<p>Does a $5000 a year scholarship count on a $55000 a year bill? We paid that much for one kid to go to college. I would call that close to full sticker price. The second kid got $10,000 a year on a school that was just under $45,000 a year when he went there. Not full price but we paid plenty.</p>
<p>Just FYI…we didn’t have a nickel of college savings. My entire income for 7 years went to college costs…every penny of it. DH’s paid the rest of our bills.</p>
<p>Somehow we managed to survive. And when we were done with the last college payment, we felt like we had won the lottery.</p>
<p>"I am guessing that the reason why you chose a more risky investment for your retirement is because you expected a higher return than from a 401K?</p>
<p>IMO unless you live in an ultra desirable area, and like managing rentals, I would sell.</p>
<p>But - what do you mean " no one pays sticker price"?
That is precisely what we pay for our daughters school & without self employment or multiple real estate investments to skew income. "</p>
<p>Emerald, we chose real estate because we know real estate and have been involved in various capacities for 20+ years. I’m quite capable as a small time manager, and the area is desirable. Priced simply did not go up here since the mid-2000’s and many went down, while taxes and insurance costs simultaneously doubled. Bad situation. We didn’t buy until after the late 90’s stock crash, and it seemed like the right thing to do at the time. </p>
<p>I guess you are correct that I can’t say “no one” pays sticker price. Almost everyone I know has received some scholarship or aid of some kind, either merit or financial. I guess I was projecting, but I’m sure some pay sticker price if they can afford to do so and the kids don’t get scholarships or merit aid.</p>
<p>bclintonk: HOW? How are all these families paying $50-60K per year sticker price for one child to go to college? </p>
<p>But then I think much the same thing when I see housing shows where young teachers are buying $600,000 homes. How?? </p>
<p>We’ve managed some trips for the kids, and an expensive travel sport. And medical costs (though with new regs, coverage has gone down, while costs have skyrocketed). </p>
<p>But how are people with incomes below, say, $200,000 or $180,000 affording expensive private colleges without aid or scholarships?</p>
<p>We are also unwilling to take on debt at our ages, nor saddle our kids with debt. I think we will end up doing what you are doing. We can sell with some profit but not enough to fund college. I’ve prepaid the mortgage down for over a decade, and have now refinanced one and looking at the others. It’s what my state has done to taxes that is the killer. Rentals are taxed at double what OO homes pay. Just ridiculous. </p>
<p>It’s unfortunate to have to remove so many great schools that have what she wants to eliminate lifelong enslavement to debt, but I guess that’s just the way it is. That whole requirement of the FAFSA for merit aid really irritates me, as MERIT aid should rest upon our child’s merits, not OUR financial business. </p>
<p>We’ve always lived frugally, driven older, paid-off cars, and done everything we can to be prepared.</p>
<p>Did anyone consider international schools? I’m wondering if it is any cheaper, and my daughter wants to be a world traveler anyway.</p>
<p>OP, we are also a pay full sticker price family. We do it because we think it will be worth it for our child to attend this university. It is what it is. Like others who posted here, basically one income goes toward this expense and the rest is out of current income/savings. So we don’t live like we have two incomes but this wasn’t too hard for us because we always lived below our means. It’s a personal/family choice. Sure, we wonder whether it will all turn out OK but we decided to offer it to my S as an option if he got into his reach school. If we could not afford it, I know he would have gone to the school that we could offer or a school that gave the most merit. If you have your child go through the application process then be honest about what you can afford or are willing to pay because your child may get accepted.</p>
<p>There are some schools who offer merit scholarships with no participation of FAFSA. Check with the schools. My S was offered a full tuition and housing scholarship at a school that never asked us for financial information. It was a wonderful offer but not a good fit for him ( he has a very specific interest) although my D would benefit from a liberal arts focus that this college offered.</p>
<p>“While it seems unfair, the reality is that colleges are not going to award your child need based aid so that you can retain significant assets. Need based aid is generally for folks without significant assets.” I believe this says it all.</p>
<p>We pay full sticker price. We inherited the money right when the kids were college age. If colleges only looked at income we’d get aid. We live pretty frugally - both cars are over 10 years old, a house with very reasonably mortgage payment (even with our high taxes). We don’t eat out a lot, most vacations are to family owned cabins. Amazing the guys who manage our money have managed to pull out $50,000 a year and we still have about the same amount in the account it started with.</p>
<p>*Quote:
Say a family has $200k cash saved for college. A school that uses CSS Profile would require 5.6% of this amount (roughly $11k) each year.</p>
<p>==========================
I don’t understand this. Why so little?
*</p>
<p>If you have $200k in a savings account or investments, then it’s not assumed that all of it is “for college” for one child. It may be your entire savings, that you need as well. It may be needed to help another child’s college costs. The formula doesn’t assume that whatever savings parents have, all of it is to go towards 4 years of college. Families NEED savings as well.</p>
<p>IF you structure your rentals to be legal business…not in your personal name but in the name of an LLC with it’s own tax ID and tax filing (owners receive K1 income from the business which is reported on their personal 1040) </p>
<p>AND the family business is at least 50% owned by the family (this percentage may have changed), </p>
<p>AND the business has less than 50 employees you do not need to report it on the FAFSA! (just the K1 distributions)</p>
<p>THEN the asset may be completely eliminated from the FAFSA calculations. </p>
<p>You will have some flexibility when managing the timing of business income and expenses.</p>
<p>This is how some people wind up with low EFC’s (I’ve seen Pell and full Cal Grant grant status in some cases) while still retaining a considerable asset base. Yes, it is totally legal. Originally designed so that farmers would be able to retain their land and lively hood, this was extended to include most small family businesses. </p>
<p>It is an unfair game and keeping up with the rules and nuances is challenging.</p>
<p>In response to post 70 above… the college will also expect you to chip in additional money from your income! The above 5.6% only applies to your assets.</p>
<p>Just FWIW, we got through 7 years of college payments amazingly smoothly, with lots of luck (wonderful college acceptances) and lack of advance planning (which ended up being great planning). Going into the college years, we had less than $10,000 in the bank, we had two fully-paid-off and young and reliable vehicles, we had NO debt other than a reasonable mortgage, we had no reoccurring expenses other than electric, gas, telecommunications, we had two average salary jobs that included healthcare, and we knew how to live frugally. (No cable tv, yard service, maid service, gym membership, dry cleaning, pedicures, hairdressing, fancy clothes -that stuff is not for us.). Kids both turned down full-rides at good public universities for a top private college that meets full-need. Again, we were very lucky, and were able to pay our EFC out-of-pocket due to the generosity of the college, but also the TOTAL LACK OF DEBT and ABSENCE OF REOCCURRING expenses. I strongly encourage others approaching college years to pay down all debt if possible and think of strategies to free up income stream… (for instance, sell fancy car for cheap reliable car w/no payments) and reevaluate your needs. Also, if your child is in range academically, let her/him apply to a few meets-100%-need-schools. We were surprised and pleased to find that private U ended up costing us less in total than state u. All the best to y’all approaching college. You will get through it!!!</p>
<p>^ I agree. We timed things so we made out last mortgage payment just as our oldest was starting college … flipping the mortgage payment into a college payment pays a pretty good hunk of our college bill … which we’ll have for 10 years.</p>
<p>(PS - Essentially instead of a 30 year mortgage we did a 20 year mortgage and 10 years of college payments).</p>
<p>Here’s how we “did it”: we put aside money every month, from the day our daughter was born (literally), into college funds. We started with $50 per month but increased that amount (and diversified that portfolio) every time we got raises or bonuses at work.</p>
<p>We stayed in our starter home, but to us that wasn’t a sacrifice - it’s just the way we are, standard-of-living wise (and frugality-wise). Over the years we have gone on some nice trips, visited some great places, but that college fund was our priority.</p>
<p>It didn’t quite work out as planned. Our income fell by 2/3 when D was a junior in high school when I lost my job, but thanks to the years of savings, it all worked out okay in the end. D graduated from college with no loans, and we didn’t need any loans, either.</p>
<p>Of course, this strategy won’t work for the OP, and it really helped that we only had one child to put through college (and she did get a small merit scholarship, too.) But it can be done in families making less than “$200,000 or $180,000.”</p>
<p>Well, because there’s a lot of wealth in this country. It’s concentrated at the top, but for the most part those are the people who can afford to pay full sticker price for their children to attend elite colleges and universities (and to send them to the elite private or exclusive suburban high schools that will burnish their credentials and make them most competitive for admission to elite colleges and universities). It’s their children who make up the bulk of the 54.6% of students at Duke and the 55.6% of students at Brown who are full-pays.</p>
<p>But it’s not entirely the wealthy. I certainly don’t consider myself wealthy, but our household income is just high enough to make us ineligible for need-based aid at every college in the country. How do we do it? Well, for starters, we’ve been saving for it since our children were little, because we value education that much. Besides the money in our daughters’ 529s, we’re spending down some other liquid assets (while continuing to fund our retirement plans, which we won’t touch until we retire). Our D1 also worked right through high school and saved most of that money for college, and she continues to work during college, both term-time and summers, and as a result is able to contribute several thousand per year out of her own earnings, which I think is a positive thing because it gives her a different kind of stake in her own education, which isn’t just handed to her as an outright gift. She’s also taking out a modest amount of loans, which we’ve made clear we’re prepared to help her re-pay once we’ve gotten both daughters through college; for us loans are just a way of spreading the cost over a longer period, which makes it more affordable. But most of it comes out of current income. We’ve needed to tighten our belts and live more modestly–no vacations, no new cars, fewer nights at the theater, fewer restaurant meals, brown-bagging it for lunch, no more daily espresso drink. There are also areas of savings as a result of a child being away at college–lower car insurance, smaller grocery bills and family entertainment costs, lots of miscellaneous expenses that are now on her budget and figured into her COA, and no longer on our budget. That’s several thousand a year right there. We also were fortunate to be able to refinance our mortgage at a lower interest rate, which freed up several hundred a month to go straight into the college kitty. We don’t mind the belt-tightening. After our unconditional love which she will always have, a quality education is probably the most important thing we could ever give our daughter; compared to that, pretty much everything is expendable. But that’s a reflection of our values and our priorities. Not everyone will look at it that way.</p>
<p>bclintonk - we are in the same boat. But I have to say, in the process we simplified our life and unburdened ourselves from the trappings of suburbia. We spend more time outdoors doing activities that really don’t cost anything, biking, picnicking, and hiking. We also sold our vacation house to pay for college and that was tough. We all miss it - it was a memory making house. We are almost over the hump but I think we will keep our frugality as well as our newly acquired interest in exploring the outdoors.</p>
You misunderstand me that $50,000 is going to tuition. There are management fees on top of that. I am very, very happy to have zero return given how much money we pull out of the fund every year. I keep expecting to find I’m investing with some guy named Madoff.</p>
<p>I don’t feel we deprive ourselves. I love eating out, but once a month rather than a few times a week. We belong to the Y not a fancy gym. We didn’t have cable until this year when it became cheaper than not having it because it’s bundled with our cell phone. (We do indulge in smart phones.) I feel I am privileged to be able to give my kids what my parents gave me, a college education and debt free start on their adult life. They haven’t abused that privilege.</p>
<p>It’s so interesting how people see some things as necessary for a good life and others not so.</p>
<p>georgek thinks it would be “living like a monk” if one had to take care of one’s own lawn, clean one own’s house and do without summer and winter vacations and cable tv.</p>
<p>My family does its own mowing, house cleaning and care, did away with cable (and doesn’t miss it), has no smart phones, and is splurging this year on a vacation by renting a modest cottage. </p>
<p>We don’t have big college savings but we put away money every month automatically into savings and investments so had funds on hand. </p>
<p>This worked well with the first kid to go through college. On graduation, there was a small debt but it was paid off in two years. The second, hopefully, will be in the same position.</p>
<p>However, we did not pay full freight, nothing close to it. The cost of living in Maine is not particularly high and our EFC was manageable.</p>
<p>^Thank you georgek for post #75. Sometimes I get a bit tired of the “walked uphill barefoot in the snow both ways from our box under the bridge” posts. :)</p>