I’m somewhat confused by the idea of tricking your kids into saving money by telling them they have to pay for something and then surprising them by giving them the money after all. It seems to have worked with your kids so who am I to judge, but I’ve always been honest with my kid about money. We didn’t give her a budget - we are a high need family - but did tell her which schools she couldn’t ED to based on the NPC. We had a spreadsheet with all the costs laid out and she had access to it though figuring out the money wasn’t really her job. She knew she might have to contribute to tuition when we ran short (she has, $3-4 thousand to date) and she knew all costs outside those directly billed by the school were hers (she made a ton of money the summer after she graduated HS, has done work study and lives frugally so she’s got plenty of money still in her account). She’s on the family cell phone plan and we pay car insurance and of course food when she’s home (everything else remains her responsibility even when home, including toiletries, etc). She has taken the subsidized loans each year - and I’ve been upfront with her that I’ll help her pay those - it never occurred to me not to tell her that. She’s appropriately grateful (for a kid) and understands that with the two of us paying we will have that $12k paid off pretty quickly - maybe even within a year or two. She knows she’s financially otherwise on her own after college and is fine with that (obviously always with a place to live here if she needed it). Anyway different strokes and all that and different things work for different kids obviously but I’ve always been pretty upfront with what I will or won’t pay for and she’s always been able to manage the rest (she started working a paying job at 15 for reference, though didn’t work during the school year until she was 17).
I paid for my kids’ tuitions out of my then current salary. I was fairly comfortable with continuation of my pay so there was no constraint financially, but they knew the cost of college. The constraint I had for them was they had the choice of going to any top 20 schools if they should get in, but anything below that we needed to have a serious discussion. I wasn’t going to pay for a no name private school by a beach because they liked the vibe. I let my kids know my expectations very early on, so there were no surprises.
I would have a financial discussion now before he falls in love with any school. Since you are uncertain what kind of merit your kid may get at some of those schools, I would let him apply, but tell him that no decision could be made until aids are in. Just another point, do not assume you will get average aid because when it comes to FA (or merit) it’s very specific to your family’s situation and your kid’s stats. My sister’s family made over 7 figures, but she saw the school awarded FA to over 50% of students, so she decided to apply for FA because they had 50% chance of getting aids. 
We had the discussion and let it be known that full pay at a private was unlikely. For our in-state public flagship, no loans required. But for OOS public, the Stafford loans would be required and for a private, needed merit and loans. One went to a private with a nice merit package, one went in-state, and third to a public OOS. All three had part-time jobs after freshman year to pay for fun expenses.
I didn’t set a particular number, because I wasn’t sure what the costs would be, but had a range in mind. All three had to consider costs in their final decisions and none were able to go to the school with the highest cost, but also were not required to take the lowest cost at the expense of academic program. They went to a high school where there were plenty of kids that did not have to worry about cost, but many more that ended up at the very good in-state flagship for financial reasons.
It is not too early to let your kid know, if they don’t already, that finances will pay a part in this journey.
I think some people do that so the kid gets used to writing a check each month and so they get used to not living on 100% of what they are making. It’s also a way for them to accrue the nest egg needed for the down payment and getting started when they move out.
Trick? Not a trick at all. When our kids lived at home after college, we gave them free everything for a while. Then we charged them a very nominal rent. When they moved out, this was given to them to use for housing deposit or whatever. I will add…my dad did tons in the 1970’s for my sisters and me. What a nice surprise for us!
My son has run the application process himself (including talking to coaches, etc…)and we’ve only monitored and checked the numbers as he went. He was given a budget of what we have saved for him, and the rest is up to him. So he was forced to be realistic about where he applied but, still tried a few reaches hopeful to get scholarships. We don’t charge him rent to live at home when he is not in school etc…
We sat S25 down a few weeks ago to start this conversation. It was helpful for him to see the numbers, both annual costs and the likely final sum, not including expenses like travel, after DH and I ran the NPC for one of his favorites (and predictably came up full-pay). We shared the current value of his 529 and what that can be used for, but that it will only go so far, and he will need to consider if he wants to have some of those funds left for graduate school as he digs deeper into researching and finalizing schools on his list.
Is our conversation done? No, absolutely not. This was a starting point to get him to think more analytically about his list. I am so, so relieved that he is better informed now, even though it felt tough to start at first. I don’t regret it one bit, and I feel we’ve laid the groundwork for open and honest dialogue about this really important part of his college decision.
We did all of this also, and I think that it is the right thing to do.
One daughter up front was not happy about the “no loans” requirement combined with the strict budget. More recently, after graduating with her bachelor’s degree (and getting a great job that she could only take because she had no debt), she also has thanked us multiple times. Our other daughter was never bothered by the budget and only applied to schools that fit the budget quite comfortably.
We did not do this, and I think that it was probably a mistake that we did not do this. We did not actually even think about what would happen if our older daughter lost her merit scholarship and ended up well over budget. I think that we were just lucky that this never happened.
Yup, where “good fit” includes but is not limited to a good academic fit.
And neither daughter attended the least expensive university that they got accepted to. They both however found a good fit and kept to the budget.
I agree that students need to know what the constraints are. We do not want to stick them with a “we cannot afford it” bad surprise after the acceptances have already come in.
We told D what we could pay, then she & I researched schools that met need & schools where she would be likely to get significant merit. She knew in advance that if the aid package didn’t work out, she couldn’t go.
S was less invested in finding a college. He picked a few, and I told him that he would need to pick one that ended up within our budget. He ended up at a state school that was very good for his major, and he qualified for an excellent automatic merit scholarship based on gpa/scores.
Both kids transferred after freshman year, and both knew the financial constraints for transferring. Both were able to transfer to schools they liked that fit the budget.
We live in an upper class community. My kids always felt “poor”. Out house is smaller than most. Everyone they knew took 2 big expensive vacations a year…often more. We took 2 bigish vacations in 17 years. Their friends parents drove newer ,nicer cars. When we met with my older daughters college counselor the first question was “ what’s your budget?” I told her no budget. Our kid could go wherever she could get in. When we left the meeting, my daughter kept asking me if it was really true. When we got home she went to her sister and said “ I just found out why we never got to go on vacation “. Of course both girls know that they are very privileged to have been able to go to expensive college with no debt. And they are appreciative.
@Sportsball said that finances would play a part in S26’s college choice (and IIRC from another post, he’s thinking D3, not a sports scholarship). I think I’d be most concerned with him having a dream school or a group of like schools that are all unaffordable. You’d need to weed those out quickly.
My kids were never thinking of NYU or USC because they knew they were out of the question. They wanted California schools but I quickly showed them those wouldn’t be affordable. We kept shortening the lists as different puzzle pieces came into it - a state scholarship, size preference, travel difficulties. We visited a few schools that took all others in that style/type out of the running (Elon, Presbyterian, Smith eliminated a lot of others).
With one I had a very simple ‘back of the envelope’ discussion, showing her what I had, what she could borrow, and the max. The other was more complicated because of sports, but she still had lots of choices. One thing that made it easier for us was that most kids from their HS were going to UF, FSU or UCF, and they were the special ones going elsewhere. It wasn’t a big competition to see who could go to the BEST school or most prestigous.
We had budgeted for 4 years at a generic “out of state public” rate in her 529. We told her we were not going to take out loans and what her approximate budget was.
I ran NPCs and checked that the numbers had some chance of working out (e.g. if 5% of people without need got a merit award and she was solidly middle of the pack for that school, I would look at numbers with no merit, if 50% of students got a number that on average would fit in our budget and she was top 25%, then no $ reason not to try for it).
Most of the top privates, and publics like the UCs had to come off the list very quickly when I found they also would be full pay with no chance of merit.
The school that was iffy on acceptance and on merit…she ended up being accepted, but without enough merit. Nice that she was accepted, but not at all fun to have to turn down. So glad there was only one in that category, because I really wanted financial cuts to happen before she applied, while the school was just one of the thousands of colleges in the world where she wasn’t applying.
D24 did struggle a bit at the end, because her best financial choice didn’t end up being the best major choice, but with the financial cuts made up front (except for the one that fell short on merit), she was free to choose the best school for her and she is really happy with her choice.
I originally thought she would have a lot more choices and there could be more merit shopping at a lower cost, but her intended major ended up making a huge difference.
We are full pay and had a dollar amount set for S21 and D23
Also, the understanding was no loans. I want them to graduate debt free.
They were allowed to chase merit at schools above dollar amount with the understanding it was a no if not at dollar amount ( There was some wiggle room in that number kids didn’t know at the time.)
Did not apply to any schools that did not give merit. or merit was limited to very few highly competitive processes.
We told kids would pay for study abroad programs above normal costs, depending on costs.
Both have taken me up on Studying abroad
Communicate realistically, early on, so there are no misunderstandings and you can target schools you can afford that are a good fit
Every year you see posts about kids getting into school and then they cant afford it. You have to let them know what the money constraints are.
This worked out for us and both are happy at Florida State and University of Florida.
They wanted big schools, with Brick campuses, Sports and what they called the traditional college experience
They see me still cheering my College team, UF, and want that as well.
That’s his younger brother. This kid doesn’t plan to compete in college.
But yes finances will play a part.
These are the general parameters of what we will tell the kid about the Family Scholarship:
- We will pay for any in-state public. Kid will need to maintain a minimum GPA to keep the family scholarship. If kid fails to meet the GPA one term, then a portion of that semester’s costs turns into a provisional loan. If the kid meets the GPA again for the remainder of college, the loan is forgiven. If the low GPA continues then the loan is not forgiven and the kid is required to move home and commute to the local in-state public or to get a full-time job (or multiple part-time jobs to equate to full-time work). (In reality, those loan payments would be saved and gifted to the kid to help with establishing a household.)
- This is how much is in the 529 and other designated sources for your college, and its growth is dependent on market returns. If it exceeds the cost of 4 years of in-state costs, then the amount in it divided by 4 can be considered the new budget for college. If a kid takes more than 4 years to graduate, then when the 529 runs out, there’s no more financial assistance. Whatever money remains in the 529 after college can be used by the kid for grad school, Roth conversions, etc.
- Loans to outside entities (feds, private loans) are not allowed. The only loan possible is based on GPA issues, and that loan is between the kid and the parents.
- The family scholarship will pay for accredited institutions that fall within the budget (i.e. less than in-state costs or less than the designated resources divided by 4, whichever is greater).
- The family will pay for application fees for up to X number of institutions, none of which can be to schools that are impossible to meet the budget. If a kid wants to apply to impossible-to-meet-budget schools, it will be on their dime.
Really curious. Did you believe that your child needed the financial incentive to do well in order to do well? Or is it it just your belief that every child should be told this? My children, just based on their inborn personalities ( for which I take no credit based on parenting ) desperately wanted to do very well in college. They would have been devastated not to, something I knew about them from a very young age in school generally . I wouldn’t have told them that there was some sort of financial punishment for not getting a certain GPA, that would have just made them anxious for no reason. But I have a nephew who definitely would be motivated by that sort of message, so I can understand why in certain cases.
Guess it depends on the GPA. If something like 2.0, the parents are merely expecting staying out of academic probation. If something like 3.9, that would be something else…
Either way, I’d never tell my kids that because an economic incentive would have no effect on them amd even if it were easily doable, it would just add anxiety. They wanted the very best grades they could possibly achieve.
I think it’s kid dependent and also major/school dependent (i.e. if a school is known for no grade inflation, etc). In my mind I was thinking of something like a 3.0 GPA, so something that is low enough to encourage exploration without fear of ruining one’s GPA, but also at a minimum level that would often be expected to get a job.
Obviously, higher than a 3.0 would be preferred, and for many people (especially those on CC), kids are driven enough that no GPA minimum is required for them to remain motivated. But by putting it out there in the beginning, if my kid decided to party hardy all night and play video games all day and manages to keep a 2.0 because of being a good test taker, well, that’s not going to fly either. And if my kid is trying hard and still struggling to get a 3.0, then a different conversation is needed.
By having a GPA rule in place before college starts it lets the kid know the rules and not feel as though I’m changing the rules partway through the game if I don’t like some of the things I’m seeing.
Gotcha. I happen to have kids who would have never considered for a second not getting the best grades they could. They certainly went to parties and social life was important but just for themselves school came first. I didn’t need to say anything or motivate them. And their classes as an engineer and a nurse were set in stone for the most part. Not much exploration was possible.