<p>Money quote:</p>
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<p>[In</a> paying for college, better to be lucky than smart | Money & Company | Los Angeles Times](<a href=“Archive blogs”>In paying for college, better to be lucky than smart)</p>
<p>Scary stuff.</p>
<p>I think that in some cases luck is definitely a factor. You’re lucky if you…</p>
<p>1) were born into an affluent family who will pay for college</p>
<p>2) have grandparents who will contribute to college costs.</p>
<p>3) have parents who are good planners and savers</p>
<p>4) have the smarts to get high stats that will either get you into a full need school or to receive a big merit scholarship.</p>
<p>I’m not saying that you have to have all of the above, but if you have at least one, you’re in a much better situation than others.</p>
<p>Along with low income kids…I feel for kids with good-but-not-stellar stats who have middle-income families who can’t pay for most of their college costs. These kids often have no choice but to attend their local public because their stats aren’t high enough to get the aid/merit they need to “go away” to school since those schools require strong stats.</p>
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<p>My H and I were each fortunate enough to be full pay at an elite school for undergrad (and our graduate work as well - his was paid for by parents, mine by my employer). Honestly, when I look at the crushing debt that some of our fellow students were under, our ability to start off young-married life debt-free was what made all the difference. We could start putting away for our children’s college very early in the game since we didn’t have loan payments to deal with. Those with loan payments aren’t quite so able to do so.</p>
<p>I am seeing the “luck” thing all across my social circle: everything the supposed experts told us about being financially responsible turns out not to be true. So I have friends who four years ago would have been able to afford private tuition for their kids but can’t now. The interesting thing - to me- will be if their investment advisers can still send their own kids to privates.</p>
<p>alh: I would add a big “DITTO” to your post. </p>
<p>And our financial advisor’s two sons? One is a freshman at our state flagship. The other headed there this fall. The older one was accepted at UNC, Duke and William and Mary (and we live in Missouri.) The parents (both private LAC graduates) loved their visit to our flagship and couldn’t see the financial wisdom in sending him anywhere else.</p>
<p>Luck: A stock tip from my dad when D21 was a year old. We scraped together a few thousand dollars (you had to buy shares in lots of 100 back then!), and that investment was worth over $30,000 when D was a freshman even after the stock market dive. (Thanks, Dad!!!). It wasn’t all of our college savings by any means, but it was the best/luckiest investment.</p>
<p>Elbow Grease: We searched hard, and D found a college she loves where she is at the top of the 50% range. With great ECs, she was awarded merit aid for about 1/3 of the cost. It isn’t all luck…</p>
<p>Slitheytove: a lot of the thought in that article reminded me of the scenarios that Malcolm Gladwell talks about in Outliers (i.e. the “luck” involved with Bill Gates, Steve Jobs, etc in getting launched in computers; and the “luck” involved with having birthdays during a certain month if you’re involved in a sport.) No one could have manipulated the year of their child’s birth to time the stock market, especially since we had no idea what would happen with the economy.</p>
<p>I have to say that both my kids are/will be “lucky” in terms of saving/paying for college, although there was a little more strategy & known variables ahead of time. D1 was able to take advantage of a NMF scholarship (that I knew about because of CC; other kids didn’t take or blew off the PSAT) and D2 will have the benefit of her momma’s 5 year work anniversary at an academic institution (that triggers the very awesome tuition benefit) coinciding with high school graduation. </p>
<p>Too bad I would have had to give birth when I was in 10th grade to trigger those awesome returns starting in 1979 :)</p>
<p>Luck sure does factor in. Both kids’ 529s were in age-based investment vehicles. D1’s rolled into a more conservative track on her 16th birthday, before the market recoved. D2’s stayed in the same track and has today recouped all losses and posted gains. Right now, I have more money in D2’s 529 than I do in D1’s and D2 is three years younger!</p>
<p>Lucky d1 has a parent working in higher ed. She’ll be attending college on a tuition benefit. Will d2 be so lucky? Who knows what the future holds for that job?</p>
<p>But, since there has been planning done for both kids, neither will find herself in a situation where we have to say, “Wow, guess you’re not going to school because we have a monster EFC and absolutely no money to pay tuition.”</p>
<p>Not luck- intelligence usually combined with hard work. Someone in the family- grandparents/parents/student- was smart enough to make the investments to pay for school or garner scholarships. This is not like winning the lottery. My H and I translated our high abilities into high income jobs with hard work. Our son inherited our intelligence. Most students will do just as well at the cheaper public schools as at the high priced ones. Those with high ability will find Honors programs and be able to get where they want to be. For the rest- ten years later it won’t matter where they went to college, it will have been a 4 year blip in their lifestyle.</p>
<p>*Honestly, when I look at the crushing debt that some of our fellow students were under, our ability to start off young-married life debt-free was what made all the difference. We could start putting away for our children’s college very early in the game since we didn’t have loan payments to deal with. Those with loan payments aren’t quite so able to do so. *</p>
<p>Very good point.</p>
<p>There was a student awhile back who said that both parents are physicians, but they are both still drowning in undergrad/med school debt (borrowed heavily for both). OMG…their child is 18 and they can’t afford his college costs because of massive private student loans? Yikes. This sounds like that story of the doctor whose student debts have spiraled up to half a million because of deferments, borrowing large amounts, etc. </p>
<p>Luck does play a role…no doubt about it. I know someone who really had nothing saved for his kids’ college costs. Then, both his parents died suddenly and he inherited over two million dollars…during the year that his oldest son was a junior in high school. Sad to say…but the timing was everything and now his kids are at pricey elites.</p>
<p>I think when we’re talking about luck…we’re saying that the student is often lucky to be the recipient of the choices of parents/grandparents.</p>
<p>wis ^^ it takes luck to be born into a family where, as you say, someone in the family was “smart enough to…”</p>
<p>but I do agree with you that cheaper publics are perfectly fine for most kids. problem is, those ‘cheaper’ publics are starting to be out of reach for many of those kids…</p>
<p>In my Sociology in Education class the single factor that most influences whether or not a child will attend college is having a mother who graduated from college. Talk about luck.</p>
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<p>It does not take intelligence to make investments, it takes money. Families who are living paycheck to paycheck do have not have that luxury. </p>
<p>As for scholarships, I would say the single largest influence in my son receiving his scholarship was having college educated parents who understand how the system works and where to seek credible information. For an outsider, it can be nearly impossible to navigate (yet another very important role I’ve seen CC play for students and parents.)</p>
<p>imho it is mostly luck when your parents bought property in the '60s or '70s that appreciated beyond what anyone might have predicted and provided you with a sizable inheritance in the late 90’s or early part of this century. The property our generation leaves our children will be worth exactly what? Will there be the same kind of appreciation? </p>
<p>some of our parents/grandparents were really lucky finance-wise to live in the times in which they did - in my opinion.</p>
<p>Not luck unless you consider it luck to have a genome that allowed a forbear to have the type of intelligence to translate potential into wealth. Most of us probably have to thank some ancestors who chose to immigrate to the US. The intelligent poor lack the factor that translates potential into accomplishment. I suspect the in debt physicians chose a more luxurious lifestyle than needed for a comfortable one.</p>
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<p>How is this to help the financial-planning professional? “After you’ve paid me a boat load of money to advise you for all these years, it’s really all down to luck”?</p>
<p>Here’s a piece of luck–the company you worked at. You have stock options from your company. Good luck–the price of the company stock has increased a lot over the years. Bad luck–you could have been the holder of stock options in a big pharma company…stock price less today than 10 years ago.</p>
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Wow intparent - you have a lot of kids!</p>
<p>On average, I tend to think our good fortune (or bad) tends to be a 50-50 mix of luck and application. For some individuals, the mix may be a bit more skewed to one or the other.</p>
<p>I try to be careful not to assume that all my good fortune is the result of my intelligence and good looks. ;)</p>
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<p>LOL! Humility is a good thing…</p>
<p>those good looks are probably a result of your ancestors having had the foresight to choose attractive mates… not luck at all :)</p>
<p>ellemenope: you are so right about the stock options piece. DH worked for a company that had a lot of long term employees (30+ years) that had put all their retirement money in company stock. When they went into bankruptcy they lost their entire financial future. This was in the mid 80’s when the idea of “diversifying” wasn’t as well known to the layperson. And for an old time company man, they never had any reason to doubt their investment in the company.</p>
<p>And we know other people who worked for Home Depot from the getgo and were able to retire very early with a nice cushion.</p>