs question

Post by marcopolo » Sun Dec 01, 2019 1:59 pm

TomatoTomahto wrote:
Sun Dec 01, 2019 1:06 pm
cowdogman wrote:
Sun Dec 01, 2019 1:03 pm
I was a philosophy major at a small liberal arts college. I remember my mom telling me at the time that she was complaining to her doctor that I was a philosophy major ("can you believe that!?") and the doctor said "so was I." She was OK with it after that.
Philosophy majors are well represented at law schools. At one time, perhaps still, they were the highest scorers on LSATs.
I find the liberal arts/stem discussion interesting on a forum mostly supportive of passive index investing to garner good returns on average, because active approaches can have outsize returns, but on average does worse.

How are two related, you might ask.

It seems to me proponents of liberal arts education usually point to an anecdotal case of someone they know, or talk about people with advanced degrees (lawyers, doctors, etc.).

But, what percentage of liberal arts majors go on to get JD or MD? what percentage end up being the successful ones people put up as examples?

By that reasoning, may be not going to college or dropping out is an even better options. we can point to many anecdotal cases of very successful people without any college degrees.

Now consider an engineering, or similar STEM degree. That by itself is not going to assure success, but the odds are that it will have a better outcome, similar to index investing...

I am not sure of the stats now, but back when I was in undergrad, engineering majors had one of the highest acceptance rates in medical school.

So, i think of it more as flexibility of options. You want to go to law or med school, you can definitely do that with an engineering degree. You want to be an engineer, you can't do that (for the most part) with a degree in political science, or similar liberal arts degree.

Liberal arts degree seems more risky, you might be one of the minority that ends up doing better than the average engineer grad, but the odds are against you.

When comparing the outliers that have done extremely well, you also need to compare them to similar outliers with engineering degrees.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: High income and college costs question

Post by cowdogman » Sun Dec 01, 2019 2:24 pm

marcopolo wrote:
Sun Dec 01, 2019 1:59 pm

It seems to me proponents of liberal arts education usually point to an anecdotal case of someone they know, or talk about people with advanced degrees (lawyers, doctors, etc.).

But, what percentage of liberal arts majors go on to get JD or MD? what percentage end up being the successful ones people put up as examples?

...

Liberal arts degree seems more risky, you might be one of the minority that ends up doing better than the average engineer grad, but the odds are against you.
I was only suggesting that college age students should pursue their interest/passion; there is plenty of time for career planning. If the passion is for engineering, great.

But I've known kids who were pushed into majors in business and engineering because their parents looked at college as job training. They didn't do well and didn't finish those degrees.

And while I am an index investor, it's seems like an awfully boring way to approach life in general. My advice to a college freshman would not be "first and foremost, do what is safe."

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Re: High income and college costs question

Post by harrychan » Sun Dec 01, 2019 2:26 pm

Harry Livermore wrote:
Sun Dec 01, 2019 11:23 am
You can also have the child apply at schools where full price is not reasonable just to see what, if any, aid pops up.
As others have said, try out the sample FAFSA, and the NPC at each school if you like. But my opinion is the whole admissions/ finaid formula is like an individual black box at each school, and you are better off encouraging the child to apply far and wide to many schools, to see what the results are.
Cheers
Do you have that luxury to understand what the financial "gap" is before the deadline to respond to the acceptance to the school?
This is not legal or certified financial advice but you know that already.

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Re: High income and college costs question

Post by marcopolo » Sun Dec 01, 2019 2:29 pm

cowdogman wrote:
Sun Dec 01, 2019 2:24 pm
marcopolo wrote:
Sun Dec 01, 2019 1:59 pm

It seems to me proponents of liberal arts education usually point to an anecdotal case of someone they know, or talk about people with advanced degrees (lawyers, doctors, etc.).

But, what percentage of liberal arts majors go on to get JD or MD? what percentage end up being the successful ones people put up as examples?

...

Liberal arts degree seems more risky, you might be one of the minority that ends up doing better than the average engineer grad, but the odds are against you.
I was only suggesting that college age students should pursue their interest/passion; there is plenty of time for career planning. If the passion is for engineering, great.

But I've known kids who were pushed into majors in business and engineering because their parents looked at college as job training. They didn't do well and didn't finish those degrees.

And while I am an index investor, it's seems like an awfully boring way to approach life in general. My advice to a college freshman would not be "first and foremost, do what is safe."
I largely agree with you.

Most kids at that age have no idea what their passion is in life. As I said, an engineering degree gives one more options.

you discover you have a passion for art, you can find a way to do that with an engineering degree. Trying to become an engineer with a degree in art is considerably more difficult.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: High income and college costs question

Post by cshell2 » Sun Dec 01, 2019 2:31 pm

harrychan wrote:
Sun Dec 01, 2019 2:26 pm
Harry Livermore wrote:
Sun Dec 01, 2019 11:23 am
You can also have the child apply at schools where full price is not reasonable just to see what, if any, aid pops up.
As others have said, try out the sample FAFSA, and the NPC at each school if you like. But my opinion is the whole admissions/ finaid formula is like an individual black box at each school, and you are better off encouraging the child to apply far and wide to many schools, to see what the results are.
Cheers
Do you have that luxury to understand what the financial "gap" is before the deadline to respond to the acceptance to the school?
Typically financial aid packages are all out by February/March at the latest and deadline to accept is May 1st. DS applied to and was accepted at 5 schools he would be happy at next year. Now we're just waiting to see what the best price is.

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Re: High income and college costs question

Post by TomatoTomahto » Sun Dec 01, 2019 2:35 pm

harrychan wrote:
Sun Dec 01, 2019 2:26 pm
Harry Livermore wrote:
Sun Dec 01, 2019 11:23 am
You can also have the child apply at schools where full price is not reasonable just to see what, if any, aid pops up.
As others have said, try out the sample FAFSA, and the NPC at each school if you like. But my opinion is the whole admissions/ finaid formula is like an individual black box at each school, and you are better off encouraging the child to apply far and wide to many schools, to see what the results are.
Cheers
Do you have that luxury to understand what the financial "gap" is before the deadline to respond to the acceptance to the school?
Yes, although not always when you apply “Early Decision.” It’s not recommended to apply that way, since it’s theoretically binding, but in real life you can back out. Applying Early (non-binding) or Regular, you’ll have time.
Okay, I get it; I won't be political or controversial. The Earth is flat.

amitb00
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Re: High income and college costs question

Post by amitb00 » Sun Dec 01, 2019 2:41 pm

My daughter goes to Brown university in their 8 year medical school program aka PLME. She is a senior in undergrad. We are paying sticker price (75K every year). YMMV, Amit

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Re: High income and college costs question

Post by amitb00 » Sun Dec 01, 2019 2:42 pm

And she is an excellent student with tons of extracurricular activities. A model student even at Brown.

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Re: High income and college costs question

Post by krb » Sun Dec 01, 2019 2:47 pm

marcopolo wrote:
Sun Dec 01, 2019 1:59 pm
TomatoTomahto wrote:
Sun Dec 01, 2019 1:06 pm
cowdogman wrote:
Sun Dec 01, 2019 1:03 pm
I was a philosophy major at a small liberal arts college. I remember my mom telling me at the time that she was complaining to her doctor that I was a philosophy major ("can you believe that!?") and the doctor said "so was I." She was OK with it after that.
Philosophy majors are well represented at law schools. At one time, perhaps still, they were the highest scorers on LSATs.
I find the liberal arts/stem discussion interesting on a forum mostly supportive of passive index investing to garner good returns on average, because active approaches can have outsize returns, but on average does worse.

How are two related, you might ask.

It seems to me proponents of liberal arts education usually point to an anecdotal case of someone they know, or talk about people with advanced degrees (lawyers, doctors, etc.).

But, what percentage of liberal arts majors go on to get JD or MD? what percentage end up being the successful ones people put up as examples?

By that reasoning, may be not going to college or dropping out is an even better options. we can point to many anecdotal cases of very successful people without any college degrees.

Now consider an engineering, or similar STEM degree. That by itself is not going to assure success, but the odds are that it will have a better outcome, similar to index investing...

I am not sure of the stats now, but back when I was in undergrad, engineering majors had one of the highest acceptance rates in medical school.

So, i think of it more as flexibility of options. You want to go to law or med school, you can definitely do that with an engineering degree. You want to be an engineer, you can't do that (for the most part) with a degree in political science, or similar liberal arts degree.

Liberal arts degree seems more risky, you might be one of the minority that ends up doing better than the average engineer grad, but the odds are against you.

When comparing the outliers that have done extremely well, you also need to compare them to similar outliers with engineering degrees.
+1. Also...you always learn something important in STEM. There’s no BS classes. And there’s a right and a wrong. You either know organic chemistry or you don’t. There’s a lot of BS nowadays in LibArts. You can graduate with a degree in English without taking Shakespeare. The rigor in LibArts two generations ago is I think gone. Of course there are hardworking kids who are taking tough courses in LibArts. But everyone graduating with a degree in STEM had to go through rigorous courses. A degree in LibArts nowadays means that you spent a lot of money and four years to get a piece of paper and that piece of paper may or may not be an indication of having received an education.

My two cents.

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Re: High income and college costs question

Post by cowdogman » Sun Dec 01, 2019 2:58 pm

marcopolo wrote:
Sun Dec 01, 2019 2:29 pm
you discover you have a passion for art, you can find a way to do that with an engineering degree. Trying to become an engineer with a degree in art is considerably more difficult.
Yes, but I think engineering is a special case. You really need a high level of math/science skills to do well in engineering schools, which I believe are filled with really smart/driven kids. Taking a few years off of math and then trying to go back to engineering school would be very difficult.

But trying to become an engineer when you don't have an interest in engineering is very likely to result in failure.

Law school, med school, business school, education degree, cooking school, etc. are all places that people end up after pursuing other interests in college. E.g., I saw in the Juilliard alumni magazine that one of its recent viola graduates was off to med school. That's cool.

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Re: High income and college costs question

Post by marcopolo » Sun Dec 01, 2019 3:19 pm

cowdogman wrote:
Sun Dec 01, 2019 2:58 pm
E.g., I saw in the Juilliard alumni magazine that one of its recent viola graduates was off to med school. That's cool.
Hmm. I thought you wanted people to pursue their passion. It sounds like that would have been the viola. Instead he/she is pursuing some "job training". Kind of sad, right? :beer
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: High income and college costs question

Post by NJdad6 » Sun Dec 01, 2019 3:21 pm

You will most likely not qualify for financial aid. Most top rated schools provide little to no merit. There are many people paying full freight for these schools. My older son has very smart friends from HS. Three at ivies, one at JH, one at Duke, one at Bucknell and one at NYU. All paying $70k+.

If you have a student with good grades and scores you can probably get some merit. Some flagship state schools will give pretty nice awards for B+ students with high 20s ACT. Other top tier privates will give generous merit to highly qualified students. My son is getting over $100k at a very highly rated “southern ivy”. He was accepted to other top privates some with merit some without. He also received nice awards including full tuition from some flagship state schools.

Best advice is maximize GPA, get the highest ACT/SAT scores possible and do your research. Some schools are very open about what merit is available and how to qualify. The statement “nobody pays full price for college” is nonsense. However you may have options if you are an above average student and flexible.

Good luck

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Re: High income and college costs question

Post by goodenyou » Sun Dec 01, 2019 3:28 pm

amitb00 wrote:
Sun Dec 01, 2019 2:41 pm
My daughter goes to Brown university in their 8 year medical school program aka PLME. She is a senior in undergrad. We are paying sticker price (75K every year). YMMV, Amit
Your daughter is very fortunate that her parents are willing to pay $600,000 for her education.
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Re: High income and college costs question

Post by am » Sun Dec 01, 2019 3:46 pm

Do you guys think that if someone can not get into an “elite school” that state school should be best option For most, especially schools Ike Wisconsin, Michigan, Illinois, etc given costs and reputation?

I am just wondering why someone would choose an expensive mid tier private school and pay so much more? Is it the curriculum, campus, something else? I have heard someone mention that there is a more desirable mix of students/families at some of the more expensive schools (whatever that means) . Guess they mean in terms of finding partners.

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