College quandary - parents perplexed

[2017ish]

Does she have the opportunity to study abroad for a year if she does State U? Our daughter-in-law (m/l) did USA school undergrad in three years, second of which was abroad at Oxford, followed by masters at Cambridge, so she has the double OxBridge on resume. (now in law school.... but maybe this is it ...)

If State U would permit such a route, that might be a more affordable option?

 

[nash031]

Getting accepted obviously doesn't mean "has to go". IMO, if she wants to go there, she needs to figure out how to fund it. You're going to give what you can give, but should not feel under any obligation to spend a quarter million dollars for an education that might provide a cool opportunity but not much of an earnings bump as to what she could get for 1/5th of the cost.

My wife and I are in line on this as we were both educated at public schools growing up, and have bachelor's from the same public University and masters' from public Universities, and together ended up with about $10K in low-interest student debt from the entire range of our education. I cannot fathom spending a quarter million dollars on a bachelor's degree. It'd be a non-starter for us unless our child was going to pay the difference.

This is like Camry vs. BMW 5 series to me.

 

[NW-Bound]

I finished my graduate degree with very little debt. I paid for my two children college education up to completion of their undergraduate degrees, then they paid for their graduate tuition with their employer's help. None of us even thought of applying to expensive schools, so I was not faced with the problem the OP has.

A compromise is for the youngster to apply for a loan, even if you have the money to give her. Perhaps that would teach her that money does not grow on trees. You can always help her pay that loan later. One hopes that by seeing herself in debts, she would not indulge herself too much while in expensive Europe.

 

[Fedup]

My employer paid for my expensive graduate school. Got to love it. Luckily I finished my Master degree in one year, otherwise they would be paying more.

 

[Morgan22]

+1
Yes, please stop these comparisons, as I have an irrational and knee-jerk reaction to attack and correct such outdated thinking.
- My undergrad tuition in 1979 was $275 a semester (in-state).
- In-state tuition is now ~$25,000. And we all know real wages have remained flat or gone down. IOW, everything costs a helluva lot more than it did back in the disco days. And undergrad degrees are now a prerequisite for any mainstream corporate job, which means their instrinsic value is now lower.

Your tuition # is a little overstated. (At least for my state, and I think MA is a high cost of living state.)
The $25k would cover in-state tuition, fees, and on campus housing (housing around $11k) for a Massachusetts state University.
Maybe if your from outside of New England it would cost $25k for tuition and fees for University of MA.

My kids have been told we will pay for in state college. If they decide to go for a private college they would have to make up the difference on their own.
I have a daughter working towards her Associates in Dental Hygiene. She's not interested in going for the traditional college education. (Or my idea of a traditional education.)
My son expressed interest in Private, but is leaning towards State U since he doesn't want to be in debt when he's just starting out on his own. We'll see if he changes his mind. He has a couple more years of HS to go.

 

[ivinsfan]

This is a great chance for some grownup talk with your daughter. I noticed you said it's a 3 not a 4 year program witch puts her out in the world earning money that much sooner. Given the unique experience and the 3 years it's really not about the money.

How will it get paid for...you could just fund the 50 and have a serious talk about this being it for her i.e. house downpayment assistance, wedding funding, etc..they won't happen now. Explain it's nothing punitive, it's for your financial health and putting her first now so she can have this chance. Perhaps she can borrow some of the money as well.If your DD is mature enough to handle 3 years abroad, a difficult degree program and being separated from family, it's not too much to expect a intelligent 2 way conversation about how to make this happen that will satisfy both parties.

 

[Cobra9777]

Not quite the same as Cambridge, but somewhat similar situation... DS had merit-based scholarships to two very good, but smaller engineering schools here in Texas. The scholarships paid all tuition, fees, room, and board for 4 years. But he really wanted to attend UT Austin, which is a top-10 engineering school nationally, and therefore merit-based scholarships are significantly harder to come by and rarely if ever cover all costs for 4 years.

Even though the extra money wasn't a showstopper from an affordability standpoint, it was still a very substantial sum over 4 years. So I really tried to convince him to go to one of the smaller schools. But he had worked incredibly hard in high school to get the GPA and SAT scores necessary for acceptance into UT's program. So, in the end, there was no way we were going to deny him that.

We still arranged the finances so he had some skin in the game. He worked over the summers for spending money and other living expenses after he moved off campus. And he had some great internships, which resulted in multiple job offers. So it worked out well.

 

[W2R]

I think if she wants to go to Cambridge, she should go, enough said and no questions about it period. This is a chance of a lifetime for her.

So the next question is how will it be paid for. Your entire family (including your daughter) needs to come together as a team and work together to figure out how to do this. All need to be pitching in on this task and giving it their all, IMO.

But there should be NO question about whether she goes or not, assuming she wants to (and who wouldn't?). None.

 

[bclover]

If DD is smart enough to get into Cambridge then she should be smart enough to figure out how to pay the added cost. Let HER take out the loans if she believes it is worth the difference - which it very well may be.

EDIT: To make it clear (if it isn't already) I think young adults should have some skin in the game with regards to their college education. Getting a free ride on mom and dad's expense account is short-changing them on part of their education - a very important part.

lol, Ive never agreed with this. my parents paid my tuition and believe me I had "skin" in the game. My skin was easy, waste their money and I got my pretty little black behind (my moms exact words) kicked from one end of the state to another. Every term my parents EXPECTED excellence and my life would have been holy heck if they felt I goofed.

I firmly believe not have tens of thousands of dollars in debt upon graduation gave me a leg up, upon graduating.

every child is different. My sons also do not have any student loans, my sons is a B + student, he too has skin in the game. the fact of knowing I will end his life and enjoy doing it if he waste my hard earned dough. He recognizes that he is fortunate that he does not have a 500 loan payment every month.

Op you know your daughter best. I always encourage my children to pick experiences over money. going to Cambridge does NOT happen to every American teen, do the pluses out weigh the negatives?

If my child had an opportunity such as that there wouldn't even be a discussion, we would have taped him to the wing of a plane if we had to. He'd be there.

 

[Fedup]

Not quite the same as Cambridge, but somewhat similar situation... DS had merit-based scholarships to two very good, but smaller engineering schools here in Texas. The scholarships paid all tuition, fees, room, and board for 4 years. But he really wanted to attend UT Austin, which is a top-10 engineering school nationally, and therefore merit-based scholarships are significantly harder to come by and rarely if ever cover all costs for 4 years.

Even though the extra money wasn't a showstopper from an affordability standpoint, it was still a very substantial sum over 4 years. So I really tried to convince him to go to one of the smaller schools. But he had worked incredibly hard in high school to get the GPA and SAT scores necessary for acceptance into UT's program. So, in the end, there was no way we were going to deny him that.

We still arranged the finances so he had some skin in the game. He worked over the summers for spending money and other living expenses after he moved off campus. And he had some great internships, which resulted in multiple job offers. So it worked out well.

Texas A&M used to give scholarship for NMS. I think my oldest kid received a voucher for one day visit. She never went because she never wanted to get out of California.

 

[bclover]

Question? Does having "skin" in the game suppose to make you more responsible? I know quite a few friends who took out loans, still goofed off, dropped out of school and now have loan payments and no degrees.

 

[REWahoo]

I know quite a few friends who took out loans, still goofed off, dropped out of school and now have loan payments and no degrees.

Well, to quote Ron White, "You can't fix stupid."

 

[Whisper66]

Question? Does having "skin" in the game suppose to make you more responsible? .

For most, yes.


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[AboutThere]

Your DD has a unique opportunity. I agree that the choice is not the same as "big state U with no loans vs. U.S. private school with $150K in loans". If I were in your shoes I'd be inclined to want to make it possible.

Some things to consider:

Is DD your only child, or have you/will you be funding other college educations? I have two daughters, and while I've never worried that "fair" = "spending the exact same amount of money", I believe it's fair to keep the spending somewhat equal. If taking on large loans for DD means that a younger sibling will have limited options, I wouldn't do it.

You say you cannot afford to pay the extra $50K per year but can afford the loan payments. Is it just a cash flow problem, or will the loan payments adversely affect your ability to run the household/save for your retirement? I would be adverse to so much debt but I don't know the details of your finances.

As far as the posters advising your daughter should get her own loans, that is not likely to happen. Student loans in the US are limited to $5,000-7,500 per year for the student. (I don't know if Stafford loans are even available for students attending college in another country). Additional private loans are available, but someone will need to consign for her. What bank is going to lend $50,000 to an 18-year old student with little income and no assets?

Disclosure, because our experience colors our opinion: DH and I paid about $250K (total) to send our two DDs to college for their BS degrees. There was no need-based financial aid offered, and we were able to pay by using savings and current income. There were no loans.

Only child for us. Cost will be about $125,000 all-in, or about $50,000 more than state U. It's not 50,000/year extra, it's $50,000 total above our college savings.

The loan situation is broadly the same as it would be for a US school. Students can get Staffords, parents can get PLUS loans. Same amounts. There is little in the way of merit aid (which is also true of Big Public U).

One of the more interesting things is that she will have no choice but to become far more independent than a typical US college student: no meal plan, no university people fretting over your happiness, basically no hand-holding.

 

[DJRR]

So, how much is your available cash flow budget? You say you can afford payments.

Sounds like the cost is $125k and you have $75k. Assuming you don't pay in advance you need $42k per year for 3 years.

Year 1 - Pay $42k and save $750 per month
Year 2 - Pay $42k and save $750 per month
Year 3 - Pay $9k and come up with $33k somehow

I would focus on cash flow, belt tightening, and a combination of summer work before I ended up borrowing $50k.

Sounds like a great opportunity though.

 

[tulak]

If DD worked hard enough to get into Cambridge, then I think she has plenty of skin in the game.

I told DS that if he can get accepted in Stanford and goes for a CS degree, then we'd figure out how to pay for it. It's not going to happen in our case, but there are definitely some benefits for going to a top notch school if you select the right major. You'll make connections there you wouldn't make otherwise and as others have mentioned, she probably won't have issues finding employment after college.

Personally, I don't mind working a little longer so my kids can get a stronger start in their life. If that's the case for your daughter, then I think it'd be silly to pass on this opportunity (IMO).

Also, it's only 50k more. Cheaper than a Tesla.

 

[FUEGO]

If you're asking "how to fund it?" then it's a simple analysis. Find those sources of debt that are cheapest, which might be parent PLUS loans as you suggest. Or it might make more sense to dip into the portfolio. I'd personally rather sell investments and pay cash instead of taking on debt with 4%+ rates (not sure what the going rate is). Unless that debt can be wrapped into the IBR rules and I thought I could end up with a "payment optional" loan (as our six figure law school loans turned out to be for the most part).

If you're asking "Is it worth it?" then it's more complex. I'd question whether an additional $50k was worth it (plus more for being a stranger in a strange land, transatlantic flights, etc). I don't know that Cambridge carries more weight in the US than any other random top tier schools, and it's probably YMMV depending on specialty. If there's a master's or other advanced degree in the works, grad school is probably more relevant than undergrad anyway.

If the "hey, going to school in the UK would be cool" is appealing, that's a steep price tag. Why not take a "gap year" as is common and live it up across the pond. $50k would go a long way on a year long jaunt over there especially with the pound being so weak.

In my situation with 3 kids, I'm going to offer them what we can afford toward in state universities, and if they get into Cambridge, we'll see what creative ways the kid can come up with to help pay for it.

 

[bclover]

For most, yes.


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lReaaly? Haven't Americans struggled with cc debt? if that were true, I would think the lack of money make them responsible enough not to lbym?

and it seems every article i read screams how 1/2 the adults are ill prepared for retirement. I would think if having to spend your own cash was a indication of responsibility that this would not be so??

ok, no worries. I always say i march left when everyone else goes right

I look at it like the statement "18 makes you an adult". I don't think turning a magical number makes you automatically responsible, nor do I think having 50k in loans going to make you a good stident.

just me



lol when I was 22 not having money did not prevent me from getting credit card debt

 

[Philliefan33]

Only child for us. Cost will be about $125,000 all-in, or about $50,000 more than state U. It's not 50,000/year extra, it's $50,000 total above our college savings.

The loan situation is broadly the same as it would be for a US school. Students can get Staffords, parents can get PLUS loans. Same amounts. There is little in the way of merit aid (which is also true of Big Public U).

One of the more interesting things is that she will have no choice but to become far more independent than a typical US college student: no meal plan, no university people fretting over your happiness, basically no hand-holding.

Thanks for the clarification.

You DD will likely be able to take about $18-20K of the loans herself. That leaves 30K for you. Some people have car loans of that amount.

With no other kids to worry about, I'd let her go to Cambridge if that's what she wanted. (After some honest discussions about the ramifications of that decision, financial and social).

 

[jollystomper]

In my view, you also have to assess your child and determine if she will really take advantage of that extra "prestige" she will gain and and leverage it for the future. For example, is she a self-starting, outgoing type who likes to get involved in things, can lead activities, good and making friends not just of peers but of teachers, adults in the community, etc.? Or is she more the reserved, likes to study but keeps knowledge to herself, wait for opportunities to come to her type? If it is the former, she has a better chance of making that extra money be worth it from a career perspective.

We went through this with one child. He was accepted at both a good State U with scholarships, and at a top 25 "elite" school, with the cost an extra 35K a year. He really wanted to go to the elite school, and we were convinced that we should extra - biased because we had gone to Ivy League schools and done well. In retrospect, their has not been a return on the difference we paid. He graduated in 4 years but did really did not take advantage of any of the opportunities and made few friends or adult contacts there. Almost 10 years later, his current job he could have had graduating from the State school, going to the more expensive school provided no benefit.

Another child got a scholarship to another good private school but took advantage of it and has done very well. So it is not just "can we figure out a way to afford it", but "is this something the child will take advantage of in the long run"

 

[rodi]

First off - congratulations to you for raising a bright, academic daughter. (I'm struggling with my 15yo and 13yo... they don't always understand the need for good grades, despite not being completely stupid.)

Does she qualify to go straight into the 3 year program? I ask this because I know the US high schools have a lower graduating standard than the European schools. It's one of the reasons the Int'l Baccalaureate program is starting to take hold here in the US. I'm sending my kids to IB high school for exactly this reason. My sons are dual citizens and there has been some interest, by younger son, of going to a public university in Italy (Bologna). But - he'd need to have the IB diploma or be faced with a year of remedial work because of his US HS diploma being lesser.

 

[NW-Bound]

Ah, the Baccalaureate. In many countries, one is not called a HS graduate until he passes the Baccalaureate. One can just throw away 12 years of school transcripts because only the grade of the Baccalaureate exam counts for anything.

Brings back memory.

 

[Katsmeow]

If she can get Stafford loans, then she should get the max she can since since those don't require parent guarantee. Tell her that when she graduates she will be responsible to repay all of this. That should work out to about 40% or so of the extra $50k.

So, really, that leaves you on the hook to take out extra loans to cover the part she can't get loans for. My inclination (as someone who is a bit believer in state U education) is that I would probably be willing to do it if she is going to study something at Cambridge that will actually help her in her future earning capacity.

 

[pb4uski]

IMO there is nothing wrong with a student graduating with some student debt... it is their investment in their life. If she works summers she should be able to pay off some parts of the loan before she graduates. If she earns $5k more a year as a result of graduating from a more prestigious university then paying that $50k loan should be no problem for her.

 

[youbet]

For most, yes.


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Have anything to back this up? (Please, not anecdotal examples.)

My own feelings are that the student's level of responsibility and seriousness at school will be a reflection of his/her values, likely rooted in family values. These ingrained values will override whether mom and dad are largely picking up the bill or whether the student is taking loans and working 40 hours a week.