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University costs for your kids -- do you have a plan?

University costs for your kids -- do you have a plan?

Old May 22nd 2014, 4:23 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by jackattack
the estimated cost of (private) college for her would be around $1 million!!!
The difference between state and private college makes no sense to do financially (if you're paying it, and there's no whacking scholarship involved). Currently, the sticker price difference appears to be, say, $100k for in-state tuition and board for 4 years, and $250k for private.

That $150k difference, compounded at a reasonable 7% over 40 years, is almost $2.5mill. I could make a very good argument that a child who knows that their retirement is fully funded from Day One of their first job could have a fantastic working life, making all sorts of adventurous, entrepreneurial 'stuff the consequences' choices, despite only having an own-brand college name on their resume. Or that using that $150k once they've got their degree to set up a business, travel, subsidise a decade or two of poorly-paying but immensely satisfying work might all be better choices than handing it over to Brand Name College; they should at least consider the alternatives.

There are perhaps a few careers/ industries where the 'right' college is terribly important and will make a clear difference to your working life. But otherwise I'd say the opportunity cost of what you could otherwise do with the money is too high.
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Old May 22nd 2014, 4:26 pm
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Default Re: University costs for your kids -- do you have a plan?

Some of those private colleges are just quirky rather than prestigious.
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Old May 22nd 2014, 4:38 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by Sally Redux
Some of those private colleges are just quirky rather than prestigious.
See, I hadn't even really thought of that - I was assuming that the only reason to pay fees of $40k+ is to be able to put Stanford or Harvard on your resume!

So... maybe I'm missing something in my lack of personal college-aged kid experience. Those with older kids and more college experience: what reasons are there for choosing a considerably more expensive private school over a public one? So far I can think of:

- prestige and recognition of the private school's name
- student wants to study something incredibly specialist that's only offered at X
- student wants to study X under Lecturer Y because Y is extremely renowned
- student's passionate goal in life is to work at ABC Company, who openly state they do preferential recruiting from XYZ College
- student didn't get good enough grades to get a place at a public uni, so it paying for a place instead

I'm ignoring not logically justifiable lifestyle choices like just wanting to go to X because it looked really cool in the brochure/ their friend is going there/ they've always wanted to live by the sea, and so on.

Any others?
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Old May 22nd 2014, 4:46 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by kodokan
See, I hadn't even really thought of that - I was assuming that the only reason to pay fees of $40k+ is to be able to put Stanford or Harvard on your resume!

So... maybe I'm missing something in my lack of personal college-aged kid experience. Those with older kids and more college experience: what reasons are there for choosing a considerably more expensive private school over a public one? So far I can think of:

- prestige and recognition of the private school's name
- student wants to study something incredibly specialist that's only offered at X
- student wants to study X under Lecturer Y because Y is extremely renowned
- student's passionate goal in life is to work at ABC Company, who openly state they do preferential recruiting from XYZ College
- student didn't get good enough grades to get a place at a public uni, so it paying for a place instead

I'm ignoring not logically justifiable lifestyle choices like just wanting to go to X because it looked really cool in the brochure/ their friend is going there/ they've always wanted to live by the sea, and so on.

Any others?
It is hard nowadays to get into a prestigious state college like UCLA - you need a GPA of about 4.5 at least, and community service coming out of your ears. If you have money, you can buy your way in somewhere, with the benefit of a low teacher:student ratio too. Also, many of the private colleges promise to get you out in the four years, whereas UC students are finding it hard to do that due to not being able to get enough classes per year. Private college may offer a discount, say $20,000; that brings it much closer to a UC, which is about $16,000 at the moment (haven't checked that figure).
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Old May 22nd 2014, 5:14 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by Sally Redux
It is hard nowadays to get into a prestigious state college like UCLA - you need a GPA of about 4.5 at least, and community service coming out of your ears. If you have money, you can buy your way in somewhere, with the benefit of a low teacher:student ratio too. Also, many of the private colleges promise to get you out in the four years, whereas UC students are finding it hard to do that due to not being able to get enough classes per year. Private college may offer a discount, say $20,000; that brings it much closer to a UC, which is about $16,000 at the moment (haven't checked that figure).
Dont forget that the California State University system also offers some good schools and can be cheaper, as well as not as competitive, but still offer an excellent education.

1. 2 years at community college

2. transfer to University as a junior.

3. Saved yourself a small fortune.
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Old May 22nd 2014, 5:14 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by Sally Redux
It is hard nowadays to get into a prestigious state college like UCLA - you need a GPA of about 4.5 at least, and community service coming out of your ears. If you have money, you can buy your way in somewhere, with the benefit of a low teacher:student ratio too. Also, many of the private colleges promise to get you out in the four years, whereas UC students are finding it hard to do that due to not being able to get enough classes per year. Private college may offer a discount, say $20,000; that brings it much closer to a UC, which is about $16,000 at the moment (haven't checked that figure).
Interesting, thanks! Is UCLA a special case? Our in-state unis (admittedly not as prestigious as UCLA) guarantee admission to anyone who ticks off the usual high school list of 4 English credits/ 4 Math/ 2 foreign language/ etc, and is placed in the top 25% of their graduating class. Is that the case in California generally, and other states?

And is the 'out in 4 years' thing a huge problem generally? I would've thought that anyone who could pull off a 4.5 GPA through high school has probably already got some college credits banked, plus would be the go-getting type that would take online classes, or do summer school if necessary rather than expecting to loll around for a 4-month holiday (assuming they haven't lined themselves up a fab internship). I've been assuming that the 5-year degree trend was due to indecisiveness/ idleness/ the need to work whilst studying.
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Old May 22nd 2014, 5:22 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by Jsmth321
1. 2 years at community college

2. transfer to University as a junior.

3. Saved yourself a small fortune.
I'm all about the 'what's the real cost here, considering lost opportunities financial, compounding, etc', but even I think that there's a huge and worthwhile life lesson to college that goes beyond the lecture halls. I think it's worth paying (within reason) for an 18-20 yr old to move out, live away from home and parents, start becoming a grown-up, make decisions, meet interesting people from a range of different backgrounds, find like-minded and intellectually equal peers, do all the out-of-hours socialising that college involves. An 18/19/20 yr old driving to their community college each day to do what's effectively another two years of high school and coming home each afternoon to their teen bedroom and dinner with Mum and Dad, just won't get that.

That said, I think it's brilliant that the community college route exists, for people who simply want the bit of paper and not the life experience, or for whom 4-yr college is financially out of reach, or who aren't sure yet just how much more education they really need.
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Old May 22nd 2014, 5:29 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by kodokan
Interesting, thanks! Is UCLA a special case? Our in-state unis (admittedly not as prestigious as UCLA) guarantee admission to anyone who ticks off the usual high school list of 4 English credits/ 4 Math/ 2 foreign language/ etc, and is placed in the top 25% of their graduating class. Is that the case in California generally, and other states?
The UC system guarantees admission if you meet a set of criteria, but the more prestigeous schools within that system are incredibly difficult to get into, particularly UCLA and UC Berkeley. At the other end of the scale UC Merced and UC Riverside are much easier to get into. If you look on the UC website you'll see a whole bunch of stats for percentage of applicants admitted, average GPA etc for each UC campus.
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Old May 22nd 2014, 5:59 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by kodokan
Interesting, thanks! Is UCLA a special case? Our in-state unis (admittedly not as prestigious as UCLA) guarantee admission to anyone who ticks off the usual high school list of 4 English credits/ 4 Math/ 2 foreign language/ etc, and is placed in the top 25% of their graduating class. Is that the case in California generally, and other states?

And is the 'out in 4 years' thing a huge problem generally? I would've thought that anyone who could pull off a 4.5 GPA through high school has probably already got some college credits banked, plus would be the go-getting type that would take online classes, or do summer school if necessary rather than expecting to loll around for a 4-month holiday (assuming they haven't lined themselves up a fab internship). I've been assuming that the 5-year degree trend was due to indecisiveness/ idleness/ the need to work whilst studying.
UC Berkeley and UCLA have admittance rates of about 20%. For some majors, the student needs to be a straight A high school student to be considered at UC Berkeley or UCLA. Others such as UC Santa Cruz have a higher admittance rate of about 50%. However there isn't much of a difference in overall freshmen high school GPA averages between the different universities in the UC system.

UC Freshmen Profiles

For the State System, pretty much everyone gets to be admitted to their college of choice unless their major is filled except Cal Poly which is very competitive in the engineering/science majors and SF state which is very competitive in medical majors.

All universities in the UC system charge the same tuition for undergraduate programs and the tuition for state system colleges are a little cheaper then the UC system.

Last edited by Michael; May 22nd 2014 at 6:09 pm.
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Old May 22nd 2014, 7:21 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by jackattack
I set up 529 accounts for all three kids shortly after they were born and pay in monthly but they're on track to fall far short of $1m even with decent returns.
Bear in mind also that there is a lifetime maximum for 529 accounts, it seems to range between $235k and $400k.
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Old May 22nd 2014, 7:42 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by jackattack
We met with a financial advisor a few years back who did some projections for us. Our daughter was roughly 4 or 5 at the time and I seem to remember that the advisor estimated that by the time that she gets to college age, the estimated cost of (private) college for her would be around $1 million!!!

We then promptly went on to have twin boys so I'm having heart failure just thinking about how much we might need save in order to help them start out in the working world without a financial noose around their necks.

I graduated from the UK without any debt (was free to attend in the early '90s plus my parents paid small stipend for my living/beer). Hubby went to a US military academy so no fees and living stipend.

I set up 529 accounts for all three kids shortly after they were born and pay in monthly but they're on track to fall far short of $1m even with decent returns.

I think your advisor may be on a commission there! Seriously though, I mean if you're saying this was a few years back, that sounds massively inflated. I use the scholarshare calculator, and even if you select 18yrs from TODAY, with a private school estimate at $50,000 for 4yrs, it estimates the complete cost of the education in 18yrs time to be $590k. Considering your info is a few years old, $1m seems well over the mark. I assume perhaps you were calculating paying for some sort of graduate degree in addition to an undergraduate?

Also, as someone else mentioned, there are lifetime caps to 529's - the caps are on contributions, not earnings, but I believe they're all under $500k, so it'd be tough to get close to the $1m.

Remember also, if you don't use the cash for qualified education expenses, you have to pay fed & state taxes on it, and a 10% penalty. As you're doing this for multiple children - remember you can roll un-used funds from one childs account to the other....
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Old May 22nd 2014, 8:10 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by kodokan
Interesting, thanks! Is UCLA a special case? Our in-state unis (admittedly not as prestigious as UCLA) guarantee admission to anyone who ticks off the usual high school list of 4 English credits/ 4 Math/ 2 foreign language/ etc, and is placed in the top 25% of their graduating class. Is that the case in California generally, and other states?

And is the 'out in 4 years' thing a huge problem generally? I would've thought that anyone who could pull off a 4.5 GPA through high school has probably already got some college credits banked, plus would be the go-getting type that would take online classes, or do summer school if necessary rather than expecting to loll around for a 4-month holiday (assuming they haven't lined themselves up a fab internship). I've been assuming that the 5-year degree trend was due to indecisiveness/ idleness/ the need to work whilst studying.
I think your questions have been answered by others.The 5 year trend I believe is due to not enough classes available to freshmen/sophomores in the UCs. My son is at Cal Poly which supposedly guarantees a 4-year degree, he seems to be on track so far.
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Old May 22nd 2014, 8:16 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by Sally Redux
The 5 year trend I believe is due to not enough classes available to freshmen/sophomores in the UCs. My son is at Cal Poly which supposedly guarantees a 4-year degree, he seems to be on track so far.
Do you mean the compulsory classes they all need to take, the English 101s and the like? I honestly didn't realise get your bum on a seat in one of those was an issue to be aware of.

Perhaps the route of community college to transferring junior has much more merit after all!
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Old May 22nd 2014, 8:18 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by kodokan
Do you mean the compulsory classes they all need to take, the English 101s and the like? I honestly didn't realise get your bum on a seat in one of those was an issue to be aware of.

Perhaps the route of community college to transferring junior has much more merit after all!
That's what I heard. Also you don't necessarily get a teacher at the UCs but a teaching assistant, the community colleges are actually better in that regard.
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Old May 22nd 2014, 8:35 pm
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Default Re: University costs for your kids -- do you have a plan?

Originally Posted by kodokan
Do you mean the compulsory classes they all need to take, the English 101s and the like? I honestly didn't realise get your bum on a seat in one of those was an issue to be aware of.

Perhaps the route of community college to transferring junior has much more merit after all!
Only about half of the classes during the first 2 years typically are compulsory. The other classes are pre-recs for your major or are electives. Therefore an engineering or science major will likely need college calculus, college physics, and other science classes but a philosophy major will likely need philosophy 101 and other such classes and possibly will take some electives that the engineering majors wouldn't be taking.
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