Kids college tuition ... hellllp!!!

[muskiefly]

Ok all,  i need some help here.

Im new to the lifestyle but have made some badass moves over the last year.  One lingering open end is paying for my sons college tuition.  I havent always been a mustachian,  and my ex-wife definitely wasn’t.   Long story short,  i have a stock portfolio of mostly facebook and twitter valued at about $60k earmarked for his college.  My sons education will cost about $120k from a highly specialized private school.   He is already getting about $40k in scolarships and still lives at home(not dorms or anything).

My thought is.... im wondering if i can roll his narrow and risky stocks into the vanguard vti,  then pay down his tuition over time.  He’s currently a junior and i’ve deferred his un-subsidised sally may (7%) loan until he graduates next year.   On one hand, i could plunk all $60k (minus gains taxes i know) down at once when the note becomes due, then just pay off the remaining balance over time.   But from my limited experience with the vanguard vti,  i think i could manage it more like a trust fund where i take the gradual and semi-predictable earnings over time to pay his monthly tuition bill and only minimally drawing down the principal.   Does this make sense, and a sound strategy?

[Jon Bon]

Ok all,  i need some help here.

Im new to the lifestyle but have made some badass moves over the last year.  One lingering open end is paying for my sons college tuition.  I havent always been a mustachian,  and my ex-wife definitely wasn’t.   Long story short,  i have a stock portfolio of mostly facebook and twitter valued at about $60k earmarked for his college.  My sons education will cost about $120k from a highly specialized private school.   He is already getting about $40k in scolarships and still lives at home(not dorms or anything).

My thought is.... im wondering if i can roll his narrow and risky stocks into the vanguard vti,  then pay down his tuition over time.  He’s currently a junior and i’ve deferred his un-subsidised sally may (7%) loan until he graduates next year.   On one hand, i could plunk all $60k (minus gains taxes i know) down at once when the note becomes due, then just pay off the remaining balance over time.   But from my limited experience with the vanguard vti,  i think i could manage it more like a trust fund where i take the gradual and semi-predictable earnings over time to pay his monthly tuition bill and only minimally drawing down the principal.   Does this make sense, and a sound strategy?

So you are paying for your son to go to a college that costs $160k? Is this an ivy? Pepperdine? Like you sure you know what website your are on?

Ok so re-reading it sounds like he is almost finished with college? Or almost finished with HS? If almost finished with college and he has done all this with loans at 7%. What is his outstanding loan balance then? And you are considering paying it for with a extremely non-diversified stock portfolio? Either way you really need to get out of owning just 2 stocks.

Lots to unpack there. I know people have gotten really creative trying to get the cost of college down. Those kids in Chicago who claimed they were abandoned by their wealthy parents come to mind. Basically I think they try very hard to find work arounds anymore. Either way, I'm still not exactly sure what's going on here, I think the sticker shock of 40k a year for college hurts my brain.

 

[FINate]

So you want to put the 60k in VTI, then draw this down over time to make payments on the loan at 7%? Is that correct?

Long term returns on the total stock market are somewhere around 10%. So on average, over the long term, this scheme may yield around an additional 3%. However, your drawdown plan is done over the short term and VTI is higher than average risk, i.e. higher volatility. Whereas the loan payment always has to be made, even if the market is way down.

Why do this? The premium isn't worth the risk. Seems like a case of snatching defeat from the jaws of victory.

ETA: Oh, and absolutely get the college funds out of those two stocks ASAP. You aren't fully appreciating the risk you're taking on this.

[secondcor521]

You're paying a guaranteed 7% interest rate after taxes to *maybe* make 10% before-tax on VTI, and who knows what will happen with FB and TWTR.  Even though payments are not due, the 7% interest is still accruing (well, it may not be now because of 0% student loan interest with coronavirus depending on the type of loan, but it probably will start accruing again sometime soon).  After paying federal and state taxes, you're probably not even winning the arbitrage game you think you are.

If I were in your shoes, I would cash out as much FB and TWTR as was necessary immediately to pay off all existing college loans and be thankful that I found something I could invest in that was giving me a 7% after tax risk free rate of return.  I would not take out any more student loans going forward as long as I had funds left to pay for college.  I'd also strongly consider diversifying away from any remaining FB/TWTR shares.  For my kids college funds, I have the next four years of predicted college money in bonds and anything beyond that in stocks.  Since I have enough, I don't need to or want to take the risk of VTI over that short of a time frame.

The other thing to remember is that when those loans were initiated, you and your DS probably lost between 3% and 8% up front in origination fees and loan fees and what not.  Each new loan takes that bite as well, whether the loan is unsubsidized or not, I believe.  That's a painful hurdle that is mostly invisible because they either roll those costs into the loan or subtract it from the initial proceeds, so it's not as in your face.  But mathematically it's still a punch in the gut - think of it as costing between 2 and 8 years of the arbitrage game you think you're winning.

[Abe]

VTI is too volatile and I’m not sure what you get from paying the loan slowly in that fashion. Are you trying to temporize the loan amount until he lands a high-paying job and pays it off himself? Let’s assume you do get a 10% return per year, you’d pay $6k per year toward the $80k loan.

Year 1: $80k - $6k = $74k * 1.07 = $79.2k
Year 2: $79.2k - $6k = $73.2k * 1.07 = $78.3k

So in two years you’ve made only $1.7k progress.

Vs: $80k - $60k = $20k, which will result in $1.4K in interest per year. That’s easily manageable and can be quickly paid off. Capital gains will be either 0 or 15% of your profits only (not the whole $60k).

[SwordGuy]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

[Mrs Brightside]

Reality check... the in state tuition at our state school is 36k per year including room and board. This is not some Ivy League tuition. Yes you can play around with community college, live at home, or skip college altogether but let’s not pretend this is Harvard tuition money.

[teen persuasion]

Reality check... the in state tuition at our state school is 36k per year including room and board. This is not some Ivy League tuition. Yes you can play around with community college, live at home, or skip college altogether but let’s not pretend this is Harvard tuition money.

And college expenses in state for my son is $25k, including R&B.  Every state is different.

But tuition does not include R&B, and OP said his student lived at home, no dorms, etc.

[cool7hand]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

Easy @SwordGuy. The poster clearly says they are new to this. Haranguing them is not helping them.

@muskiefly: What's done is done. You realize that you made a mistake. That's huge! Congratulations!

I agree with the other posters who counsel for paying down the loans asap by liquidating your investments. The interest rate is too high to risk keeping the money in the market to hope you make more. Start with the high interest loans first.

If you have more specific questions, please share them.

[SwordGuy]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

Easy @SwordGuy. The poster clearly says they are new to this. Haranguing them is not helping them.

@muskiefly: What's done is done. You realize that you made a mistake. That's huge! Congratulations!

I agree with the other posters who counsel for paying down the loans asap by liquidating your investments. The interest rate is too high to risk keeping the money in the market to hope you make more. Start with the high interest loans first.

If you have more specific questions, please share them.

Sorry!   But Gosh and Golly!    My astonishment and query remain!   

[draco44]

I agree with the other posters who counsel for paying down the loans asap by liquidating your investments. The interest rate is too high to risk keeping the money in the market to hope you make more. Start with the high interest loans first.

I'm in this camp as well. Keep things simple and crush those loans as soon as possible since 7% is already a pretty high interest rate.

One other aspect not addressed yet is that since your son has an unsubsidized loan, depending on the exact terms of your son's student loan, it's probably a great idea to make at least an initial large-ish payment on the loans shortly before graduation in order to prevent interest capitalization. In case you are blissfully unfamiliar, that's when unpaid interest that's been accruing while your son is in school is added to the principal amount of the student loan upon graduation, and then forever afterwards has interest is charged on it  IN ADDITION to the interest that was already being charged on your precapitalization principal amount). For people considering slowly paying off student loans who may have overlooked that delightful bit of red tape, interest capitalization can really throw a wrench in their calculations.

[Car Jack]

2 stocks is taking a huge risk.  I would certainly rather be in VTI than those.  Does your state offer a tax benefit to put money into a 529?  If they do, put in as much as you can.  Then as bills come due, pay them out of the 529.

Do NOT pay off any student loans right now.  We know that some amount of student loans will be forgiven.  It's just a matter of how much.  My crystal ball says $10k.  Also, federal student loans are currently frozen, so the interest rate until September is zero. 

I'm someone who does understand if your son is in a somewhat special needs college.  Congrats to him and you for doing college for him.  I've got one son like that and we paid about $55k for high school alone.  He didn't do at all well in community college and is now working at Amazon directing trucks in/out of the warehouse.

[muskiefly]

Thank you all for your input and guidance.  I think i have some really good things to think of here.  I may have failed to mention that his ridiculously expensive college is actually art school if that helps 😂😭.   But,  he will probably end up getting a job right outta school moving to LA and paying more than what i make. (Digital animation)

My daughter is going a much more conventional and practical route in a state university,  so i’ve got her covered.  And yes basically my son will cover the costs above what i have saved for him,  but im trying to minimize his debt by being as smart as i can be,  with what i have set aside for him.  Obviously many decisions were made with my ex-wife originally,  but she is no longer any part of the equation.  Having also dealt with divorce, now single income,  splitting assets and 401ks, etc. etc.  over the last 2 years,  i’m actually in a much better position financially than i was before....

Thank you all once again,   I sincerely appreciate your input as i grow in my newfound wisdom...

[Jon Bon]

Harvard University/Undergraduate tuition and fees
51,925 USD
2019 – 20

Like most private colleges no one really pays the sticker price. But yeah, Harvard would be around the same price.

I know nothing about art or art school, and maybe this one is different? But art school historically has not been the path to pay down six figures in student loan debt.

[Cranky]

I do know two people who went to art school who make very nice livings - one is some sort of computer game designer, and the other is in movie special effects (and he makes more than any engineer I know at this point.)

[Jon Bon]

I do know two people who went to art school who make very nice livings - one is some sort of computer game designer, and the other is in movie special effects (and he makes more than any engineer I know at this point.)

Oh yeah I'm sure its possible, but when one generally hears "student loans for art school" That usually means a bad situation. Its just a stereotype at this point.  He might get six figures right out of college, obviously I have no clue.

[begood]

I do know two people who went to art school who make very nice livings - one is some sort of computer game designer, and the other is in movie special effects (and he makes more than any engineer I know at this point.)

Oh yeah I'm sure its possible, but when one generally hears "student loans for art school" That usually means a bad situation. Its just a stereotype at this point.  He might get six figures right out of college, obviously I have no clue.

It's definitely a stereotype. Digital animation is a growing field that pays very well, and "art schools" are one of the best places to get an education in digital animation. Also video game design and development. Think of the gorgeous visuals in today's video games - all that art didn't spontaneously generate.

[Cranky]

Similarly, I hear that composing music for video games is quite lucrative these days.

[ChpBstrd]

I would probably take the guaranteed 7% return from paying off the loan rather than hoping VTI outperforms that yield. You'd probably win that bet, but the gains would be minor while the risk of being wrong could be tens of thousands of dollars lost. E.g. VTI corrects 20% while you're paying 7%. It appears you've been lucky so far because the return on these two tech stocks has far exceeded the loan rate, but getting lucky is not the same as a plan.

Why were these savings not put in a 529 account or roth originally? Could you transfer some of the funds into a 529 so they could grow tax-free until the semesters when they are needed?

Overall, here's the kiddo's plan to graduate debt-free. That last part where the kid earns 5k a year for the 4y of college is key to graduating debt-free! The opportunity to "earn" 7% with 100% safety is a good financial choice in this era of low interest rates.

Cost:             -120k
Scholarships:   40k
Savings:          60k
Jobs over 4y:   20k 

[tooqk4u22]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

Reality check... the in state tuition at our state school is 36k per year including room and board. This is not some Ivy League tuition. Yes you can play around with community college, live at home, or skip college altogether but let’s not pretend this is Harvard tuition money.

And college expenses in state for my son is $25k, including R&B.  Every state is different.

But tuition does not include R&B, and OP said his student lived at home, no dorms, etc.

No kidding, I thought $120k or $160k (not sure if the $40k is before or after total) was low especially if any private or public out of state comes into play.   

Harvard University/Undergraduate tuition and fees
51,925 USD
2019 – 20

Like most private colleges no one really pays the sticker price. But yeah, Harvard would be around the same price.

I know nothing about art or art school, and maybe this one is different? But art school historically has not been the path to pay down six figures in student loan debt.

Princeton - $75k/yr
Boston College - $75k/yr
Penn State - $27k/yr instate / $42k/yr out of state
UCLA - $38k/yr in state / $68k/yr out of state
Alabama - $30k/yr in state / $38k/yr out of state

I mean really, as Brightside said its not crazy.    For my state, the state uni is about $30k/yr, and not what I would call a top tier system.     

Live at not really an option for mine, unless I move, and sure housing can be split with roommates or aid/grants may reduce cost (unlikely for us bc of assets).   So yeah.....

[Morning Glory]

I don't know where you are but my state does not allow"washing" funds through a 529. You only get a tax break on contributions in excess of your withdrawals.

I bought a house in college. I saved waitressing tips in a coffee can and when it got full I would drive to the bank and contribute to my CD (this was ages ago when CDs had decent interest). When I had enough I used it for a down payment on a house.

 The mortgage payment was less than my classmates were paying for half a dorm, and it increased in value in the time I lived there. I rolled most of the equity into a down payment on a house in my new more expensive area, but also used some of it to pay for my wedding. I paid off my loans before the six month interest free period was over too.

[Jon Bon]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

Reality check... the in state tuition at our state school is 36k per year including room and board. This is not some Ivy League tuition. Yes you can play around with community college, live at home, or skip college altogether but let’s not pretend this is Harvard tuition money.

And college expenses in state for my son is $25k, including R&B.  Every state is different.

But tuition does not include R&B, and OP said his student lived at home, no dorms, etc.

No kidding, I thought $120k or $160k (not sure if the $40k is before or after total) was low especially if any private or public out of state comes into play.   

Harvard University/Undergraduate tuition and fees
51,925 USD
2019 – 20

Like most private colleges no one really pays the sticker price. But yeah, Harvard would be around the same price.

I know nothing about art or art school, and maybe this one is different? But art school historically has not been the path to pay down six figures in student loan debt.

Princeton - $75k/yr
Boston College - $75k/yr
Penn State - $27k/yr instate / $42k/yr out of state
UCLA - $38k/yr in state / $68k/yr out of state
Alabama - $30k/yr in state / $38k/yr out of state

I mean really, as Brightside said its not crazy.    For my state, the state uni is about $30k/yr, and not what I would call a top tier system.     

Live at not really an option for mine, unless I move, and sure housing can be split with roommates or aid/grants may reduce cost (unlikely for us bc of assets).   So yeah.....

A quick google shows you are incorrect on the state schools. Are you including room and board? Private schools are always stupid expensive but I dont think you pay anything near sticker there for the vast majority.

The 2020 tuition & fees of Pennsylvania State University-Main Campus (Penn State) are $18,450 for Pennsylvania[ residents and $35,514 for out-of-state students. The 2020 graduate school tuition & fees are $22,994 for Pennsylvania residents and $38,728 for others.

The University of Alabama/Undergraduate tuition and fees
In-state tuition 10,780 USD, Out-of-state tuition 30,250 USD

University of California, Los Angeles/Undergraduate tuition and fees
In-state tuition 13,240 USD, Out-of-state tuition 42,994 USD

I just have a REALLY hard time believing that 40k-ish a year for tuition only is the best/only option here.

[SimpleCycle]

So I’m guessing based on the interest rate that you have taken out Parent PLUS loans for his tuition.  Those loans have about a 5% origination fee, which is just gone forever.  Is your current loan balance about $90k, all in deferment?  And you’ll owe another $30k in tuition and fees next year?

I’d sell all the college stock money and immediately put it in a high yield savings account.  Pay next year’s tuition and fees out of that pot of money to avoid the PLUS loan fees.  Then apply whatever is left to the outstanding loans.  Don’t bother trying to out earn a 7% interest loan in the market, especially if you can’t deduct the interest.

[ChpBstrd]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

Reality check... the in state tuition at our state school is 36k per year including room and board. This is not some Ivy League tuition. Yes you can play around with community college, live at home, or skip college altogether but let’s not pretend this is Harvard tuition money.

And college expenses in state for my son is $25k, including R&B.  Every state is different.

But tuition does not include R&B, and OP said his student lived at home, no dorms, etc.

No kidding, I thought $120k or $160k (not sure if the $40k is before or after total) was low especially if any private or public out of state comes into play.   

Harvard University/Undergraduate tuition and fees
51,925 USD
2019 – 20

Like most private colleges no one really pays the sticker price. But yeah, Harvard would be around the same price.

I know nothing about art or art school, and maybe this one is different? But art school historically has not been the path to pay down six figures in student loan debt.

Princeton - $75k/yr
Boston College - $75k/yr
Penn State - $27k/yr instate / $42k/yr out of state
UCLA - $38k/yr in state / $68k/yr out of state
Alabama - $30k/yr in state / $38k/yr out of state

I mean really, as Brightside said its not crazy.    For my state, the state uni is about $30k/yr, and not what I would call a top tier system.     

Live at not really an option for mine, unless I move, and sure housing can be split with roommates or aid/grants may reduce cost (unlikely for us bc of assets).   So yeah.....

A quick google shows you are incorrect on the state schools. Are you including room and board? Private schools are always stupid expensive but I dont think you pay anything near sticker there for the vast majority.

The 2020 tuition & fees of Pennsylvania State University-Main Campus (Penn State) are $18,450 for Pennsylvania[ residents and $35,514 for out-of-state students. The 2020 graduate school tuition & fees are $22,994 for Pennsylvania residents and $38,728 for others.

The University of Alabama/Undergraduate tuition and fees
In-state tuition 10,780 USD, Out-of-state tuition 30,250 USD

University of California, Los Angeles/Undergraduate tuition and fees
In-state tuition 13,240 USD, Out-of-state tuition 42,994 USD

I just have a REALLY hard time believing that 40k-ish a year for tuition only is the best/only option here.

You are correct. 

University of Washington - $11,487/year
https://www.washington.edu/opb/tuition-fees/current-tuition-and-fees-dashboards/undergraduate-tuition-dashboard/

Purdue University - $10k/two semesters
https://www.admissions.purdue.edu/costsandfinaid/tuitionfees.php

Indiana State - $9186/two semesters
https://www.indstate.edu/costs-aid/tuition-undergraduate-2021

West Virginia University - $8976/two semesters
https://admissions.wvu.edu/cost-and-aid

Iowa State - $8043/two semesters
https://www.registrar.iastate.edu/fees

Missouri State - $7482/two semesters
https://www.missouristate.edu/Costs/undergraduate-costs.htm

Arkansas State - $6976/32 hours
https://www.astate.edu/info/costs/undergraduate/

CUNY Brooklyn - $6930/two semesters
https://www.brooklyn.cuny.edu/web/about/offices/bursar/tuition/undergraduate.php

University of Florida - $6380/year
https://www.sfa.ufl.edu/cost/

One could double these numbers for out-of-state residents and still have a better deal than a lot of folks are getting themselves into going to their local college. Best of all, most of these are "teaching" universities instead of "Research 1"/prestige universities, so there's a good chance your kid will be instructed by an experienced PhD instead of a grad student with perhaps 2 years more training than the students.

[cchrissyy]

Does this make sense, and a sound strategy?

yes you make sense and it's wise to consider the question but since the loan rate in your situation is 7% the answer is no don't do that

[SimpleCycle]

Harvard University/Undergraduate tuition and fees
51,925 USD
2019 – 20

Like most private colleges no one really pays the sticker price. But yeah, Harvard would be around the same price.

I know nothing about art or art school, and maybe this one is different? But art school historically has not been the path to pay down six figures in student loan debt.

51,925*4=207,700

I’d say $208k is not “around the same price” as $160k, it’s 30% higher.  It’s 73% higher than OP’s net price of $120k.

[SimpleCycle]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

The research consistently shows going to a selective college results in higher earnings than going to a non selective college.  The magnitude depends on the study, but even the most conservative estimates are about $5k a year, so you’re likely to end up with a positive ROI over an average length career.

“Expensive schools are not worth it” is dogma on this board, but it’s really not universally true.

[cchrissyy]

Guys, it's March of his junior year in university. There is no point second guessing the enrollment decision.

[Freedomin5]

Does your kid have a part time job/summer job that could help fund part of his education?

[tooqk4u22]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

Reality check... the in state tuition at our state school is 36k per year including room and board. This is not some Ivy League tuition. Yes you can play around with community college, live at home, or skip college altogether but let’s not pretend this is Harvard tuition money.

And college expenses in state for my son is $25k, including R&B.  Every state is different.

But tuition does not include R&B, and OP said his student lived at home, no dorms, etc.

No kidding, I thought $120k or $160k (not sure if the $40k is before or after total) was low especially if any private or public out of state comes into play.   

Harvard University/Undergraduate tuition and fees
51,925 USD
2019 – 20

Like most private colleges no one really pays the sticker price. But yeah, Harvard would be around the same price.

I know nothing about art or art school, and maybe this one is different? But art school historically has not been the path to pay down six figures in student loan debt.

Princeton - $75k/yr
Boston College - $75k/yr
Penn State - $27k/yr instate / $42k/yr out of state
UCLA - $38k/yr in state / $68k/yr out of state
Alabama - $30k/yr in state / $38k/yr out of state

I mean really, as Brightside said its not crazy.    For my state, the state uni is about $30k/yr, and not what I would call a top tier system.     

Live at not really an option for mine, unless I move, and sure housing can be split with roommates or aid/grants may reduce cost (unlikely for us bc of assets).   So yeah.....

A quick google shows you are incorrect on the state schools. Are you including room and board? Private schools are always stupid expensive but I dont think you pay anything near sticker there for the vast majority.

The 2020 tuition & fees of Pennsylvania State University-Main Campus (Penn State) are $18,450 for Pennsylvania[ residents and $35,514 for out-of-state students. The 2020 graduate school tuition & fees are $22,994 for Pennsylvania residents and $38,728 for others.

The University of Alabama/Undergraduate tuition and fees
In-state tuition 10,780 USD, Out-of-state tuition 30,250 USD

University of California, Los Angeles/Undergraduate tuition and fees
In-state tuition 13,240 USD, Out-of-state tuition 42,994 USD

I just have a REALLY hard time believing that 40k-ish a year for tuition only is the best/only option here.

Yes, it is total est cost as indicated by university as it serves as a consistent system data point for comparison.  Sure it can be optimized but tuition, fees, books, etc are what they are and even room and board still needs to be covered, sure maybe knock $5-10k off for simple diet, lower quality housing or and/or roommates it still leaves a pricey cost.  Not everybody lives in a state with cheap in state tuition or has the option of living at home to go to school.   

Yeah $40k in just tuition probably not ideal but total cost is what matters, somebody somehow has to pay for it in the end.

[StarBright]

Hi OP!

So my job occasionally involves working with VFX - noticed that you mentioned LA off the bat. Just want to say that if your son is open to being outside of LA to keep an eye on Atlanta.

It is bustling with movie/TV work and video game and AR companies are also starting to set up shop down there because the infrastructure exists. It would definitely be a lower cost of living than LA.

[tooqk4u22]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

The research consistently shows going to a selective college results in higher earnings than going to a non selective college.  The magnitude depends on the study, but even the most conservative estimates are about $5k a year, so you’re likely to end up with a positive ROI over an average length career.

“Expensive schools are not worth it” is dogma on this board, but it’s really not universally true.

If my kids got into MIT or Harvard it would be worth it to find a way.   

[Cranky]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

The research consistently shows going to a selective college results in higher earnings than going to a non selective college.  The magnitude depends on the study, but even the most conservative estimates are about $5k a year, so you’re likely to end up with a positive ROI over an average length career.

“Expensive schools are not worth it” is dogma on this board, but it’s really not universally true.

If my kids got into MIT or Harvard it would be worth it to find a way.

As the nice man from Yale told us "If you get into Yale, your parents won't go broke paying for it." Those schools have big endowments and make grants. One of my dd's went to a 7 Sisters schools and we paid much less out of pocket than we paid for her sister's state university.

[Metalcat]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

The research consistently shows going to a selective college results in higher earnings than going to a non selective college.  The magnitude depends on the study, but even the most conservative estimates are about $5k a year, so you’re likely to end up with a positive ROI over an average length career.

“Expensive schools are not worth it” is dogma on this board, but it’s really not universally true.

Correlation is not causation.

There also happens to be a HUGE correlation between going to an elite school and coming from a wealthier family.

I'm not saying there aren't distinct advantages to going to elite schools, but each kid (and their parents) needs to understand what those advantages are in order to actually capitalize on them.

One of the main advantages of elite schools is networking opportunities, so a shy, introverted kid who isn't great at pursuing opportunities goes through 4 expensive years just to get a marginally superior education, but also quite possibly a lower GPA, then what did they really gain? And how does it offset the enormous cost??

If a kid is going to have their parents pay for an extremely expensive school, then that kid better be prepared to understand what the specific advantages of that school are and make the most of it while they're there.

I say this as someone who attended both a "lower tier" university and an "elite" university, and strategized my way through both of them for max benefit.

[SimpleCycle]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

The research consistently shows going to a selective college results in higher earnings than going to a non selective college.  The magnitude depends on the study, but even the most conservative estimates are about $5k a year, so you’re likely to end up with a positive ROI over an average length career.

“Expensive schools are not worth it” is dogma on this board, but it’s really not universally true.

Correlation is not causation.

There also happens to be a HUGE correlation between going to an elite school and coming from a wealthier family.

I'm not saying there aren't distinct advantages to going to elite schools, but each kid (and their parents) needs to understand what those advantages are in order to actually capitalize on them.

One of the main advantages of elite schools is networking opportunities, so a shy, introverted kid who isn't great at pursuing opportunities goes through 4 expensive years just to get a marginally superior education, but also quite possibly a lower GPA, then what did they really gain? And how does it offset the enormous cost??

If a kid is going to have their parents pay for an extremely expensive school, then that kid better be prepared to understand what the specific advantages of that school are and make the most of it while they're there.

I say this as someone who attended both a "lower tier" university and an "elite" university, and strategized my way through both of them for max benefit.

There are ways to account for selection bias and good researchers do that.  There is a large body of research on this issue, and I am well acquainted with it and the causal and observational methods employed in it.  Most people who say "where you go to college doesn't matter" are citing Dale&Krueger's 2002 paper, but more recent studies have found an effect for women, minorities, and low-income students.

https://www.theatlantic.com/ideas/archive/2018/12/does-it-matter-where-you-go-college/577816/

[Metalcat]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

The research consistently shows going to a selective college results in higher earnings than going to a non selective college.  The magnitude depends on the study, but even the most conservative estimates are about $5k a year, so you’re likely to end up with a positive ROI over an average length career.

“Expensive schools are not worth it” is dogma on this board, but it’s really not universally true.

Correlation is not causation.

There also happens to be a HUGE correlation between going to an elite school and coming from a wealthier family.

I'm not saying there aren't distinct advantages to going to elite schools, but each kid (and their parents) needs to understand what those advantages are in order to actually capitalize on them.

One of the main advantages of elite schools is networking opportunities, so a shy, introverted kid who isn't great at pursuing opportunities goes through 4 expensive years just to get a marginally superior education, but also quite possibly a lower GPA, then what did they really gain? And how does it offset the enormous cost??

If a kid is going to have their parents pay for an extremely expensive school, then that kid better be prepared to understand what the specific advantages of that school are and make the most of it while they're there.

I say this as someone who attended both a "lower tier" university and an "elite" university, and strategized my way through both of them for max benefit.

There are ways to account for selection bias and good researchers do that.  There is a large body of research on this issue, and I am well acquainted with it and the causal and observational methods employed in it.  Most people who say "where you go to college doesn't matter" are citing Dale&Krueger's 2002 paper, but more recent studies have found an effect for women, minorities, and low-income students.

https://www.theatlantic.com/ideas/archive/2018/12/does-it-matter-where-you-go-college/577816/

Which is why in the rest of my post I talked about how there ARE real advantages and that individual students would be best off understanding what those specific advantages are and being prepared to capitalize on them.

[ChpBstrd]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

The research consistently shows going to a selective college results in higher earnings than going to a non selective college.  The magnitude depends on the study, but even the most conservative estimates are about $5k a year, so you’re likely to end up with a positive ROI over an average length career.

“Expensive schools are not worth it” is dogma on this board, but it’s really not universally true.

If my kids got into MIT or Harvard it would be worth it to find a way.

As the nice man from Yale told us "If you get into Yale, your parents won't go broke paying for it." Those schools have big endowments and make grants. One of my dd's went to a 7 Sisters schools and we paid much less out of pocket than we paid for her sister's state university.

The irony is that the experience at a brand name school is being taught by a graduate student in a 100-person arena, and the experience at the state university is likely to be a classroom of 25 people taught by someone with a PhD and 20 years teaching experience. It's a market inefficiency that people hold the brand name degrees in awe.

[Cranky]

My dd’s college had tiny classes taught by professors - no grad students because no grad school, which is the advantage of those high falutin’ liberal arts schools! She also went to a (free) boarding school where most of her teachers had PhDs. There are just such a variety of educational experiences possible that it’s difficult to compare them apples to apples, isn’t it?

[joe189man]

Why the hell are you paying $160k to send your kid to college?   What possible advantage will your kid get that will offset $100k to $120k in excess costs?

The research consistently shows going to a selective college results in higher earnings than going to a non selective college.  The magnitude depends on the study, but even the most conservative estimates are about $5k a year, so you’re likely to end up with a positive ROI over an average length career.

“Expensive schools are not worth it” is dogma on this board, but it’s really not universally true.

If my kids got into MIT or Harvard it would be worth it to find a way.

As the nice man from Yale told us "If you get into Yale, your parents won't go broke paying for it." Those schools have big endowments and make grants. One of my dd's went to a 7 Sisters schools and we paid much less out of pocket than we paid for her sister's state university.

The irony is that the experience at a brand name school is being taught by a graduate student in a 100-person arena, and the experience at the state university is likely to be a classroom of 25 people taught by someone with a PhD and 20 years teaching experience. It's a market inefficiency that people hold the brand name degrees in awe.

i graduated from a small state university, my wife went to a random private college in the midwest then got a masters at a regionally known private university where we live out west-ish. None of these schools are name brand, well known nationally, but we are in the top 10%+ of income income earners. i say this coming from low to middle class parent households and both my wife and i still having student loan debt. I think that schools (like top name universities) and networking opportunities there can help students achieve more success but would argue choice of major, regardless of school will be a bigger predictor of financial success.

Sounds like OP's son chose an expensive school that results in a lucrative career with lots of job prospects, well done