When Your Middle Schooler Wants to Go to Harvard: What Now?
I have a friend who was left speechless when her 12-year-old unexpectedly announced she wanted to go to Harvard. I bet you can imagine what she was thinking, “Oh boy, how are we going to pay for that!” If this were your kid, you might be thrilled, or you might be in shock. Either way, middle school is the right time to get your financial strategy in order.
Take a Financial Inventory
You may have already been saving for college. Take that number, divide it by 4, and you have your baseline for what you can afford for yearly tuition. If you have saved $40,000, and your parents have saved $20,000, you have a total of $60,000 to spend over 4 years or $15,000 a year. Any amount over that will have to be:
1. Found in your monthly cash flow,
2. Borrowed or
3. Replaced with merit or need based aid (or both).
Get Honest About the Costs with Your Child
Middle schoolers are old enough to have conversations about paying for college. If your child has expressed an interest in any particular school, explore that school’s website with them and find the cost of attendance.
Some elite universities have crossed the $100,000 a year total all-in cost (tuition, room and board, travel, other expenses). But will you pay that? By using a net price calculator on the school’s website, you can get an estimate of how much aid you would likely receive.
Elite schools do have large endowments and are able to offer generous need-based financial aid. You may find that you qualify for more aid than you think. An elite college might even end up being cheaper than a state school for your child!
If full price isn't realistic for your household budget, now is a good time to have that honest conversation about what it would take to pay for this school
Understand "Merit" vs. "Need-Based" Aid
This is the biggest financial trap for parents of high-achieving kids: The Ivy League does not offer merit-based academic or athletic scholarships. Every dollar of aid from an Ivy is based on family income and assets. If your family earns too much to qualify for need-based aid, you will be expected to pay full price.
Knowing this in advance will save your child from heartbreak down the road. If full price isn't realistic for your household budget, now is a good time to have that honest conversation about what it would take to pay for this school: extra work applying for scholarships and borrowing both from private and public sources.
You could also steer your child toward top-tier private schools that do offer merit scholarships for top applicants. Schools do list their policies on their financial aid websites, and if you have questions, call or email the school’s aid office.
Contribute to Your 529 Plan
If you haven't started a 529, it isn't too late. The tax-free growth and tax-free withdrawals for qualified education expenses make it one of the best tools in your arsenal.
Some states (like Vermont) offer tax credits when parents save in the state 529 plan. Tax credits reduce your taxes owed dollar for dollar. I always encourage parents to take advantage of these incentives and not leave money on the table.
If you are worried that you are locking up your money by putting it in a 529, know that there are even more options available for any leftover money.
Your middle schooler’s job is to stay curious, build great study habits, and explore what interests or excites them. Your job is to set up a financial structure so that when that acceptance letter arrives, it's a moment of celebration for all.
Closing
You don't have to figure out how to help your child achieve their college dreams on your own. Get the free College Cost Calculator by Fulla Financial or schedule an initial consult with your wealth advisor.
