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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308847  
Subject: Affording college. Date: 8/10/2012 10:38 PM
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Newsweek and The Daily Beast have listed their college rankings for the year. There are several different listings (Most Beautiful, Best Party and so on) but two of them are Least Affordable and Most Affordable.

Affordability covered several different areas. Total cost, average student debt, financial aid, and future earnings. The Most Affordable list has some surprises. There are some good state schools, there are several good tech schools, and there's a handful of the most elite, most expensive schools in the country. They made the list based on future earnings and huge financial grants.

Least Affordable:

http://www.thedailybeast.com/newsweek/galleries/2012/08/05/c...

Most Affordable:

http://www.thedailybeast.com/newsweek/galleries/2012/08/05/c...

And all the rankings:

http://www.thedailybeast.com/newsweek/features/2012/college-...

Harvard started the huge financial grant program. They had become so expensive that apparently only international bankers could afford to go there, so they started a new rule. They would accept the students they wanted, without paying any attention to how much money the student or the parents had. Then, every student whose parents earned less than $60,000 a year (or, in some cases, whose parents had abandoned them) got the full ride: tuition, room and board. From there going up there's a sliding scale.

It makes for some interesting reading. And I hope that some people will pass it on to college bound kids who will add another consideration as to which colleges to apply to.

Nancy
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Author: ishtarastarte Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305715 of 308847
Subject: Re: Affording college. Date: 8/11/2012 12:12 AM
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Thanks!

C's starting her senior year in a couple weeks and we're starting to look.

Until the last month or so, she had only talked about a couple of local schools and all of a sudden she's talking about maybe somewhere else.

Ishtar

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Author: Globetraveler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305716 of 308847
Subject: Re: Affording college. Date: 8/11/2012 11:36 AM
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I can't agree with their methodology when Yale, Stanford, MIT, Baylor, Harvard, and Princeton are all considered in the top 25 of "most affordable" colleges. All of these will run you 50K plus a year.

Yes, they are great colleges, but most affordable? Seems to me they missed a lot of good, affordable colleges. I've got to wonder how much money these colleges "donated" to get their name on the list.

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Author: determinedmom Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305717 of 308847
Subject: Re: Affording college. Date: 8/11/2012 11:53 AM
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Interesting list. However, for many people the most affordable way to attend college is to go to community college for 2 years at low cost (around here many community colleges do have dorms and so if the student wants the dorm experience it is available at far less cost that at a 4 year univerity). Then, transfer to a 4 year university for the final two years. I fully recognize that this may not not be the best choice for every student but it is a great choice for many.

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Author: SooozFool Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305718 of 308847
Subject: Re: Affording college. Date: 8/11/2012 12:47 PM
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I can't agree with their methodology when Yale, Stanford, MIT, Baylor, Harvard, and Princeton are all considered in the top 25 of "most affordable" colleges. All of these will run you 50K plus a year.

Yes, they are great colleges, but most affordable? Seems to me they missed a lot of good, affordable colleges. I've got to wonder how much money these colleges "donated" to get their name on the list.


I wondered about this as well, and it appears that the key comparisons are between student loan debt accrued by the time of graduation and median starting and median mid-career salaries.

IOW, the "most affordable" isn't a list of the cheapest, but rather the ones that show the best return on investment (measured by salaries).

Not an unreasonable approach. I wasn't surprised to see some of the schools on the least affordable list by that measure.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305719 of 308847
Subject: Re: Affording college. Date: 8/11/2012 2:15 PM
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I wondered about this as well, and it appears that the key comparisons are between student loan debt accrued by the time of graduation and median starting and median mid-career salaries.

They also offer huge grants. As I said, anyone accepted at Harvard whose parents earn less than $60,000 a year gets a full scholarship (which is called grant money). And there's a sliding scale from then on. Most of the other top colleges had to offer the same or similar grants because all the top students were heading to Harvard in order to get the good deal.

I have a cousin at Harvard whose mother is a teacher and doesn't earn a lot and he got the full scholarship. So I know that the grants work.

So it's perfectly possible for someone from a poor family to go to Harvard for four years and not owe a penny. They could also come from a family earning more, but still get enough grant money that any debt would be a small amount.

I think the major catalyst in determining affordability was amount of debt combined with future earnings.

Nancy
the Forbes rating put Williams first, and they looked at future salary and student debt.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305720 of 308847
Subject: Re: Affording college. Date: 8/11/2012 2:33 PM
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However, for many people the most affordable way to attend college is to go to community college for 2 years at low cost (around here many community colleges do have dorms and so if the student wants the dorm experience it is available at far less cost that at a 4 year univerity). Then, transfer to a 4 year university for the final two years. I fully recognize that this may not not be the best choice for every student but it is a great choice for many.

Definitely. And particularly in many cases where college is not automatically considered part of one's education. I have a number of cousins on my mother's side of the family for whom college is regarded as a remote and bewildering mountain. Starting slow, and staying close to home can get someone started on a college track and a BA without adding homesickness to the problem.

Nancy

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Author: malaoshi Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305721 of 308847
Subject: Re: Affording college. Date: 8/12/2012 11:20 PM
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Interesting reading.

I have probably mentioned before that DH knew ONE thing when we married and moved to America the same week. "In America, you have to save for your kid's college." Don't know how he knew that. (England was nearly free for both of us...Oxford Law and Bristol, 3 majors.)

So...we immediately started a little college fund when DD#1 and DD2 were born.

Our mistake...the money increased over the 18 years for each, BUT becos it was in the KIDS' names we got NO financial help at all...Eastern Ivy League schools and no debt, but except for a local book scholarship, no help at all.

It did affect our retirement savings, as so much was being socked away monthly for the kids for 22 years.

Next time I would do it differently.

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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305722 of 308847
Subject: Re: Affording college. Date: 8/13/2012 12:13 AM
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Always save for your retirement first and then put extra away for kids education.

Fuskie
Who also suggests not putting college savings in the kids' names as they could use that money for anything they want, but with a 529 college savings plan, if they don't use it you can always designate a new beneficiary...

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305724 of 308847
Subject: Re: Affording college. Date: 8/13/2012 10:35 AM
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Who also suggests not putting college savings in the kids' names as they could use that money for anything they want, but with a 529 college savings plan, if they don't use it you can always designate a new beneficiary...

I'm not a big believer in 529 plans, but would point out that this is only one of many options to be used for college savings. Personally, we saved a pittance in 529 plans for the kids because I wanted that we hadn't left any stone unturned, but the vast majority of their college savings were kept in taxable accounts in our names. That meant it counted less in terms of financial aid, which didn't matter because they didn't qualify anyhow, that we could use the money for anything that we wanted including their college or a new car for us, that we could spend it in any amount or proportion for the kids so that we ended up spending to their need and not equal amounts just because they are twins, and we can use whatever is left over to do whatever we wish with that including adding it to our retirement account or opting to give it to the kids to get them started in life.

Personally, I found this to be the most flexible for us, and I would encourage anyone saving for college to look at all options and not just plunk money into a 529 because it is 'a college account.' There are pros and cons to all options, and so all options should be weighed in terms of the big picture.

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305725 of 308847
Subject: Re: Affording college. Date: 8/13/2012 11:03 AM
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I put $5000 into a 529 plan each year to maximize my state tax deduction.

PSU

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305726 of 308847
Subject: Re: Affording college. Date: 8/13/2012 11:17 AM
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I put $5000 into a 529 plan each year to maximize my state tax deduction.

If my state had a tax deduction, I most likely also would have maxed out my contribution. I'm not sure which states allow tax deductions for a 529, but that is certainly another thing to take into account when deciding how best to save for college.

I'm just about done with paying for college, and am very glad that we had put enough aside for our kids to go to the school of their choice without having to worry about how to pay for it.

I'm also very glad that we were saving for our retirement as well, and think folks need to think about both retirement and college savings when putting money aside.

I know you have done that, but sometimes it helps other people to mention it.

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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305727 of 308847
Subject: Re: Affording college. Date: 8/13/2012 2:31 PM
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Check out Clark Howard's guide to 529's where he rates each state's plan.

http://clarkhoward.com

Fuskie
Who notes if your state doesn't have a good plan, he always loves Utah...

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Author: Lea77 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305728 of 308847
Subject: Re: Affording college. Date: 8/13/2012 3:47 PM
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Yeah, I was looking for my school to be on there as tuition has crept up over the years to pass 50k (I believe), but no.

I think it's unfortunate that your parents salary counts for so much in the aid packages. I understand why, but a person making 100k can still probably not afford to fork over 50k a year.

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Author: Windowseat Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305730 of 308847
Subject: Re: Affording college. Date: 8/13/2012 4:14 PM
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A lot of the schools on the least affordable were in the same numbers.

At Harvard, I know, there's a sliding scale. Even people earning over a 100k will still be eligible for some aid. I'm not as sure about some of the other schools. I know that schools like Stanford were grumbling about Harvard's policy because they had to match it or lose good students, and they didn't have an endowment fund the size of Harvard's. (The grants that Harvard gives amount to something like 10% of the interest from the endowment fund).

The Forbes list uses different criteria. Post-graduate success, student satisfaction, debt, graduation rate, and competitive awards (which relates to how many students get Rhodes or Fulbright scholarships).

http://www.forbes.com/top-colleges/

http://www.forbes.com/sites/michaelnoer/2012/08/01/americas-...

It's interesting to look at the different methodologies used in rankings. US News bases some of their methodology on how other schools regard a college: what does Yale think of Harvard and vice versa. There can be a lot of mutual backscratching in a system like that.

But it's interesting to read, and I'm glad that college ranking services are including debt as a criteria. Even if you get the degree you want, if you're going to be shackled to a huge debt for the rest of your life you'll have to make decisions based on money rather than personal satisfaction.

Nancy

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Author: DrBooa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305743 of 308847
Subject: Re: Affording college. Date: 8/16/2012 6:20 PM
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I can't agree with their methodology when Yale, Stanford, MIT, Baylor, Harvard, and Princeton are all considered in the top 25 of "most affordable" colleges. All of these will run you 50K plus a year.

These are some excerpts from MIT's page, http://mitadmissions.org/afford/basics/:

"If you are admitted to MIT, we will make sure that you can afford to come to MIT.

--snip---

"MIT only confers financial aid on the basis of financial need. We do not award money based on any measure of merit - academic, athletic, artistic, or anything else.

--snip---


MIT will meet every single cent of your family's demonstrated financial need.

The total price for MIT - tuition and fees, housing and dining , expenses, etc - is in excess of $55,000 a year. Believe it or not, this price is actually thousands of dollars less than what it actually costs to be a student at MIT - even students who don't receive financial aid are already receiving a considerable subsidy to study here!

For the students that do receive financial aid, the size of the award depends entirely on your own family's financial situation. Because of this, "average" numbers will only give a very general snapshot of what some individuals are offered.

Last year, MIT awarded over $85 million in MIT Scholarships to our ~4,300 undergraduates. The median debt upon graduation is $12,900; the average annual starting salary for graduates is well in excess of $60,000. (emphasis mine)"

MIT also has free tuition for families that make $75K or less a year, and it's a sliding scale from there up. Their admissions is need-blind--they do not admit people based on what they can pay, and I sincerely doubt they need to make a donation to get on the The Daily Beast's list of most affordable colleges--they do not suffer from a shortage of applicants.

I suspect the same is true for Yale, Stanford, Baylor, Harvard, and Princeton. In fact, the Ivy League colleges mentioned in that list were the ones who came up with the idea of free tuition for families that make less than a certain amount a year, because they were afraid of not getting good students, and only getting well-off students.

It's sort of like the people who accused Obama of fixing the Women's soccer semi-final match with Canada in the Olympics--you know, Obama would totally threaten the Norweigen ref. Because women's soccer is so important in our country! </sarcasm>


--Booa (who loves all soccer, including women's and means no offense to women's soccer with this comment)

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Author: bibliophage One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305820 of 308847
Subject: Re: Affording college. Date: 8/27/2012 12:26 AM
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Both my brother and I went to schools on the "most affordable" list that you would not have expected to be affordable, but they actually were affordable. My school did have a lot of students whose parents were wealthy and could afford the full ride, but there were plenty of people there who relied on grants, loans, and work-study jobs to get through. My parents had saved pretty hard, but they weren't wealthy. My roommate/best friend's parents were a police officer and a SAHM, and another friend's only parent was a janitor. The schools did this by admitting everyone need-blind--that is, without regard to ability to pay-- and then they made sure the financial aid package actually covered then need. At the time I attended loans still made up part of the package but I believe now tuition and board are entirely covered by grants.

The only reason they can do that, of course, is due to their large endowments and it's not really a selfless move--they are looking to attract the best students they can and financial aid is a big selling point. But the colleges' commitment to ensuring that the students they choose to admit are financially able to attend is the main reason why our alma maters continue to get a donation from me and my brother every year.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 305885 of 308847
Subject: Re: Affording college. Date: 9/5/2012 9:21 PM
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<< In the 1990's our daughter incurred no college debt for her undergraduate degrees. She did borrow to attend and complete Law School.

Kahuna, CFA >>


So.... how is your daughter's legal practice going and is she keeping you occupied there?

Some children don't want to see their parents unemployed, I suppose!



Seattle Pioneer

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