Thanks for the feedback!
Mlipps, that makes alot of sense. I never even considered a 529 as an option. Granted, my ability to really take advantage of the benefit is limited since I won't have a long ramp up time; if I choose school B, classes would begin 3/31. However, given that it's a 2.5 year program, I may as well store the money in a tax free vehicle during that period. Living in Georgia, my 529 tax benefit isn't huge ($2k per beneficiary), but better than nothing!
RE: LLC, I expect my household income to hit 6 figures soon, as my wife just completed her masters and will be working soon. I'm curious if a 'married filing separate' tax filing would enable me to maximize the LLC benefit so that I wont hit the $105K threshold.
Weedy, my wife is currently not employed, so that $80k is for my salary. She went to school to be a therapist, so when she does begin work, it will likely not be a game changing income ($30-45K). My cash flow for that $80K after tax, 401k deductions, etc, is about $4400 a month. So using my expenses listed in the OP, that nets about $3k every month. However if we choose school B,that will go up since we will eventually move from my in laws house and have to pay a full reasonable amount of lodging ($700-1000/month), though my wife should be working by then (adding around ~$2k per month in after tax income). So our long term monthly net will be be closer to $4500 assuming we continue our mustachian living, and even more if we sell my car.
To your point about our cars, i wholehartedly agree (though these cars are far from fancy!). We sold our big house far out in the suburbs in order to move to a more meager space closer in the city where I can leverage public transit. Once I do that, I will look to sell my car.
Worst case scenario for tuition/fees for school B is $120,000 over 2.5 years. Doing some rough numbers to compare school A vs School B: with school B, I will net $132,000 in after tax earnings (barring any increases) during that 30 month period. Assuming my wife gets employment in the next month, that jumps to $192,000, leaving $72K for living expenses in southeast U.S., where cost of living is relatively low. With School A, tuition is removed, but so is my income ($160K over to years), leaving my wife's prospective salary of $30K/yr (60K in for living expenses over 2 years) in the higher cost of living northeast United States (where school A is located).
To your point, while the tuition of school B is daunting, when taking into account my lack of income, the numbers come out to being very close to even. It simply becomes the tough decision of which school I want to dedicate the next 2+years of my life to. It seems my best option is to go ahead and put as much of my liquid assets into the 529 while doing what I can to free myself up from our car debt. While it hurts to do so, It may be best to use a good majority of that $17K in house proceeds to go ahead and pay of my wife's car since it carries the largest balance.