Author Topic: College, we clearly are the minority  (Read 6442 times)

unplugged

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College, we clearly are the minority
« on: February 22, 2013, 12:00:17 PM »
We are right in the middle of sending 2 kids to college. We are the parents of a junior and a senior. In talking with the other kids and we are in the minority. Now talking with some adults we feel even more in the minority. We are the only parents who are shunning student loans. Our kids are choosing to utilize only schools that will be funded 80-90% through the Georgia Hope Scholarship. Our teens have nest eggs from jobs and will continue to work part time. Our kids are living at home through college and we are getting waivers from the college that requires kids live on campus their freshmen year. Thankfully we live fairly close. One child is choosing technical school and the other a state college. One will also consider a less prestigious , formerly called "junior" college for the first 2 years. We plan to supplement that 10-20% + not covered from Hope by kids income and us parents pitching in. If necessary, I am seriously willing to work fast food to pay for that 10-20% LOL. If the kids can do it, so can I ( if we come up short.)

I don't like to judge other people so I wont go into details on how 99% of their friends are approaching college. But it's very different from our approach. I simply CAN"T saddle young people with debt. How can I be alone in that? How?????
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TN_Steve

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Re: College, we clearly are the minority
« Reply #1 on: February 22, 2013, 12:30:19 PM »
You are not alone. 

We did the same, but are (by luck/fate/workaholism) in a very different income position than most.  We committed to ensuring that our sons (three in four years, so all in undergrad at once) have no loans for undergraduate studies, regardless of where they went.  Many/most/some people can't do anything like this; my siblings, for example, are simply not able to afford paying those bills for their kids, even at instate school with bright-flight and other scholarships.  Thus, I have a very hard time judging others on this topic.

We are not going to pay for grad schools though.  Rather, we'll loan them the money at AFR and thereby get some fixed income for pre-59.5 retirement years.  Big interest break for the aspiring lawyer and isn't "unfair" to other kids who probably would do phd engineering work if they get tired of working.  At that point, they are on their own and quite capable of making the decision to take on even mortgage level debt.

Bottom line, as in many things, people have to make their own pertinent decisions.

dragoncar

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Re: College, we clearly are the minority
« Reply #2 on: February 22, 2013, 12:54:16 PM »
My personal philosophy (trigger warning: liberals) is that if you choose to have kids, you have certain responsibilities.  Traditionally, society expected you to care for them until adulthood - i.e., when they were 18.  These days, adulthood seems very skewed.  We recognize this in our liquor laws, for example.  Are college kids really adults?  I'm all for supporting kids through college.

That doesn't mean they can't learn self-sufficiency.  I like the approach of letting them take some debt, some kind of job that doesn't interfere with studies, etc.  But I wouldn't ask them to take out outrageous loans just because I wanted a new toy.  I like TN_Steve's idea of loaning at mutually beneficial interest rates.

HawkeyeNFO

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Re: College, we clearly are the minority
« Reply #3 on: February 22, 2013, 01:42:58 PM »
3 kids here, my assumption for planning is that they will all want to go to college.  The 9/11 GI bill will pay for about 1 school year for each of them at the in-state rates(plus a living allowance).  Beyond that, I have Coverdell accounts set up, and some scholarships sure would be nice too, but you can't count on them.

I agree, the key is to keep students and brand new grads out of debt.

lhamo

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Re: College, we clearly are the minority
« Reply #4 on: February 22, 2013, 06:15:49 PM »
I think you will find you have lots of company in these quarters. 

I agree with your philosophy 100%.  I did my BA/MA/PhD at a state school and with a combination of savings, work and scholarships/fellowships came out debt free.  I was able to make choices other people might not be able to make due to my lack of debt.  I want the same thing for my kids.  We are saving for their college, because it is unclear if we will re-establish US residency before they go to school, but will consider that as well as investigate other options that will help to bring down the cost and avoid loans.  If necessary we will cashflow their college expenses by continuing to work a bit longer.  Of course, we will expect them to work and contribute to the cost as well.  I saw plenty of evidence when I was in school that 100% parental funding of college costs was not a good thing.  Learning to balance multiple priorities and navigate the workplace is an important part of the college experience, in my book. 

Stick to your guns -- you are doing right by your kids and your family.  Just because everyone else is idiotic doesn't mean you have to be.


kendallf

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Re: College, we clearly are the minority
« Reply #5 on: February 22, 2013, 08:10:25 PM »
"Don't handicap your children by making their lives easy.”
― Robert A. Heinlein

We're about to send our second (and last) child to college. 

Our oldest went to FSU on scholarship but has also worked and taken loans; I wouldn't change that and she's grown up and become a better person in the process.  I plan to help her repay her loans although I haven't promised to.

Youngest is a 4.5 GPA IB student and top level gymnast and goes to Michigan State on a full ride next year.  She'll train and compete 20+ hours a week; it's a full time job.  Again, I think it's made her a better person.
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James

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Re: College, we clearly are the minority
« Reply #6 on: February 22, 2013, 08:31:30 PM »
"Don't handicap your children by making their lives easy.”
― Robert A. Heinlein


Damn right and damn hard.
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TN_Steve

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Re: College, we clearly are the minority
« Reply #7 on: February 22, 2013, 09:09:42 PM »
"Don't handicap your children by making their lives easy.”
― Robert A. Heinlein


Damn right and damn hard.

Yep, I regret not using the cat-o-nine tails more frequently when they were growing up.  Would have built character.  :-)

As I stated above, families differ.  We feel like we made the right call.  The experiences at MIT, Rice, Harvey Mudd, Caltech and the like are tough to match and we didn't want the kids to rule them out based on money.  In our situation, we believed it appropriate to pay the main bill (not spending money, or much in the way of engineering books though) for kids who had no car, came home once a year, and bought all clothing at thrift shops.  True, they could have borrowed the egregious sums needed for their education as a result of their parents' FAFSA numbers, but why make them, if you can swing it without much problem and have raised them right to begin with?  It isn't as if they became spendthrifts and lost their understanding of the worth of a dollar as a result. 

Again, let me hasten to add that this was our personal situation and decision.  Others legitimately would reach other decisions.

unplugged

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Re: College, we clearly are the minority
« Reply #8 on: February 22, 2013, 10:09:52 PM »
I'm proud that our kids have juggled part time jobs, too many extra curricular activities, and AP classes, but again, that's just another area where they have been the minority.

The modern casual use of student loans bothers me worse than before. I also think colleges have overly raised their prices and I can't help but wonder about a connection. Then I am seeing kids graduate and make WAY less than they had expected to. Many are over qualified for the work they are doing.

If this generation is getting hit by the economy so badly, I think being debt free could be a real financial tool ya know? But I know each family has their own unique set of college situations.
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sol

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Re: College, we clearly are the minority
« Reply #9 on: February 22, 2013, 11:57:31 PM »
We intend to pay for half of college educations, regardless of where they go.  The other half will come from them, either from working or scholarships or debt. 

Expensive private colleges are basically full of two types of kids; smart kids who got in for free, and mediocre kids with rich parents.  Each group tends to gravitate towards itself.  Which type do you want your kid to hang with?

mustachecat

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Re: College, we clearly are the minority
« Reply #10 on: February 23, 2013, 06:19:42 AM »
My parents would have paid my way through any (good) college of my choosing and told me so in no uncertain terms. I made the mature choice and attended the school where my dad teaches (tuition remission!). They were still on the hook for housing, but I also graduated a year early, so it wasn't as terrible as it could have been (but certainly nowhere near as frugal as living at home). I paid for books, food, and fun from a part-time job.

College-age me was far from any real Mustachian virtue, but... I think if you raise your kid right, they'll generally make good decisions.

MsSindy

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Re: College, we clearly are the minority
« Reply #11 on: May 09, 2013, 01:57:05 PM »
I don't really understand spending sooooo much on college tuition that I hear about these days.  I mean, unless you're a really gifted intellect, is it really worth it to go to an Ivy League or other prestigious private school and come out $100k in debt?  I get that there are some cool bragging rights and it's a "cool experience", but is it really worth $100k - $200k?

I just wanted to get a good paying job.  Did my first 2 years at community college either online, weekends, or night school while working full time.  Saved money and went full time to finish my last 2 years at the local Cal State - no debt.  Recruited by a top Consulting Management firm where I spent the next 15 years.  A lot of my colleagues went to fancy schools and were offered higher starting pays, but after about 3 years the pay scale evens out...and most still have crushing student debt. 

I just don't get it.  I'm not sure people are looking at ROI on tuition, but are more about "the experience".

Undecided

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Re: College, we clearly are the minority
« Reply #12 on: May 09, 2013, 04:24:37 PM »
I don't really understand spending sooooo much on college tuition that I hear about these days.  I mean, unless you're a really gifted intellect, is it really worth it to go to an Ivy League or other prestigious private school and come out $100k in debt?  I get that there are some cool bragging rights and it's a "cool experience", but is it really worth $100k - $200k?

I just wanted to get a good paying job.  Did my first 2 years at community college either online, weekends, or night school while working full time.  Saved money and went full time to finish my last 2 years at the local Cal State - no debt.  Recruited by a top Consulting Management firm where I spent the next 15 years.  A lot of my colleagues went to fancy schools and were offered higher starting pays, but after about 3 years the pay scale evens out...and most still have crushing student debt. 

I just don't get it.  I'm not sure people are looking at ROI on tuition, but are more about "the experience".

Well, it's a luxury, in one sense, but it may ("may") also change the options one has (or has an awareness of) at graduation or later in life. Of course, there are very expensive schools that are very selective (and are essentially an option only for the "gifted intellect") and then there are very expensive schools that are much less selective. One type seems likely to be more worthwhile than the other. Assuming one has a "fine" state school option, as an example, paying more to attend Williams seems more defensible than paying just as much more to attend Syracuse.

iamsoners

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Re: College, we clearly are the minority
« Reply #13 on: May 09, 2013, 09:22:02 PM »
Good for you. I graduated from college debt free (through a combination of scholarships, work, family gifts and graduating early) and I would have to say it's one of the best gifts my family was able to give me--it allowed me the freedom to go out on a limb and try a career in a far off city that wouldn't have been feasible if I had debt payments.  Basically it meant that the world was open to me and I didn't have the fear and weight of debt hanging over me.

Even though I agree with the MMM philosophy that kids should take responsibility and begin to own some of their financial decisions at college age--I would still love for my children to have the gift of a debt free graduation that I got. We're not actively saving for that specific purpose but if there's surplus at the time they go, which there likely will be, we'll gladly give it. And hopefully along the way we instill them with a sense of hard work and responsibility that helps them choose a frugal school and work to bridge the gap.

Quote
The modern casual use of student loans bothers me worse than before. I also think colleges have overly raised their prices and I can't help but wonder about a connection.

I agree wholeheartedly. Student loan money is so easily available--what lender wouldn't make a loan that CAN NEVER BE DISCHARGED and charges twice the prime rate?--and the supply/demand system has gotten messed up.  People are willing to take out loans because they believe it's an investment or haven't thought through the consequences and the money is there so colleges have no incentive to keep costs in check.  Tuition is absurd--I graduated in 05 and it's nearly doubled at my cheap state school since then. Absurd! But what market force is keeping it in check? I

I truly think student debt is the next (or at least a coming) economic bubble that will burst to the detriment of our economy. I'm not sure exactly how it will burst given the current bankruptcy laws but something's got to give.

Worsted Skeins

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Re: College, we clearly are the minority
« Reply #14 on: May 10, 2013, 07:10:18 AM »
I think the important thing to remember in these discussions is the vast differences in educational opportunities across this country.  There are people who always draw a line in the sand that college students should live at home and commute to school.  The problem here is that our local community college is mediocre at best.  Those with science/engineering interests would not be able to complete a BS at a state university within an additional two years.  The cost savings of the community college is minimal to non-existent.

Further, our regional university (also within a commuting distance) has a limited number of degree offerings.

We have one child and planned before his birth to help fund college.  Paying $50K+ annually was out of the question.  But in part because we are savers with assets, our Expected Family Contribution runs high. I did considerable research to find colleges with relevant programs that give merit aid.  Some schools only provide financial aid (this includes most of the Ivies and almost-Ivies).  But many others want smart and interesting students and are willing to offer incentives. My son attends one of those schools.  Additionally he is participating in a program in Britain this summer with fees waived due to a supervisory role that he is taking on; his flight covered by grant.  It takes initiative to find funding but it can be done.

Some parents remember declaring financial independence from their own parents and suggest their kids should do so.  This is no longer an easy thing to do unless your kid joins the military, gets married or he becomes a legally emancipated minor.  Parental income will be considered for financial aid purposes--whether or not you want it to be.  Parents who choose not to assist their kids with college expenses will nonetheless have an influence on the price their kids must pay.  That is how the system at present works.

For us, college is important.  We recognize that not every kid should attend college though.  Since most high schools give minimal guidance in these matters, parents often need to assist their kids help find post-secondary paths.

twinge

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Re: College, we clearly are the minority
« Reply #15 on: May 10, 2013, 07:30:54 AM »
Quote
My personal philosophy (trigger warning: liberals) is that if you choose to have kids, you have certain responsibilities.

I honestly have no idea if by stating this you are sending out a warning that you are a liberal or a warning to liberals because I don't associate this philosophy with one party or another.

I think a college education is a grey area in terms of parental responsibility (and I say this as someone who values education enough to get a PhD and who has regularly been saving for my children's education).  I would counsel my children away from getting huge loans and I will support them financially in wise decisions about college to the best of my ability given my range of other priorities, but I also think at 18 your children are legally adults and need to start taking responsibilities for themselves.   I think when the time comes I will likely approach it in part as a parent wanting to support my children in their dreams and ambitions and in part as an investor who will want my children to make a reasonable case that they are approaching the problem in a way that makes sense as an investment in their future.  Given that my 11 year old has self-directed passionate interests and has already consulted the dept. of labor website for the viability of careers he's interested in, and has already imagined an early retirement plan to then pursue non-financial interests, I think he'll be up to the task.  My 3 year old-- I don't know, she wants to be an astronaut or a race car driver :).

mustachecat

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Re: College, we clearly are the minority
« Reply #16 on: May 12, 2013, 10:20:05 AM »
A timely article:

http://www.insidehighered.com/news/2013/01/14/study-finds-increased-parental-support-college-results-lower-grades

Quote
Much discussion about higher education assumes that the children of wealthy parents have all the advantages, and they certainly have many. But a new study reveals an area where they may be at a disadvantage. The study found that the more money (in total and as a share of total college costs) that parents provide for higher education, the lower the grades their children earn.

...

This finding backs the idea that parental financial support can act as a "moral hazard" in that students make decisions about how seriously to take their studies without having personally made the investment of cash in their educations.

Really interesting. The full text of the study is here.

There are some common-sense caveats, of course; the effect is diminished at highly competitive institutions; "lowest grades were earned by children whose parents essentially supported them without much discussion of student responsibilities [...]; and the negative impact of high levels of parental financial support was mitigated or eliminated by parents who set clear expectations for their children about grades, graduating on time or other issues..."

But I guess the fact that there is a negative correlation between parent spending and their children's collegiate achievement means that, unfortunately, many parents are failing in their responsibilities to set boundaries and demand achievement/effort/etc. from their kids.

unpolloloco

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Re: College, we clearly are the minority
« Reply #17 on: May 20, 2013, 10:23:20 AM »
I'd say the best way to deal with this is setting a fixed amount that you'll pay for education (say, a percentage of the price of the in-state flagship) and then encourage the kid to choose based on expected return on investment.  Ensures that they'll have the opportunity to graduate with minimal debt if they so choose, but also gives them the choice to go elsewhere.  Also, allows scholarships to count directly towards their costs/pocketbooks, giving a much greater incentive to find as many as they can.  This puts the ball solely in their court for them to decide what would be the best option.  Obviously, guiding them along the way would be a good idea, but this means that they'll have the ultimate decision and would deal with the benefits or consequences of this decision.  This is what my parents did and it put me in charge of my education instead of them - which is a good thing by any measure!

madhadron

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Re: College, we clearly are the minority
« Reply #18 on: May 25, 2013, 10:21:47 PM »
I thought I'd chip in a few tidbits from my perspective as an ex-academic who's worked on a couple of different continents and seen the folks at various grades of institution.

1. The students and professors plateau in intelligence and ability at the level of decent state universities. University of Michigan and Ann Arbor, University of Illinois at Urbana-Champagne, University of Virginia, University of Arizona---their students and professors are every bit as smart as the ones at MIT or Harvard. They are less pretentious and less likely to be assholes, though.

2. No one should ever pay for a PhD in science or engineering in the USA. In any legitimate program, you are *paid* to take such a degree. Sometimes you are paid quite generously, as I was (about $55k/year plus subsidized housing, insurance, and lots of perks).

3. The instruction in basic subjects is on average better at a community college than a four year university. Obviously, this varies by school and subject, but you're better off taking those general requirements that would be several hundred person lecture classes at U of Wherever at your community college.

4. Look beyond the USA. The EPFL and ETHZ in Switzerland, which have the slightly more prestige than Caltech and MIT, charge CHF1200 per year in tuition for foreign students. You need to speak French or German, but you can pay for a lot of language lessons for that difference in price. Canadian schools aren't as cheap, but are certainly cheaper for an American than a US school.

5. Who said a bachelor's degree is four years? The fee that I'm seeing listed for an AP exam is $117. That's cheaper than any college credit from a traditional school that I know of. My school was encouraging me to graduate at the end of my third year. I had a friend who did it in two because she was financially strapped. That was a physics degree, mind you, one of the heaviest programs at the university, exceeded only by astrophysics and biochemistry.

On the other hand, the most valuable skill I have, what pays the bills and is very rapidly building my savings, is programming, which I have never taken a class in in my life. I learned it starting when I was 13 and had several years of professional experience before I got to college. Think about that. A bachelors in physics, another in math, a masters in biology (got thrown out of my PhD), and my high school hobby that has the highest market worth.

lhamo

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Re: College, we clearly are the minority
« Reply #19 on: May 26, 2013, 01:41:09 AM »
madhadron, just curious, but what would you say are strong schools overseas that offer English-language BS programs in computer science/engineering?  Are there schools in Canada/Australia/New Zealand/the UK that would be comparable to the best STEM programs in the US? As expats who most likely won't be re-establishing US residency before our kids hit college, we're starting to think about how to expose our DS (now 12) to a wide range of options, though in all likelihood he will probably want to go back to the US. 

Aussie

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Re: College, we clearly are the minority
« Reply #20 on: June 01, 2013, 01:02:46 AM »
Just have a couple of comments about your situation...

You mentioned you would work fast food to keep your kids out of debt.  Does that mean that you have a family income less than $100,000?  If so, you might be able to get all or most of the tuition waived if your children can get into a top-tier private school (Stanford, Harvard, MIT). 

If they aren't going to get into one of those, than state schools are absolutely 100% the best option.  I have a lot of friends who went to less competitive private schools and now have all this crazy debt and iffy career prospects. 

I definitely think your attitude is very reasonable... Too many parents get guilted into spending crazy amounts of money on college when they could get better results for almost nothing

I am a little concerned about your hard line approach to money in college.  College almost by definition can not be a revenue neutral experience.  Putting too much pressure over small amounts of money often forces young adults into false economies such as using the McDonalds Dollar menu as a cheap food source or choosing their classes to fit around their Walmart schedule.  During the first 2 years of college 5-10 hours of part time work if nice, but it will probably be for minimum wage and they will gain little from the job besides a little cash.

The absolute most important thing to handling college with financial responsibility is to make sure that you are in position to graduate with a job.  This means that you should work 1/2 paid internships in your 3rd/4th years.  This is especially true for non STEM majors.  There is nothing wrong with Poly Sci, but you need to devote a lot of time out of school adding another skill that will push you into a career.

Finally, college is a great social experience and I would consider letting your kids live at school for at least the first 2 years.  This is a once in a lifetime chance to meet new people and grow as an adult.  Also, i would really encourage study abroad.  It is the cheapest chance to see the world.  You can probably get extra financial aid and it can even be cheaper than going to school in the US if you pick a country with subsidized student housing like Sweden or Hong Kong (not Australia or the UK)

course11

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Re: College, we clearly are the minority
« Reply #21 on: November 23, 2013, 11:37:43 AM »
I thought I'd chip in a few tidbits from my perspective as an ex-academic who's worked on a couple of different continents and seen the folks at various grades of institution.

1. The students and professors plateau in intelligence and ability at the level of decent state universities. University of Michigan and Ann Arbor, University of Illinois at Urbana-Champagne, University of Virginia, University of Arizona---their students and professors are every bit as smart as the ones at MIT or Harvard. They are less pretentious and less likely to be assholes, though.

Is this based on having taught at MIT and Harvard?

The bolded generalization is a bit thick (in my opinion as an MIT grad). I'm hard pressed to remember any professor of mine who was an asshole, or even particularly pretentious.

ShortInSeattle

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Re: College, we clearly are the minority
« Reply #22 on: November 23, 2013, 01:48:25 PM »
We intend to pay for half of college educations, regardless of where they go.  The other half will come from them, either from working or scholarships or debt. 

Expensive private colleges are basically full of two types of kids; smart kids who got in for free, and mediocre kids with rich parents.  Each group tends to gravitate towards itself.  Which type do you want your kid to hang with?

I like this approach. I think it makes sense for anyone going to college to have some skin in the game.

In my case my Mom offered me a monthly stipend, and I covered the rest with loans.  I felt accountable to her - because I knew she was sacrificing to help me out.  I felt accountable to myself - because I knew I'd be responsible for paying those loans off.




Argyle

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Re: College, we clearly are the minority
« Reply #23 on: November 23, 2013, 07:28:53 PM »
The thing many people generally don't realize is that Ivy League schools are rich and will subsidize any student admitted whose parents don't make a ton of money.  It can often cost less to go to Harvard than to a State U.

You can get a good education at a State U., especially if you're mature and self-directed.  I wouldn't recommend them for everyone, though.  Many of them are hurting badly for funding.  Where they used to be 40-50% supported by the state, now often it's 10-15%. At the same time costs have gone up.  One big reason for this is electronics -- when every desk of every secretary and administrator has to have a computer, and the campus has to be full of computers for all the students who don't have one (and yes, at state universities there are still significant numbers of students too poor to have their own computers -- and the universities don't want to exclude the poor even more by insisting that everyone needs to bring one) -- and all those computers have to be replaced every 5-6 years because the computer companies are eagerly making them outdated -- that's a huge expense that universities didn't have forty years ago.  Add to that an arms race about facilities.  Students often choose universities on superficials like the quality of housing (no more sharing a small cinderblock room with the bathroom down the hall -- students want private rooms with their own bathroom), fancy rec centers, sports teams that win, and the rest.  And greater numbers of students lower the cost per student.  So poverty-stricken state universities are desperate for students, and often accept great numbers of underprepared students in an attempt to keep numbers up.  So it is easy for the motivated student to be stuck in huge classes with great numbers of unmotivated, semi-literate students.  This is demoralizing, plus a good student won't be pushed as hard because anyone who can write a literate sentence will get a reasonable grade.

So I don't think the important difference between Harvard and a state university is the professors.  It's the other students.

Some students may also be easily intimidated or uncertain or need more attention.  Some small private colleges are extra-good at that. And a number of them have enough funds to give good scholarships. 

It's worth looking at all the options before making a decision about which kind of college is most affordable and best.

sunshine

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Re: College, we clearly are the minority
« Reply #24 on: November 24, 2013, 07:10:31 AM »
I'd say the best way to deal with this is setting a fixed amount that you'll pay for education (say, a percentage of the price of the in-state flagship) and then encourage the kid to choose based on expected return on investment.  Ensures that they'll have the opportunity to graduate with minimal debt if they so choose, but also gives them the choice to go elsewhere.  Also, allows scholarships to count directly towards their costs/pocketbooks, giving a much greater incentive to find as many as they can.  This puts the ball solely in their court for them to decide what would be the best option.  Obviously, guiding them along the way would be a good idea, but this means that they'll have the ultimate decision and would deal with the benefits or consequences of this decision.  This is what my parents did and it put me in charge of my education instead of them - which is a good thing by any measure!

This is what we did. Our kids have enough for an in state school for 4 years. Their big incentive for scholarships, a part time job with college reimbursement etc was they get to keep anything that is left( if any) once a degree is in hand and they hit a certain age. It is their choice to make the best use of this money. They know exactly what they have and that the bank of mom and dad is totally closed after that amount.

lizzzi

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Re: College, we clearly are the minority
« Reply #25 on: November 24, 2013, 08:23:29 AM »
We told our two girls that we would pay the cost of in-state state schools, and if they wanted anything more expensive than that, that they would have to take out the loans on their own heads. Several of our friends had taken this approach with their children, and it seemed to work out well for all. We ended up with a neighborhood group of debt-free college grads. Then after college, we moms and dads all enforced the "three-week rule." They could have three weeks of lounging at home gratis, but after that, they either had to be employed, actively seeking employment, or signing up for the military--while contributing some funds to the household. One neighbor (unbeknownst to her son) saved the rent she charged him, and later gave it back to him to help towards his first house down payment.

nottoolatetostart

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Re: College, we clearly are the minority
« Reply #26 on: December 14, 2013, 04:41:40 AM »
You are not alone. We plan on paying for college. However, my husband and I differ on the details. His parents were/are wealthy and sent him to a private Ivy league school. Fully paid and he had no job. I don't think he actually earned his first dime until he was 21. I went to a state school and worked 30-40 hours a week during the week and especially weekends as a server and still graduated within 4 years. I was involved in a couple extracirculars, but no leadership roles. However, it did not hurt my opportunity at full-time employment at college (got that lined up by senior year). Did community college for the first 2 and then graduated from my dream (state) school 2 years later. I never graduated or got an associates degree from the community college, so my "only" degree is from the prestigious state school (it was "THE" state school of our state). No one would ever know I went to community college first.

I want our kids to earn a portion of their living expenses. They need to learn time management, priorities, etc. Having a job and balancing school aids in that. No college kid I knew actually studied on Friday or Saturday night. There's no reason why kids can't be working. I always got off at 9-10 pm and had plenty of time to meet my friends to go out afterwards for a few hours. Less to do = more trouble you can get into. It can be done. Oh, I am book smart, just street smart, but still ended up with a A-/B+ average, so didn't affect my grades at all.

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Re: College, we clearly are the minority
« Reply #27 on: December 14, 2013, 10:46:14 AM »
Here's an interesting viewpoint:

Don't pay for all of your child's university education.

My (very generous) parents paid for my undergraduate education. It was SUCH a gift and a real joy to learn without worrying about money. Oh, some of the best years of my life!! BUT, upon undertaking my second degree at the graduate level, I had an eye-opening experience as I learned about student loans, debt, and money management.

So it depends. Do you want to make your child's life easier by paying for education so they can focus on learning? Or introduce some hardship early on, so they can manage their finances better in the long run?

I don't have an answer. But I thought it could be food for thought! I watch shows were kids were supported by their parents and then when they support themselves they are still spending at the same level but are not making enough money. It can be a recipe for disaster.

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Re: College, we clearly are the minority
« Reply #28 on: December 14, 2013, 08:03:36 PM »
I don't see a problem with having kids take on some student loans.  I consider student loans "good debt".  Like a mortgage.  At least the Direct federal loans, which were called "Stafford" loans back in my day. 

Our worst case funding formula for in state schools that have a current price tag of $22k/yr (on campus living, all expenses included): $27k student loans (cheap Direct loans maxed for 4 years), $30k from our 529 college savings, $30k from the kid's piggy bank, summer jobs in HS and college, work-study, grants, scholarships, etc.  Obviously the more they earn from jobs, the less loans they would need. 

Is it bizarre to think $27k of indebtedness is unreasonable given the fact that a properly selected college education should yield $10-15k/yr higher earnings potential straight out of school and even more later in one's career? 

Why are student loans good debt?
  • Looks like Direct federal student loans are available at 3.86% fixed rate (5-10+% lower than the cheapest unsecured credit an 18 year old with zero credit history could get on the open market). 
  • This is debt that has above the line tax deductible interest. 
  • You don't have to service the debt (for a period of time) if you become unemployed or have financial hardships (deferment or forbearance). 
  • You can get on an extended repayment plan with up to 30 years amortization. 
  • My student loan lender knocked 2.25% off my rate for paying on time and having auto-draft (I think these rate reductions are gone with pushing all federal loans to Direct lending). 
  • Many qualify for subsidized (=0%) interest rates while enrolled in school (even if you continue to grad school) and a period beyond school.
  • You can enroll in a repayment program that is tied to your income.  You make a lot, you pay more sooner.  You don't make much, you pay less that year.
  • Under the Public Service Loan Forgiveness program, you can have all student loans forgiven after 10 years of work in public or nonprofit employment.  In the Income based repayment program, all remaining student loan indebtedness not paid within 25 years is forgiven
  • Student loan indebtedness is a form of life insurance.  Upon death, all remaining balances owed are forgiven.  They aren't indebtedness of your estate.

The bad part of student loan debt?  You generally can't discharge in bankruptcy.  Debt service sucks up cash flow from other worthwhile uses (like fast cars or maxing IRAs).
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Re: College, we clearly are the minority
« Reply #29 on: December 15, 2013, 02:25:52 PM »
"Don't handicap your children by making their lives easy.”
― Robert A. Heinlein


Damn right and damn hard.

Yep, I regret not using the cat-o-nine tails more frequently when they were growing up.  Would have built character.  :-)

As I stated above, families differ.  We feel like we made the right call.  The experiences at MIT, Rice, Harvey Mudd, Caltech and the like are tough to match and we didn't want the kids to rule them out based on money.  In our situation, we believed it appropriate to pay the main bill (not spending money, or much in the way of engineering books though) for kids who had no car, came home once a year, and bought all clothing at thrift shops.  True, they could have borrowed the egregious sums needed for their education as a result of their parents' FAFSA numbers, but why make them, if you can swing it without much problem and have raised them right to begin with?  It isn't as if they became spendthrifts and lost their understanding of the worth of a dollar as a result. 

Again, let me hasten to add that this was our personal situation and decision.  Others legitimately would reach other decisions.
I have a friend who paid her daughter's way through school at Yale and part of med school.  She and her husband both have good jobs and are good savers.

At one point, my friend told me she was thinking of cutting her daughter off - she was 19, a junior, and had come home and told her mother she was going on the pill.  Her mother did not approve of premarital sex (they are not religious, she was just older and Chinese).  I looked at her and said "hmmm...I probably wouldn't choose this to be the issue to drive a wedge between you, it's only sex."  (That prompted a "wait, did you do it before marriage?  Oh, and you turned out okay, so..."  But really I pointed out that her daughter started college at 17, shopped at thrift stores, held down a job to pay for things she needed, volunteered, and paid for her own plane tickets home.  Oh and kept close to a 4.0. 

mm1970

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Re: College, we clearly are the minority
« Reply #30 on: December 15, 2013, 02:27:13 PM »
We intend to pay for half of college educations, regardless of where they go.  The other half will come from them, either from working or scholarships or debt. 

Expensive private colleges are basically full of two types of kids; smart kids who got in for free, and mediocre kids with rich parents.  Each group tends to gravitate towards itself.  Which type do you want your kid to hang with?
Didn't use to be that way.  I was a smart kid (not quite free, did have to borrow some).  Yes there were some mediocre rich kids, but there were a fair number of really smart rich kids too.

mm1970

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Re: College, we clearly are the minority
« Reply #31 on: December 15, 2013, 02:33:37 PM »
I thought I'd chip in a few tidbits from my perspective as an ex-academic who's worked on a couple of different continents and seen the folks at various grades of institution.

1. The students and professors plateau in intelligence and ability at the level of decent state universities. University of Michigan and Ann Arbor, University of Illinois at Urbana-Champagne, University of Virginia, University of Arizona---their students and professors are every bit as smart as the ones at MIT or Harvard. They are less pretentious and less likely to be assholes, though.

Is this based on having taught at MIT and Harvard?

The bolded generalization is a bit thick (in my opinion as an MIT grad). I'm hard pressed to remember any professor of mine who was an asshole, or even particularly pretentious.
Maybe it's because nice-people self select, but one of my best friends when I was in the Navy went to MIT and another good friend went to Harvard.

Of course, they were scholarship kids.

Undecided

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Re: College, we clearly are the minority
« Reply #32 on: December 16, 2013, 08:54:26 AM »
We intend to pay for half of college educations, regardless of where they go.  The other half will come from them, either from working or scholarships or debt. 

Expensive private colleges are basically full of two types of kids; smart kids who got in for free, and mediocre kids with rich parents.  Each group tends to gravitate towards itself.  Which type do you want your kid to hang with?
Didn't use to be that way.  I was a smart kid (not quite free, did have to borrow some).  Yes there were some mediocre rich kids, but there were a fair number of really smart rich kids too.

If anything, it's become less "that way" at top schools in the U.S., as they have just continued to become more academically selective. Of course, there are well known private schools that are nothing special in terms of selectivity, but nobody who will ever matter is likely to equate attending one of them with attending a very selective school.

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Re: College, we clearly are the minority
« Reply #33 on: December 16, 2013, 09:16:17 AM »
If anything, it's become less "that way" at top schools in the U.S., as they have just continued to become more academically selective. Of course, there are well known private schools that are nothing special in terms of selectivity, but nobody who will ever matter is likely to equate attending one of them with attending a very selective school.

I'm kind of out of the loop in terms of fancy expensive well known private schools that aren't very selective.  Can you name a few?  Are these small liberal arts colleges or any of the Ivy's?
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Undecided

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Re: College, we clearly are the minority
« Reply #34 on: December 16, 2013, 09:56:43 AM »
If anything, it's become less "that way" at top schools in the U.S., as they have just continued to become more academically selective. Of course, there are well known private schools that are nothing special in terms of selectivity, but nobody who will ever matter is likely to equate attending one of them with attending a very selective school.

I'm kind of out of the loop in terms of fancy expensive well known private schools that aren't very selective.  Can you name a few?  Are these small liberal arts colleges or any of the Ivy's?

Then I'm guaranteed to offend! But the Ivies and the potted Ivies have continued to get more selective. I was thinking of places well known in the population at large (perhaps at root because of sports) that seem to be perceived as "fancy," but which don't have the same kind of selectivity as the schools to which you alluded. To minimize the number I offend, one example would be Syracuse.

Siamond

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Re: College, we clearly are the minority
« Reply #35 on: December 16, 2013, 10:44:36 AM »
I simply CAN"T saddle young people with debt. How can I be alone in that? How?????

You're not alone. I totally agree. Plus it's BAD debt, those student loans rates are not exactly enticing (compounded by the fact that we don't qualify for subsidized loans).

Even if I'm paying an arm and a leg with those tuitions. But I am making it VERY explicit to my kids, showing them each invoice, etc. And then they deal with books, pocket money and the likes by themselves. The loan learning curve will come to them, but only for masters. Overall, we're a lucky family, we can afford such balance.

They are displaying solid responsibility & good grades though. If not, I would probably have pressured them more.

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Re: College, we clearly are the minority
« Reply #36 on: December 16, 2013, 11:27:13 AM »
Then I'm guaranteed to offend! But the Ivies and the potted Ivies have continued to get more selective. I was thinking of places well known in the population at large (perhaps at root because of sports) that seem to be perceived as "fancy," but which don't have the same kind of selectivity as the schools to which you alluded. To minimize the number I offend, one example would be Syracuse.

This is probably offensive, but I didn't know Syracuse was supposed to be a "great" school or highly selective (any more so than the 80-90 schools that don't make it into the top 10-20 best schools). 
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shamelessHedon

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Re: College, we clearly are the minority
« Reply #37 on: December 16, 2013, 11:38:43 AM »
We paid cash for 1/3 tuition and books for the first kid. She paid 1/3 and her mom paid 1/3. This ended when she chose to pause school for more than one semester. If she goes back now (26 yo) it will be on her own dime.

Because we had time with the second one, we put money in a 529.  She estranged herself from our family so we reinvested it in a different vehicle for ourselves.  She has since joined the navy so she will have educational benefits there.

Bottom line, we dont go into debt to help our kids, and helping them is conditional on their behavior.

Undecided

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Re: College, we clearly are the minority
« Reply #38 on: December 16, 2013, 12:08:55 PM »
Then I'm guaranteed to offend! But the Ivies and the potted Ivies have continued to get more selective. I was thinking of places well known in the population at large (perhaps at root because of sports) that seem to be perceived as "fancy," but which don't have the same kind of selectivity as the schools to which you alluded. To minimize the number I offend, one example would be Syracuse.

This is probably offensive, but I didn't know Syracuse was supposed to be a "great" school or highly selective (any more so than the 80-90 schools that don't make it into the top 10-20 best schools).

That's how I see it too, but it's well known and very expensive. It is, I think, the type of place the earlier post regarding schools with mediocre rich kids (to paraphrase, perhaps) described. If someone thinks that a school like Princeton or Williams is home to more than a token number of such students today, though, they're kidding themselves.