An New Idea About Affording College
As most of you know, the Pandora household is preparing to send our first born off to college. We actually received our first second acceptance letter!
For those of you not here yet… the cost of college is enough to take your breath away, which is why this article caught my attention.
An activist group in California is proposing that the state charge graduates of its university system 5% of their income for 20 years after they graduate, as tuition. The LAT reports that it’s not completely wacky: the head of the entire UC system has said that he likes the plan, and that his team will study it. In that case, let us do some quick and dirty math.
Current UC undergrad tuition per year: $12,192
Four year UC tuition costs: $48,768
Which would equal 20 annual payments of: $2438
Which is 5% of: $48,768
Now, I haven’t thought this through, but it did catch my attention. Go read the entire article. (Fair use limits my cutting and pasting.)
I’m interested in your thoughts… because what high school seniors are facing financially makes this idea worth a second look.
Tags: College, Education, Financial Aid
this has some relationship to the federal program:
http://studentaid.ed.gov/students/attachments/siteresources/LoanForgivenessv5_051511.pdf
i met with a recently graduated vet, with an ungodly amount of student debt, who planned to work at a modest income in a practice in Louisiana. It looked likely that the federal program would (eventually–10+ years out) enable her to get out from under some/all of the student loans.
In a perfect world perhaps–but time value of money doesn’t like a 20 year delayed payment program. And where’s the vic? Face it, colleges and universities are big business, and as long as they can get people to pay that tuition–they’re gonna charge it. The 20 yr. plan doesn’t account for defaults and death. It’s just a lousy game, tuition is–and we all have ponied up begrudgingly at the upper hand they have. The online courses may give ’em a bit of a sweat–but since recruiting has gone global at alot of upper end schools, someone from another part of the planet is delighted to be accepted to a name US school and pay the tab. Two areas of budgeting I can’t even quibble over–education and healthcare. I want the best, and they set the price. Here’s to the ’96 Olds getting me thru 4 kids in out-of-state schools!!!
Something’s gotta give, Joanne. Someone spending anywhere from 120,000.00 to 200,000.00 for a flippin’ undergrad degree is nuts.
Peanut gallery talking. That’s why you better be in that guidance office w/ your first-born scouring local (a great source) and college scholarships. The US Savings bonds of our day ain’t gonna cut it. Also, I put a FIRM exit day on graduation. No 10 year plans on my dime.
I’ve put four through — two at UD and two at private colleges. No matter how much Delaware kids want to get away from home, I feel confident in saying UD is dollar-for-dollar a better value than private schools that cost three times as much. Unless it’s an Ivy or your child wants to major in something UD wasn’t offer, it makes more sense to come out of UD with manageable debt than go to a private school and wind up paying off student loans when you want to buy a house.
P.S. — If your child goes to UD, you’ll probably have a little more in your retirement account when the time comes. Think about yourself a little too.
Four?! Wow, I’m really impressed. We have applied to U of D since my son wants to major in engineering and physics (those are not my genes!). So we’re fortunate that his choice of major merges well with U of D.
“I’ve put four through”
Me too. Paid for 18 years of college and 13 years of grad/med school. Now sitting on a whopping load of debt, but at least kids are all debt free.
“We have applied to U of D since my son wants to major in engineering and physics”
U of D has good programs. I’ve hired a PhD from there.
For the love of Christ, it’s UD, not U of D.
Several universities have put a cap on the amount expected from families. For example, at Harvard, undergrads are not expected to pay a dime if the family income is below a certain amount (I think it’s $60,000). After that, the contribution is a percentage of the family income. Fortunately (unfortunately?), my daughter did not qualify for a free ride to Harvard.
Other schools have policies of not putting students into debt. Vanderbilt, with a total annual cost of about $58,000, is one such school. That means the students will be debt-free. Parents, however, are not so lucky.
And I am not knocking UD. It is a wonderful school with top-quality academics. But they cap aid for in-state students at $4,000 unless you get a free ride. Add in room and board, and the cost to students/families is about $8-10,000 per year. Many private colleges offer far more financial aid, and with outside scholarships, the cost to attend them can be equal to or less than state schools.
I have spent the last 6 months sorting through college applications, procedures and costs with my daughter. Filled out the FAFSA, the CSS profile and individual schools’ forms. No matter how you slice it, college is very expensive and a huge pain in the ass.
I should add that I think some debt is good for the student. They know as they go through college that they will have to work once they get out to help pay for their education. It instills some responsibility. I don’t want my kids buried in debt, but a little won’t kill them.
Ah, the forms. What a mess. And some of the online applications are a nightmare. One major university’s web page is a confusing mess – which might tell you what their tech degrees are worth. 😆
“I should add that I think some debt is good for the student. They know as they go through college that they will have to work once they get out to help pay for their education. It instills some responsibility. I don’t want my kids buried in debt, but a little won’t kill them.”
I disagree. This will basically force them to work when they finish, rather than explore their opportunities. For example, my daughter got a masters degree in education, and then decided it was not for her. She’s now at a good medical school. Another has tried out two or three careers. I’ve pushed her to be a college professor, she’s tried it, and wants something else.
At that age, they don’t need debt to be responsible. They want to succeed and have a good life.