College Costs: Part 1. Things Don't Turn Out You Way You Planned

We have two kids.  The first one completed her Sophomore Year at USC. The second one is going to college this fall.
As parents, we planned for our daughters college for quite some time.  As immigrants to this country, and as children of immigrants, my husband and I had pretty similar paths to college.  Our parents, raised in the turmoil of war and revolution in China, they were refugees uprooted from their home country. With no parents to guide them, our parents did what most Chinese parents of their background planned for their kids:  They worked really hard, sacrificed a lot to give us the best education they could muster and did everything they could to give us what they didn't have: a college education so we can have a leg up in the American society. As teenage immigrants, we executed what was planned for us: studied extremely hard to get into the best college we could, and our parents promised to paid for it.
So what was the result? My sisters and I attended the Wellesley College for our bachelors degree.  I went on to Columbia University for a masters, and to UCLA for Law School.  One of my sisters received a masters from John Hopkins, the other from Boston University.  My husband attended U.C. Berkeley and Yale University for architecture.  His brother attended Stanford University. Back then, we all received some kind of partial or full scholarship, with some financial aid.  Our parents paid for the rest proudly and willingly. It was not so bad financially given that tuition was only a fraction of the cost these days. They enjoyed the bragging rights to claim that their kids attended top universities in the United States. I remember that my attendance at Wellesley was about $7000 per year and my parents paid for a portion of the tuition, and I had financial aid, scholarships and work study to cover most of it.
As immigrants, my parents had some savings, but coming to this country, it wasn't easy for my dad to find a job in his profession of telecommunications engineering.  He supplemented our family savings by opening a restaurant and later a motel. The money wasn't much, but was enough to give him and my mom enough work credits so qualify for Medicare when they reached retirement age.
Now it's time for us to plan for our daughters' education. We wanted to be able to do the same for them what our parents did for us.  After all, we are earning more than our parents ever did, right? The expectation was high for our kids to excel. We want to be able to pay for them to attend a top university, and all they needed to do was to excel academically and get into a top university.
My husband and I, through our careers, were able to earn a comfortable income.  We are definitely upper middle class, but not super wealthy.  We own a home, but a modest one by most standards and we saved money early to pay for our kids college education. But as the years went by, the cost of a college education just kept skyrocketing. All of a sudden, we find the cost of financing our kids college difficult even with our savings. If we look at a four year college education at one of the elite private universities that we attended, the cost would be close to $70,000 a year with room and board and incidentals.
The situation with these top schools is they they are infuriatingly "need based" only, so they do not give out merit based scholarships to academically talented students at all, so the years of asking our kids to do well in high school  in order to get into a good college does nothing to help them get any scholarships whatsoever to attend those elite universities. When we filled out the FAFSA application for financial aid, we found that our kids don't qualify for much scholarships or grants at all, although we do qualify for $5500 in loans.  The loans at 7% interest rate is barely worth considering because we can take out a home equity line of credit with a far lower interest rate.
Even if we were willing to bite the bullet, sacrifice our retirement savings, take on more loans, four years of sacrificing to send our kids to those "elite colleges" would cost $280,000 for one kid, and for two kids, it would be $560,000.  I'm not sure what middle class family can afford this expense without assistance, and at a time when we are getting close to retirement age, is it prudent at all?
Also, the idea of going to college "just to explore" is less of a reason to go to college than to learn marketable skills that will help them get a job that provides a living wage. If our kids studied a subject that is not marketable, graduate and cannot make a living, is a college education really worth this kind of ruinous expense? Would it be better that we saved the half a million dollars to help them and ourselves later?
With the social support network diminishing in America, having a marketable skill is not just required to get ahead, but also essential to stay afloat as a responsible and contributing citizen.
Read the next installment about how our family worked with our kids to send them to college, and what unexpected paths they chose.