With local private colleges costing $35,000 per year how can middle class parents afford to pay for their kid's college?
We're a middle income two paycheck family on Long Island. (And you know the cost of living here.) Thanks to scrimping and saving for 16 years we bought our home and have $50,000 in the bank plus some retirement savings. On paper we qualify for zero financial aid.
So I should just take $35,000 of it and pay for Freshman year? What about the other 3 years? What about my other son who goes to college right after the first one graduates?
It sound cruel and unfair, but my child is on his own as far as college tuition. I'm pushing him hard academically because he will need scholarship money to afford it. He can live at home for free and we'll help him with books and such but that's all we can do.
How are other parents handling it? Loans? Second mortgages? Is it a new thing that parents are considered responsible to pay for college education or was I oblivious when I went to school?
(I paid my own way through college at St. John's University BUT that was in 1986 when it cost $5000 per year!)
The average private college tuition is now $40,000 per year and to that you can add room/board, books, some spending money (additional food money), and travel to and from home. You are talking close to $55,000 per year all-in. Too many parents are realizing the true mountain of cash that this represents when it is too late - freshman year of High School. The $220,000 for a four year private education represents a disciplined savings plan of $10,000 net cash per year from the day your child is born until they graduate at 22. Want to have a second child? Make that $20,000 per year in net savings for college.
Expecting the financial miracle to take place four years before that first tuition payment needs to be made is not an effective strategy which is why there has been so much marketing around College Savings Plans recently. Families in the middle class might well have their hand played for them instead of being able to choose amongst the top available academic options to which their student was accepted.
However you cannot spend $35,000 for one year's tuition against a backdrop of only $50,000 in cash assets. This would fail every test in the Suze Orman "Can I Afford This?" book. You must maintain an emergency cash supply of three to six months minimum.
The break line on financial aid has historically been $150,000 in annual gross income, $100,000 in total cash assets, and your own home. As a two wage earner home with only $50,000 in cash on hand, we would not be so quick to eliminate your family from financial aid consideration.
If your child is living with you, he will be considered a dependent from a college financing perspective and to that end, your income will indeed be considered in most cases.
We can only suggest a very rigid savings discipline at this point combined with a very serious analysis of public institutions that match your student's interests including the SUNY program options here in New [lacrosse].
