Is $20K a reasonable number?

fieldsports · May 8, 2013, 2:14pm

OP, you have some financial flexibility. You also need a bit more information about her exact options. It sounds like the basic degree at the flagship should be fine, and she should succeed there, but her dreams have been a little different, and you might be able to make those dreams come true, depending on how compelling it all seems, and what kind of merit aid might be forthcoming next spring from a dream private LAC.

In my opinion, give the kid a target budget number. Keep it conservative. You can always authorize more money late in the game, but you really don’t want to have to roll the number back. At the same time, I think you should give her a realistic target number, not subject to too much upward expansion. A kid might feel misled and frustrated if she did her whole application process with a budget of $20,000 in mind, only to find in April of 12th grade that she could actually have used $50,000 as a benchmark. But a few thousand of wiggle room, added to the budget late in the game to stretch a disappointing merit offer, could be a good thing.

Ballparking the budget numbers is your job. You seem to have about $30,000 per year of swing between what you might realistically need to offer and what you truly can offer, if inclined. That’s a lot of swing. To settle on the numbers, I would want to look at it in the context of overall retirement and other financial planning.

Encourage her to give the flagship honors program a fair hearing, but also to seek out whatever she thinks would be her dream school, and apply (quickly, in the fall) for admission with merit aid. Caution her not to fall in love with anyplace until the numbers are final in the spring of 12th grade. When evaluating the offers, she should be able to articulate the pros and cons of the different schools, and explain what the benefit would be of spending more money.

You may find, at that time, that a bit more spending will get something of real value, and you will be willing to do it. Or not. The money can always be used for her benefit in other ways. For example, you could offer her a nice chunk of money toward a down payment on her first home, if she were to go to the flagship. College is not the only thing in her life that will ever matter. And it will probably end up costing more than projected.

Bigdaddy88 · May 8, 2013, 2:18pm

I’m 99.99% sure we won’t be eligible for any need based aid.

I like the idea of setting different limits for different schools. However, we are dead set against our kids going into debt. It took my wife and I forever to pay off our student loans.

ucbalumnus · May 8, 2013, 2:25pm

Run some net price calculators to be sure. You might be surprised.

Bigdaddy88 · May 8, 2013, 2:31pm

The NPC’s are a little tough because we own a small business.

We are also aware that she needs to apply to several schools where her stats put her in the top 10-15%. She will also apply to a few schools with large merit awards where she is in the top 25% and hope that she gets invited to the scholarship weekends. Can’t win it of your not in it!

LBowie · May 8, 2013, 4:23pm

PhD in what field? If it’s science she’s after, it will most likely be free. This may be true for other disciplines as well. Tuition is usually covered and they give a stipend for living expenses. She might need a little help with living expenses if she does her PhD in a high rent city, but it shouldn’t cost you anywhere near as much as undergrad. I was fully financially independent of my parents as a PhD student.

Bigdaddy88 · May 8, 2013, 4:34pm

She will be studying psychology and wants to teach in college, conduct research and write books. I just want to drive the bus…

Longhaul · May 8, 2013, 4:39pm

Craft the list carefully.

A strong student can easily get $15-$20k/year in merit at many private schools, HOWEVER, many of the elite private schools do not give merit. Based on our experience, I’d say $30k/year is more realistic for total cost of attendance.

Do NOT count on full tuition at Bama. I have not heard anything to the contrary, but for us this year Bama NMF changed in August (dropped housing in yr 2-4) and Huntsville changed in December (from what we expected to be a full ride to $15k/yr).

I also think you are under estimating the cost of Bama. She will likely want to live in the Honors suites, which are close to $9,000/yr. Add the freshmen meal plan which is over $3,500. Plus course fees, books, travel. If she is interested in Greek life, factor that in as well.

Look into the University Scholars at Bama for the Bachelor/Masters combo. Some programs are 4 years and others 5.

Some privates to consider:
Rhodes in Memphis has many merit awards of various amounts.
Tulane is fairly good at merit.
Trinity University in TX.

Privates to rule out:
Pitzer - top merit is $5k/yr
Franklin & Marshall
Pomona
Haverford

BeanTownGirl · May 8, 2013, 4:53pm

Cast a wide net to see what you get, since merit aid is so unpredictable. Here is a link to the Kiplinger’s “Best Values” which has useful stats on non-need-based aid, you can sort on the columns to highlight items of interest (%students receiving merit, average merit award).
[Kiplinger’s</a> Best Values in Private Colleges-Kiplinger](<a href=“http://www.kiplinger.com/tool/college/T014-S001-kiplinger-s-best-values-in-private-colleges/index.php?table=lib_arts&state_code]Kiplinger’s”>http://www.kiplinger.com/tool/college/T014-S001-kiplinger-s-best-values-in-private-colleges/index.php?table=lib_arts&state_code)=ALL&id=none

Use this to identify more schools.

4kidsinarow · May 8, 2013, 5:08pm

BigD

We too are in the same boat, own a business, send our kids to Catholic HS. We told our kids that we can continue to pay what we have been, for HS + a little. We can uncomfortably do that. So it definately limited some of our first 2 kids choices, however, they will leave school with very little to no debt. Savings that you have, can be reallocated to grad school, seed money for a business, a wedding or help with a downpayment on home later. A lot can change in 4 years. I would advise on capping it (maybe it is $25K for your family), but I feel it is a good life lesson to teach our kids that we cant afford everything we want. And agree with Beantown…cast a wide net, and dont let your daughter “fall in love” with one school–it is almost always the one that you will pay the “full freight” on. Best of Luck…PM me if you would like.

Bigdaddy88 · May 8, 2013, 5:20pm

Thanks for all the thoughts. We are definetly crafting the list carefully. As I stated previously, we are going to apply to a bunch of schools where my D’s stats put her in the top 10-15% of accepted students according to the CDS. All the schools on our preliminary list offer full-tuition and/or full ride merit scholarships. Some say “up to full-tuition”. And others offer only a handful of these high awards. Still in all, very worthwhile to apply.

We have family friends who have a D attending a very prestigious LAC on a full ride. Her stats and my D’s stats compare favorably. Seems the key to these large competitive awards is to get an invite to the scholarship weekend. Then of course you have to impress the heck out of the committee. So, we will roll the dice and apply to some of the big dogs as well.

Not sure what to think about the full tuition promise at 'Bama. I’m certain I would have to see something in writing guaranteeing the offer prior to accepting. I have spoken at length with our regional recruiter and have no reason to think their is any funny business going on.

Lastly, I realize I may have underestimated the cost of room and board, but the difference will be negligible in the larger scheme.

coralbrook · May 8, 2013, 5:23pm

My D had a similar experience. She got a very nice merit package from an OOS public (Montana State) early in the acceptance process. But, after visits to several universities it just became clear that she was much happier, with a better fit, at smaller private universities. She turned down another large in-state public school that would have been the lowest cost overall.

In the end there was an $8k/year difference between strong lowest cost public and the best academic/social/financial private college opportunity. We knew she would be happier and more successful at that school so we stretched $3k/year over the initial agreed budget. We also did not qualify for need-based aid, although some of the packages had some quasi-aid included such as work offers and unsubsidized student loans. In fact, the private did everything they could to try to make their offer financially attractive.

So, I believe you should set a slightly lower budget (not necessarily lower than the $20k which might be slightly unreasonable depending on where you are looking), knowing that you may have to stretch if a golden opportunity comes her way during the decision time. Her selected private did everything they could to show her the love and make her feel really wanted and that was just so important to her/us.

cptofthehouse · May 8, 2013, 5:37pm

Bigdaddy, once you look at your finances and decide what you can comfortably pay, the rest is really a personal and family decision. I’ve known families who were very well to do who insisted that their kids take the best deal or go to state U on principle. Some want their kids to commute and will pay for any tuiton, but refuse to pay for room and board anywhere so that if the student wants to go away for college, s/he has to get a full ride. Some put stipulations on distance and states and time of travel.

One thing I see a lot is the perceived value of a college determining what parents will pay. Many families would break the bank for Ivies, or maybe just HPY or certain “name” schools but not others. Or will make exception to price for schools with a family connection. My DH’s colleague would have paid for ivy, but when it came to Tufts or SUNY, he wasn’t impressed enough with Tufts to pay 3X the cost. He would have done it, he says, for HPY or Columbia. Still others have paid for NYU, JHU, and other names they recognize but, not about to pay for a smaller school like Haverford or Claremont simply because there is no name recognition to the parent who is paying, My neighbor had nixed UMich because she could not bear the thought of paying such a high OOS premium with her kid being in a minority even among full pays of paying the absolute most for the school with Michigan in staters paying so much less. The $10K sweetener did the trick, as the other choice was a full pay $60K school, but I swear, she would prefer to pay that than $40K for a school where most of the kids pay a lot less. I kind of feel that way about UVA, I have to admit for no rational reason, as I am paying an OOS premium anyways, and as a full pay parent have been in that minority paying the most a number of times.

So everyone draws the lines as to what they want to pay for a number of reasons.

I, for one, give college choice a big heads up with my kids, and if it weren’t getting into financial danger zones, i would pay full freight to just about any college that any of my kids want. I really want to give them what they want in this area, and am sad that we cannot be financially responsible and do so. I regard it as a failing on our part, and it does make me sad.

So it’s what you you decide as parents, as a family. Once you have the maximum in place, it’s a matter of what you want to pay, and how much leeway you want to give your children. No one should pay more than the family can safely afford, and family members should not be suffering to pay for a kid’s college. No second job, or raiding the pension or borrowing more than the ratios say are wise, or selling the house and living in a way that is more uncomfortable for everyone. But, yes, we’ve cut back to up the budget numbers for college and we put it high up there on items we are willing to pay a premium for.

Bigdaddy88 · May 8, 2013, 6:49pm

Very well said. I just wanted to see where the CC community came down on this issue. Seems to be split pretty evenly. Obviously, we are going to make our own decision. I guess I’m caught between being practical and wanting what’s best for my kid. After all, she’s done her part and now it may be time to do ours??

Ideally, she’ll receive a couple of nice merit offers and all this will be moot!

intparent · May 8, 2013, 7:18pm

The ‘biggest dogs’ in the LAC world really don’t give merit aid. Are you certain this kid is going all on merit? A lot of time family’s will say their kid has a “full ride” when what they mean is a combo of merit/need based aid/federal loans…

One of my D’s best friends had parents who (I can’t say this nicely) waffled on how much money they would provide for her education. Started with pretty much NOTHING. Kid said, well, guess I better apply to service academies. Parents said… okay, we will pony up the cost of your private high school. So kid started visiting, interviewing. Ended up with a range of offers, mostly privates with varying merit aid. But… the least expensive schools were also the least desirable to her. Parents ended up ponying up some more money on the LAST day of decision making for one of the better schools on her list, but kid is also taking out more in loans than is good for her. But my main point is that their search was excruciating for all of them, partly because the parents couldn’t give her a straight story on what they would or could pay.

Also… those scholarship weekend invites are tough to wrangle. Even at a college where D2’s stats were in the top 5% for the college, she did not get that nod. I am pretty sure in the case of this college, they mostly gave those to students who increased the diversity of their pool in some way.

If your D’s experience is like mine this past year, she could get merit offers between $15,000 and $25,000 at several schools with an annual cost around $55,000 (plus travel & books/spending money, so say around $58,000). Bringing the COA down to $33,000 - $43,000/year. If you pay $20K – then she is still taking out a pile of debt.

However, just a personal thing at our house, I would not have sent my kid to a large state university, even in the honors college. She would not have fit in well; I also know from my own personal experience what the flaws are in that system, and thought a smaller school would be better for undergrad for my kids.

Also, what field does she think she will be studying? If she does indeed go to graduate school, the cost varies widely depending on her field of study.

MirabileDictu · May 8, 2013, 7:37pm

When we went through the admissions process I created a spreadsheet with various salient characteristics of the schools to which my son applied. Among the categories I included columns for size of student body, percent of degrees granted in his major area, student:faculty ratio, graduation rate, frosh retention rate, and net price. I also color coded the cells based on the positiveness/negativeness of the data. For us, small classes are critical, so the best student:faculty ratios were shaded green, the middle yellow, and the worst red. For net price, the lowest were shaded green and the highest were shaded red. When I was done gathering the data, I sorted by net price. This allowed me to look at all of my son’s options from the cheapest to the most expensive and get an immediate visual impression of what, if anything, the extra money was buying.

I found this spreadsheet to be very helpful. There was a lot of red and yellow (mostly in size, graduation rate, and frosh return rate) in our lowest priced ($17-25k) options. There was a lot more green in our most expensive options ($40-56k). But what really struck me was that there was even more green in the middle ($27-35k). Clearly, this was the sweet spot. There was no need to even think about our most expensive options. We simply needed to decide if it was worth an additional $10k per year to go someplace with substantially smaller classes and up to twice the graduation rate of our cheapest options. We thought that it was. We are spending twice as much as our cheapest option, and 37% less than our most expensive option, and we have a very clear idea what that extra money is buying.

Putting together the data was a PITA, but the end product really simplified our decision and gave us confidence in it.

coralbrook · May 8, 2013, 8:37pm

That is an excellent idea and gave some good solid numbers to the OP for a range of net costs and budget.

We were mostly applying in state (California) without the stats for the UC system, so our budget was probably higher than someone targeting the Midwest. Originally I set the budget at total annual cost for UC (which we had used as savings target) and we went from there.

Bigdaddy88 · May 8, 2013, 8:59pm

Intparent—

The girl I speak of is Johnson Scholar at Washington and Lee. That is a true full ride merit scholarship. Now, I’m not sure if you consider W&L as a top dog, but I certainly do! The only out of pocket expense the parents have is travel and sorority issues.

Again, at this point we are dividing the schools into several categories based on their COA and merit aid and where my D stands compared to the last freshman class. So any school that she’s in the top 20% stat-wise AND they offer full rides or full tuition merit aid are in the running. Then we will also apply to schools where she’s a high match and hope that she gets invited to compete for the large merit scholarships if she’s accepted at all.

My D will thrive anywhere she lands. She’s the most grounded, well-adjusted kid you’ve ever met. Having said that, she is in love with the LAC model. So, we’d love to see her attend the best LAC she can get into, but there needs to be some common sense applied…doesn’t there?

intparent · May 8, 2013, 9:46pm

Yes, it is a matter of definition. Hardly any of the top 10 ranked LACs give any merit at all. Once you get below that, they do.

There are other factors to consider… my D2 ended up choosing her most expensive option, but it is also the school at the top of the Forbes “Return on Investment” list of colleges this year as well. I feel confident that (1) we can pay the bill, and (2) if she makes it to graduation, she will be very well positioned in the job and/or graduate school (with funding) markets.

Bigdaddy88 · May 8, 2013, 9:53pm

USNWR had W&L ranked 11th I believe.

intparent · May 8, 2013, 9:56pm

I thought it was 14 (just pulled up the 2013 numbers before I posted) … just saying, the ones at the very top (Amherst, Swat, Williams, Carleton, etc.) do not give any merit at all. W&L is a great school, and good for her if she can get a big scholarship!

Is $20K a reasonable number?

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