I had a continuing education class in Durango last weekend, and we used it as a family day trip, treating ourselves to dinner at our idea of gourmet; Applebee’s. As we sat there waiting for our food, Jim was watching college football on the many TV’s that are scattered about this four star establishment.
Stanford was battling someone on one of the screens, and our daughter asked who was playing. Jim looked at her and said,
“That’s Stanford, where you are going to college.”
We kind of laughed since she doesn’t know Stanford from Pueblo Community College, but that got me to thinking. What if my kid does want to go to Stanford?
She is only 7, and I’m not a tiger Mom who has been planning her educational future from conception, but let’s just for a minute consider it as a possiblity. Could we do it, and would it make sense?
Could She Get Accepted?
Because I’m a
geek well rounded parent, I checked out some stats on getting accepted to Stanford University. We’ll assume today’s statistics because I have no idea what the next decade will bring.
For fall 2014,
There were 42,167 applicants, of which 2,145 or 5.1% were admitted.
73% of the admitted class had GPA’s of 4.0 or above.
95% of accepted applicants were in the top 10% of their class.
80% of those accepted scored over 700 on the math SAT’s, and 71% scored over 700 on critical reading SAT’s.
89% had a 30 or higher on the ACT.
Wow, if she wants to get in, she can never get below an A and has to have almost perfect test scores. With all that, she still has only has a 5% chance of getting in. That’s a lot of pressure!
How Much Does Stanford Cost?
Stanford does not offer a break in tuition for in state vs out of state, so everyone is in the same boat. According to collegecalc.org, the cost of tuition for 2014 at Stanford is $44,184. Add room and board, books, and fees and the cost per year averages $58,394. That makes a four year degree at Stanford ring in at $233,396!
Won’t You Get Financial Aid?
Well obviously if you’re smart enough to get into Stanford, you’ll probably get some scholarship money. Lower income students can also qualify for grants, which do not have to be repaid. For a family with an income of $48,000-$75,000, the net cost after scholarships and grants for this year was only $8,530, a very reasonable number if you ask me.
However, if parents earn an income over $110,000, the net price rises to $37,357. Just like with Obamacare, middle to high income earners are pretty much screwed when it comes to higher education at prestigious schools. I agree that $110,000 is a good salary in many parts of the country, but to pay a third of your annual income for college is crazy. What if you have two kids in college at the same time? I guess Mom and Dad can live in the car and eat canned soup if they want their children to have an ivy league education.
Can’t You Save Money In a 529 Plan?
We do have a 529 plan set up and have contributed off and on since our daughter was a few months old. For the last couple of years, we’ve consistently put in $200 a month and extra at the end of the year if it made sense. Still, with our continued rate of savings, when she’s 18 we will only have $50k-$60k IF we can average between 7-8% on the rate of returns.
Our daughter also has a Roth IRA. If we make her contribute a portion of whatever income she earns from future jobs, it might add up to around $30K when she is 18. I’d love to let her save that for a retirement nest egg, but we could use it for educational purposes if we must.
At today’s prices, she could almost afford a Stanford degree. I really don’t think parents are on the hook for the full cost of a college education, but I want to help as much as possible. She would have to come up with an extra $60,000 in student loans or we could sell one of our rental properties if we really didn’t want her to be burdened with the full amount of debt.
How Much Is It Going To Cost in The Future?
My daughter will graduate from high school in 11 years. Estimated costs of tuition and other expenses for Stanford in 2024 are $102,413 or a massive, whopping, lifetime burdening amount of $409,653 for a four year bachelor’s degree. We better hope she finds a billionaire’s son to marry while she’s there because I can’t think of a single bachelor’s degree that averages enough start up salary to pay off the amount of money she would owe after graduation
This is the truly sad part of the story for me. Even if my kid is exceptional enough to get into Stanford or another Ivy League school, we could never afford it. Yes, we are considered top earners, but there is no way we can pay that much for a college education, and I would almost lock her in her room before I’d let her borrow that much money.
It’s a sad world we live in where only the uber rich and people in poverty can afford to send their kids to a prestigious school.
The Bright Side
There is a silver lining. The good news is that you don’t have to go to Stanford or any fancy school to have a decent career. Jim and I both went to state schools, and I can think of several occupations where you don’t even need a traditional college degree to do well financially. In 11 years, there might be more online options for education. Maybe the traditional four year degree will become a thing of the past. I can remember having to take two PE classes, library, sociology, and music appreciation in college, none of which helped me earn a degree. Maybe with skyrocketing costs, students will someday be allowed to take only what’s necessary for the career they want.
Our kiddo has no idea what she wants to be when she grows up, and I wouldn’t expect her to at age 7. Today it’s a veterinarian. Tomorrow it might be a ballerina. As she gets older and has more wits about the future, we can have an honest and open dialogue about careers, how much she might earn, and what the cost of a degree might be. We hopefully won’t decide based on emotion.
I will admit that if our daughter does turn out to be Stanford material, and she decides she wants to be President of the United States, I would have a hard time telling her she can’t because of money. I do sometimes worry that even though we plan and try and save, it still might not be enough. Even though I want to retire in 10 years, I could keep on working if it means the difference between affording college or not. While it’s pretty unlikely we’ll have to worry about such a scenario, I guess I’ll make sure to hustle as much as possible just in case!
What are your thoughts on the cost of a college education now or in the future? Do you really think it will cost over $400,000 to go to school in the next decade?
Image: Wikipedia Commons