What is the best way to help our children for college?

[quilter]

I know this is probably a separate thread but I'm curious as to how many people expect their kids to go to college rather than take some other path? Seems to be a common thing to just assume your kids will go to college as well as assume that the parents will pay for a large portion of it of they can. I don't have kids (and didn't have parents who could pay for my college) so it was never something that entered my mind.

I have 2 children who are still fairly young.  I have no idea if they will or will not go to college.  I am all to aware that for some kids college is not really worth it, especially now that many students have the option of vo-tech high schools that prepare kids to enter a trade upon graduating.  My kids are young enough that I do not know where their talents are and they do not have an idea as to what they want to do.  If they chose college, great, if they don't that's fine as well.  My son, whose 6, already know that if he goes to college he will have to pay for it(as I and my husband did), so when he is older, it will be no surprise to him.  My current issue is trying to figure out what to do with the little bit of money they have, so they can get the best returns.  I do not think 529 plans are what we want as we have no idea about them going to college, so for now it is just doing nothing in a savings account.

For their benefit, you do not want to put it in anything that resembles an account in their name.  If they go to college, colleges will take it all.  If they don't, then you could just give it back to them.  Invest it in your name, preferably in a retirement account.

I don't get this. Don't you save for college to pay for college?  Our retirement is fully funded way to excess. Why would I not do everything I can to avoid having my grandkids take loans?  Do you really think that colleges are going to magically find tons of money to give out in scholarships?  If they did all these people who post on here about their sometimes over $100,000 loans would instead have gotten gifts from the school

I have two nieces who got stellar grades, stellar sat's and lots of activities. The family could contribute little.  Yes the colleges said they will give them an aid package. There were some grants, work study and they have lots of loans.   

[BZB]

Personally I'm putting money into a 529 and planning to talk up community college for the core curriculum. I'd also like my kid to do career exploration and job shadowing starting in middle school and continuing through high school. The tangent responses to this thread (about how to prepare your kid for life in general) reminded me of this thread: http://forum.mrmoneymustache.com/off-topic/another-chance-to-teach-my-kid-stuff/msg127225/#msg127225.  You might find it interesting, although it doesn't specifically address your question about helping children for college.

[avonlea]

I know this is probably a separate thread but I'm curious as to how many people expect their kids to go to college rather than take some other path? Seems to be a common thing to just assume your kids will go to college as well as assume that the parents will pay for a large portion of it of they can. I don't have kids (and didn't have parents who could pay for my college) so it was never something that entered my mind.

I have 2 children who are still fairly young.  I have no idea if they will or will not go to college.  I am all to aware that for some kids college is not really worth it, especially now that many students have the option of vo-tech high schools that prepare kids to enter a trade upon graduating.  My kids are young enough that I do not know where their talents are and they do not have an idea as to what they want to do.  If they chose college, great, if they don't that's fine as well.  My son, whose 6, already know that if he goes to college he will have to pay for it(as I and my husband did), so when he is older, it will be no surprise to him.  My current issue is trying to figure out what to do with the little bit of money they have, so they can get the best returns.  I do not think 529 plans are what we want as we have no idea about them going to college, so for now it is just doing nothing in a savings account.

For their benefit, you do not want to put it in anything that resembles an account in their name.  If they go to college, colleges will take it all.  If they don't, then you could just give it back to them.  Invest it in your name, preferably in a retirement account.

I don't get this. Don't you save for college to pay for college?  Our retirement is fully funded way to excess. Why would I not do everything I can to avoid having my grandkids take loans?  Do you really think that colleges are going to magically find tons of money to give out in scholarships?  If they did all these people who post on here about their sometimes over $100,000 loans would instead have gotten gifts from the school

I have two nieces who got stellar grades, stellar sat's and lots of activities. The family could contribute little.  Yes the colleges said they will give them an aid package. There were some grants, work study and they have lots of loans.

I think he might be referring to the efc calculation.

[MrsPete]

I don't get this. Don't you save for college to pay for college?

The poster didn't mean don't save for college -- he or she meant keep the money in your name, not your kids' names.  The reasoning is sound:  If you're going to qualify for any federal money or other need-based scholarships, "they" will expect ALL of the student's savings to go towards paying college tuition, whereas the scholarship people expect a smaller proportion of the parents' assets to go towards the child's college. 

In reality, however, this doesn't make any difference.  If you are middle class, you're not going to qualify for any financial aid.  In my experience, a whole lot of people THINK they're going to qualify for at least some aid, and then most don't. 

A better reason to keep your savings in your own name is that even the most responsible 18-year old can believe that a fairly small college account is going to stretch farther than it really will, and while I am very happy to pay my child's college tuition, I am not willing to see the money for which I scraped and saved become the downpayment for a sports car or a spring break trip.  Yet if it's in the child's name, he or she could rationalize, "Oh, Mom and Dad have saved $$$ -- that's plenty for me to have ___ now and still pay my tuition!"  Or, "I'll take out this much now, and I'll earn it back in time to pay my tuition." 

IMO, if they are too young to accept the financial burden at 18 then they probably aren't ready for college.   I also believe a great many students would be much better off spending four or five years "finding themselves" then going to college, at which time they are ready for college, as well as the financial burdens.

You're mixing two thoughts here: 

1.  All 18-year olds aren't ready academically or emotionally for college. 
2.  College is expensive, and someone's gotta pay for it. 

They are two separate topics. 

If your 18-year old isn't ready for college, #2 doesn't matter.  If he or she isn't ready for rigorous coursework or isn't clear on the usefulness of the degree, then no one should be paying.

However, I can't buy into the idea that I should push the financial burden of college entirely onto my child.  My husband and I earn the cost of a semester's college (tuition, housing, everything) in less than a month.  We do live in a low cost area, and our college expenses are lower than average.  To earn that same amount, my daughter -- even though she's working at more than minimum wage -- would have to put in many, many more hours.  This would delay her graduation and would increase the years she'd be working at this lower income level.  She "gets it" and is nothing but appreciative and hard working.  It's much more efficient for us to pay and see her out in the professional world sooner. 

I'm sorry if people have taken my comments as some kind of attack of liberal education.    I'm simply looking at it in a dollars and cents perspective.     The non-marketable value of education is for each individual to determine.   

I wouldn't pay for a degree that was "non-marketable".  My daughter is studying to be a nurse.  From a dollars-and-cents perspective, she's doing exactly the right thing:  She's earning a degree at a young age, so she'll be able to work and earn a decent paycheck.  She's going into a field that will always be needed and a field in which work is available everywhere.

I know this is probably a separate thread but I'm curious as to how many people expect their kids to go to college rather than take some other path? Seems to be a common thing to just assume your kids will go to college as well as assume that the parents will pay for a large portion of it of they can. I don't have kids (and didn't have parents who could pay for my college) so it was never something that entered my mind.

My husband and I both have college degrees, and it is our goal for our kids.  We've never said "If you go to college", only "When you go to college", and we've pushed them academically, nurtured their interests, and helped them explore careers -- so that this is a reality for them.  I'm not saying that it's the right path for everyone, but it is the right path for my kids. 

[SDREMNGR]

I don't get this. Don't you save for college to pay for college?  Our retirement is fully funded way to excess. Why would I not do everything I can to avoid having my grandkids take loans?  Do you really think that colleges are going to magically find tons of money to give out in scholarships?  If they did all these people who post on here about their sometimes over $100,000 loans would instead have gotten gifts from the school

I have two nieces who got stellar grades, stellar sat's and lots of activities. The family could contribute little.  Yes the colleges said they will give them an aid package. There were some grants, work study and they have lots of loans.

If you put your money in your retirement accounts, college's calculation formulas do not demand as high a contribution percentage as it does from accounts such as 529s that are designated for the child's education.  This just helps the financial aid calculations in the child's favor.  Then if you want to contribute more than you are "supposed to" by the college's calculations, you may do so at your choice.  Also, IRAs have exemptions for withdraws for education purposes that are penalty free.

So if you have room to invest in your retirement accounts, it's smarter to put your money there.  If you have already maxed out all of your own retirement accounts and have money left over, then you are welcome to invest in 529s.  But it's not advisable to do so until your own retirement accounts are maxed out.

As for your nieces, I don't know their particulars and why they didn't qualify for aid / grants.  But there are a small number of colleges in the U.S. that are completely need blind and if your kid can get in and you are poor, you struck gold because they are getting a nearly free ride.  I'm talking Harvard, Yale, Stanford, etc.  The ones with gigantic endowments.  Then there are many other private and state colleges with specific scholarships that also give full rides.  Often these are merit based and for particular majors or for meeting some state criteria.  Then there are the athletic ones.  Also great if you are stellar in athletics.  So there are a lot of ways to get in and through college free or nearly free.  Working a low paying side job as a young adult is not particularly the smartest way to fund a college education.  In fact, excelling in high school academically or athletically is often the best bang for the buck.

[Latwell]

Never pay your children the tuition and expect them to give the tuition to the school.

True story:
Parents gave my past coworker well over a hundred grand for their son to go to college. Instead of paying the school directly, I just told them how much it was or would them a bill and they would pay the amount on the bill but give him a check to his name.

He ended up taking the money to Atlantic city and gambling it all away he even dropped out of college without them knowing because he lost all the money. He then "transferred" to another school so they would pay even more.

He had a bad gambling problem and practically living out of the trunk of his car. He took a job as a teller with us just so he could get even more money to gamble. He also believed to live comfortable you HAVE to make 6 figures.

Sorry for the horror story.

[phred]

but he regrets the lack of the four-year degree and the chance to learn more broadly about the world.

that's why we have public libraries where one can go wherever their heart and mind takes them.  At college all you will get is a narrow slice tainted by the leanings or agenda of the instructor or his department.

To learn more broadly of the present world go visit it.  Spend a month or a season living elsewhere as a native would instead of as a tourist or semester abroadie would

[phred]

What is the best way to help your child for college?  I find it hilarious that all the answers concern money.

Looking back on my own uni days, and those of my friends, we (at least some of us) wished we knew how to balance a checkbook and plan and keep to a personal budget. 

We wish we had had jobs in high school even if our parents were filthy rich. Keeping a job might have given us needed discipline to prevail in a class even if we couldn't stand the teacher and thought him a buffoon.  Job experience would also have given us something to relate to during those interviews for the all important summer internships.  Juggling high school classes and a job would have given us better time management skills so we could take a student research position without affecting the GPA.  Don't need the part-time money?  Commit to a volunteer position - something serious rather than a casual show up once in a while.

We wish we had some practical skills:  how to change a bike tire and repair a punctured inner tube, how to wash clothes - what color goes with what (and what's an iron?), some automobile skills such as how & when to check the oil, change a flat tire, put on a new wiper blade.

Lastly, if you are/were a 4.0 student in high school, understand that does not mean you are some kind of genius.  You may have been going to a (disguised) blue collar high school where you have/had no real scholastic competition.  In college you will be up against the real "A" students.  If you don't emotionally know how to deal with failure, your time at college may be brief.  At least take a study skills course; I liked summer at Cornell where I took the study skills course, and also learned my "A" grade papers in high school English were basically crap

[tmac]

What is the best way to help your child for college?  I find it hilarious that all the answers concern money.

Because reading comprehension.

Original post:

I've read and commented on several threads here about college tuition and how much help we got from our parents, etc.  I am thinking about this more and more because my wife and I are planning on having a child and I've been thinking about what is optimal way to save and provide for my kid's college tuition.

[Gin1984]

What is the best way to help your child for college?  I find it hilarious that all the answers concern money.

Looking back on my own uni days, and those of my friends, we (at least some of us) wished we knew how to balance a checkbook and plan and keep to a personal budget. 

We wish we had had jobs in high school even if our parents were filthy rich. Keeping a job might have given us needed discipline to prevail in a class even if we couldn't stand the teacher and thought him a buffoon.  Job experience would also have given us something to relate to during those interviews for the all important summer internships.  Juggling high school classes and a job would have given us better time management skills so we could take a student research position without affecting the GPA.  Don't need the part-time money?  Commit to a volunteer position - something serious rather than a casual show up once in a while.

We wish we had some practical skills:  how to change a bike tire and repair a punctured inner tube, how to wash clothes - what color goes with what (and what's an iron?), some automobile skills such as how & when to check the oil, change a flat tire, put on a new wiper blade.

Lastly, if you are/were a 4.0 student in high school, understand that does not mean you are some kind of genius.  You may have been going to a (disguised) blue collar high school where you have/had no real scholastic competition.  In college you will be up against the real "A" students.  If you don't emotionally know how to deal with failure, your time at college may be brief.  At least take a study skills course; I liked summer at Cornell where I took the study skills course, and also learned my "A" grade papers in high school English were basically crap

I found college to be the opposite.  My English 101 classes were easier than Junior year of high school.  Not one english class in college was harder than my senior year. 

[phred]

Because reading comprehension.

I went by the title "What is the best way to help our children for college? " because it is not always about the money