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College Preparation : Financial Aid and Planning
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The College Forum is opening a new thread to discuss both financial aid and financial planning for a college education. BOTC was motivated to open this new topic as a result of both discussion on our forums, the essay presented below, and recent discussions on our other sports website College Forum.

Financing a College Education - Some Hard Numbers

If you read forums such as College Confidential (dedicated to admissions, programs, academics, and environments at college campuses) and follow schools in the Top 50, you will find that the biggest reason for admissions disappointment comes during the awarding of financial aid. Many students and their families will be forced to drop their dream schools when handed a statement of what the bills will be.

Here is the simple fact : Most private institutions among the Top 50 Universities and Top 20 Liberal Arts Colleges are going to be $40,000 per year tuition, $10,000 per year in room and board, and $3,000 in books, spending money, and travel costs.

Too many families are ignoring what it means to actually pay $53,000 per year from your NET INCOME towards a college education. The expectation is that a miracle will happen with funding - either through academics, athletics, or financial aid.

The truth is that you must plan to save $220,000 for a full private school price tag. This means setting aside $10,000 per year per child every year from the time the child is born through college graduation in order to have that cash available.

Suppose your child is now about ten years of age and you have not started a college savings plan? That same private college price tag requires you to now start saving $20,000 of your NET INCOME per year per child at ten years of age.

If scholarship money comes through for you, you will have a built-in savings program. However, a word of caution comes with that sports scholarship. If your student-athlete receives a 0.25 scholarship - which is $10,000 per year - you will still need to come up with $40,000 per year to complete the story.

Even if you knew your ten-year old son or daughter would receive a 25% discount eight years later, you would still need to save $15,000 per year if you have not started when they were younger.

Hopefully, you get the point. There is no magic formula that will make up the difference in tuition payments aside from your own family budget. Start saving early and start saving now.

Finally, a word on financial aid : If your family has a gross income of $150,000, has cash assets of $100,000, and owns your own home, you can rest assured that you will be outside of most financial aid programs. (These parameters have been tested with many financial aid calculators.)

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Re: College Preparation : Financial Aid and Planning
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The following discussion is replayed from the Back of THE NET College Forum. In this discussion, merit scholarships are discussed along with their decreasing frequency in the Top 20 US News and World Reports institutions. The exchange discusses the barbell or double bubble effect currently being experienced by many middle class families.

Originally Posted by BoardLord
Originally Posted by Anonymous
A student will typically only get meaningful academic money if they are attending a school which is below their academic potential. Virtually none of the top academic schools give any academic money.
While it is certainly true that many of the top academic institutions (Top 20) have severely curtailed their academic scholarships in favor of augmenting their financial aid programs, the amount of assistance provided overall has slightly increased over the last decade. Due to the economic downturn, many institutions were facing student populations already on campus that experienced financial hardships - parents losing jobs, external scholarship sources being cut, and similar stories. This caused a shifting of resources at many schools in order to preserve enrollment levels at the cost of some entering freshmen.

That said, there are still wonderful schools across the Top 50 in US News and World Reports that offer healthy academic scholarships. We encourage you to consider the Patriot League schools where Bucknell, Lafayette, and Lehigh will offer academic discounts nearing 40% ($20,000 per year and more) for top academic candidates (Top 10% of their High School classes).

These shifting resources, including the 28 national universities offering true need-blind admissions programs, are creating an unintended effect - the so-called BARBELL or DOUBLE BUBBLE in admissions. Here, we are seeing a middle-class squeeze where the parents are financially capable of paying full-freight for their students according to paper calculations, but unwilling to do so as the hardships would be too great.

This Double Bubble (lower income students can attend on financial aid and higher income students can attend on their own payments) has become a major concern at many universities and represents one of the biggest risks to private collegiate education.

Re: College Preparation : Financial Aid and Planning
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The following article is a real-life example from one of our BOTN posters on the financial strains that self-funding a college education at $35,000 per year might impose.

Originally Posted by BoardLord
Originally Posted by Anonymous
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].

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Originally Posted by CageSage
The following article is a real-life example from one of our BOTN posters on the financial strains that self-funding a college education at $35,000 per year might impose.

Originally Posted by BoardLord
Originally Posted by Anonymous
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].


Isn't borrowing the money an option, for people with decent incomes that don't have hundreds of thousands in the bank?

Re: College Preparation : Financial Aid and Planning
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Originally Posted by Anonymous
Isn't borrowing the money an option, for people with decent incomes that don't have hundreds of thousands in the bank?
Certainly. But ...

If a family did not have the lifetime discipline of saving for a college education, why would those same people take on debt ranging from $100,000-$200,000?

The United States has a problem facing us in the next twenty years, akin to the current concern about social security. There is currently 1 TRILLION ($1,000,000,000,000.00) dollars in debt that has been accrued to finance college educations.

Could this be the next mortgage backed security crisis? Seriously, this is 1T dollars that will provide zero value to the economy over the next two decades. Student debt represents a mortgage for graduating students without owning any property. Those are all middle class consumers who will not be able to participate in the housing market and more.

Think about the impact.

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Originally Posted by CageSage
Originally Posted by Anonymous
Isn't borrowing the money an option, for people with decent incomes that don't have hundreds of thousands in the bank?
Certainly. But ...

If a family did not have the lifetime discipline of saving for a college education, why would those same people take on debt ranging from $100,000-$200,000?

The United States has a problem facing us in the next twenty years, akin to the current concern about social security. There is currently 1 TRILLION ($1,000,000,000,000.00) dollars in debt that has been accrued to finance college educations.

Could this be the next mortgage backed security crisis? Seriously, this is 1T dollars that will provide zero value to the economy over the next two decades. Student debt represents a mortgage for graduating students without owning any property. Those are all middle class consumers who will not be able to participate in the housing market and more.

Think about the impact.


Interesting...just from a personal standpoint, I think we'll be ok with making monthly payments, even though we haven't been nearly as disciplined as we would've liked over the years, as far as the college funds go. I'm counting on loans to supplement what we have saved, which isn't much, when you consider $40K per year. However, with both of our salaries, we should be able to add a monthly loan payment to our bills..I hope! As always, good conversation, and interesting information you've presented here...

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Originally Posted by CageSage
Originally Posted by Anonymous
Isn't borrowing the money an option, for people with decent incomes that don't have hundreds of thousands in the bank?
Certainly. But ...

If a family did not have the lifetime discipline of saving for a college education, why would those same people take on debt ranging from $100,000-$200,000?

The United States has a problem facing us in the next twenty years, akin to the current concern about social security. There is currently 1 TRILLION ($1,000,000,000,000.00) dollars in debt that has been accrued to finance college educations.

Could this be the next mortgage backed security crisis? Seriously, this is 1T dollars that will provide zero value to the economy over the next two decades. Student debt represents a mortgage for graduating students without owning any property. Those are all middle class consumers who will not be able to participate in the housing market and more.

Think about the impact.


Best post I have seen on BOTC.

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All colleges are required to have a Net Price Calculator on their schools website, plug in your financial information, assets, income etc., it will tell you based on todays costs of tuition what your final bill will be, having put 2 thru so far, the net price calculators are pretty accurate. Some will even give you what merit money will be given based on GPA, AP classes and SAT scores. Too many of my oldest kid friends graduated into a crappy employment era 2011-12, those that made poor school choices, are strangled with loans, no jobs or low paying jobs. The big salaries for new grads are not there anymore, if they are lucky enough to gain employment in their field of choice. Keep your kids debt to a minimum. That is the best gift you can ever give them. Remember the starting tuition is not the same amount four years later. Tuition/room/board at one school for us was 15,000 more by year four.

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As far as scholarships are concerned if you were to get a 50% scholarship (I know I'm dreaming) is that 50% of tuition or is that tuition room and board or is that everything including incidentals? A buddy of mine his son is getting a full ride for basketball and it covers everything soup to nuts, another guy I know his son has a full scholarship for cross country and it does not cover room and board it is only tuition, in Lacrosse is there a standard on how this works?

Re: College Preparation : Financial Aid and Planning
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Basketball and football can be huge revenue sports for a college. Bowl games and the Final Four bring in millions in TV revenue and sponsorships. Does cross-country, soccer or lacrosse do that?

Think about it from the college side.

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