college payments

[sblatner]

Our 3 kids went to California State Universities (public) and I think we paid out something like $175,000. One went to school close to home which saved us living expenses while the other two went to school in Southern California.

Because of our household income (not wealthy but I guess we are in the eye's of the government) they didn't qualify for any grant's or scholarships. I sometime's felt we were the only ones paying 100% of the college costs.

We are the other California family that paid full price though he did get two small scholarships from our community. Nothing from the college.

[LivingAlmostLarge]

I feel like there are less scholarships for public universities?

[disneysteve]

I feel like there are less scholarships for public universities?

This is such an important statement.

Everyone spouts the advice to save money by sending your kid to a state school but when you actually run the numbers, it doesn't necessarily work that way. Sending our daughter to the state university would have cost about $5,000/year less than sending her to the private university she attends which was a far better fit for her. I'm not suggesting that 5K/year isn't significant but it's hardly enough to justify choosing the state school over the private school. Due to scholarships and grants, the private school can often be nearly as cheap or even cheaper than the state school.

[TexasHusker]

I feel like there are less scholarships for public universities?

That is correct. But that’s purely a function of how much private schools charge. They can charge anything they want. And when you mark up something by 200 percent, it’s still quite profitable to then discount it 50 percent.

The prices at public universities are government regulated. No smoke and mirrors.

That being said, college expense is grossly out of line. Much like healthcare finance, the normal ebb and flow of supply and demand has been broken by gubmit tampering.

[disneysteve]

That is correct. But that’s purely a function of how much private schools charge. They can charge anything they want. And when you mark up something by 200 percent, it’s still quite profitable to then discount it 50 percent.

My daughter's college has a facebook ad running that says 99% of students get some form of aid. So essentially nobody actually pays list price. That number is fantasy. A number of schools have actually lowered their list price in recent years but that didn't actually make the school any cheaper because nobody was paying that price anyway.

From a 2015 article in U.S. News:

Rosemont College, a Catholic school just 10 miles west of Philadelphia, and Utica College in New York both announced in the last two days that they're moving from a "high price, high discount" model to a "low cost, low discount" model.

"For us and for our families, the system that most college and universities are following of having very high sticker prices and high discounts to go along with it was really getting out of hand," says Rosemont President Sharon Hirsch. "In our case we were advertising a sticker price that wasn't the true tuition."

[SavingBucks]

We also live in southern CA but our daughter is in her 2nd year at a public university in Idaho. No monies offered locally, but her school did provide some scholarship monies based on GPA. They used to offer monies based on test scores but changed policy (DD got a 31 on ACT!). Cost is about $26K which shows you how high the cost of room and board is in CA!!!

DD was accepted at the closest state university here, but we were told that the school is very impacted. The timeframe for graduation from this school (4 miles from home!) would be 6-7 years for a degree in mechanical engineering! Up in Idaho she is planning to graduate in 4.5 years with TWO BS degrees AND a minor. She went to community college locally for summer session last this year and plans to again this summer.

Yes, staying locally would have been cheaper for the long haul. But we are cash flowing it and she is getting the college experience on campus.

[LivingAlmostLarge]

That's my worry too. Public university is crowded.

FWIW talking with a few neighbors they skipped the prepaid tuition program because it turned into a bad deal for them. Their kids didn't go. Then it was worth nothing.

[~bs]

when i graduated from a public university around 12 years ago, tuition was $3k/year. So no loans or payments. I worked full time while I was going college.

I did get accepted into colleges that I would have paid 10X the amount, tuition alone. But after weighing the cost/reward, I decided that it was not worth the cost of the better universities. Unless you're expecting to make A LOT more money over the long term, there's no way the higher tuition costs pencils out. The calculation below eliminates smaller expenses like transportation, food, cost of books, etc that should be somewhat similar for both. It also eliminates the time value of money and being able to invest the funds over the next 30-40 years. There's a huge difference in starting your professional career with large savings versus a large loan, like $225k difference (excluding investing gains)

Public university
Cost -$2900/year
Housing $0 (live with parents)
Income $25000/year (after tax)
$22100 net gain per year
$88400 after 4 years

Private out of state university
Cost -$30000
Out of state housing, airfare, etc - $5000 (excludes furnishing and other moving costs)
Income $0 (likely not going to work if obtaining a $30k/year education)
-$35000 net loss per year
-$140000 after 4 years

[~bs]

Drake that's how I worry. That we will be paying 100% for both kids. Right now I am stressing how much to save.

If your kid isn't a super high academic achiever, minority, and/or if you're not low income, chances are you will pay the majority, if not all tuition.

That's the situation I was in. Academically, I glided through high school (too boring/irrelevant for me), but got into really good schools based on my standardized test scores with SAT/ACT at 99%+ percentile. I didn't meet the minimum 3.0GPA for most of them either. But a situation like that means not getting scholarships.

[Like2Plan]

That's my worry too. Public university is crowded.

FWIW talking with a few neighbors they skipped the prepaid tuition program because it turned into a bad deal for them. Their kids didn't go. Then it was worth nothing.

I am not sure what they mean by this. Here is a link to the GET Program Details: http://www.get.wa.gov/sites/default/...%20Details.pdf

There are penalties for a non qualified refund, but I would do a roll over to another 529 plan http://www.get.wa.gov/sites/default/...ev10-27-17.pdf if that turned out to be the case. You would still have to pay federal taxes and a 10% penalty on the gain when you cashed in the other 529 plan if it wasn't used for a qualified expense/reason, but it looks like you could escape the GET penalties by doing this.

I bought some units when the program first started. I believe I paid $38.00 per unit to start with (current units are $113 per unit). The pay out rate is now 103.86. The $103.86 is 1/100 of the cost of tuition at UW for 1 year. (100 units = 1 year). It was designed to cover the cost of tuition at the most expensive state university. If you attend UW, WWU or Harvard you receive the same $103.86 per unit (for this year). Obviously, the units would cover more for WWU--and they can be used for room and board and books as well. It is a very flexible program.

"It is important to remember that if funds were ever insufficient to cover all of the program’s obligations, GET customers are protected by Washington State Law" GET = Guaranteed Education Tuition.

Interesting graph: http://www.get.wa.gov/sites/default/...Chart-2017.pdf
You'll notice the tuition did go down- the state legislature reduced the tuition. Also, the price of GET units were way out of whack to the price of tuition. GET adjusted the accounts to put in more units (or folks could request a refund). So, they made it right.

I would equate this program to something more like bonds. I don't think you are going to make 22% on it like the stock market, but if your worry is to cover the cost of tuition at a state school as a base line this will certainly do the trick.

(Also, what is the likelihood that your DKs do not attend college? I would put it as very unlikely.)

[disneysteve]

If your kid isn't a super high academic achiever, minority, and/or if you're not low income, chances are you will pay the majority, if not all tuition.

That's the situation I was in. Academically, I glided through high school (too boring/irrelevant for me), but got into really good schools based on my standardized test scores with SAT/ACT at 99%+ percentile. I didn't meet the minimum 3.0GPA for most of them either. But a situation like that means not getting scholarships.

I think this is a situation where you really need to choose wisely. A student who is rather average academically should probably consider doing a couple of years at community college and then finishing at the local state school. They'll still get a good education but at a much lower cost. I can't imagine going to the private school and paying full price, even if the parents are well off. My daughter's college would have cost us well over $200,000 without any assistance. If not for her getting her merit scholarship, there's no way we would have sent her there.

[~bs]

I think this is a situation where you really need to choose wisely. A student who is rather average academically should probably consider doing a couple of years at community college and then finishing at the local state school. They'll still get a good education but at a much lower cost. I can't imagine going to the private school and paying full price, even if the parents are well off. My daughter's college would have cost us well over $200,000 without any assistance. If not for her getting her merit scholarship, there's no way we would have sent her there.

True. If I was smarter about it and less lazy, I would have just farmed those As in high school and had more options for college.

Other options are going instate first two years, then transferring out of state. You need to do research though to make sure the credits transfer. But yeah, community college first, then instate after is another good route to go.

I thought about going back to school for a masters' degree, but back when I looked (maybe 5 years ago), the cost would have been $40k+. No ways the degree would benefit me enough salary wise to offset that cost.

[disneysteve]

Other options are going instate first two years, then transferring out of state. You need to do research though to make sure the credits transfer. But yeah, community college first, then instate after is another good route to go.

I don't know how common this is but here in NJ, it is actually now possible to do your full 4 years at the community college but your degree actually comes from the state school. They have some sort of alliance that makes that possible. I would imagine that is the cheapest way of all.

[Gailete]

I don't know how common this is but here in NJ, it is actually now possible to do your full 4 years at the community college but your degree actually comes from the state school. They have some sort of alliance that makes that possible. I would imagine that is the cheapest way of all.

And in my area every once in a while they bring up the subject of a community college and whoever is in charge of these things votes it down as too costly without enough benefit. Back in the day when I was feeling good, I wouldn't have minded going and taking classes at a community college to get me more employable but eventually went to a 2 year RN program. Around here the possibility of getting that community college going is slim to none. I remember taking night classes in accounting while working my job at Arby's the year after I graduated. Probably one of the most beneficial classes I ever took even though I had to quit because I got a new job and had to move away for it. I have always liked going to school except for a few yawner classes like philosophy at 8 or 9AM the morning when it was still dark out.