First Child off to College

[happytraveler]

My daughter is set to go off to college next year. She has done pretty well in school, and has been offered some merit based scholarships at the 3 colleges she has been accepted to so far. I have calculated the net price of tuition/room/board after deducting the value of the scholarships for each school, and estimated the total 4-year cost ot of pocket of attending each school. The costs are as follows:

State University: $26,096
Private Univsersity: $121,752
Liberal Arts College: $100,828

Education wise, the Private University probably has a better reputation than the State School, and is a better "fit" for her academically, socially, etc. But, I am certain she could go to the State University and get a very fine education and have a positive expereince. In short, I think the private University is a "better" school, but not 4-5 times better. Her second choice, at the moment, is the small liberal arts college.

I have made no commitments to her about how much of her college education I would fund; I have not promised her she could, for example, go anywhere she wants, and I would pick up the tab. I have told her we would see where she gets in, and then we would evaluate her options. I am considering telling her that I will pay for the cost of the State University in full, but any costs beyond that, she will be responsible for. Financially, I have the resources to pay for any of her choices, but I am not sure (for a variety of reasons) I should pay for her to go to college anywhere she chooses. Part of my dillema is that if she goes to the more expensive school, she will likely be burdened with student loans for years to come. Being 17, I don't think she has the maturity and life expereince to understand how owing someone $100,000 could impact her.

Any thoughts or suggestions? Thanks!

[zibazinski]

DF and now his DD are facing that very same thing. He paid for all 4 years to the tune of over 200k and it is not a "name" school but one where she could pretend to play a sport (sat the bench and had the uniform anyway.) I finally got her a job at a bank because she was so unemployable. If she had gone to a NAME private school, which her friend did and had 6 job offers and a sign on bonus, it might have been worth it in this economy. I asked DF why he didn't steer her to a better decision and he wanted her to "make that choice for herself after his advice." Both are regretting that decision. Does your student know what they want to do or have any idea?

[quotequeen]

Most people here are very opposed to paying for private colleges when you could just go to the state school. (Even that is too much for some people, they will say your daughter should go to CC for two years and then transfer to the state school.)

I went to the private school, and IMO, you shouldn't underestimate the importance of it being a better fit academically and socially. If I'd had to go to my state's public school I don't think I would have ended up where I am now.

ETA: It also matters what schools we're talking about, as zib says. Do you live in Michigan, California, or Virginia? Do the choices include Princeton and Oberlin, or is this expensive small liberal arts college one that nobody's ever heard of?

[Taxman10]

::I am considering telling her that I will pay for the cost of the State University in full, but any costs beyond that, she will be responsible for.::

i think that is pretty reasonable. I think your success in life really depends more on what you do after college, not so much where you go.

[zibazinski]

That is very true for some professions and not so true for others. What does DD want to do or is she undecided? If Df's DD had gone to Wake Forest, she'd be rolling in job offers for instance. She didn't go there and finally got a job in a bank that any schmo with a 4 year degree could have gotten.

[happytraveler]

"ETA: It also matters what schools we're talking about, as zib says. Do you live in Michigan, California, or Virginia? Do the choices include Princeton and Oberlin, or is this expensive small liberal arts college one that nobody's ever heard of?"

Our public state institution does not have the reputation of the schools in the 3 states you mentioned---but, I am confident if she applies herself and takes advantage of her opportunities, she will get an education equivalent to what she could have received at a school like UVA. (I genuinely believe that the student is far more of a factor in success than the school.) The private university is a well regarded school with a name that is recognized nationally, though one would not think it is in the same class as Princeton. I would say that the liberal arts college is similar in stature/prestige to Oberlin.

"Does your student know what they want to do or have any idea?"

I would say that she has an idea--she seems to have an interest in the life sciences, but like so many things at her age, she may very well change her mind tomorrow.

I am almost embarrassed to say this, but part (maybe most) of my reluctance to pay for her education at the more expensive schools is my perception is that these institutions are taking adavnatage of students/parents, by charging exhorbitant rates for tuition/room/board. Every parent wants the best for their kids, and these schools essentially exploit that desire--recognizing that there are a lot of parents willing to pay virtually any price for an education. I really don't want to be a part of that game. Nonetheless, I am human, and given that I am fortunate to have the resources, I am torn between providing what my daughter would like to do (which is not completely unreasonable in my view), and my own principles.

[happytraveler]

Jan 10, 2011 8:27:41 GMT -5 zibazinski said:

That is very true for some professions and not so true for others. What does DD want to do or is she undecided? If Df's DD had gone to Wake Forest, she'd be rolling in job offers for instance. She didn't go there and finally got a job in a bank that any schmo with a 4 year degree could have gotten.

LOL---I only mention this because you brought up the name of the school, but one of the schools she has not yet heard from is Wake Forest. I suspect that if she gets in there, she will not get any merit based aid, and based on our income, we will not get any need based aid. So sending her to Wake Forest will cost in excess of $200,000 for four years of school. I have not (no surprise) saved that much money for her to go to school.

[zibazinski]

Not necessarily as Df's DD GF's Dad makes over 200k a year and she got some merit based aid but I'm sure it still cost him a pretty penny. But SHE has a good job in a city where she wants to live in and DF's DD is living at home and working at a bank. Same dollars spent, I am sure but one got a good ROI and the other did not.

[Gardening Grandma]

happytraveller
Is a compromise possible? (2 yrs at state college and if she does well, transfer to expensive college?)

[zibazinski]

She'll lose credits and time and the more expensive school will probably not take her. Start as you mean to go on. If State college is in her future then CC is fine and transferring is fine but we don't know what schools we are discussing here. There are NAME state schools as well as NO NAME ones.

[BeenThere...DoneThat...]

...congrats on her getting accepted, and congrats to you for being level-headed, thoughtful, and generous...
...my vote? gift her $15k and offer to loan her $15K at 1% interest over 120mos... imo, college is one of the first major adult decisions a young adult will make... and, imo, she will never "own" the decision unless she pays for it...

[happytraveler]

Jan 10, 2011 9:19:58 GMT -5 Gardening Grandma said:

happytraveller
Is a compromise possible? (2 yrs at state college and if she does well, transfer to expensive college?)

Thank you for the suggestion--this is not something I had considered.

[happytraveler]

Jan 10, 2011 9:51:26 GMT -5 BeenThere...DoneThat... said:

...congrats on her getting accepted, and congrats to you for being level-headed, thoughtful, and generous...
...my vote? gift her $15k and offer to loan her $15K at 1% interest over 120mos... imo, college is one of the first major adult decisions a young adult will make... and, imo, she will never "own" the decision unless she pays for it...

This is another good idea--particularly the idea of me loaning her the money. Gives her ownership (and the financial consequnece)of her decision, but I suspect that I can be more flexible with the loan terms than the bank will.

[Urban Chicago]

I think my answer will heavily depend on what major your daughter is planning.

Also, she says she wants to go to the private school. Has she actually done anything to show her commitment (like saving money from her job, researching less expensive housing options, etc?)

[zibazinski]

You cannot and will not ever collect on any "loan" you make your DD so don't bother with that route. What is DD's major?

[Deleted]

Jan 10, 2011 10:35:54 GMT -5 zibazinski said:

You cannot and will not ever collect on any "loan" you make your DD so don't bother with that route.

Cannot?
Will not?

I know many families that have loaned college money to their kids, and the kids either repaid in full or are in the process of repaying.

It IS a very viable option.

[happytraveler]

Jan 10, 2011 10:11:28 GMT -5 Urban Chicago said:

I think my answer will heavily depend on what major your daughter is planning.

Also, she says she wants to go to the private school. Has she actually done anything to show her commitment (like saving money from her job, researching less expensive housing options, etc?)

She actually is quite responsible finanically. She has worked since she was 15 (3 years now) at a restaurant, and has about $10,000 saved. SHe has not researched cheaper housing options---the schools she is looking at require her to live on campus for atleast the first year. As I mentioned earlier--she is leaning otwards majoring in life sciences (biology, chemistry) but I take that with a grain of salt---she could change her mind very quickly.

[Urban Chicago]

Okay, has she mentioned a campus job or work-study?

[happytraveler]

Jan 10, 2011 10:35:54 GMT -5 zibazinski said:

You cannot and will not ever collect on any "loan" you make your DD so don't bother with that route. What is DD's major?

No firm major, but leaning towards biology/chemisry/etc. I am not sure if I agree regarding her paying back a loan--I borrowed money from my parents 20+ years ago--as I recall the amount of $8000. I repaid them. I think she is of good character and, to date, she has met her obligations--I would hope she would continue to do so in the future. I have no reason to expect otherwise.

[happytraveler]

Jan 10, 2011 12:54:34 GMT -5 Urban Chicago said:

Okay, has she mentioned a campus job or work-study?

My understanding is that work-study is basically reserved for kids who are determined to have a finanical need (e.g. need based aid)---she will not be elligible for this. (If it is not reserved, I suspect they get first "dibs") I actually would prefer that she not work her first year in school, or atleast her first semester. I would rather her have an opportunity to transition from hihg school to college life without the burden of a job. At some point beyond that, however, I would probably expect her to secure some sort of part time employment during the school year. I think she would accept that as part of her obligation towards paying for her education. I have not pursued that (for the reasons above), but it might be worth talking to her about it---make sure we are on the same page.

[souldoubt]

I think offering to pay up to the cost of the state school and putting anything beyond that on her is more than fair. Some people on here will tell you going to a certain school is well worth what it costs and in some cases they're right but it's hard to predict whether or not it's worth it for some kids. I had a really good GPA in high school but opted to go to a local JC first and transferred to a state school after that. Part of me will always wish I had the "move away and live at college" experience but I got out debt free after working while going to school. Where I went to school hasn't held me back at all but I also went on to get my certification which was the big thing that helped me at my current job.

[jennml]

There are many factors to weigh in this situation.

One example (which may or may not help):

My sister decided to attend a small, private College despite having received a free ride to the state school. Neither choice was really a name school so that was not a factor. Private school gave her a merit based grant so out of pocket expenses were reasonable (if I remember correctly her tuition came out to a little more than what her private HS tuition had been so no hardship for my parents). She decided on this more expensive school because she liked the campus and general feel of the college. She would be commuting as she chose to stay in state. Majored in Chemistry with Pre-med intentions although this school is not known for that major (it's known for business). Did well at first. Then got involved with a Sorority. Grades suffered. Got a warning that she would lose her grant if grades did not improve the subsequent semester. Switched to an"easier" major (Biology). Bombed it again and was forced to leave after loss of grant. She initially blamed the fact that the teacher was terrible and, since this school is not known for the sciences, she had no other teacher to enroll with. Now admits that the sorority played a part DUH!

She then enrolled at the local CC but credits didn't all transfer. Finally figured out what she wanted to do (nursing) and is now attending a private college well know for nursing but her graduation is delayed 1 year due to loss of credits and failed classes at first school. But she's maintaining a solid 3.0 gpa. No more significant parental contribution as extra money sucked dry by previous floundering so now it all has to be loans. I co-signed a small one for a summer class. The rest she's up the creek without a paddle.

Now this is a very different situation than happy's but it shows how things can spiral out of control especially when the student isn't 100% on their goals.

I, on the other hand, went to Boston University, which is fairly well know and expensive. I received alot of finaid and worked summers to pay one semester while my parents paid the other. None of my aid was merit based so when I did flounder a bit junior year I didn't lose any aid. Graduated with a double major on time and with ~$20,000.00 in fed SLs. I chose my school for it's name, location, the finaid package, and because I knew it was a solid choice for my chosen career track (Pre-Law). I stuck to that track and, although not a lawyer...yet, have used my degrees in my current career.

Personally, I think the most important part of this decision is the affordability of the school and the career aspiration. Some careers benefit from a name school some don't. In addition, the student's temperment must be taken into account. Will they stick to it and work hard? Will the waffle back and forth on majors? How much parental supervision do they need?

It sounds like happy's daughter is very grounded and responsible. She knows the importance or work and saving. So, if she is clear on her career track and said career would most be benefited by the pricier school, I'd suggest she sacrifice and get the loans to make up the difference that you cannot provide and go the pricier route.

ETA: Whoa...sorry for the book...

[debtheaven]

I am considering telling her that I will pay for the cost of the State University in full, but any costs beyond that, she will be responsible for. Financially, I have the resources to pay for any of her choices, but I am not sure (for a variety of reasons) I should pay for her to go to college anywhere she chooses.

Could I suggest another compromise? I'm not dead-set on this by any means, it's only a thought, since you say you could afford for her to go to any of those three schools. How about offering to pay more, ie 50K (or whatever you are considering)?

I only say this because it sounds like you are considering paying more, even if not the full cost of the two more expensive schools. If indeed you are considering this (I could be wrong), I think you need to be up-front about it with your DD so she can make an informed decision.

In any case, congrats to you and your DD!

ETA: I too believe children can and do repay loans. And I also believe that children can take their education very seriously even if they are not paying for it, since that was my experience. But, I am older and college was much, much cheaper then. I'm certainly not suggesting you should pay everything for your DD, I'm just saying that having parents pay does not necessarily mean the child will not take their education seriously.

[debtheaven]

Hey T-Bird! Great minds and all that LOL.

[happytraveler]

I appreciate the advice, and also appreciate hearing your own college experiences. My daughter has until May 1, 2011 to decide, so I am sure that this will be a regualr topic of conversation at the dinner table for the next few months.

[happytraveler]

Jan 10, 2011 15:27:11 GMT -5 @debtheaven said:

I am considering telling her that I will pay for the cost of the State University in full, but any costs beyond that, she will be responsible for. Financially, I have the resources to pay for any of her choices, but I am not sure (for a variety of reasons) I should pay for her to go to college anywhere she chooses.

Could I suggest another compromise? I'm not dead-set on this by any means, it's only a thought, since you say you could afford for her to go to any of those three schools. How about offering to pay more, ie 50K (or whatever you are considering)?

If I had to say now what was going to happen, I think what you suggest will be pretty close to what we will agree on. I will probably agree to pay $50K-$75K of the tuition (obviously more than the cost of going to our state college, but less than the full costs of going to the private college), and explain to her that she will be finanically respnsible for the difference. That will give me the opportunity to help her go where she wants (which I want to do), but, as you suggested, gives her some finanical ownership of the decision.

[debtheaven]

Happytraveler
Thanks for your response! That's great, it gives you all plenty of time.

Another thing. I'm sorry, I know it seems obvious but I have seen some posters post about this, and it is an issue with my own kids in regards to my ex's family. I believe that parents should basically treat kids equitably as far as education goes. Nobody is under any obligation to pay for anything. But if you do contribute to a child's education, IMO it's not right to pay for one and not the others. Again I know I am sensitive to this issue but I just wanted to point out the obvious.

[debtheaven]

ETA: We cross-posted. I think that is a great solution. As you say, it leaves her options fully open, and also leaves her financially responsible for her decision, but not "crippled" by excessive student loans.

Please update when you have made your final decision, and again, best of luck!

[zibazinski]

Yes, same DD but DF won't let her access her money. If I'd have been him I would have said she could have from HIM what a normal school would have cost and the rest come out of her money but now he tells me she ALSO has over 200k from her Grandmother dying but still wants him to pay for grad school. I have told him to not tell me anything anymore about her and their finances because my head will explode

[debtheaven]

Zib, if she could get a decently-paying job after grad school, it's probably a good deal for him. Since he can easily afford it, better to pay for grad school and make her grow up once and for all. Better yet, split grad school with her.

I couldn't live with somebody who had such fundamentally different values from me, even if it is a second marriage. That may change the money that is available, but it's the values that would be the issue.