Wealthy parents - any advice in how to cover $70,000 college costs?

Jesus H Christ, why can't meteors fall from the sky and strike people like you down? Smug, rich turd.

You are WRONG. Ivy League schools don't provide a network ONLY for minorities and low income students. They provide a network for ALL students. The research ASSUMES that people from rich families are just going to work for daddy and that they don't need the network but that isn't necessarily the case. It is a FACT that the network at Ivy League schools is BETTER than the network at other less reputable schools.

I'll grant you that Ivy League schools actually have pretty bad engineering programs. But you can be certain that an engineer from MIT or Stanford is going to get more job offers than an engineer at Rutgers or Nebraska.

Good point. being that white kids earn equivalent salaries regardless of what school they attend, the middle class white kids from State U are actually doing better than their Ivy counterparts because they earn the same amount despite some very high earners bringing the Ivy average up by using family connections. That means the median kid at the state school with the same ACT score as the Ivy kid is earning more money.

Here's my advice- use this opportunity to teach your child the valuable skill of marketing themselves and using their unique talents & gifts as a bargaining tool. You don't get something for nothing. Similarly, you shouldn't give something for nothing. Just like in the professional arena, it's acceptable to be transparent with colleges about other offers and opportunities in front of you and your desire to pursue the best deal you can for yourself and your family.

Good point about the study being done on subjects entering college 30 years ago. Also, the study itself was done in 2011, a little longer ago than i would have thought. For goodness sake, how hasn't the world and the workforce changed in 30 years? As one with a child entering college this fall, I have to agree with your reasoning, 'read the study'.

But one thing i don't think has been given proper consideration is if the more elite colleges offer an education and full college experience that has very worthwhile and valuable attributes which do not strictly translate to eventual salary advantages. An education is not just about our future paycheck. It shapes the way you think about yourself and the world. In my mind at least, this is very significant in comparing the options, though almost impossible to quantify.

Wealthy tuition wrote:

High level Universities don’t give merit based scholarships. We don’t qualify for financial aid. I can pay it, but if there are alternatives I’m open to them. Most private scholarships are very small (hundreds of dollars). Has anyone found good options for covering a decent amount of the cost?

If 70K is an issue for you, then you aren't wealthy.

All the people debunking "don't listen" are using anecdotal examples to miss the point: it's the odds. If you go Ivy, your odds of that fancy-pants job will improve. I recently finished my stint on my big-firm hiring committee, and saw this battle fought time and again. I'm all about small schools and grit, but that view loses out repeatedly to the view that pedigree matters. Obviously the Michigans/Virginias (state) will win out over the Cornells (Ivy), but again, you're using anecdote to argue against the underlying truth. Pedigree matters.

Having said that, for the OP, you go to the best state school in your state, or you find the private school that will throw money at your kid. We just went through this exact process, and my kid chose the high-ranking state school over the Ivy schools that granted admission; also in the mix were private schools offering essentially 100% scholarships. There was no comparison between getting out debt-free, after 80k total tuition, versus carrying debt after 70k per year. Granted, we're looking at grad school next, and that's where the kid will buff the resume with a higher-ranking school (to the extent there is one) in the chosen field.

But where "don't listen" misses the point is that mountains of people making big money at a hedge fund or fancy law firm are making less than lots (many/most?) quality solo and small-firm practitioners who went to a less-fancy school and therefore "lost out" on the big firm job. Because I have friends who went the "less prestigious" route, I know that I make roughly 50-60% less than they do, and I work 30-40% more, at the same seniority level. You tell me who is better off. Granted, we all started out at less prestigious schools, so it's unlikely (again, odds) that any of us will be President. But if you have any sense of the kid's life goals, you'll know whether this is an issue. Most everyone doesn't care.

Maybe this has been addressed already, but I will ask anyway.

So, the study supports the notion that pay scale is relatively even across the board regardless if an employee had gone to an elite school as opposed to a presumably more affordable school. Okay, that is a comparison of the two based on earning potential.

How about comparing the two based on the chance of landing a job in the first place. I believe that would be called "employment rates." As far as I know, isn't this very common for colleges to calculate and even publicize?

I would think this is a very important consideration, perhaps even more so than pay scale.

The study says that the average pay is equal. So if someone had no pay, their 0 factors into the average. If you are suggesting that grads at the less expensive schools have a harder time finding employment, that means that more of them would have to have higher paying jobs than grads from the ivies. That's how the average is calculated.

Not necessarily. We would have to know how they conducted the survey. Perhaps they just go around to firms and say how many came from public colleges, and how many came from elites, and compare the two. In that case, which is very likely, they are not figuring in all the people who could not get jobs in the first place.

Or a hypothetical scenario: say that it takes a public institution grad an average or 18 months to find a job in his/her chosen field, but it takes an elite school grad 4 months. That would make a significant difference in their earnings even over a lifetime.

My bet is that elite shcool graduates are hired at a much higher percentage and more quickly than are non-elite graduates. But again, this is conjecture without knowing the limits and protocol of the study.

HOME...

EQUITY...

LOANS!

This one is easy. Put $1,000,000 in the market and at 7-8% average gain per year you can use the investment income to pay the college bills. If you need more, just invest more. There is no limit.

Juice Springsteen wrote:

HOME...

EQUITY...

LOANS!

^^^ NO!

Invest wrote:

This one is easy. Put $1,000,000 in the market and at 7-8% average gain per year you can use the investment income to pay the college bills. If you need more, just invest more. There is no limit.

1: Markets fluctuate, so while you might be lucky enough to average 7 or 8% over the long term, in the four years of the college term, it could lose a lot, and you would have to withdraw, locking in the loss becuase you need the money right away. Bad idea, and any financial investor will discourage you from this strategy because your "investment horizon" is too short.

2: Taxes. You better figure $1.2 mill. if you want $70 K after taxes, assuming you are lucky enough to actually make 7%.

3: If that is your intent, most 529 Plans will allow you to do that within a tax deferred shelter, except that there are max. limits, of which $1 million in a year is probably too much (can't remember off-hand).

And of course, many people don't have that kind of capital to invest, and if they did, perhaps they should be investing in their retirement first, which is a common investment advisory.

If your going to get taxed for capital gains, you should try to net more like 10% per year. Ask your advisor how to get that extra 2-3% bump.

Invest wrote:

If your going to get taxed for capital gains, you should try to net more like 10% per year. Ask your advisor how to get that extra 2-3% bump.

Long term capital gains rate verse short term cap. gains rate. That's all I know about and I don't have a tax advisor,

seattle prattle wrote:

Invest wrote:

If your going to get taxed for capital gains, you should try to net more like 10% per year. Ask your advisor how to get that extra 2-3% bump.

Long term capital gains rate verse short term cap. gains rate. That's all I know about and I don't have a tax advisor,

Agreed. Better to make more in the market so you have a cushion. Upping the initial investment to $1.2m and averaging 10% gain seems more sensible. Remember, a $70,000 tuition is just the start. There are dorms and books and other fees.

True that.

But as a slightly different approach, I believe i posted earlier, at least some schools, my son's included, allows payment of all four years as one upfront lump sum payment, thereby locking in this year's tuition rate for the duration of the four years. That is like locking in a 3.5 to 4% rate of return (the usual rate of tuition increases each year) in so doing. Yes, that is less than one might make in the market, but it is not subject to chance nor market fluctuations - it is guaranteed, done, locked in.

This is for tuition and room and board only.

Sounds like a good deal to me.

seattle prattle wrote:

True that.

But as a slightly different approach, I believe i posted earlier, at least some schools, my son's included, allows payment of all four years as one upfront lump sum payment, thereby locking in this year's tuition rate for the duration of the four years. That is like locking in a 3.5 to 4% rate of return (the usual rate of tuition increases each year) in so doing. Yes, that is less than one might make in the market, but it is not subject to chance nor market fluctuations - it is guaranteed, done, locked in.

This is for tuition and room and board only.

Sounds like a good deal to me.

Good point. That way you would only need to make about 6% in the market to make up the difference. I hope the OP is still following this thread so they can start investing that $1m principle now to get a head start.