@toomanyteens I personally know several people who probably will be leaving more than $10 Millions USD to each of their kids. To them, I would assume $300K is more than affordable and “not that much money”, although they do not waste money; they didn’t get rich by wasting their money. However, to even people who are making $500K per year gross, $300K IS “much money”. Here in Southern CA where I live, “average” house costs around $800K, and IMO “decent” house for a family of 4 costs over $1 Million USD. Even if you make $500K gross per year, federal and state and other taxes will eat up $200K out of the $500K gross, leaving you with $300K for living expenses, insurance etc. I bet you a person with a family of 4 who makes $500K gross per year here probably manages to save around $100K per year. Therefore, $300K is a lot of money to even this type of person. But for people who invested and have other sources of significant income aside from salary or earnings, $300K is affordable.
Even my $1 Million plus house is sort of a mirage in asset because I can’t sell it and go find another decent house at a cheaper price in this area, and if I take out a mortgage on it, I will have to pay off this debt. To be honest, I guess I could sell the house and rent a house or buy a small townhouse and use the remaining money for something else, but I don’t want to do that.
From a financial perspective, it’s more to do with savings then income, at least for me. We are in the donut hole, 250k -350k depending on the yr (own a business). We have saved for many years. 300k per kid (two) is certainly not painless! But it is doable as we’ve saved (on purpose- for both retirement and college funding) a sizable amount of money. So when that 600k is spent, we won’t be rolling in it, but will have enough for a comfortable retirement. I’ll just have to work a few extra years which is fine. That’s a trade off we decided to make many yrs ago. We have nice things but are not extravagant. No fancy cars or country club memberships. Not because we can’t. I just don’t care about those things. Neither does my wife. S is a freshmen , full pay, at a expensive excellent private school (we were public high school people). The resources and experience is fantastic. Amazed he’s able to be involved in so many things as a freshman. Could that happen elsewhere? Probably. Would it for him? Probably not. He thrives in this setting. That’s the whole part of fit that we found important. I know we could drop him anywhere and he would survive and be just fine. This, however, is about more than being fine, it’s about thriving in all aspects. We saved the money to create the opportunity. We have the opportunity. It would seem odd to not capitalize (literally) from it.
Again, those that can, can and those that can’t can’t. If we hadn’t saved enough, which took commitment and discipline over many yrs (and working my butt off while my wife did a great job at home - she’s working now to lesson the pain which is a big sacrifice to both of us but worth it), we wouldn’t be able to do this. We can, so we do.
Not sure why this needs to be debated. I’m sure everyone is doing what they can or feel they should do. No one else is walking in your shoes. Who care what they have to say. Frankly I’m not interested in their opinion. I wish them well and best of luck.
Hey now. The vast majority of Americans live in the “boonies” (at least to the extent $1 million plus is required for a decent home for a family of 4). And with nothing near the appreciation that gets house values to that level.
@northwesty He decided to defer attendance at Stanford for one year and go abroad to improve his skill in another language on a FREE (free something finally!) study abroad scholarship. I asked this question because I wanted to hear different stories of people who decided to do the same thing as I decided (actually had to go along half willingly) to do. Actually, it wasn’t 100% my decision; my wife was SET on 100% supporting our kid’s desire to attend Stanford EVEN IF we had to mortgage our house (of course, we didn’t have to). My role was to sit my kid down and explain various options regarding the money. But the decision to take a gap year to pursue language study abroad and attend Stanford this upcoming year was made for us when the study abroad scholarship notification was received in May 2017 AFTER he accepted the offer to Stanford. We then requested a gap year, which was granted by Stanford in 5 minutes. Other schools (UCLA/Berkeley/Honors Colleges) did not allow our kid to take a gap year and defer admission, so our choice was limited to one school unless we wanted to apply again to colleges a year after.
I strongly hinted to our kid that his dad would be just as happy if he decided to attend University of South Carolina Honors College (not University of Southern CA) and I will open a stock account in his name and put all the money he ended up saving by not going to Stanford in the stock account but he would not bite. lol
@PurpleTitan Believe me, I tried to convince my wife, but she has so many friends here, whereas I don’t need to live here. I needed to marry someone who would follow ALL my decisions, including moving to AL and buy an awesome house next to golf course for half million dollars and retire on $2 million dollars. lol
Hope people understand that I just wanted to hear people’s stories, not to spark any debate on whether this or that is right.
By the way, our kid’s language skills in another language improved SO much in 5 or 6 months. I would say his level went up to the level he would have acquired if he had studied the language for another 4 or 5 years at Stanford.
Web – Out of curiosity, what kind of deal would it have taken (in your circumstances) to turn down Stanford full pay?
Since Stanford has an 80+% yield rate, your answer (I guess really your wife’s answer) might be nothing.
Half tuition at Trojan USC? Full tuition at USC? A prestigious competitive scholarship (full tuition or full ride) like Jefferson/UVA, Morehead/UNC, Robertson/Duke, Stamps Leadership (various schools including USC)?
Years ago I turned down 1/2 pay at MIT and whatever small amount Berkeley cost back then because my parents couldn’t afford either one. I chose a full ride at Texas A&M, which was the only full ride I was aware of in those pre-internet days.
My son recently chose a $65K/year college (Caltech) over less expensive options because we told him the cost was OK with our savings. We would have paid the $72K for CMU SCS if that had been his selection between his top 2. He had options as low as $27K (Calpoly). He had 1/2 tuition at USC and at a non-STEMy LAC. He didn’t apply to any full-tuition options, but he could have with NMF.
It depends. We wouldn’t have paid for these if it involved taking loans, just as my parents weren’t willing to take loans.
Over the years, on CC, I have seen various people turn down Harvard and/or Stanford for the Robertson or Morehead, and for a similar full-ride-plus named scholarship at Michigan. There was one kid years ago who turned down Harvard for a full ride at Vanderbilt, and the daughter of a very active poster who turned down Yale for a full ride at Rhodes (and a chance to be a star in her sport there). She later went to medical school at Yale.
In real life, a kid I knew well turned down Stanford full pay to go to Brown full pay. Another kid, the son of a friend, was accepted at Stanford and planned to enroll. (He may not have been full pay. His father was on faculty at Stanford’s Education School.) He never enrolled, however; a summer job at Facebook turned into a career. A friend of my child’s turned down Stanford with financial aid for a full tuition scholarship at Chicago. My impression was that her decision was certainly influenced by the cost difference, but it mattered a lot that Chicago was a 3-4 hour drive from her home, and Stanford would have been a 3-4 day drive.
Based on the numbers available, the number of people who turn down an actual admission to Stanford to go anywhere other than an Ivy League university or MIT is really small, probably no more than a few dozen a year. I imagine Regents Scholarships at Berkeley bag a few.
@northwesty My kid could have received an “automatic” (?) half tuition off at Univ of Southern CA because he was a NMF, but for me it would have been a very tough decision in one of the following three scenarios. It would not have been tough for my wife though. I am super glad that I avoided making such decision though. I do not envy people who get into so many great colleges and have to make a tough decision.
Free tuition or more at top 30 ~ 50 ranked schools such as Univ of Southern CA, UCLA or Berkeley or Univ of Michigan (or one of those prestigious sounding scholarships that JHS poster mentioned above) vs Stanford. Note I am saying again I do not believe my kid's hard stats were outstanding enough to receive this level of merit scholarships because he wasn't offered Regents from UCLA/Berkeley, but I think I would have recommended (not forced) my kid take the money in this scenario. His hard stats and NMF was good enough to receive near full ride from Honors Colleges though. Interestingly, I met a few people who did not have all that good stats but were from financially "poor" families who were offered Regents from Berkeley, so I have no idea what the requirements are.
UCLA/Berkeley vs a Free Ride or full COA at good Honors College. I myself would have recommended (not forced) to my kid that he go to the Honors College but again, not my wife.
Yale, Princeton or Harvard offers $20K merit scholarship (never would happen but just saying) vs Stanford. This is not because we thought Stanford was a better school than HYP but because we thought Stanford was a better fit for our kid.
Virtually every full-pay student at an Ivy, Stanford, Duke, or Chicago could have attended somewhere else for free.
There are a few key drivers of the decision to choose the full pay option: very high ability, high level of focus, majors where there is a wide range of potential outcomes, and interest in being very involved beyond the classroom.
I have twins who both turned down Stanford 2 years ago for free rides at state universities. And they are very happy. And so are we. One of them has banked over $32,000 in overflow scholarship cash. And she is a sophomore. Believe me, it was harder for us to allow them to make the choice to walk away from Stanford than it was for them to do so.
Yeah, two kids going to Stanford at full pay would probably get my “no” vote, even though I could probably afford it with some effort. Good for your kids. But being a sucker that I am, my kids would probably win me over if they really wanted to go to a specific school and I thought it was a good fit.
If parents start very early (like when the child is born) and can afford $150-200 a month, you can get a lot saved in a 529 plan. That’s what we did. We also put bigger chunks into the accounts if a bonus was a little bigger than expected. We also invested in our state’s pre-paid plan when each child was born and, even though we now know they will not go in state, the cost of education was a good bet and those investments went from $30,000 to almost $70,000 in fifteen years.
We are another family who lives frugally compared to our neighbors. Our house fits our 4-person family just fine compared to the 8000 square foot houses on our block. We do vacation once or twice a year but that’s what Starwood and Southwest points are for! We drove our Hondas into the ground and kept them for 15 years until recently buying two used “higher end” cars that took my husband six months to find exactly the right models with the right number of miles, etc. We don’t belong to the golf club. The kids worked and paid for the upgrades to their iPhones when they wanted new ones. Does my husband make a good living? Yes. We had the money to invest. We don’t feel like we’ve really given up anything since we are frugal in general and not overly-frugal where we feel like we are missing out.
We still feel a little sting thinking about paying full price since we’ve lived our lives not paying full price for much. We recently got a look book from Williams and it stated the average cost per year was $16,000. Crazy. If a year at a school is “worth” a certain amount then why are some people paying x and some paying a ton more? Because they saved? I know it won’t happen but this full-price and then discount thing is out of control. If kids are getting the same experience, then families should be paying around that amount. If colleges charged $35,000 instead of $70,000 per year, wouldn’t everyone win? More people could afford the $35,000 and schools wouldn’t have to play the “grant” or “scholarship” game with them. Financial aid would only be for the most needy. That $16,000 number really threw us into a loop and, gosh I hate to say it, but made me feel like I’m paying for other kids’ education as well as ours.
@websensation - We would never have allowed them to apply had we not been fully prepared to make it happen for them. However one of them ended up sold on UNC and the other attended Stanford’s Admit Weekend still undecided. (Also had the Mork at USC). In the end kid felt split between Stanford/USC/UF. And made the decision not to be college poor. So far so good. Talk to me again when kid is trying to get a job!!
@homerdog:
“If colleges charged $35,000 instead of $70,000 per year, wouldn’t everyone win?”
No. Many of the kids who get fin aid now would not win. They would lose. In fact, they wouldn’t be able to attend Williams.
“More people could afford the $35,000 and schools wouldn’t have to play the “grant” or “scholarship” game with them.”
Williams doesn’t give merit money, but the schools that do play that game so that they can get the high-stats or otherwise desirable kids who they would otherwise not get.
If they charged everyone the same rate, they probably could still make the finances work, but their student body would not be what they desire. Their 75-25 percentile test scores probably would not be what they desire either. And let’s face it: a lot of people like discounts. They want to think that their school is as desirable as Harvard and they’re getting half off rather than that their education is only worth half of what Harvard’s is worth.
“That $16,000 number really threw us into a loop and, gosh I hate to say it, but made me feel like I’m paying for other kids’ education as well as ours.”
You would be if you are full-pay at a private.
But privates engage in price discrimination because it makes sense for them economically and status-wise.
They can form the best class possible (as they see it) while maximizing revenues and reputation.