There are virtually no situations where a 400K college education is worth it, for a family that has to pay rack rate. For some, 400K is nothing, and so their child can go wherever they want, and what they may want is the social connections that can be made at a highly selective school for 400K total. For many, financial aid will bring that cost down a lot, even to the point that the highly selective expensive private college may be cheaper than the in-state flagship, may even be free for them.
Beyond that, the only situation where it might be worth it for a family that is not extraordinarily wealthy to pay 400K for a college education is the social connections that can be made there, which will affect their career opportunities. However, a lot of those social connections are already set before college starts, because those kids knew each other in prestigious prep schools, or even earlier, from the beaches of the Hamptons, or Nantucket, or exclusive settings that most of us have never even heard of.
Virtually anything else can be done much more cheaply at the in-state flagship, or with merit money at somewhat less selective schools.
I think the basic issue is that any family actually paying $100K at a meets need college is extraordinarily wealthy by normal US family standards.
Again long story short, if paying $100K instead of $50K for the kid’s four years in college, only means the parents spend $200K instead of $250K on themselves for four years of their empty-nest retirement, then that might well make perfect sense as a utilty-maximizing tradeoff for the family.
The question is then whether the aid formulas are doing a reasonable job filtering for families in that position, and I think there is a good argument they mostly are.
Except in cases where something like a divorce is in practice forcing one parent to disproportionately take on that cost, but again colleges understandably have a high burden of proof for kids claiming the noncustodial parent is truly not available for contributions, as opposed to that parent just saying they won’t contribute so the kid can get more aid.
We are a full pay family. Both of our kids went to their first choice school. For S21 it was a out of state state school and for the other it was a LAC. Do I think that the LAC is worth 95K a year, for him probably. Do I cry each time I pay the bill, absolutely. No school is worth 100K a year, but we have saved and have the money for him, and he is taking every advantage. I do think that his LAC is going to position him for grad school admissions and the 350K we spent on education will be the last we will have to pay for him. My older son who we spent less than half on may need support for his grad school.
A related topic is the cost now of medical school. That is absolutely outrageous and with potential earnings for doctors dramatically decreasing, 80-100K a year in tuition is just disgusting. As a family of two doctors there is no way we think this is worth it.
Yeah, many of the doctor families I know were encouraging their possible premed kids to go in-state public or at least chase merit, rather than just full pay somewhere supposedly “good for premed”. They had the savvy to know that many places would be plenty good for premed for their kid, and to know that it is one thing to full pay for college, another to full pay for college AND med school.
ETA: Random anecdote, but my S24 with a Bio interest swore he wasn’t interested in med school when starting college, and then of course changed his mind once he got started. We’re still committed to helping him launch whatever ends up being his professional path with as little debt overhang as possible, but I will admit I was not bummed to hear him recently mention possibly doing a MSTP.
For those who don’t know, this is a type of MD/PhD program that would mean “free” med school . . . as long as you don’t think too much about the opportunity cost of the four extra years where your only income is a stipend. But of course if you came out of undergrad with a lot of debt already, you definitely WOULD have to think carefully about that.
I don’t know if he will actually do med school at all, let alone a MSTP. But I just think this underscores the point that minimizing undergrad debt preserves options for whatever comes next. And so however you do the assessment of the value of undergrad, that is definitely worth keeping in mind–the college says you can pay $X, but can you actually pay that without saddling the kid with much if any debt?
And in fact still have resources left over to maybe help even more after that?
MD/PhD programs when I was training were almost impossible to get into and most started out older with research experience already (many had a masters). I can only imagine that these programs are even more competitive now. Not sure for most what the benefit is over doing just the PhD.
The parent was wondering if they could justify the cost of $348k on Notre Dame.
IIRC, some posters said it was worth it for the experience and connections. Spending $348k on an undergraduate degree on one of my kids would never had been an option for my spouse and I.
But I remember thinking, that is a lot of money for an “experience”. For 4 years. And that if I had that kind of money, maybe spending $100k or $200k on school and giving the kid $200k or $300k towards a house would be a better investment… and a 30 year experience.
As usual, it depends on the parents, the finances, and the kid.
If it works for you to pay $100,000/year for college, do it! If it doesn’t work to pay $100,000/year for college, don’t do it! And don’t worry about what someone else is doing.
Absolutely, and this is true whether you are looking at the total price or the difference between whatever the “cheaper” option is. It’s like any other “is it worth it” question, and every family is different. The family who has to take out big loans, or who just misses aid cut-offs but has to dig deep into their retirement savings or pay on a payment plan out of monthly after tax income is not the same as the family who has a well-funded 529 plan in their back pocket or the family with 7 or 8 figures in assets to whom $400k literally affects nothing significant in terms of lifestyle, retirement or inheritance options.(and even the latter might decide that it’s not “worth it”, and that’s also ok.)
I think the point is that a lot of professional white-collar families can do “both / and”.
In California, the choice for a lot of such families is the UC system (state schools) which is roughly $50K per year, or $200K total. So you are “only” talking about $200K difference. While $200K is certainly not small change, it is not materially life-changing for a lot of parents who have white collar jobs.
To me, spending more for college is akin to driving around in a fancy car vs. a Honda. Both are safe, both will get you around town, both will “get the job done”… so why spend any more, for college or for a car? The answer is that is comes down to a very personal family choice, and there is no ‘one size fits all’, since not all families will ‘miss the money’ in the same way.
If someone else drives around in a much fancier car than I can personally afford, I spend zero mental energy thinking how they are wasting their money…. ‘when my much cheaper car can get me around just fine’.
Same for other families’ college choices for their kids.
The only thing I advise is that kids should be cautious in taking out excessive personal student loans because it limits their flexibility in taking a job. And unless I know with absolute certainty that the child is going to graduate or professional school, I would even take those costs off the table, since kids change their minds frequently during college. Meaning, it could very well be that a bachelor’s is their terminal degree.
We were a two professional income family when our kids went to college. Being full pay was not an issue. Families like ours had a plan to pay for college and that is what mattered. We expected to fund college, and didn’t want to or have to restrict choices based on costs. The colleges our kids attended then (graduated in 2007 and 2010) are now very close to $100,000 a year.
There are families who strongly believe that their students should attend the “strongest” (in their minds) colleges, and these families don’t qualify for need based aid. Many of the elite schools only give need based aid…so this means that they are paying the full costs…and are willing to do so.
I’m wondering how many parents of elite school grads here wish their kids had gone to the state flagship?
Our child had the following choices: UCLA or Berkeley at around $50K per year (we live in CA), a rare full-merit scholarship to another T20 private school worth $100K per year, and a famous US school at $100K per year. It was certainly not a trivial decision for us, but we had contributed $50K into a 529 plan when she was a baby (and contributed nothing more), and the great stock market we’ve all enjoyed over the past 18 years meant that the original $50K is now enough to pay for 3 years of the famous school (and tax free). So we have no regrets {although that school bill in July and November always causes me to blink hard). I viewed that original $50K 529 investment as akin to not buying that fancy SUV back in 2008 our family seriously looked at. Instead our family ended up buying a Honda, and that was fine too.
I have a kid that went to an expensive school. I also have a kid that went to the instate flagship, who had an excellent outcome. I still feel I would sent him to a better school if he got in. I suspect so does he, strongly. For exposure, and long term network.
Not at all. I think it was absolutely the best choice by a wide margin.
We left it to the kids to some large extent. The younger kid had the choice to go to an out of state flagship that was ranked at 16 or something for his field vs some 35 for the instate flagship for twice the cost. We told him if he picked the out of state school, there may have been some resistance to the idea for a variety of reasons.
I don’t think this accurately describes “social connections” as played out in today’s world.
The first multi-millionaire in my kid’s friend group at MIT was a first gen college student from a blue collar background, who took a project he did with a team and two professors and turned it into a startup which was quickly bought by a large Tech public company. Kid cheerfully claimed he had the lowest GPA of any of his friends, many of whom ended up working for him both in the “low pay but tons of fun” startup stage, as well as in the “heck, we’re all wealthy now if we stick around long enough to monetize our options” phase.
These aren’t prep school kids. I know a lot of families who send their kids to prep school, and they do NOT want their kids working as hard as they’d have to at many of the “high price/hard work” colleges in America, let alone busting their chops for a modest salary at a startup for the privilege of working 100 hours a week. And this is not exclusively an MIT story– read the bio’s of 50 successful entrepreneurs over the last 15 years of so. These are not the sons and daughters of the Hamptons. And the point of a university education for these families was not “social connections”. It was mentoring and quality teaching by subject matter experts, and living and breathing in an environment where intense hard work could be rewarded (not guaranteed, but possible) whether in a monetary sense, or social welfare sense, or just a satisfying career and paying one’s taxes.
I think you are describing a different era than our own.
I like the car analogy, including because I think it emphasizes the point about being able to pick your luxury spending.
When we first got married, my wife and I “underspent” on cars (by normal dual-income-no-kids standards) because we didn’t do regular long commutes and wanted to be able to save more. This meant buying lightly-used economy cars and owning them a long time.
It was a big deal for us when we graduated to buying NEW economy cars. I still remember my legal secretary bursting out in involuntary laughter when I mentioned I had just bought a new car, she asked what it was, and I told her it was a Kia (this was right at the beginning of Kia starting to become a more respectable brand in the US). A Kia we still have, I might note, although it is now our garden center/dog carrying car (poor Kia).
We just recently graduated to buying lightly-used “luxury” cars (not the most popular used brands or models, though, the ones where the first owner got murdered on depreciation). Will we ever buy a new “luxury” car? Not sure about that.
I note that is actually not the worst way to get all the latest safety technologies for the kiddos (one is driving one of these cars, one will be in a couple years). But I also don’t mind them for our now more frequent kid-related road trips, something we plan to keep up indefinitely in the empty nest years now about to begin (with D30 heading to boarding school).
And then all along we were sticking the savings in 529s (essentially, obviously there are more moving parts than this), so now we can buy shiny new “luxury” schools for the kids.
So are these “luxury” schools worth it? Would it have been more worth it to buy new luxury cars? If the answer is neither schools nor cars, what were we supposed to be spending it on instead?
And of course some families in our financial position will have a very real answer to that question, like they absolutely have something else in mind they would rather spend that money on. And that is fine too.
