College Fund

[hello867]

I have a 3 year old and 1 year old and have about 60k in 529 accounts saved for them. It will grow through the years but will it be enough or do I need to add more? Would like to cover 4 years of college for each.


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[aceyou]

Hard to guess what higher education will look like and cost in 15 years.  If costs continue on the trend they are on now, then I would say no, you definitely don't have enough to cover two children's room and board for 4 years. 

However, a few things.  You don't have to cover 100% of their college.  My wife and I will likely be capable of covering 100% but both of us feel it would be better for our children if we only cover half.  That way they are motivated to seek out scholarships/grants, and get the grades to put themselves in the best position to get them.  And once they are in college, we feel they'll be less likely to blow money on stupid stuff if they see a direct connection between spending and debt. 

Also, there are other ways you could cover their tuition if it becomes needed.  You could use the principal of Roth IRA's, for example.  Or, you may just be able to float it with your income if you are still working.  You are on this site, so you are likely saving a large percentage of your income.  For a few years, you could just save less and divert some of that money towards their schooling without it effecting your lifestyle one bit.  Just a few ideas to think about. 

[hello867]

Really great points. We are open to just covering enough for a state school and they would have to do the extra for a private school. Also looking for scholarships will be a priority. Working through college is something we support as well.

We are at the last year or two working so we are just doing our last checks to see if everything is filled enough. Sounds like we need to pad it more. But how much more?


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[ender]

My biggest concern with college funding is 15-20 years from now we have no idea what college prices will be.

But if the market pushes their price down, the money you put into a 529 is "locked" and it's not that much of an advantage over a taxable investment (especially not over a 401k/IRA).

$60k is a lot for college costs. That's already about the cost of tuition and room/board for the university I went to.  What type of school do you want to send them to?

[ysette9]

You could also just accept that this is what you have and help your kids make the best of that money when the time comes, supplementing with current income at the time if you are able and feel it is appropriate. That is basically what my parents did. I spent two years at junior college and the transferred. My sister spent four years at junior college and tried on three majors before finding a good fit and transferring. I really love the freedom to test out the college waters in a low-cost and low-stakes way like junior college. It is easy on the budget and allows the kid (kid!!) time to mature and get a clue about what he/she wants to do.

[CheapScholar]

I work in Higher Ed.  Like others said, it's hard to know what the industry looks like in 15 years.  I, for one, do not see the massive revolution that some are predicting.  College is an experience and educational opportunity that a majority of Americans still want and want to provide for their children.  People complain because the price has gone up over the past few decades, but the truth is those costs are present because it's more expensive to provide the educational experience (rising faculty salaries, universities do more research, personnel that offer student club experiences and needed services, more security measures, I could go on and on).

My guess is that in 15 years a public 4 year education is maybe 15% higher than today (plus inflation) because state legislatures are providing less every year.  Privates will not rise as much.

Try to encourage your kids to get great SAT and ACT scores.  The wealthy privates have loads of cash and pretty much anyone who can get into those schools is taken care of.  I wouldn't be surprised if Harvard and Stanford are tuition free for undergrads in 15 years.

[Clean Shaven]

I have a 3 year old and 1 year old and have about 60k in 529 accounts saved for them. It will grow through the years but will it be enough or do I need to add more? Would like to cover 4 years of college for each.

Does your state have a program for prepaid tuition for the state college(s)?  Might want to look into that, if available.