I hate the sad reality that so many families have to take parent loans to attend schools in the state where they pay taxes, even though they may still be paying off their own loans. I also hate the way some of the kids shame each other for school choices, driving others to feel like they have to choose an expensive school with a low acceptance rate to be successful. (Or to be fair, kids conversely assuming that someone going to an expensive school is rich and paying full sticker price). I even had an adult stop speaking to because I set limits on which schools I would pay for my child to apply to. (These were out of state schools with little to no oos merit that are outside our budget).
Some of those kids who committed to attend costly schools did not truly grasp the expense and are now two months from their first semester struggling to figure out how they will pay for it. Some of them have a working plan, but others erroneously thought loans would just be arranged for them. It makes my heart ache to know that, in this FAFSA year with a severe time crunch and so many unknowns, some may make a snap decision about supplemental loans that could be crippling later. A program like your school has would be such a benefit.
I feel like conversations about “right match” schools would help develop insight and compassion for others. It might also help parents who feel like they have to stretch to accommodate a less affordable choice because they don’t want to disappoint a child who might not immediately see the value of a merit offer. Spreadsheeting with my child helped her take ownership, and shifted the conversation from where we would let her go to what was the best overall choice for the future she envisioned.
We had very very detailed spreadsheets. Google doc them and we shared between us parents and child. When we all got some information it was put on. It became very apparent where the “true” choices were. Gotta have a reach here and there.
Parents are the worst. I have to admit both of my kids schools the kids seemed to support each other. The D-day or Ivy day reality hits hard for most students. No one ever had to explain past “This is a great school for me to attend”.No reason not to be happy for your friends success and decisions. I question what parents teach their kids??
I told my kids that I went to a local regional smaller school since I paid myself through undergrad and medical school (all loans were paid off long ago) and look where we live. (heart of Chicago neighborhood in nice area). People on my block went just about everywhere but we all ended up in the same place. Very few schools have said advantages. I told my kids that nothing replaces hard work. No one should ever out work you since it’s the one thing you can control. Many have more money or are taller or prettier but… No one should out work you. It pays off. Especially with this generation.
100%. The bar right now seems almost subterranean.
D23 got a her 1st summer internship and her boss is giving her rave reviews. D23 is great and seems to be learning lots and gaining skills…but her boss raves most often about the fact that D23 shows up 10-15 minutes early. Every day.
When showing up to work in a way that lets you boss know they don’t have to worry about you showing up is a “wow!” moment in a professional field…well, as I said - the bar is low for those who are willing to work and work hard.
I gave numerous presentations about the cost of college and available aid through the years. A few times, I could see the light bulb go off for a parent - that parent would inevitably contact me later to discuss their options further. Other times, my presentation didn’t have the desired impact. Parents wanted their kids to go to the school they wanted to attend, and they were willing to borrow whatever it took to make that happen. I have no idea whether or not it was crippling debt for them. Some people can tighten their belts and make the payments. Others may find that the payments are too much for them to afford. Mortgages are like that, too.
I worked very closely with graduate students who were deciding whether or not to take on debt for grad school. I admit that there were some students whose debt level (undergrad +grad) worried me. Some chose to put off grad school or attend a funded program rather than borrow more. Others decided to take on the debt - and those students seem to be living within their means and paying down their debt. It isn’t necessarily a bad thing to borrow. You just need to understand how it all works.
And I know from professional experience that financial aid people try hard to help people understand how it all works. Of course, you can lead a horse to water, but you can’t make it drink.
Every day there are savvy financial planning experts posting, appearing on CNN, etc. explaining that you do NOT need to purchase “extended warranties” if you’ve bought with a credit card that automatically has an extended warranty; why buying dorm insurance isn’t necessary if you have a homeowners policy which includes it; why increasing your deductible on every policy you own is likely a great way to increase your cash flow with a VERY minor risk of losing the bet; why an adult who has dependents needs disability insurance; why purchasing extra dental and optical insurance is usually a bad bet; etc, etc, etc.
Most people don’t listen or can’t do the math.
I’ve worked for companies which have spent tons of money trying to get employees to read the benefits booklet, to sign up for free money (transit-chek which basically pays a monthly stipend and all it takes is filling out a three minute form; matching funds for a 401K), to read a simple table and figure out the most cost effective health care plan based on the number of dependents and their ages.
There is a hard core group of adults who just won’t do it. They pick the first option no matter what. All they care about is a low co-pay. Period. They want to walk out of the doctor’s office and pay 10 bucks, even if it’s costing them a thousand dollars extra per year for the plan. Terrible ROI. They want “free dental care” even when it’s costing them an extra $1500 to pay for a “free” cleaning and X-rays (which would be $300 out of pocket, depending on where they live).
Here on CC we obsess about the kid who won’t be able to take calculus until senior year… forgetting that for many employed and highly functioning adults, they can’t do basic arithmetic even when it’s hurting their pocketbook!
Or the way car sales people keep telling us how we can lower our monthly payment even after we’ve explained that the total cost of the car is more than we are willing to spend.
I just helped a family place their daughter. They wanted prestige (hate that word). I sat alone and interviewed the daughter. I figured out what she really wanted. Her parents also didn’t want to be strapped for money since let’s face it. It’s tight for most people.
Long story, I basically told the parents behind the girls back where she will probably go to lol. She did on her own pick Miami of Ohio. Fantastic scholarship. Loves, loves, loves the campus and people going there. She had other solid choices but the fit was just screaming. Another one for the same reason is going to Indiana University.
Both parents I had to talk down the “Prestige” mountain. But it was kinda easy. I just asked (I knew the answer before hand)… Where did you go to undergrad?
Valid points. It’s also needlessly frustrating when a school tells a kid their cost of attendance will likely be 30k and then it turns out to be 50k due to tuition raises, fancy dorm construction, etc. This happened to us with more than one school.
With these types of basic tuition issues, maybe the invitations from school counselors and financial aid should go out to kindergarten parents, though it still may not be enough. Your point about rising costs is definitely a strong one. My husband and I were lucky enough to meet a financial planner during grad school before we had savings or kids and thought our college savings plan would be enough for wide open college choices, but tuition costs far exceed the projections. We do have a range of choices, but a conservative range.
Beyond lowering tuition, I feel like we need to do more to provide low interest options and lower tuition so those who might not have the resources or capability to plan ahead can reach that tuition mark without high interest loans or jeopardizing equity. Even those who do plan could use this. I feel lucky to live in a state with high, transparent tuition awards and reasonable housing.
You are lucky, here we have crazy expensive housing, and the only state merit program is free CC for the top 15% of the class. Our counselors meet with students and parents once for 20 minutes, and will not recommend a single college, just told to use naviance. I went to five of those meetings, even asked “if this was your child, where would you suggest they apply with these stats and this budget,” I think they are told not to answer this question.
I am sorry to hear that. Hmmm, our very good counselor was also very hesitant to recommend specific colleges, except for in-state schools, and also said to use Naviance. However, our school district is really large and college fairs and visits to the school are like nothing I could have imagined growing up in a rural midwestern town. But yes, our state schools do provide a quality education at affordable prices even if kids feel they have to explain away the “party school” infamy ASU gained in the 90s. We do feel fortunate.
Federal student loans have some of the lowest rates out there. In the last ten-ish years, the rates for undergrad loans were below 4% and that was as low as a fully secured mortgage loan. Inflation has made the loan rates go up but the rate is set by a formula set by congress. For many years I had credit cards at 5% or 6%, but now even with my perfect credit (and most college kids don’t have perfect credit) some cards have gone up to 10% or more.
Federal student loan rates are not high, especially for undergrads. I do think they shouldn’t have origination fees assessed. You can argue about the rates on grad student loans, but as stated above it is often the grad student loans that are in default because those students have borrowed too much over too many years.
I was actually thinking more in terms of raising the student borrowing limit beyond $5500 or providing similar rates to parents who have to step up to pay the gap. I am not a finance person, though, so maybe it isn’t really feasible from a systematic perspective. I agree the first $5500, which is unsecured to boot, is favorable.
I used to think the $5500/$6500/$7500/$7500 should be increase too. After all, it no longer costs $15k per year at most schools and most students cannot afford to cover the cost of tuition at a state school on that $5500. However, as I learned more and as my kids went through school, I was glad they couldn’t borrow more than that (and they didn’t even borrow all of that). Most students who need to borrow those direct loans have trouble paying back even the minimum amounts. They are getting out of college with debt but still need a car, a place to live, set up for a new job (computer, clothing, home office things). I have one who is still getting set up, working 3 jobs, planning for a wedding and she hasn’t even started paying back her loan yet (finished grad school officially in May). If she’d had the opportunity to borrow more, she would have. Instead, she worked a few more hours at Starbucks and ‘lived poor’ all through college and grad school. No spring breaks in Cancun for her. And no new books (always used), no new clothes, didn’t have a car. And yet she still had fun while in college, played a club sport, was in a sorority. She just did it all as cheaply as possible.
If students could borrow $40k, they would, and the initial repayments would be $800-$1000 per month. Or they’d be paying back for 10 years without making any progress on one of the plans based on income.
I’ve been on this forum for long time, and I’ve been repeating that very thing like a broken record, only to be rebuffed by students and parents alike. I haven’t checked to see if any of those same kids are on the forum again lamenting their decision. I’m pretty sure some are, but they probably wouldn’t want to hear from me
We ran into a similar situation where the college my daughter wanted to go to gave us $0.00. We tried to make it work, but without additional debt, it would be impossible. She took the mature route and opted for community college so she can have 2 years debt free.(we taught her well ). That gives us the opportunity to save, so we can cover her student loans for her last 2 years and she can have a debt free bachelors degree.
Fact check- you get rebuffed because you claim that “it doesn’t matter where you go” AND “even if you can afford full freight you’re an idiot for doing it”.
If you posted something more nuanced- like “if your kid doesn’t know what they want to study, AND hasn’t been excited academically up until now, taking on debt when there is a more affordable option might not be the optimal way to go” you’d get TONS of support for your position. Your typical posts- which veer towards “Electrical engineering at Northwest Clown College is just as good as MIT and provides better ROI” or “you should invest your money in T-bonds so you can buy your kid a condo” are just insulting to folks who are savvy investors and know exactly how to save, how to make their capital grow, and understand ROI very, very well.
). That gives us the opportunity to save, so we can cover her student loans for her last 2 years and she can have a debt free bachelors degree.