BOTC - US Lacrosse Community Forum Forums LACROSSE LIBRARY COLLEGE RESOURCES College Preparation : Financial Aid and Planning

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.)

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...

Best post I have seen on BOTC.

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.

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?

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.