Should you incur substantial debt for that "dream" school? or an arts major?

Parents Forum
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<p>We have set money aside, but probably only enough to get them through a state college, like we attended. We started saving for college when each child was born–since we are self employed we knew there would be ups and downs, better to start when we were up!</p>

<p>So as I said–directing the kids to a life of big school bills, is NOT at all what I want. My husband and I always save and buy our cars with cash, pay off our credit card every month, and only carry the debt of our home. We have tried to teach our children that owing money is a burden that they do not want to carry. I am saddened how young people don’t seem to even feel bad about having a bankruptcy on their records these days.</p>

<p>My 8 year old came up with the concept of “the man is pushing down the dreams of the little guy” (direct quote from her at age 7)…and I have explained to her that if she gets a good education, she doesn’t have to be in the little guy category. She can be the leader not the follower. She needs to dream big. I don’t think that is all together bad. If you set high goals you will go much further than if you set lower goals.</p>

<p>Now being around my Ivy League business associates, my kids are exposed every day to stories of the Ivies. I can’t exactly shelter them from it, and frankly I have been really impressed with the quality of these people and the moves they are able to make financially due to their connections and their talents. And yes, I have been impressed with people who were not from Ivies–believe me, until last year I hadn’t been around anyone from these schools. So I guess I am “young and impressionable” about this. And yes, I am concerned about it or I wouldn’t have posted anything.</p>

<p>Both kids know without fail they will get a college education. They are bright children, but who is to say how bright compared to the millions of other glowing stars out there! But I don’t see that it is harmful to expose them to all options–which include high end private institutions to our local college of arts in Laguna Beach. I just want to them to know that we expect great things from them–they may be successful artists, successful parents, successful pilots, successful business owners, or successful auto mechanics. They must strive to use their full potential and the need exposure to success, so they know what success is. Being a man and a woman of integrity and love will be at their core and a good education will be the key that unlocks many doors.</p>

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<p>“We were looking at high end private high schools–and one mom told me to quit work, so that we will look better (read poorer) for the financial aid package. She did that and got more money for financial aid than she is able to bring home in a paycheck…hmmmm–anyone out there done this or heard of this idea?”</p>

<p>Must be an awfully small paycheck…</p>

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<p>Ivy2B…your last sentence in post #161 about a good education being key to unlocking many doors is very true. I think you will find most parents on CC thinking that way as well and that’s why they are here because they value a good education. Please be aware that many of us are also into setting standards and goals and reaching for one’s dreams. A fine education can be that goal. But that can be had at places other than “ivy”. Ivy itself ought not to be the goal. A “good college”…the best you can achieve, is something to strive for. Using “ivy” as a goal can be a set up for disappointment, let alone is very narrowly defined as a successful college outcome. My kids had high goals and standards for themselves and have achieved very well so far and will likely be successful people. However, “getting into an Ivy League college” was never the stated goal. A “good college” is how they dreamed. Even so, one attends an Ivy but that never was her goal and she liked several non Ivies just as much if not more than some of the Ivies.</p>

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<p>Thanks sooz - I just wanted to get a broader perspective on this—I am concerned about being able to afford the best and what is the best I can afford. This board really got me to thinking about that. And that goes for any school not just ivies. My husband and I have done well with our state school educations. But now that our kids are in college prep type private schools–we live in a horrible public school district in S. Cal, so private was our only option–they are surrounded by kids who will not be heading to the local community college or trade school. These kids are all high achievers and most from very wealthy families. (We are the Beverly Hill Billies of the group!) It is on my mind on a regular basis–preparing them for college. I think my parents thought of that when I was about 17 not 8 years old!</p>

<p>Mini–I kind of thought the same thing when she said that–gee what did you do for a living?! But I think it probably is more of a case that without her income they could qualify for more financial aid. I don’t know—it was the first time I had heard of someone doing that.</p>

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Is this the same Laguna Beach detailed in the MTV series, where the wealth is just dripping from everybody? Is this the Laguna Beach where the average and median cost of a 3 bedroom home was approximately $1.5M in 2006? If so, wow…I’m impressed. My daughter would like to live your life!</p>

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<p>This is the kind of thing that is easily debunked with a simple EFC calculator.</p>

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<p>I understand the debate about Ivy League schools, top LAC’s, etc. I have several kids and the cost to send all of them to those caliber schools is rather daunting. Our oldest just went through the college application process is still deciding where to attend. He actually chose not to apply to any Ivy League school. He did apply to several difficult schools, some he got in, some he didn’t. So, don’t think that just because your S or D goes to a private college prep school, they will get in anywhere they want. Competition can be very stiff. Anyway, to the point, he will probably choose a lesser known, but still very good school, in the midwest and have his tuition covered by academic scholarship. He has been offered about $2500 in work/study from the school. He also has just gotten a summer job where he will earn about $3000. As parents, we will only need to pay about $5,000/year for him to go to college. He was also offered loans but will turn those down. He knows that if he attends the lesser known school and earns very good grades he will probably still get into medical school. Going into graduate school debt free is a real motivator as the current cost of medical school is about $250,000 for four years.</p>

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<p>Well if your parents planned ahead and thought to themselves that they don’t want their kid to be flooded in debt by their mid 20s, it really shouldn’t be an issue.</p>

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<p>What 8 yr old knows or cares about the Ivies, particularly if you live in CA?</p>

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<p>Allmusic, I know what you mean. The only thing my kids thought about college up until the beginning of junior year was, “I’m going to work real hard to do my best to achieve so that I can eventually go to a good college.” We didn’t talk college names. When it was time to look into colleges, they looked into them. Talking about specific colleges at a young age is hard for me to relate to. The goals should be more general.</p>

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If you are in California, then the “best” for a middle-class family is Berkeley or UCLA. It’s a pretty good “best” to be looking at. What you should be doing is tracking UC tuition, making sure that you can save enough to pay for the kids’ college – encourage them to aim for the UC system. If they are excellent and accomplished students, they might also get into an Ivy-caliber school and qualify for generous need-based aid, or get into an excellent private university and LAC and qualify for generous merit aid. Part of aiming for the “best” is aiming to be good enough to get the money.<br>

That’s what they say, not what they do. It works for people on the low end of the economic spectrum - who qualify for a lot of aid – but it’s extremely difficult for those parents to give their kids the opportunities in childhood and high school that lead the way to an Ivy – so it is a promise that is elusive for most. For middle class families, you will discover that your “EFC” is calculated on the assumption that you are willing and able to take on debt - it tend to be roughly one-third of your income. Obviously, if you earn $60K you would not be able to pay $40K out of pocket. </p>

<p>You mentioned that you and your husband are self-employed – which means that you would never be able to count on any particular level of financial aid in any case. The financial aid people go over the schedule C line-by-line and add deductions such as depreciation, car or travel expenses right back in. The bigger the gap between gross receipts and net earnings, the less certain the financial aid process.

Sometimes there is an advantage to being a big fish in a small pond. My d will graduate with an Ivy degree and my S. will graduate from a Cal State. My son is currently applying for an paid internship opportunity that is only open to Cal State students that is amazing - I have seen his application and I can’t imagine that he will have much competition. If he doesn’t get it, it certainly will be close. The internship is as good as anything that might be offered at private colleges – but competition would certainly be a lot tighter for a kid at an Ivy. There will be doors open everywhere – they are different doors, but they are doors nonetheless.

Mostly myth. If one spouse is working part-time at a low-paying job, then the financial aid hit coupled with employment related expenses (clothes, meals out, commute costs, childcare expenses ) and the tax hit which often happens when the 2nd earner’s income puts the family into a higher bracket or AMT territory can end up making the 2nd job more trouble than it is worth – but that isn’t going to work for families with accumulated assets or higher incomes. It’s more likely that she’s getting a financial aid benefit at a private college because of the tuition being paid at the private high school – the Ivys & similar caliber school will generally subtract that amount before calculating financial aid. </p>

<p>Personally, I felt public school for free was a better option. I saved all sorts of money that I used to finance extras like travel for the kids and dance classes, and even was able to donate a few hundred bucks a year to the public schools my kids attended. </p>

<p>You can’t count on college financial aid, and you definitely can’t count on your kids being admitted to Ivy-caliber school. A notch or two below the Ivies and you are looking at financial aid becoming very iffy – the vast majority of colleges are far less generous with their financial aid dollars. </p>

<p>And heavy debt sure can close many more doors than an Ivy degree can open. Be very careful what you assume when you meet a successful Ivy league graduate: the vast majority of Ivy grads come from very affluent families – they are rich and well-connected even without the degree. All too often, kids who are attending Ivy-type schools on financial aid end up hanging out mostly with other middle class kids on financial aid, and while they get a stellar education, they don’t necessarily ever make the “connections” that the Ivy is supposed to afford, because they aren’t hanging with the right crowd.</p>

<p>My d. will probably go into public service or nonprofit work when she graduates, by the way. So will my son. Neither knew that they were so inclined before starting school. But the point is, the degree isn’t going to make much difference in that field. Both will find it relatively easy to get steady and emotionally rewarding employment for modest pay and reasonably good benefits.</p>

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<p><a href=“http://content.kiplinger.com/tools/privatecolleges/privatecollege.php?schoollist=prv_univ&sortby=RANK&orderby=flip&states[]=ALL&myschool[]=none&outputby=table[/url]”>http://content.kiplinger.com/tools/privatecolleges/privatecollege.php?schoollist=prv_univ&sortby=RANK&orderby=flip&states[]=ALL&myschool[]=none&outputby=table&lt;/a&gt;&lt;/p&gt;

<p>The list contains average debt. Some of the ivy appear within reach financially.</p>

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<p>Want to weigh in on two points:
1- do not sacrifice your retirement for your kids “dream school.” Make sure you have disability insurance, long term health care plan, etc. in place before you agree to take on your kids loan payments. You could get hit by a bus tomorrow… income gone, kid paying off loans plus responsibility for your care. Not a pretty scenario. If you’re lucky enough not to get hit by a bus… your kids could still end up paying for your nursing care or medical bills or whatever, long after they would have retired their school loans. Think about it… kid is 50 with his or her own children to educate, but they’re paying someone to bathe you so they can go to work, since you spent your own retirement funds paying off college loans. Do- the math… in home care can cost $80K a year or more; nursing home can cost 100K; a person with Alzheimer’s can live for over a decade, impaired, in need of round the clock attendance; you may have a spouse who needs a roof over his/her head so you can’t sell the house to pay for nursing care. Lots of people will lend a kid money for college; nobody wants to finance your retirement.</p>

<p>2–I laugh every time I hear or read someone debating the merits of a “practical degree”. Back in the late 70’s you had thousands of unemployed engineers in places like Long Beach CA… supposedly a recession-proof area, but when aerospace went belly -up, so did the jobs. </p>

<p>I could write a book on the boom/bust of various “safe” professions, all of which have had massive layoffs over the last 30 years. Go study your passion, learn to read and write, even better if you can manipulate numbers and read a graph. Some years engineers are “in”; some years accountants are “out”; if you graduated with a degree in e-commerce in 2001 you couldn’t get arrested once the dotcom boom imploded. So- don’t worry about a safe career. There aren’t any. All there is are the skills between your ears, regardless of what you majored in.</p>

<p>Follow your bliss.</p>

<p>As I’ve mentioned before, I work in Corporate HR and am responsible for hiring several hundred people a year in a variety of disciplines. We hire former concert pianists for jobs as statistical analysts (most musicians are good in math); we hire political scientists and historians for anything involving writing and analysis; we hire linguistics majors as technical writers, and Renaissance Studies majors for virtually anything.</p>

<p>We have jobs that go begging… we have lobbyists working with the INS to admit more non-Americans to fill jobs which require strong quant skills. We’ve hired ESL teachers to help recent Immigrants learn English quickly; we’ve hired dialect coaches to help immigrants who’ve been here a while lose their accent and make their English easier to understand on the phone or in a video conference. It’s expensive to sponsor a foreign national for a Green card but it beats the alternative… not being able to hire qualified people at all. Show me a recent college graduate who can write, read and think critically, can interpret a bar graph, and has fire in the belly about something… anything, and I’ll show you someone who is employable.</p>

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<p>Taxman mentions that the money used for college could be invested to become retirement funds. Yes, but there are other considerations. We will probably end up paying over $120,000 total to put our two kids through a wonderful private college. One will graduate debtfree, one will graduate with less than $15,000 in student loans (he’s got $750 dollars in private scholarships to reduce the loans so far - hoping for more!!!) Both of the kids could have gone to big state U’s for free. So conceivably, we could have sent them to state schools and invested the money. But human nature is funny! Would we have invested that money, or would it have gone to purchase a new car, new roof, trip to Europe, more meals out, etc? Even though we are , by nature, frugal types, I’m sure having all that extra money in the budget would have resulted in much of it being frittered away. Instead, we have a goal and we tighten our belts - and we see the result in the wonderful options our kidone (and soon to be kidtwo) have at their private U. I’m willing to bet that most people would not actually save all that money that they could, if their kid took the free-ride option.<br>
We are upper-middle income ($95,000 or so a year, with two working parents), and we get substantial financial aid from my kid’s school. We have been able to meet our EFC out-of-pocket for the first three years, and expect to be able to do so next year. We are expected to pay approximately 1/4 of our pre-tax income to the school, or almost all of my take-home income. So essentially, for 7 years we are living on one income, and spending the other on school. What better use for my money, than to provide my kids 4 years to explore in such a great place? I see parents who are willing to pay for 13 years of private elementary, middle school and high school, but who don’t want to pay for a private college. Well, I’m doing the opposite. :slight_smile: It’s not the destination but the journey…</p>

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<p>Very well said indeed. We all know that there is only one inevitable destination no matter how many years nursing home our saving could support. I see my life extended through life of my kids and dream and hope are also important part of one’s life.</p>

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<p>Does the “average debt for students” number have any real meaning? It seems that you could have Ms. Moneybags who graduates with zero debt and combine her with Ms. Borrowedlots who has $30K in debts and come up with an “average” of 15K in debt – Or am I missing something? It seems that the number I want to focus upon is what MY kid will incur.</p>

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<p>Inverse, there is an old saying amoung accoutants,which is, “figures lie…and liars figure.” The fact that the url that you noted stats that they meet 100% of need based aid can mean nothing. What colleges think is a proper financial package vs. what parents believe is a proper financial package may not be one and the same.</p>

<p>We also don’t know how much private funding is occuring outside of what the college knows about. Also, if you have one kid whose tuition is zero because of their low income and another who has incurred $30,000 per year indebt, the average yearly debt is only $15,000.</p>

<p>Finally, I don’t know if the numbers are based on four years or they are based on a per year basis.</p>

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It tell you which school is better for average kid financially. Everyone’s situation is different. You may need to find out your kid’s case through actual application.
But it may serves a purpose as a general guidance.</p>

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<p>taxguy,</p>

<p>The average figure can only provide a general picture. Individual number will likely differ as you correctly point out.</p>

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<p>Calmom, I am not sure I understood the point about self employed people not getting financial aid. Did I read you wrong? We are self employed and our kids receive need based aid at both their colleges. </p>

<p>For Ivy2Be…you mention that you send your children to private elementary or middle schools and likely will do the same for high school. If you can afford that now, and I am not sure what the tuition is, already that is money you will have each year of college that you are used to paying out of pocket. </p>

<p>I could never have afforded private schools for my kids growing up, though we don’t have any around here and it would mean boarding school which we were not interested in doing. If you can afford private schools now, that is one chunk you’ll be able to keep paying out at college and then of course it cost more but you are part way there. </p>

<p>You seem to live in an affluent community which is not the case where my kids grew up. People here do not talk about wanting to go to the Ivies. It simply is not a topic here at all. However, a couple do end up there even so. There was no big strategy to make that happen. There was no “ivy goal”. Simply, work hard, do your best, set realistic goals that are broad enough, follow your passions, and the rest will follow.</p>