Author Topic: Sorry kids, we can't afford Stanford - We make too much money  (Read 4399 times)

cheapass

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Sorry kids, we can't afford Stanford - We make too much money
« on: October 14, 2016, 06:36:45 AM »
Surprised they use criteria of income AND net worth (minus retirement accounts). Would putting your home and taxable accounts in a trust circumvent the means testing?

https://thinkprogress.org/stanford-will-now-be-free-to-all-students-from-families-that-earn-less-than-125-000-per-year-72f63bc3a96e#.e1k20n2if

KCM5

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #1 on: October 14, 2016, 06:45:14 AM »
Surprised they use criteria of income AND net worth (minus retirement accounts). Would putting your home and taxable accounts in a trust circumvent the means testing?

https://thinkprogress.org/stanford-will-now-be-free-to-all-students-from-families-that-earn-less-than-125-000-per-year-72f63bc3a96e#.e1k20n2if

I doubt you could do that to circumvent the means testing. They're private, so they can ask for whatever information they want and control of a trust would be one of those things.

In general, I think means testing for college tuition makes sense. I was one of those kids that didn't get help from my parents but also didn't get any grants - I did get a couple of grand in subsidized loans over the course of my four years in school, but thats the extent of it. And you know what? I did great because I came from a family that was financially stable and valued education, even if they didn't pay for it. Means testing can be one way to sort out students in that way. I don't think its perfect, but it is acceptable.

sirdoug007

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #2 on: October 14, 2016, 06:52:56 AM »
Stockpile in the IRA/401k/403b. Cash out home equity and taxable accounts and buy physical gold/collector cars/ etc for four years!


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ysette9

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #3 on: October 14, 2016, 12:19:28 PM »
When I was a kid I sort of jokingly asked my parents if they would send me to Stanford if I got in. This was very theoretical because who knew anyone who went to Stanford?
Turns out years later I went to Stanford for grad school and got my conlany to pay for it. ;) Score!

Paul der Krake

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #4 on: October 14, 2016, 12:44:25 PM »
Cue the whining of people who make $126,000 a year but are "barely surviving these days" because they live in a HCOL area... wah wah wah

The fact that the FAFSA doesn't look at assets if you make less than 50k/year gets thrown around regularly, but more schools are wising up, including the local flagship state university.

Honestly, I don't think it's worth fretting about. If a child of mine is driven enough to be accepted at Stanford/Harvard/$uberPrestigiousU, we will make it work, even if that means paying full freight. It's the mid-tier 50k/year universities you should be wary of.

(says the guy with no children)

tonysemail

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #5 on: October 14, 2016, 12:52:15 PM »
if there are unscrupulous ways to game the system, then I'm sure someone will think of it.
corp shell games are similar to using grandparents or other relatives.
i lack the courage to do stuff like this.
So I'll keep socking away in 529 accounts and we'll put the remainder on student loans.

Scandium

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #6 on: October 14, 2016, 01:49:48 PM »
Cue the whining of people who make $126,000 a year but are "barely surviving these days" because they live in a HCOL area... wah wah wah

The fact that the FAFSA doesn't look at assets if you make less than 50k/year gets thrown around regularly, but more schools are wising up, including the local flagship state university.

Honestly, I don't think it's worth fretting about. If a child of mine is driven enough to be accepted at Stanford/Harvard/$uberPrestigiousU, we will make it work, even if that means paying full freight. It's the mid-tier 50k/year universities you should be wary of.

(says the guy with no children)

Initially I thought "damn we make way too much", at least $50k over. But if my kid gets into standford he can get all the loans and if we have to pay $30k/year+ then so what? We'll be close to enough for retirement then anyway (hopefully) and on our salary it's not that much, really. We put more into 401ks now after all.. If he goes there it had better be for an awesome, high-paid job, so what's money for if not investing in something like that?!

seattlecyclone

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #7 on: October 14, 2016, 02:05:19 PM »
If you look at their fine print, any amount of home equity that exceeds 1.2 times your family income is ignored, as are any assets in retirement accounts. Sounds like a great deal for early retirees who stuffed their retirement accounts!

TomTX

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #8 on: October 16, 2016, 10:07:11 AM »
If you look at their fine print, any amount of home equity that exceeds 1.2 times your family income is ignored, as are any assets in retirement accounts. Sounds like a great deal for early retirees who stuffed their retirement accounts!

Sweet. My income will be ~$45k* from a pension by the time MiniTX is applying for college.  With the home equity cap and most assets in retirement accounts, my "Stanford Net Worth" should be well under $100k.

AND Stanford aren't assholes about outside awards/scholarships. They go to your expected contribution first, unlike lots of other schools who just reduce the school's contribution.

 *Um, plus whatever tradelines bring in... If that's still a thing I would need to limit it starting the "prior prior year"

Hotstreak

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #9 on: October 16, 2016, 10:45:00 AM »
What a terrible rule.  Support from your school shouldn't be based on the successes and failure of your parents, it should be based on the students potential, grades, and achievements.  Unless you make it a requirement that parents directly pay for their children to go to college, the children will continue to live their lives only at the whim of their parents.


Many people on this forum have said they won't pay for their kids college.  Those kids are going to be hurt by this.


This rule forces students of rich parents to maintain good relationships with their parents if they want to go to nice schools.  Students who have poorer parents are the only ones who will get a free education and really be able to be independent.  Nobody should have to beg at the family trough, and be forced to capitulate to their parents values under threat of not being able to get an education without personal debt.

Lagom

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #10 on: October 16, 2016, 11:53:15 AM »
What a terrible rule.  Support from your school shouldn't be based on the successes and failure of your parents, it should be based on the students potential, grades, and achievements.  Unless you make it a requirement that parents directly pay for their children to go to college, the children will continue to live their lives only at the whim of their parents.


Many people on this forum have said they won't pay for their kids college.  Those kids are going to be hurt by this.


This rule forces students of rich parents to maintain good relationships with their parents if they want to go to nice schools.  Students who have poorer parents are the only ones who will get a free education and really be able to be independent.  Nobody should have to beg at the family trough, and be forced to capitulate to their parents values under threat of not being able to get an education without personal debt.

Meh, if you're smart about prepping yourself for the real world (e.g. majoring in something marketable, seeking out leadership/internship opportunities, etc.), the value of the Stanford network probably exceeds having to pay full price via student loans anyway. Maybe not for someone focused on FIRE, but then those people should go the community college->transfer route (or learn a trade and skip college altogether) if they really want to min max, regardless of their parent's wealth.

Vanguards and Lentils

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #11 on: October 16, 2016, 12:56:30 PM »
What a terrible rule.  Support from your school shouldn't be based on the successes and failure of your parents, it should be based on the students potential, grades, and achievements.

This is probably a question where people's political views will influence their opinion. It's almost certainly true that the student's achievements are highly correlated with their parents' success. If you thought that economic diversity is a good thing for your university, then making the school more expensive for kids who had the "edge" of successful parents would balance out the student demographics.

lhamo

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #12 on: October 16, 2016, 01:04:30 PM »
The exclusion of home equity from financial aid calculations for schools that rely only on the FAFSA is one of the things that has me pondering the purchase of a more expensive house, which would likely be downsized after the kids finish school/get launched.  We wouldn't qualify under the Stanford 300k equity limit, though -- nor would most people who own a home in places with expensive real estate, unless you just bought recently with a minimal downpayment.

If both kids stick with in-state public higher ed, we're set for college expenses anyway. And we could probably cash flow private institutions if DD decided to go that route (DS is already enrolled in our flagship public and has no intention of transferring).  I'd like to see them get some merit scholarships, though, as that makes them more competitive for good internships, graduate funding, etc.

mxt0133

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #13 on: October 16, 2016, 01:10:46 PM »
Support from your school shouldn't be based on the successes and failure of your parents, it should be based on the students potential, grades, and achievements.

This is why there are merit based scholarships independent of the institution a student will be attending. For example Gates Millennium Scholars and Rhodes Scholars as some of the most well known ones.  One just has to know where to look and apply.

lhamo

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #14 on: October 16, 2016, 02:47:32 PM »
Support from your school shouldn't be based on the successes and failure of your parents, it should be based on the students potential, grades, and achievements.

This is why there are merit based scholarships independent of the institution a student will be attending. For example Gates Millennium Scholars and Rhodes Scholars as some of the most well known ones.  One just has to know where to look and apply.

GMS is only open to under-represented minorities.  If you are white or non-API Asian, you can't apply.  You also have to have significant financial need -- it is not a pure merit scholarship

http://www.gmsp.org/gates-millennium-scholars-program/

Rhodes is a post-bac scholarship, and due to its historic nomination/selection processes it has an extremely strong bias toward graduates of the ivies and other elite institutions -- for example, the current cohort of US students is dominated by graduates of Harvard, Yale and Princeton (which each have 3-4 scholars compared to 1-2 for other institutions, most of which are other Ivies, SLACs, or flagship state universities).  If you are not able to get enough financial support to attend a top school as an undergrad, you are unlikely to be competitive for a Rhodes scholarship. 

While there are merit-based opportunities through programs like the National Merit Scholars, many institutions make scholarships avaiable only to those with demonstrated financial need -- purely merit scholarships are no longer that prevalent.

Hotstreak

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #15 on: October 16, 2016, 02:52:54 PM »
Support from your school shouldn't be based on the successes and failure of your parents, it should be based on the students potential, grades, and achievements.

This is why there are merit based scholarships independent of the institution a student will be attending.  One just has to know where to look and apply.

Ahh, but you left out getting approved, which is a very important part of the scholarship process!  Unless the student is ultra-smart or well put together, they will need to get approved multiple times, possibly many many times, to reach the level of assistance being given to students from lower income households. 



This is probably a question where people's political views will influence their opinion. It's almost certainly true that the student's achievements are highly correlated with their parents' success. If you thought that economic diversity is a good thing for your university, then making the school more expensive for kids who had the "edge" of successful parents would balance out the student demographics.

I don't think that adds up.  Why do the end-run-around of using free college for certain students as a way to accomplish diversity goals that could be reached more directly?  For example, why not just admit an even spread of top applicants from each family income bracket, if their goal is diversity of economic background.

Vanguards and Lentils

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #16 on: October 16, 2016, 04:39:53 PM »

This is probably a question where people's political views will influence their opinion. It's almost certainly true that the student's achievements are highly correlated with their parents' success. If you thought that economic diversity is a good thing for your university, then making the school more expensive for kids who had the "edge" of successful parents would balance out the student demographics.

I don't think that adds up.  Why do the end-run-around of using free college for certain students as a way to accomplish diversity goals that could be reached more directly?  For example, why not just admit an even spread of top applicants from each family income bracket, if their goal is diversity of economic background.

I feel like you just said the reason! Since the original post is a discussion of students who were already admitted, what's left is whether the student can actually afford to attend. Even if the admissions committee admits even proportions of each family income bracket, you will probably agree that this doesn't increase diversity if the students from lower income brackets can't afford to attend. And yes, they could do this more directly, perhaps by listing different levels of tuition for different income groups, but I have seen that done nowhere - it's always sticker price minus varying levels of financial aid.

AlienRobotAnthropologist

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #17 on: October 16, 2016, 07:38:29 PM »
In my personal experience, ivy league caliber schools are the cheapest option if your parents aren't rich. My sister and I both attended the ivy league schools of our choice and they were cheaper than the in state school or any other option maxing out the merit scholarships at everywhere we applied. Even the local community college would have cost slightly more. But this only goes for undergrad. I decided to skip the masters because of the money and my sister went to a non-ivy law school that would give her free tuition since $65000+ per year is hard to swallow. Most of our classmates came from dual income, white collar, professional families and took on large amounts of debt, but not much more than anywhere other than their in-state flagship would have required. Some are making ~$30k upon graduation, others are making way over $100k and many others decided to pursue a PhD.

mxt0133

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #18 on: October 16, 2016, 09:26:24 PM »
While there are merit-based opportunities through programs like the National Merit Scholars, many institutions make scholarships avaiable only to those with demonstrated financial need -- purely merit scholarships are no longer that prevalent.

This is something that people keep saying but I just can't find evidence of.  The majority of stories from my social circle have been students that have managed to stitch together enough scholarships that are not need based to come out of college debt free.  They range from employer scholarships, private endowments, business association, non-profit organizations, and even university endowments scholarships.   I know students that have been given 4 year full merit based scholarship to MIT and CalTech that have parents with incomes well into the mid six figures. 

I was from a low performing high school and was ranked #34 in my class and even I managed to earn enough scholarships, that did not require any financial information in the application, that for the first year I was actually paid to go to school.  I was not the only one either kids ranked higher were able to score larger scholarships and also got paid to go to school.  We just applied to every scholarship there was.  Even freaking Coca-Cola gives scholarships for crying out lout if you just know to apply for. 

Let's not forget about athletic scholarships, which is a whole other avenue to pay for college.  Again three cousins that were mediocre swimmers managed to get full rides on swimming scholarships.

Apparently, there are millions of dollars of scholarships out there that go unclaimed every year.*

I understand that my anecdotal sample size doesn't really capture the complete picture.  But every year more and more people are going to college and not all of them are taking out hundreds and thousands of loans out.  If you are truly talented and gifted you will not be paying for higher education.


*http://college.usatoday.com/2015/01/20/2-9-billion-unused-federal-grant-awards-in-last-academic-year/
*https://www.unigo.com/pay-for-college/scholarships/10-scholarship-myths-debunked

deadlymonkey

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #19 on: October 17, 2016, 09:10:10 AM »
While there are merit-based opportunities through programs like the National Merit Scholars, many institutions make scholarships avaiable only to those with demonstrated financial need -- purely merit scholarships are no longer that prevalent.

This is something that people keep saying but I just can't find evidence of.  The majority of stories from my social circle have been students that have managed to stitch together enough scholarships that are not need based to come out of college debt free.  They range from employer scholarships, private endowments, business association, non-profit organizations, and even university endowments scholarships.   I know students that have been given 4 year full merit based scholarship to MIT and CalTech that have parents with incomes well into the mid six figures. 

I was from a low performing high school and was ranked #34 in my class and even I managed to earn enough scholarships, that did not require any financial information in the application, that for the first year I was actually paid to go to school.  I was not the only one either kids ranked higher were able to score larger scholarships and also got paid to go to school.  We just applied to every scholarship there was.  Even freaking Coca-Cola gives scholarships for crying out lout if you just know to apply for. 

Let's not forget about athletic scholarships, which is a whole other avenue to pay for college.  Again three cousins that were mediocre swimmers managed to get full rides on swimming scholarships.

Apparently, there are millions of dollars of scholarships out there that go unclaimed every year.*

I understand that my anecdotal sample size doesn't really capture the complete picture.  But every year more and more people are going to college and not all of them are taking out hundreds and thousands of loans out.  If you are truly talented and gifted you will not be paying for higher education.


*http://college.usatoday.com/2015/01/20/2-9-billion-unused-federal-grant-awards-in-last-academic-year/
*https://www.unigo.com/pay-for-college/scholarships/10-scholarship-myths-debunked

You have to be talented and gifted AND have the time to fill out hundreds of scholarship applications.  I went to school on almost free ride (debt free 2 years after school) but I got to the point that I was saying, NO i will not write a 2000 word essay for a 500 dollar scholarship.

mxt0133

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #20 on: October 17, 2016, 12:06:09 PM »
I went to school on almost free ride (debt free 2 years after school) but I got to the point that I was saying, NO i will not write a 2000 word essay for a 500 dollar scholarship.

Ahh, this is where my guidance counselor helped me out tremendously.  His suggestion was to write 2-3 essays that covered different topics such as being a first generation immigrant and how I overcame the disadvantages of coming to a new country and adopting to a new culture.  Or how sports helped me learn about team work, how to handle failure, and exercise persistence and grit.  I would then mix, match and blend them for all my applications depending on what I thought they were looking for in applicants.  That way I would only spend about 10-20 minutes per essay and application after the initial 15-20 hours it took to draft and proof the original essays.

For some of them I literally earned hundreds of dollars an hour, which is way more that I could have made at my part-time job at Blockbuster making $5.40/hr.

I would add that if someone can't write 2000 words for $500 at the age of 18 then they probably won't do well in college overall or don't really need the money.  Which kind of supports the filtering nature of applications in general.

EDIT: Typos
« Last Edit: October 17, 2016, 12:50:36 PM by mxt0133 »

BTDretire

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #21 on: October 19, 2016, 12:14:26 PM »
Surprised they use criteria of income AND net worth (minus retirement accounts). Would putting your home and taxable accounts in a trust circumvent the means testing?

https://thinkprogress.org/stanford-will-now-be-free-to-all-students-from-families-that-earn-less-than-125-000-per-year-72f63bc3a96e#.e1k20n2if

I doubt you could do that to circumvent the means testing. They're private, so they can ask for whatever information they want and control of a trust would be one of those things.

In general, I think means testing for college tuition makes sense.
It probably does make sense. However, I have an average family income of $43k over
my married lifetime. We have, by living frugully save a large stache. We would probably not get student aid, but a family that earned $70k and saved nothing, would get aid. We are punished for doing the right thing!

Pigeon

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #22 on: October 19, 2016, 01:34:33 PM »
Many institutions that give some merit based aid will deduct private scholarships right off the top of the aid package.   So, you can spend hours writing the essay and win the $500 one time scholarship and FancyPants U just gives you $500 less aid.

mm1970

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #23 on: October 19, 2016, 01:49:55 PM »
Quote
This is something that people keep saying but I just can't find evidence of.  The majority of stories from my social circle have been students that have managed to stitch together enough scholarships that are not need based to come out of college debt free.  They range from employer scholarships, private endowments, business association, non-profit organizations, and even university endowments scholarships.   I know students that have been given 4 year full merit based scholarship to MIT and CalTech that have parents with incomes well into the mid six figures. 

Hm.  This is interesting.  I watched (From afar) as friends navigated college application and selection for their daughter this past year.  Mom says "she's WAY smarter than we were!"  But I think she sells herself short.  Both parents have degrees in engineering from a good school (top 15 I think).  Dad is now a lawyer.  Kid raised very much upper middle class.  Attended a top gifted school, all sorts of camps including language immersion and camps at Oxford, that sort of thing. National Merit Finalist.  Applied to a metric ton of colleges.

Didn't get in to all of them.  Despite doing research in high school for summer fun, didn't get into MIT or Stanford.  Got a $30k a year scholarship from Mom& Dad's alma mater (about half the annual cost).  Got a full ride at a decent university in the Northeast.  (Top 40 in engineering.)  Got into several UC's.  (Doesn't live in CA).  Family income has got to be near 7 figures.  Chose a top-10 engineering school, no financial aid.

So, I think yes - you can get full rides if you don't need the money.  But it may not be a top-10 school, it might be a top-40 school.  Some folks might actually get that aid at the top-10 school.  (I'm not betting on that for my upper middle class white boys).

TheGrimSqueaker

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #24 on: October 19, 2016, 02:18:10 PM »
This rule forces students of rich parents to maintain good relationships with their parents if they want to go to nice schools.  Students who have poorer parents are the only ones who will get a free education and really be able to be independent.  Nobody should have to beg at the family trough, and be forced to capitulate to their parents values under threat of not being able to get an education without personal debt.

In most families, affluent or otherwise, maintaining a good relationship with your parents doesn't require begging at the family trough or capitulating to their values.

There's something to be said for social skills, and for being the kind of person worth helping. In fact, social skills and work ethic often count for more than educational achievement when it comes to long-term success in the work world.

Children of affluent families tend to do better academically than middle-class or working-class ones, but they also are far more likely to have gotten to university age without ever having to learn to share, to compromise, to work, or to overcome adversity. Children from working-class or lower-middle-class backgrounds are far more likely to already have those lessons under their belts. So I'd say that having to get along with Mom and Dad for four more years, having to live with relatives instead of at a dorm (if logistics allow it), or having to get a job to help defer education costs, is a reasonable thing to require of a young person who's coming from an affluent background. Call it remedial social skills 101.

mxt0133

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #25 on: October 19, 2016, 02:32:23 PM »
It probably does make sense. However, I have an average family income of $43k over
my married lifetime. We have, by living frugully save a large stache. We would probably not get student aid, but a family that earned $70k and saved nothing, would get aid. We are punished for doing the right thing!

With that income and if you put the majority of your stache into retirement accounts and/or your primary home, your expected family contribution (EFC) should be almost zero.

You comment about assuming you won't get student aid is why millions of grants go unclaimed every year.*

*http://college.usatoday.com/2015/01/20/2-9-billion-unused-federal-grant-awards-in-last-academic-year/

Libertea

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #26 on: October 21, 2016, 04:00:51 PM »
There's no reason why funding higher education has to be all or nothing, either.  While you don't want to see young people start out their lives mired in crushing debt they will struggle for decades to dig out from under, I do think it's better if kids have at least some skin in the game.  You tend to appreciate something more if you work for it versus if it's just handed to you as an expectation that you can take for granted.  And a college education is still a privilege and something that should be earned, not a birthright.

My goal is to fund half of my niece's and nephew's college expenses at one of our state U's.  They can make up the difference via working PT like I did in college, or taking out loans, or getting money from their parents, or being good students and earning scholarships, or any other way they choose.  If they want to go to Stanford, they will still get the exact same amount of cash from Aunt L (me) as they would have gotten had they attended the state U, and again, it will be their responsibility to make up the difference.  Obviously in this case, the difference will simply be a lot higher. 

It ultimately depends on what they value in a college education.  I am a very satisfied state U grad myself, and I personally do not feel that paying for private school is worth the cost differential.  So I am not going to subsidize that.  But if they feel differently, that's their business.  It's their money, and they are free to make their own decisions regarding the value of attending private schools (and live with the financial consequences of those decisions).

former player

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Re: Sorry kids, we can't afford Stanford - We make too much money
« Reply #27 on: November 13, 2016, 07:52:44 AM »
My baby went there. It was so hard sometimes we had to order quick essay for homework. But it was worth it, now she's in one of the best colleges in the country
I'm now hoping like mad that you left off the "sarcasm off" tag at the end of that post.

But I'm lacking in confidence that my hope is justified
« Last Edit: November 13, 2016, 12:39:57 PM by FrugalToque »