When my son was young, maybe MS?, he asked if I could afford to send him to his dream school. My reply was if he got in, I’d find a way. That was before the great rise in tuition, and before the Ivy 10% rule.
Fortunately, things worked out.
So never promise anything? Say you’ll pay ‘up to’ $XXX but that you reserve the right to not pay if there is a cheaper option? I hope that was the wording I used, that I wasn’t making a promise when discussing a budget with my daughter, but I don’t know what she heard and it wouldn’t have surprised me to hear her say “But you promised! why did you even let me apply?” Well, she applied to a few schools we could not afford without aid, and I think she knew that but I’m not sure. Until you have a child actually go through the process, you just can’t imagine or predict all the options, which school will be the best fit financially and academically. Many top students have always won every award, always gotten what they want, so they and their parents continue to think the scholarship will come through. How many of them know, as juniors, that Ivies don’t give merit scholarships, or that an outside scholarship doesn’t really help? Now, they are just one more student admitted to Hopkins or USC with top scores and grades, and the expected awards just didn’t happen. They haven’t been lectured on CC about the need for a safety you will actually want to attend and can afford.
I can understand why he wants to go somewhere more diverse. This is an important issue for my kids, as well.
Here is how we handled it - IRL:
We told ds that, barring any unforeseen circumstances (we usually said “Unless Dad gets hit by a bus” - meaning serious illness, Dad lost his job, etc.) we had a $XXX amount of money that was available for him. That pile would enable him to attend any undergraduate school in the country, but choosing a top tier would use up the entire pile. He wound up with two free options and four in-between options, and three pricey, full-pay top tier options. If he chose free, the pile would wait for graduate school. If he chose something in the middle, there would be some left in the pile for graduate school, but not enough to cover all of it. If he never attended graduate school, whatever was left in the pile was still going to be his to be used reasonably (car, travel, house down payment - worked out in some way so as to avoid any gift tax consequences). If he chose free or in the middle, he could use some of the pile to travel abroad each summer while in undergrad. His free choices were NOT at public Ivies, but much lower-ranked, Big State U, rah rah schools. He chose one of the top tier, full-pays for undergraduate school, and we couldn’t be happier for him. But, we will not foot any grad school bills, and he will not be traveling abroad each summer 'cause the pile has to be used in its entirety for the four undergraduate years! And, he knows he only gets four years! That was his choice.
This method worked well for our family. I’m not sure why it couldn’t work for any size of “pile.” One person’s pile might be $0, another’s a total of $50,000, or $100,000, or $250,000. We were definitely up-front with ds about what we were willing to do and let him make the decision.
An issue we had with the “pile” thing is that most of ours was in 529s. PhDs in science (which both my DH and I have, and would be the probable “graduate school” choice for both kids, if they decided to go) are generally fully funded. So there is no opportunity to use a 529 for that (even rent-- I asked). So we pretty much expected to use it up for UG. Just something to keep in mind. Maybe most of you talking about “graduate school” are talking about med and law school, which are not funded.
@donnaleighg - excellent point. Our pile was not solely made up of 529 money. Probably only 25% of it.
I still think the pile method works even if all the money is in 529 accounts: the 10% penalty and tax only applies to the earnings portion of non-qualified withdrawals, not the total withdrawal. Furthermore, there are exemptions that apply if there was a scholarship.
I don’t know what happens if the ownership is transferred from parent to child, and then the non-qualified distribution is made. Is the penalty and tax on the earnings then the responsibility of the student, who is presumably in a very low tax bracket?
Penny-wise and pound foolish. I get the gist of OP’s kid’s concerns, which are valid, if inconvenient to his parent’s notion of taking free-ride thru Old Miss. That “free” experience will be vastly different than one at NYU or Northwestern, which are vastly different too. It’s an odd list of schools, but I’m sure this was all discussed prior to application submittals. OP: so long as school choice meets your initial budget, let kid decide.
See post #40 - OP was a fake. Led to a continuing and interesting discussion, though…
What Hoggirl told her son is pretty much the same thing we have told our daughter. So we are encouraging her to apply to schools, public or private, that will give her merit aid. In case she doesn’t get merit aid, then we have a few publics, flagship and regional, with “affordable” (a relative term, for sure) tuition.
Thrown into the mix is that her dad, my husband, will be 64, when she graduates with her BA. He wants to retire, then. We won’t be comfortable doing that if she spends all of her fund on the Bachelor’s degree. And we’ve told her that, too. People should just be frank with their kids about what they are comfortable spending, and how much there is to spend. They are 17 and 18, not 10. They can handle it. If not, they will learn to…
I’m not a parent - just a student, but I just wanted to say that what my parents did was pretty similar to what @Hoggirl did for her son.
At the beginning of the college search process, my parents explained to me that they would pay $XXX per year for four years (it was already established that I would be paying for grad school on my own). Any money left over would go to me (for summer spending, a future down payment on a home, a car…didn’t matter, they trusted me to spend it wisely). Any gap between what they were willing to pay and tuition would be my responsibility, whether through summer/part-time jobs, loans, or begging my friends for money. That being said, they let me apply to any schools I wanted to, understanding that I might not be able to attend if I got a bad FA package.
I ended up getting into UPenn and Yale. UPenn’s package ended up being ~20k over the amount my parents were willing to pay, so I knew it had to come off the list. No complaining or fuss; I was prepared for that to happen. I was honestly pretty anxious checking Yale’s FA, realizing what a pity it would be if it was also unaffordable. Miraculously, I got enough aid that it cost ~5k less than what my parents were willing to pay! As it is, I may still be tempted by a full-ride to one of my safety schools to save money for grad school.
Anyway, I am SO glad that my parents talked to me about financials before I started applying. A lot of my friends are currently entrenched in battles with their parents about wanting to attend a more expensive school and I feel really lucky that I was able to avoid it all. Trying to shield kids from the financial aspects may be well-intentioned, but ultimately does them a disservice. One of my friends got into UC Berkeley, but probably won’t be able to attend because of finances. She’s frustrated because she feels like she wasted all of her effort applying, and wishes that her parents just told her earlier so that she knew not to bother.
@OrchidBloom Sounds like your parents handled this perfectly, and you are making very responsible, mature decisions! Congratulations on your great options! 
I’m actually glad the OP was fake…I was really feeling sorry for the kid! I mean, I’m all for saving money and having a budget, but FIT is important too!
@OrchidBloom, depends on which grad school.
PhD programs (the ones worth go to) will be funded, so you wouldn’t have to pay. I wouldn’t advise spending much money on a JD (outside of YHS). That leaves med school/health or b-school. If the goal is med school or some other health profession, going to the full-ride school makes a lot of sense. For b-school, however, work experience would be very important, and Yale may give you a leg up (especially in certain elite MBA feeder industries).
But it also depends on what program/school your full-ride option is. So the decision, to me, is very dependent on goals and majors.
I’m sorry, but this is ridiculous. Only PhD programs in the sciences are reliably funded. That doesn’t mean that ALL of the other graduate programs are “not worth” going to and that graduates of all of them are doomed to live lives of eternal servitude as adjuncts. There are other law schools worth going to out of the 3 you mention.
And there are other professional graduate programs besides med school and b-school and law school. Sheesh.
What an incredibly narrow view.
@Consolation, to each his/her own, but given the career prospects (and I don’t see chained to a 6-figure debt while working 100 hours a week in Big Law as a wonderful life), I would advise against spending a lot of money on a PhD or most JDs. Again, I’d need to hear the details, but I’m merely pointing out that passing up on a Yale undergraduate education (which doesn’t seem like it will cost @OrchidBloom $250K) in order to save for grad school may not make the most sense, depending on the grad school and goals.
In pretty much all subjects, PhD programs produce far more PhDs than will be needed to replace the faculty at research universities as such faculty retire. Of course, some of the “excess” PhDs go to LACs (not many, because they are small), non-research universities, community colleges, or even high schools for faculty positions, and some of the others become adjuncts. But that still can leave “excess” PhDs, even in the sciences, who must look for non-academic jobs. See http://www.nature.com/news/2011/110420/full/472276a.html .
So attending an unfunded PhD program in anything is a high risk endeavor in terms of potentially a lot of debt that one would have difficulty paying off in the weak market for PhD graduates.
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I don’t either. But there are other lives in the law.
Sure. But there is a lot of room between “a lot of money” and “fully funded or worthless,” as there is daylight between “YHS law school or don’t bother” and “most JDs.” Are you seriously suggesting that it is literally not worth going to, for example, Chicago, U VA, Georgetown, Northwestern, and Cal? Really???
If the money were there, and I were OrchidBloom, I would spend it on Yale rather than wait for some completely hypothetical grad school, unless I got a full ride to another really outstanding school.
Looks like @Hoggirl (#63) and @OrchidBloom (#70) are examples of where the parents and student talked early about financial constraints before applications were made, setting the parental rules ahead of time, so that elimination of unaffordable acceptances was a quick and easy matter in April (of course, that also meant that obviously unaffordable schools could be pruned from the application list before wasting any effort applying to them).
This quote says how things can go wrong when the parents and student do not have the pre-application money talk:
Do most parents and students have a pre-application college money talk (like @Hoggirl and @OrchidBloom ), or do most leave it until April (like @OrchidBloom 's friends)?
“Do most parents and students have a pre-application college money talk, or do most leave it until April?”
that would be an excellent new discussion to start!