First child entering college in the fall... need some advice

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dschwarz
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First child entering college in the fall... need some advice

Post by dschwarz »

So, just got some great news, our oldest child has been accepted into two top US universities and will be choosing between them for her undergraduate education. (These are both private universities; we did explore our state university and we determined that for her field of study, the private schools would be worth the investment.)

We are still awaiting final financial aid numbers from the schools, but I am not optimistic that we will get much help from either. The quickie financial aid calculators on the schools' websites come up with $0 need based aid for us.

She's received $4000 in outside merit scholarships, but these schools don't offer merit scholarships themselves.

We have $157K saved in a 529 for her, and the all-in 4 year cost looks to be around $320K.
Parents combined income- $250K/year in a high cost state. Just refinanced a 15yr, $380K mortgage.

Can anyone recommend a good source of advice on how to maximize our chances of receiving financial aid in future years, how to properly handle any financial gifts from grandparents who may be inspired to contribute, and the best type of loans to take out if it comes down to that?

We have two other kids to plan for; one is a HS freshman and the other, a 3rd grader. Both are in public school, and both have 529s with proportionately less money invested.

Thanks!
123
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Re: First child entering college in the fall... need some advice

Post by 123 »

At your household income level of $250K with only one child in college at a time I don't see any financial aid coming your direction. Assets not included on the initial post could further diminish opportunities for assistance. Congratulations on your self-sufficiency.
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oldfatguy
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Re: First child entering college in the fall... need some advice

Post by oldfatguy »

dschwarz wrote: Tue Apr 13, 2021 1:44 pm
We have $157K saved in a 529 for her, and the all-in 4 year cost looks to be around $320K.
Parents combined income- $250K/year in a high cost state. Just refinanced a 15yr, $380K mortgage.

Can anyone recommend a good source of advice on how to maximize our chances of receiving financial aid in future years, how to properly handle any financial gifts from grandparents who may be inspired to contribute, and the best type of loans to take out if it comes down to that?
If you spread the 529 money over 4 years, you still need to cover about 41K each year. With HHI of 250K, can you cashflow that 41K?

I don't see any financial aid in your future at that income level.

If grandparents are feeling generous, I don't think it will matter much how they give the money - contribute to the 529, give it to your or your daughter, etc.

In addition to her scholarships, your daughter can also contribute by working, and perhaps taking student loans.
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CyclingDuo
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Re: First child entering college in the fall... need some advice

Post by CyclingDuo »

dschwarz wrote: Tue Apr 13, 2021 1:44 pm So, just got some great news, our oldest child has been accepted into two top US universities and will be choosing between them for her undergraduate education. (These are both private universities; we did explore our state university and we determined that for her field of study, the private schools would be worth the investment.)

We are still awaiting final financial aid numbers from the schools, but I am not optimistic that we will get much help from either. The quickie financial aid calculators on the schools' websites come up with $0 need based aid for us.

She's received $4000 in outside merit scholarships, but these schools don't offer merit scholarships themselves.

We have $157K saved in a 529 for her, and the all-in 4 year cost looks to be around $320K.
Parents combined income- $250K/year in a high cost state. Just refinanced a 15yr, $380K mortgage.

Can anyone recommend a good source of advice on how to maximize our chances of receiving financial aid in future years, how to properly handle any financial gifts from grandparents who may be inspired to contribute, and the best type of loans to take out if it comes down to that?

We have two other kids to plan for; one is a HS freshman and the other, a 3rd grader. Both are in public school, and both have 529s with proportionately less money invested.

Thanks!
$320K is getting way up there for a 4 year undergraduate degree. You have to draw the line somewhere, and that one would have crossed my line enough to say - you're going to the state university.

Your incomes are too high to qualify for financial aid. Outside of academic or talent scholarships, saving aggressively to foot the bill yourselves for each child, and cash flowing the remainder each semester during the college years, etc.. is how many of us did it. Your kids can work in high school to help save up some money, and work in college and during the summers as well (ours both had paying internships) which all helped graduate debt free from undergrad and grad school.

We went the state university route for one, and private for the other (the one who went to private schools got talent scholarships and a graduate assistantship). The one at the state university was a real go getter for landing paid internships and she worked them in the summer as well. We had saved aggressively for 18-22 years and everything was covered with enough remaining in their UTMAs to start them both off in life debt free with a nice nest egg.

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hayesfj
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Re: First child entering college in the fall... need some advice

Post by hayesfj »

Congratulations to your Daughter for all her hard work to get to this enviable position. And certainly credit goes to her parents as well for helping both emotionally and financially.

You did not say what field of study your Daughter wished to pursue or which Universities are involved. I think the question you have to ask is "will her degree in x from y allow her to pay off > $150K in Student Loan debt? And you might want to look at the number of students who switch majors. Her school maybe tops for Bio Engineering, but only middle of the road for Bio Statistics.

I don't think you can count on any significant aid money.
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TomatoTomahto
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Re: First child entering college in the fall... need some advice

Post by TomatoTomahto »

With income of $250 and only one child in college (at a time), you are unlikely to get any need-based financial aid from any but the most generous schools (eg, Princeton).

Good on ‘ya for investing in her. My experience is that the ROI on education is worth it. Many BHs disagree, and that’s what makes horse races.
Last edited by TomatoTomahto on Tue Apr 13, 2021 2:37 pm, edited 1 time in total.
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Nebraska_Drought
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Re: First child entering college in the fall... need some advice

Post by Nebraska_Drought »

Sent my first off to college last fall, so we are not far removed from having these same discussions.

First, is the degree being earned going to reflect a $320K tuition bill? Outside of a STEM field, and even iffy at that, can you honestly answer that question and say that the ROI of putting that kind of money (out of pocket) be realized in a career that will approach 20% of that amount in earnings? There are many discussions like this on this forum and many end up at the conclusion that when it comes to paying out of pocket, the degree from a state school is going to be just as valuable as the one from the private. Not always, but most likely. With 2 other kids hitting college and one being a decade away, will you be able to do the same for those 2 kids as your first? As others said, you are not going to get any 'need' based financial aid, they will offer you loans and most will not be subsidized either.

With the good amount you have in your 529 right now, I'd strongly suggest choosing the school that makes the most financial sense both for your child and your 2 other children along with what you and your wife can support. How will bankrolling all 3 college educations (especially at a $320K level) set you back on your retirement plans?

Good luck ! This is never easy.
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TomatoTomahto
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Re: First child entering college in the fall... need some advice

Post by TomatoTomahto »

Nebraska_Drought wrote: Tue Apr 13, 2021 2:31 pm Outside of a STEM field, and even iffy at that, can you honestly answer that question and say that the ROI of putting that kind of money (out of pocket) be realized in a career that will approach 20% of that amount in earnings?
I’m not sure on the “20% of that amount” math. Could you describe what you mean, because I think I’m misunderstanding.
I get the FI part but not the RE part of FIRE.
OnTrack2020
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Re: First child entering college in the fall... need some advice

Post by OnTrack2020 »

Agree with other poster that, if the $4,000 is a renewable scholarship, you will have to foot around $40,000 per year. Also, what is the type of education that warrants spending $320,000 over 4 years? Even for a private school, the price tag is pretty high. One of our children was in a STEM program at a private university, and the price tag was not even near that.

Does that price tag include room/board for 4 years? If so, have her move off-campus for sophomore, junior, and senior year. That will save quite a bit.
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TomatoTomahto
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Re: First child entering college in the fall... need some advice

Post by TomatoTomahto »

OnTrack2020 wrote: Tue Apr 13, 2021 2:41 pm Does that price tag include room/board for 4 years? If so, have her move off-campus for sophomore, junior, and senior year. That will save quite a bit.
I’m not sure that we saved a lot of money, but our son learned to cook very well and he ate better food for the two years he was off campus.
I get the FI part but not the RE part of FIRE.
OnTrack2020
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Re: First child entering college in the fall... need some advice

Post by OnTrack2020 »

TomatoTomahto wrote: Tue Apr 13, 2021 2:54 pm
OnTrack2020 wrote: Tue Apr 13, 2021 2:41 pm Does that price tag include room/board for 4 years? If so, have her move off-campus for sophomore, junior, and senior year. That will save quite a bit.
I’m not sure that we saved a lot of money, but our son learned to cook very well and he ate better food for the two years he was off campus.
She'll definitely want roommates for the savings. :happy
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Re: First child entering college in the fall... need some advice

Post by livesoft »

The OP's investments may go up by over $200K each of the following 4 years, so paying for college will just put a little dent in that growth, but nothing to worry too much about. I don't see financial aid in the future for this family, but the students can certainly work during the summers and part-time during the school year without any problem I would think.
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Nebraska_Drought
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Re: First child entering college in the fall... need some advice

Post by Nebraska_Drought »

TomatoTomahto wrote: Tue Apr 13, 2021 2:39 pm
Nebraska_Drought wrote: Tue Apr 13, 2021 2:31 pm Outside of a STEM field, and even iffy at that, can you honestly answer that question and say that the ROI of putting that kind of money (out of pocket) be realized in a career that will approach 20% of that amount in earnings?
I’m not sure on the “20% of that amount” math. Could you describe what you mean, because I think I’m misunderstanding.
I did not phrase that well, I am sorry for that. What I was trying to say is that if the degree earned would start her our at 20% of the total investment ($320K * 20% =$64,000) then it may be something to pursue. STEM fields may start out in this range, depending on the degree and where the job is located, but few will. My point was is the $320K degree that much more valuable over a career than the much cheaper degree earned at a state school?

I assume that the merit scholarships earned are able to be used regardless of where she would go ?
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Re: First child entering college in the fall... need some advice

Post by neverpanic »

dschwarz wrote: Tue Apr 13, 2021 1:44 pm So, just got some great news, our oldest child has been accepted into two top US universities and will be choosing between them for her undergraduate education. (These are both private universities; we did explore our state university and we determined that for her field of study, the private schools would be worth the investment.)

We are still awaiting final financial aid numbers from the schools, but I am not optimistic that we will get much help from either. The quickie financial aid calculators on the schools' websites come up with $0 need based aid for us.

She's received $4000 in outside merit scholarships, but these schools don't offer merit scholarships themselves.

We have $157K saved in a 529 for her, and the all-in 4 year cost looks to be around $320K.
Parents combined income- $250K/year in a high cost state. Just refinanced a 15yr, $380K mortgage.

Can anyone recommend a good source of advice on how to maximize our chances of receiving financial aid in future years, how to properly handle any financial gifts from grandparents who may be inspired to contribute, and the best type of loans to take out if it comes down to that?

We have two other kids to plan for; one is a HS freshman and the other, a 3rd grader. Both are in public school, and both have 529s with proportionately less money invested.

Thanks!
You used the term "investment". If you want the $300K education for her instead of the $150K education, then you and/or she will need to borrow the money. The way the financial aid programs typically work, she likely won't qualify as being independent because she isn't supporting herself. At your family's income level, I would expect there to be plenty of loan offers, some less exciting than others. Shopping student loans is like shopping for a mortgage and a home. I liked the sales pitches from SoFi and Splash.
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dschwarz
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Re: First child entering college in the fall... need some advice

Post by dschwarz »

Thanks for all the replies.

I tried to head off the "Go to State U instead" debate in my original post... I should've known that will never work with Bogleheads :D

To clarify a few things:

She is going for STEM
The merit scholarship is $1000/year recurring
I expect that she will be contributing from summer earnings and her own savings
$320K is a high estimate and includes room + board + textbooks, incidentals + cost increase years 2-4. Living off campus could save $ in years 3,4.
I'm not here to argue private vs. State U (which would be $100K all in.)

I am looking for resources (books, trustworthy sites, etc.) on how to best manage funds so as to maximize any chance of aid in future years, particularly in year 4 when we will have our current HS Freshman in college somewhere as well. That's the only year I see any realistic chance of getting need-based aid.

Thanks again.
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Re: First child entering college in the fall... need some advice

Post by cchrissyy »

even in the unlikely event you get need based aid that year, most aid is just loans, so you are better off using the 529, the grandparent help, and your own cash flow
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oldfatguy
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Re: First child entering college in the fall... need some advice

Post by oldfatguy »

dschwarz wrote: Tue Apr 13, 2021 3:30 pm I am looking for resources (books, trustworthy sites, etc.) on how to best manage funds so as to maximize any chance of aid in future years, particularly in year 4 when we will have our current HS Freshman in college somewhere as well. That's the only year I see any realistic chance of getting need-based aid.
I don't think it will be realistic then, either.
Shalom Aleichem
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Re: First child entering college in the fall... need some advice

Post by Shalom Aleichem »

We are in the same boat. Older kid wants to go into medicine. Younger into robotics and AI. For the older - it doesn't matter where she goes as long as it's a decent four year school. I don't think there's any significant difference in preparation for medical school going to Yale, Harvard, UCLA, or Kansas. You get what you put into it. The younger thinks she wants MIT. I don't know enough about that but I bet for robotics and AI (I haven't researched it yet) there probably is a smaller number of school that are appropriate. Maybe CalTech, Stanford and I think Purdue.

I'd make sure it's genuinely accurate these two schools will prepare her for a much better future. I could imagine if she goes into finance there are school where making connections are important. If it's film school and looking at USC (eg), ... , well I'd make sure she is looking at a field where realistically she can become financially independent.
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Re: First child entering college in the fall... need some advice

Post by momvesting »

First, go look at the sticker for tuition, nothing else. There are many variations of the books, travel costs, room/board, and other estimates given. A lot of those estimates can be held down dramatically if you choose to do the work. For example, my daughter's school estimates $1200 for books. My kid has been renting books from Chegg and even borrowed some of the classics for a literature class from the library. Last semester we spent about $90 for books and this semester was about $150. We were also shocked by the price of the meal plan, which rounds out to about $30/day. Even with some meals out and some prepackaged food from Trader Joe's, we can stay far under that. There are ways to beat the estimates, but your kid has to be willing to do it.
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Re: First child entering college in the fall... need some advice

Post by Shalom Aleichem »

dschwarz wrote: Tue Apr 13, 2021 3:30 pm Thanks for all the replies.

I tried to head off the "Go to State U instead" debate in my original post... I should've known that will never work with Bogleheads :D

To clarify a few things:

She is going for STEM
The merit scholarship is $1000/year recurring
I expect that she will be contributing from summer earnings and her own savings
$320K is a high estimate and includes room + board + textbooks, incidentals + cost increase years 2-4. Living off campus could save $ in years 3,4.
I'm not here to argue private vs. State U (which would be $100K all in.)

I am looking for resources (books, trustworthy sites, etc.) on how to best manage funds so as to maximize any chance of aid in future years, particularly in year 4 when we will have our current HS Freshman in college somewhere as well. That's the only year I see any realistic chance of getting need-based aid.

Thanks again.
Is STEM for say computer programming at robotics? Private might be worth it. Is STEM for medical school? Unquestionably not worth it.
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Re: First child entering college in the fall... need some advice

Post by texasdiver »

hayesfj wrote: Tue Apr 13, 2021 2:24 pm Congratulations to your Daughter for all her hard work to get to this enviable position. And certainly credit goes to her parents as well for helping both emotionally and financially.

You did not say what field of study your Daughter wished to pursue or which Universities are involved. I think the question you have to ask is "will her degree in x from y allow her to pay off > $150K in Student Loan debt? And you might want to look at the number of students who switch majors. Her school maybe tops for Bio Engineering, but only middle of the road for Bio Statistics.

I don't think you can count on any significant aid money.
$150,000 of student loan debt is absolutely not happening for an undergraduate. The undergraduate loan limits are $5,500 in federal student loans during their first year in school and $31,000 in total. The monster student loan balances you read about are for graduate and professional school not undergrad.

Sure YOU can take out $150,000 in student loans for your child's undergraduate education. But they will be Parent Plus loans which YOU will be on the hook to repay, not your child.
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TomatoTomahto
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Re: First child entering college in the fall... need some advice

Post by TomatoTomahto »

Nebraska_Drought wrote: Tue Apr 13, 2021 3:09 pm
TomatoTomahto wrote: Tue Apr 13, 2021 2:39 pm
Nebraska_Drought wrote: Tue Apr 13, 2021 2:31 pm Outside of a STEM field, and even iffy at that, can you honestly answer that question and say that the ROI of putting that kind of money (out of pocket) be realized in a career that will approach 20% of that amount in earnings?
I’m not sure on the “20% of that amount” math. Could you describe what you mean, because I think I’m misunderstanding.
I did not phrase that well, I am sorry for that. What I was trying to say is that if the degree earned would start her our at 20% of the total investment ($320K * 20% =$64,000) then it may be something to pursue. STEM fields may start out in this range, depending on the degree and where the job is located, but few will. My point was is the $320K degree that much more valuable over a career than the much cheaper degree earned at a state school?

I assume that the merit scholarships earned are able to be used regardless of where she would go ?
I thought that was what you meant, and in that case, and I honestly am not saying this in a snarky way, you should catch up on what bright energized kids are earning right out of college. Admittedly, STEM degrees are at the upper end of the range, but I know of some
Non-STEM kids earning more than $64k.
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texasdiver
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Re: First child entering college in the fall... need some advice

Post by texasdiver »

To answer the OP's original question.

We are a family with a roughly similar AGI. We went through 4 years of paying for college with our oldest daughter from 2016-2020 and our middle child is starting as a freshman this fall.

Bottom line? Now that you have locked into a school there really isn't any way to manipulate your income at this point that will effectively increase your chances of financial aid short of some sort of massive life change like retirement or changing careers. The FAFSA and other systems used by colleges are too sophisticated and they know all the tricks.

For families in our position there are really only two options for reducing the cost of college in any hugely meaningful way:

1. Use your state's public university system. This is most likely to be the best and cheapest choice. If you plan far enough ahead you can move to a state that has a public university system that you like which is what we did when we moved to Washington 5 years ago instead of Oregon. My wife had offers in both states and the better higher ed options in WA was one factor in our choice. Or middle daughter will be entering UW next fall so that seems to have paid of.

2. Pursue merit aid at private schools and OOS public schools. This is largely an exercise in finding schools in which your child is going to be in the top 10-25% of applicants. In other words, schools that will have an incentive to recruit your child to boost their apparent rankings. Our daughter got lots of merit aid award offers in the $30,000/year range from mid-range private schools but zero merit offers from the top rated schools that she applied to.

It sounds like you went for the most highly rated private school that your child could get into which as you found out is a recipe for paying full freight. That puts you in good company. Most of the top 20 schools around the country have a majority of students who's parents are full pay with no aid. Or perhaps token amounts of merit aid that are barely rounding error in the total cost. They mostly aren't the children of the ultra-wealthy. They are mostly the children of normal professional families in highly paid professional like medicine, law, and business and they mostly just suck it up and find the money or borrow. There is no secret way for most normal professional folks to hide income or assets in a way that will meaningfully affect financial aid. At least not without committing fraud.

It's also not about what degree or program your child is pursuing. The cost is mostly going to be born by you and not them. Grad school is a different matter. But undergrad is mostly on the parents. The amount that undergrad students can borrow is trivial (maybe 10%) compared to the total cost of a top private school education.
KlangFool
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Re: First child entering college in the fall... need some advice

Post by KlangFool »

OP,

1) How do you plan to pay for the 40K per year difference for this kid? Student loan?

2) How could you say no to kid #2 and kid #3 if they choose a 320K college too?

3) How do you plan to pay for the kid #2 and #3?

4) Why do you think you can afford to pay for 3 X 320K college education?

5) If you cannot afford to spend that amount for all 3 kids, why are you saying yes to kid #1?

Pardon my ignorance. I do not see how you can afford to pay for the 320K college education.

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delamer
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Re: First child entering college in the fall... need some advice

Post by delamer »

What kind of financial aid are you talking about?

Scholarships, grants, student loans, parent loans, work study?

They are all types of financial aid with vastly different consequences.

As another poster suggested, It seems to me that the question is whether you and your spouse are prepared to take on $150,000 in loans for the education of one of your three kids.

Because your daughter isn’t going to get free money or be eligible to take on that level of loans herself at her chosen schools.

You might ge able to wring a little more money out of the system, find loans with relatively low interest, or get a break in year 4 with another child in college, but six figures in loans for one education is what you are up against.

There is ROTC, though.
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greg24
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Re: First child entering college in the fall... need some advice

Post by greg24 »

There are other ways to reduce the price of college.

Can she be an RA in the dorms for a couple years? That would be a huge reduction in cost.

Are you maximizing your tax efficiency? Can you somehow get your MAGI low enough to qualify for the AOTC? If you save on state taxes on your 529, are you funneling as much as possible through that account?

Take AP classes, a community college class in the Summer, and do whatever else it takes to guarantee graduating in 4 years (or less).
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Re: First child entering college in the fall... need some advice

Post by TomatoTomahto »

Both of my kids worked while in college.

One was an EMT, but too many hours affected his grades, so he did some graphics design on the side. Net net, I wish that he had just focused on school.

The other did internships during the summers and TA work during the academic year. He made a bunch and it seemed to augment his schooling rather than detract from it. He graduated with a job offer (which he accepted) and a mid 5 digit amount in his brokerage. We only required that he spend his earned money on completely discretionary things (eg, trip to Europe with GF) and we bribed him with a parental match on his Roth 😁
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Re: First child entering college in the fall... need some advice

Post by welldone »

dschwarz wrote: Tue Apr 13, 2021 3:30 pm I am looking for resources (books, trustworthy sites, etc.) on how to best manage funds so as to maximize any chance of aid in future years, particularly in year 4 when we will have our current HS Freshman in college somewhere as well. That's the only year I see any realistic chance of getting need-based aid.
Dschwarz, you will not be able to "maximize aid" for when you have two students in college due to the changes recently made to FAFSA. Starting in 2023, there is no benefit (reduction in EFC, which will be changing to SAI - Student Aid Index) given to having two children in college at the same time. That loophole was just closed in recent legislation.
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Harry Livermore
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Re: First child entering college in the fall... need some advice

Post by Harry Livermore »

oldfatguy wrote: Tue Apr 13, 2021 3:34 pm
dschwarz wrote: Tue Apr 13, 2021 3:30 pm I am looking for resources (books, trustworthy sites, etc.) on how to best manage funds so as to maximize any chance of aid in future years, particularly in year 4 when we will have our current HS Freshman in college somewhere as well. That's the only year I see any realistic chance of getting need-based aid.
I don't think it will be realistic then, either.
+1. It did not really move the needle for us this past year, when our son was a senior and our daughter was a freshman. Expected Family Contribution was still over the full tuition amount at each school.
Cheers
livesoft
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Re: First child entering college in the fall... need some advice

Post by livesoft »

I've heard that Ron Lieber's new book on paying for college has some things for parents. Check it out.
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Re: First child entering college in the fall... need some advice

Post by chipperd »

dschwarz wrote: Tue Apr 13, 2021 3:30 pm Thanks for all the replies.

I tried to head off the "Go to State U instead" debate in my original post... I should've known that will never work with Bogleheads :D

To clarify a few things:

She is going for STEM
The merit scholarship is $1000/year recurring
I expect that she will be contributing from summer earnings and her own savings
$320K is a high estimate and includes room + board + textbooks, incidentals + cost increase years 2-4. Living off campus could save $ in years 3,4.
I'm not here to argue private vs. State U (which would be $100K all in.)

I am looking for resources (books, trustworthy sites, etc.) on how to best manage funds so as to maximize any chance of aid in future years, particularly in year 4 when we will have our current HS Freshman in college somewhere as well. That's the only year I see any realistic chance of getting need-based aid.

Thanks again.
Regarding the highlighted above, it's past time to have the nuts and bolts discussion of how much school will cost and how much each party is willing to pay/take out in loans. This definitely needs to be clear and agreed upon before moving forward. With our three currently in school, they pay 10% of all college related costs. Keeps it clean and simple.
To answer your original question, to maximize financial aid, there is a two year look back, as you may know if you did the CSS profile or FAFSA. Since much of financial aid formula is based on household income, you would need to drastically cut your HHI income. By drastically, I mean on the order of a 150-180k/year cut (unless your referring to an Ivy school that your daughter was accepted to in the above) to obtain any reasonable amount of aid. You would then need to appeal next financial aid cycle and let the school know why you had a loss of HHI. You could cut HHI and appeal this year, but probably to late and again, would need to provide the reason for the loss of income.
I have, as many do here, high functioning kids who got accepted to elite schools. All of mine turned those acceptances down and took a next tier acceptance and the 30-40k/year in merit plus financial aid, knowing grad school is where a student really can cash in. Particularly in STEM positions, an undergrad is pretty much guaranteed a job, but that next level undergrad degree really won't net all that much more in starting salary (maybe start at 80k instead of 65k for newly minted engineering degree in a moderate sized city/suburb in the northeast?).
Really tempting to take up the question of "Is 320k worth it for an undergrad education?", but I'll bite my tongue since it's really transparent where I stand on this one.
Lastly, I'm a bit concerned hearing about the level of merit aid ($1k/year if I read correctly?). I obviously don't know your daughter's academic stats, and it's great she got into an elite school, so please understand I mean no harm in saying: If she is just squeaking in, being a small fish in that large elite pond can be a shocker for some. Many kids that I am aware who admissions feel will make it, get more in merit funds to attend (Ivies excepted).
One extreme example to highlight the point is my daughter's b.f. who attends MIT undergrad for free all in, and in fact gets a $2,500/year stipend. Now he's a special kid in many ways, but elite schools with large endowments will throw money around when they want a student.
Again, I mean no disrespect, but you were asking about costs, and that could be a factor when it comes to costs if she will transfer after a year or so.
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DIFAR31
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Re: First child entering college in the fall... need some advice

Post by DIFAR31 »

chipperd wrote: Tue Apr 13, 2021 6:04 pm Lastly, I'm a bit concerned hearing about the level of merit aid ($1k/year if I read correctly?). I obviously don't know your daughter's academic stats, and it's great she got into an elite school, so please understand I mean no harm in saying: If she is just squeaking in, being a small fish in that large elite pond can be a shocker for some. Many kids that I am aware who admissions feel will make it, get more in merit funds to attend (Ivies excepted).
At most "top private universities" (OP's description), there is no institutional merit aid, because there doesn't have to be. These schools are already attracting the top applicants. My guess is that the $1k/year merit aid is an outside scholarship.
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Re: First child entering college in the fall... need some advice

Post by DIFAR31 »

greg24 wrote: Tue Apr 13, 2021 4:21 pm There are other ways to reduce the price of college.

....

Take AP classes, a community college class in the Summer, and do whatever else it takes to guarantee graduating in 4 years (or less).
At many (most?) of the top ranked schools, AP or community college credits earned while in high school will not translate to credits that can be applied to a bachelor's degree. They may satisfy a requirement for a lower level college course that is a gateway to a higher level course, but they will not assist in completing degree requirements any earlier.
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teen persuasion
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Re: First child entering college in the fall... need some advice

Post by teen persuasion »

dschwarz wrote: Tue Apr 13, 2021 1:44 pm So, just got some great news, our oldest child has been accepted into two top US universities and will be choosing between them for her undergraduate education. (These are both private universities; we did explore our state university and we determined that for her field of study, the private schools would be worth the investment.)

We are still awaiting final financial aid numbers from the schools, but I am not optimistic that we will get much help from either. The quickie financial aid calculators on the schools' websites come up with $0 need based aid for us.

She's received $4000 in outside merit scholarships, but these schools don't offer merit scholarships themselves.

We have $157K saved in a 529 for her, and the all-in 4 year cost looks to be around $320K.
Parents combined income- $250K/year in a high cost state. Just refinanced a 15yr, $380K mortgage.

Can anyone recommend a good source of advice on how to maximize our chances of receiving financial aid in future years, how to properly handle any financial gifts from grandparents who may be inspired to contribute, and the best type of loans to take out if it comes down to that?

We have two other kids to plan for; one is a HS freshman and the other, a 3rd grader. Both are in public school, and both have 529s with proportionately less money invested.

Thanks!
For you to be eligible to receive need based aid, with 529 funds (and possibly other non-retirement accounts), you would need to qualify for the auto EFC = zero, to sidestep the addbacks of tax deferred contributions to AGI and skip the reporting of Available Assets like 529 and taxable assets.

You would need an AGI < $27k on your prior-prior year tax return (2019) to be eligible, plus meet another filing criteria (there's a long list, but it includes eligible for free/reduced lunches, WIC, Medicaid, TANF, etc, or parents filed 1040 but did not file schedule 1, or a parent was a dislocated worker).

So to game this out, you have to manage your tax return several years in advance of your student beginning college. My youngest is 16, a HS sophomore; the current year's (2021) income will be on the tax return info reported on his first FAFSA for the college year 2023-24. We are managing our AGI so we don't inadvertently go over FAFSA cliffs. Of course, rules for that year's FAFSA have just changed. Then, the auto EFC = 0 AGI limit will be under 175% of federal poverty level for the appropriate family size (or 225% if a single parent family), instead of one-size-fits-all $27k.
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Re: First child entering college in the fall... need some advice

Post by momvesting »

teen persuasion wrote: Tue Apr 13, 2021 8:14 pm
dschwarz wrote: Tue Apr 13, 2021 1:44 pm So, just got some great news, our oldest child has been accepted into two top US universities and will be choosing between them for her undergraduate education. (These are both private universities; we did explore our state university and we determined that for her field of study, the private schools would be worth the investment.)

We are still awaiting final financial aid numbers from the schools, but I am not optimistic that we will get much help from either. The quickie financial aid calculators on the schools' websites come up with $0 need based aid for us.

She's received $4000 in outside merit scholarships, but these schools don't offer merit scholarships themselves.

We have $157K saved in a 529 for her, and the all-in 4 year cost looks to be around $320K.
Parents combined income- $250K/year in a high cost state. Just refinanced a 15yr, $380K mortgage.

Can anyone recommend a good source of advice on how to maximize our chances of receiving financial aid in future years, how to properly handle any financial gifts from grandparents who may be inspired to contribute, and the best type of loans to take out if it comes down to that?

We have two other kids to plan for; one is a HS freshman and the other, a 3rd grader. Both are in public school, and both have 529s with proportionately less money invested.

Thanks!
For you to be eligible to receive need based aid, with 529 funds (and possibly other non-retirement accounts), you would need to qualify for the auto EFC = zero, to sidestep the addbacks of tax deferred contributions to AGI and skip the reporting of Available Assets like 529 and taxable assets.

You would need an AGI < $27k on your prior-prior year tax return (2019) to be eligible, plus meet another filing criteria (there's a long list, but it includes eligible for free/reduced lunches, WIC, Medicaid, TANF, etc, or parents filed 1040 but did not file schedule 1, or a parent was a dislocated worker).

So to game this out, you have to manage your tax return several years in advance of your student beginning college. My youngest is 16, a HS sophomore; the current year's (2021) income will be on the tax return info reported on his first FAFSA for the college year 2023-24. We are managing our AGI so we don't inadvertently go over FAFSA cliffs. Of course, rules for that year's FAFSA have just changed. Then, the auto EFC = 0 AGI limit will be under 175% of federal poverty level for the appropriate family size (or 225% if a single parent family), instead of one-size-fits-all $27k.
This might be true for public but is absolutely false for elite private. Our MAGI was just under $100k, EFC was about $25k, we have about $100k in a 529 and we were given need-based aid of over 50% at an elite private. We will pay about $33k/ year.
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teen persuasion
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Re: First child entering college in the fall... need some advice

Post by teen persuasion »

momvesting wrote: Tue Apr 13, 2021 8:24 pm
teen persuasion wrote: Tue Apr 13, 2021 8:14 pm
dschwarz wrote: Tue Apr 13, 2021 1:44 pm So, just got some great news, our oldest child has been accepted into two top US universities and will be choosing between them for her undergraduate education. (These are both private universities; we did explore our state university and we determined that for her field of study, the private schools would be worth the investment.)

We are still awaiting final financial aid numbers from the schools, but I am not optimistic that we will get much help from either. The quickie financial aid calculators on the schools' websites come up with $0 need based aid for us.

She's received $4000 in outside merit scholarships, but these schools don't offer merit scholarships themselves.

We have $157K saved in a 529 for her, and the all-in 4 year cost looks to be around $320K.
Parents combined income- $250K/year in a high cost state. Just refinanced a 15yr, $380K mortgage.

Can anyone recommend a good source of advice on how to maximize our chances of receiving financial aid in future years, how to properly handle any financial gifts from grandparents who may be inspired to contribute, and the best type of loans to take out if it comes down to that?

We have two other kids to plan for; one is a HS freshman and the other, a 3rd grader. Both are in public school, and both have 529s with proportionately less money invested.

Thanks!
For you to be eligible to receive need based aid, with 529 funds (and possibly other non-retirement accounts), you would need to qualify for the auto EFC = zero, to sidestep the addbacks of tax deferred contributions to AGI and skip the reporting of Available Assets like 529 and taxable assets.

You would need an AGI < $27k on your prior-prior year tax return (2019) to be eligible, plus meet another filing criteria (there's a long list, but it includes eligible for free/reduced lunches, WIC, Medicaid, TANF, etc, or parents filed 1040 but did not file schedule 1, or a parent was a dislocated worker).

So to game this out, you have to manage your tax return several years in advance of your student beginning college. My youngest is 16, a HS sophomore; the current year's (2021) income will be on the tax return info reported on his first FAFSA for the college year 2023-24. We are managing our AGI so we don't inadvertently go over FAFSA cliffs. Of course, rules for that year's FAFSA have just changed. Then, the auto EFC = 0 AGI limit will be under 175% of federal poverty level for the appropriate family size (or 225% if a single parent family), instead of one-size-fits-all $27k.
This might be true for public but is absolutely false for elite private. Our MAGI was just under $100k, EFC was about $25k, we have about $100k in a 529 and we’re given need-based aid of over 50% at an elite private. We will pay about $33k/ year.
True, each institution has its own proprietary financial aid formulas for handing out their own aid dollars. That will vary by institution, and some elite private schools give out more aid, or at higher relative incomes. Too, NYS's Excelsior Scholarship program now makes aid available in state up to a bit over $100k income, I believe.

I was working only from FAFSA formulas (as they are available and not secret).

Also, OP's income and 529 are both larger than your numbers. OP mentioned a 529 account for each child, but didn't give the combined total, which is what the FAFSA will include, plus any taxable assets.

I did find with my kids that financial aid varied greatly from school to school, even with our low EFC number. One school gapped DD1 an amount equal to 50% of our gross income, while a similar price school offered full aid. But getting EFC/SAI = 0 increases your available sources of aid, because you are now eligible for federal grants like PELL and state grants like TAP in NYS, in addition to any institutional aid.
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quantAndHold
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Re: First child entering college in the fall... need some advice

Post by quantAndHold »

Well, we got financial aid because all 3 of ours were in college at the same time. But that seems like a bad plan for you, given your kids’ ages.

If your kid is in a field where there are paid internships, she should start applying for internships as soon as she is eligible. A paid internship at Google for example, will pay better than anything else she will find, and be a big early career boost. Companies like that will occasionally hire strong freshmen. One of the downsides of this is that the internship is essentially an extended job interview, and I’ve seen freshmen and sophomores that weren’t quite mature enough to handle the experience. But if she has the maturity and lives simply, she can probably earn her living expenses for the year in one summer. 2 of ours were computer science majors. That helped a lot.
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Re: First child entering college in the fall... need some advice

Post by neverpanic »

texasdiver wrote: Tue Apr 13, 2021 3:39 pm
hayesfj wrote: Tue Apr 13, 2021 2:24 pm Congratulations to your Daughter for all her hard work to get to this enviable position. And certainly credit goes to her parents as well for helping both emotionally and financially.

You did not say what field of study your Daughter wished to pursue or which Universities are involved. I think the question you have to ask is "will her degree in x from y allow her to pay off > $150K in Student Loan debt? And you might want to look at the number of students who switch majors. Her school maybe tops for Bio Engineering, but only middle of the road for Bio Statistics.

I don't think you can count on any significant aid money.
$150,000 of student loan debt is absolutely not happening for an undergraduate. The undergraduate loan limits are $5,500 in federal student loans during their first year in school and $31,000 in total. The monster student loan balances you read about are for graduate and professional school not undergrad.

Sure YOU can take out $150,000 in student loans for your child's undergraduate education. But they will be Parent Plus loans which YOU will be on the hook to repay, not your child.
OP stated it will be a "we" transaction.
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Re: First child entering college in the fall... need some advice

Post by GreendaleCC »

DIFAR31 wrote: Tue Apr 13, 2021 7:32 pm
greg24 wrote: Tue Apr 13, 2021 4:21 pm There are other ways to reduce the price of college.

....

Take AP classes, a community college class in the Summer, and do whatever else it takes to guarantee graduating in 4 years (or less).
At many (most?) of the top ranked schools, AP or community college credits earned while in high school will not translate to credits that can be applied to a bachelor's degree. They may satisfy a requirement for a lower level college course that is a gateway to a higher level course, but they will not assist in completing degree requirements any earlier.
Which top ranked schools don’t offer actual credits for some AP exam scores? I think this is incorrect.
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quantAndHold
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Re: First child entering college in the fall... need some advice

Post by quantAndHold »

GreendaleCC wrote: Tue Apr 13, 2021 10:32 pm
DIFAR31 wrote: Tue Apr 13, 2021 7:32 pm
greg24 wrote: Tue Apr 13, 2021 4:21 pm There are other ways to reduce the price of college.

....

Take AP classes, a community college class in the Summer, and do whatever else it takes to guarantee graduating in 4 years (or less).
At many (most?) of the top ranked schools, AP or community college credits earned while in high school will not translate to credits that can be applied to a bachelor's degree. They may satisfy a requirement for a lower level college course that is a gateway to a higher level course, but they will not assist in completing degree requirements any earlier.
Which top ranked schools don’t offer actual credits for some AP exam scores? I think this is incorrect.
University of Denver, and it isn’t even a top ranked school.
DIFAR31
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Re: First child entering college in the fall... need some advice

Post by DIFAR31 »

GreendaleCC wrote: Tue Apr 13, 2021 10:32 pm
DIFAR31 wrote: Tue Apr 13, 2021 7:32 pm
greg24 wrote: Tue Apr 13, 2021 4:21 pm There are other ways to reduce the price of college.

....

Take AP classes, a community college class in the Summer, and do whatever else it takes to guarantee graduating in 4 years (or less).
At many (most?) of the top ranked schools, AP or community college credits earned while in high school will not translate to credits that can be applied to a bachelor's degree. They may satisfy a requirement for a lower level college course that is a gateway to a higher level course, but they will not assist in completing degree requirements any earlier.
Which top ranked schools don’t offer actual credits for some AP exam scores? I think this is incorrect.
Dartmouth, for one. After a quick review, I will change my "many (most?)" to "some." Often, when straight credit is given for a high AP exam score, it's determined on a department-by-department basis, and is not governed by an overall school policy. And the more prevalent practice is to waive certain course requirements rather than grant credits toward graduation.
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Re: First child entering college in the fall... need some advice

Post by GreendaleCC »

quantAndHold wrote: Tue Apr 13, 2021 10:45 pm
GreendaleCC wrote: Tue Apr 13, 2021 10:32 pm
DIFAR31 wrote: Tue Apr 13, 2021 7:32 pm
greg24 wrote: Tue Apr 13, 2021 4:21 pm There are other ways to reduce the price of college.

....

Take AP classes, a community college class in the Summer, and do whatever else it takes to guarantee graduating in 4 years (or less).
At many (most?) of the top ranked schools, AP or community college credits earned while in high school will not translate to credits that can be applied to a bachelor's degree. They may satisfy a requirement for a lower level college course that is a gateway to a higher level course, but they will not assist in completing degree requirements any earlier.
Which top ranked schools don’t offer actual credits for some AP exam scores? I think this is incorrect.
University of Denver, and it isn’t even a top ranked school.
:confused

“High scores on the AP exams can earn you credit and/or placement at the University of Denver. Credit is granted under the guidelines stated below. A maximum of 45 quarter hours can be awarded for AP and IB credit.”

https://www.du.edu/registrar/newstudent ... 0-2021.pdf
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Re: First child entering college in the fall... need some advice

Post by GreendaleCC »

DIFAR31 wrote: Tue Apr 13, 2021 10:54 pm
GreendaleCC wrote: Tue Apr 13, 2021 10:32 pm
DIFAR31 wrote: Tue Apr 13, 2021 7:32 pm
greg24 wrote: Tue Apr 13, 2021 4:21 pm There are other ways to reduce the price of college.

....

Take AP classes, a community college class in the Summer, and do whatever else it takes to guarantee graduating in 4 years (or less).
At many (most?) of the top ranked schools, AP or community college credits earned while in high school will not translate to credits that can be applied to a bachelor's degree. They may satisfy a requirement for a lower level college course that is a gateway to a higher level course, but they will not assist in completing degree requirements any earlier.
Which top ranked schools don’t offer actual credits for some AP exam scores? I think this is incorrect.
Dartmouth, for one. After a quick review, I will change my "many (most?)" to "some." Often, when straight credit is given for a high AP exam score, it's determined on a department-by-department basis, and is not governed by an overall school policy. And the more prevalent practice is to waive certain course requirements rather than grant credits toward graduation.
:confused

https://oue.fas.harvard.edu/apexams

http://catalog.yale.edu/ycps/table-of-a ... on-credit/

https://odoc.princeton.edu/curriculum/g ... d-standing

https://registrar.stanford.edu/students ... edit-chart

https://firstyear.mit.edu/academics-exp ... -placement

https://bulletin.columbia.edu/general-s ... ap-credit/

https://courses.cornell.edu/content.php ... avoid=7931
TimeMan
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Re: First child entering college in the fall... need some advice

Post by TimeMan »

As a HS dropout with my first child going into UTD with one of the higher merit scholarships they gave out this year, the thought of out of pocket $320k for a STEM degree makes me ill.

My parents were small business owners and made a killing in the 80's and 90's, spent every dollar they earned, and now I support them as they are living on SS. That's a reason I'm a member here, because I refuse to end up like that.

I lamented not going to MIT (computer nerd programming at 7 in the early 80's) primarily due to I feel I could have hooked up with a Google type founding. Fast forward to 24 and I came up with a SaaS product in the early 2000's that I sold and now I work for a FAANG with $3M net worth set to retire as soon as I get these kids sorted.

As much as I regret not having been around the "IT" crowd to come up with some fantastic startup that let me quit college early with a solid startup angel, I cannot imagine making $240k and signing on a $320k degree.

If you cannot see your child being Sergey Brin or Bill Gates, it is a waste.

Instead, I'm using my industry connections to get my child sudo-interships in highschool and will continue my career long enough to get her those connections as she is perusing Comp Sci.

I'm a hiring manager for FAANG and I DO NOT CARE where you go to school.
infotrader
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Re: First child entering college in the fall... need some advice

Post by infotrader »

TimeMan wrote: Wed Apr 14, 2021 12:29 am As a HS dropout with my first child going into UTD with one of the higher merit scholarships they gave out this year, the thought of out of pocket $320k for a STEM degree makes me ill.

My parents were small business owners and made a killing in the 80's and 90's, spent every dollar they earned, and now I support them as they are living on SS. That's a reason I'm a member here, because I refuse to end up like that.

I lamented not going to MIT (computer nerd programming at 7 in the early 80's) primarily due to I feel I could have hooked up with a Google type founding. Fast forward to 24 and I came up with a SaaS product in the early 2000's that I sold and now I work for a FAANG with $3M net worth set to retire as soon as I get these kids sorted.

As much as I regret not having been around the "IT" crowd to come up with some fantastic startup that let me quit college early with a solid startup angel, I cannot imagine making $240k and signing on a $320k degree.

If you cannot see your child being Sergey Brin or Bill Gates, it is a waste.

Instead, I'm using my industry connections to get my child sudo-interships in highschool and will continue my career long enough to get her those connections as she is perusing Comp Sci.

I'm a hiring manager for FAANG and I DO NOT CARE where you go to school.
I couldn't agree more, but I am from a very different background: working as an academic in my entire career.
Going to college is just a fine experience. If you go for the sake of education, it really does not make much difference if you go to a state college or an ivy school.
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Re: First child entering college in the fall... need some advice

Post by chipperd »

DIFAR31 wrote: Tue Apr 13, 2021 7:26 pm
chipperd wrote: Tue Apr 13, 2021 6:04 pm Lastly, I'm a bit concerned hearing about the level of merit aid ($1k/year if I read correctly?). I obviously don't know your daughter's academic stats, and it's great she got into an elite school, so please understand I mean no harm in saying: If she is just squeaking in, being a small fish in that large elite pond can be a shocker for some. Many kids that I am aware who admissions feel will make it, get more in merit funds to attend (Ivies excepted).
At most "top private universities" (OP's description), there is no institutional merit aid, because there doesn't have to be. These schools are already attracting the top applicants. My guess is that the $1k/year merit aid is an outside scholarship.
Sorry, the highlighted portion of your statement doesn't seem accurate to me based on my working definitions of "top" and "most" and not our experience at all. (As I mentioned in my prior post, Ivies are excluded). For me "most" is at least 80% and "top" is the top 50 in the U.S.
Here are a few private universities and colleges, ranked by USNW, that do provide institutional merit scholarships: U of Chicago ranked #6, Northwestern U ranked #9, Vanderbilt, ranked #12, Rice, ranked #16, Notre Dame, ranked #19, Emory, ranked #21.
These schools provide merit money just from an academic point of view. Obviously the further down the list one tracks, the more likely academic merit money will be offered.
Let's not forget many of the other top private U's, including those above, (with the exception of U of Chicago and Emory in the case of athletics as both are D3), will provide funding for athletes and those with special gifts or talents, as I cited in my example with MIT, ranked #4.
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Re: First child entering college in the fall... need some advice

Post by stoptothink »

infotrader wrote: Wed Apr 14, 2021 1:00 am
Going to college is just a fine experience. If you go for the sake of education, it really does not make much difference if you go to a state college or an ivy school.
I've asked this in several threads now, with no answer from anybody; outside of the education, how is the "experience" at an Ivy (or other "elite" U) different/better than state college? What is this "college experience" and why can't they get it at state U? FWIW, I did not attend an Ivy but UCLA for undergrad and two less prestigious public universities for grad school. I did have Ivy grad school offers, but my UCLA "experience" (which was nearly free) was mediocre so my choices for grad school were all about money.

As a parent, I'll pay for my child to have a better education which provides them with more opportunity, but I have not heard anybody provide a compelling reason as to why I should pay for a "college experience".
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Re: First child entering college in the fall... need some advice

Post by kleiner »

stoptothink wrote: Wed Apr 14, 2021 7:51 am As a parent, I'll pay for my child to have a better education which provides them with more opportunity, but I have not heard anybody provide a compelling reason as to why I should pay for a "college experience".
I agree that college can be like an enjoyable 4 year fun summer camp for some kids. I don't want to pay for that either.

The problem however is that what we think of as "college" is really a bundle of services: the actual learning, networking opportunities, self-discovery, and the credentials. I have been reading for years about how this is going to get unbundled but it hasn't fully happened yet.

Marc Andreesen, the VC says:
A bundle of actual education/skills acquisition, social/dating service, network building, “attached to a hedge fund” (in the form of an endowment)
getthatmarshmallow
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Re: First child entering college in the fall... need some advice

Post by getthatmarshmallow »

stoptothink wrote: Wed Apr 14, 2021 7:51 am
infotrader wrote: Wed Apr 14, 2021 1:00 am
Going to college is just a fine experience. If you go for the sake of education, it really does not make much difference if you go to a state college or an ivy school.
I've asked this in several threads now, with no answer from anybody; outside of the education, how is the "experience" at an Ivy (or other "elite" U) different/better than state college? What is this "college experience" and why can't they get it at state U? FWIW, I did not attend an Ivy but UCLA for undergrad and two less prestigious public universities for grad school. I did have Ivy grad school offers, but my UCLA "experience" (which was nearly free) was mediocre so my choices for grad school were all about money.

As a parent, I'll pay for my child to have a better education which provides them with more opportunity, but I have not heard anybody provide a compelling reason as to why I should pay for a "college experience".
Every elite university has its own brand, but the ingredients are basically: 1) residential campus for most of the four years there, probably in a rural or isolated area 2) all or most social/work activities are centered on campus or the immediate environs 3) the median student is very bright and accomplished. 4) they're quite a bit smaller than the average public school and the schools work to establish a sense of community.

The result is that the student's friends are likely to be bright, talented people who have four focused years (and that's the expectation) where they're encouraged not just to learn, but to explore and learn outside of class with peers who are there for the same purpose. It's really an environment unlike much else.

(And it's not really replicated at grad schools at the same institution.)
Carguy85
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Joined: Thu Mar 19, 2020 6:26 pm

Re: First child entering college in the fall... need some advice

Post by Carguy85 »

Very interesting thread on perspective...I wish you the best juggling expectations not only with the current college goer but the younger two as well....My wife and I (both millennials) with graduate degrees need to get with it I suppose with what a current 4 year degree costs. I suppose we woefully underestimate the value by a factor of 8-10.
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