How much do you plan to fund your child's college/university?

[MrThatsDifferent]

We’re asking financial creativity for costs approaching $200k now from 18 year olds that barely know anything about the world or finances and who rarely have jobs that earn more than poverty level. C’mon people.

$200K?

I live in a fairly sizeable Midwestern city.
Annual tuition at the local state school is $11K.
Students can attend 1 of 2 satellite schools for the first two years for $6K.

That’s at the top end for the Ivies, the most that anyone will pay currently. Also though, for some new parents, what will tuition be 18 years from now? Hell, if you want to be really Mustachian, have your kid learn German and send the kid there for a free university education. Honestly don’t care as long as the kid gets a degree without owing anyone a dime, that’s the singular goal.

[MrThatsDifferent]

Long before I had kids I always said I wanted to do what my parents did for me - tuition paid while I covered living expenses. They could have easily paid it all but it was a point of pride for me to pay for myself.

We are in Canada and tuition is a whole lot cheaper here. 4 year undergrad is just a bit over $7k/year. But with fees, let's say $8k. So $32k for 4 years. For safety, I budgeted and saved $40k each.

My DD19 has a small part time job. She gets about $5k/yr in scholarships and I returned all that money to her because I figure she earned it. She moved out for her second year and is responsible for all her living expenses and textbooks. Between her scholarships, her job and her savings from her job this past year, she should have no problems affording her lifestyle with an extra year's buffer from prior savings. 

I am actually surprised at the number of Mustachians who also pay living expenses. I see no reason why my kids can't cover their own living expenses with a part time job (and my kids don't get a lot of hours!).Ok - a part time job may not be enough to cover DD living on her own, but combined with savings from previous years and extra hours in the summer (she has not yet been able to get a fulltime job sadly), she has plenty for a frugal lifestyle.

She earns about $400-500/mo working about 8hrs a week (super part time IMO and way less than most of her friends make). I'd be horrified if she spent $500 a month for "play". Sure some would go to clothes, toiletries, transportation, etc. But IMO, that would be a very inflated lifestyle.

Then again, if it came to a conflict between part time job and extra credits at school or mental health and ability to study like @Laura33 brought up, I'd have no issues changing my tune and putting out more cash. I definitely do not want my children feeling extreme pressure to balance work and study.

I am a bit conflicted what to do with the leftover money. DS is in college (like community college in the US I guess?) so his fees are half of what DDs cost. I never planned to evenly split the money - just to pay tuition for each kid for whatever they choose and then pocket the rest. But with their choosing such different paths, the $$ difference is greater. I don't know about giving them some of the excess savings though. In my mind, this is my money, not their money and I'm ok with padding my FIRE stash a bit more.

Sent from my VCE-AL00 using Tapatalk

I agree, you don’t owe them the money, you owe them a debt free education. Mission accomplished! Enjoy your money however you wish.

[secondcor521]

I thought I would point out this resource to people who are interested in college prices:

https://research.collegeboard.org/trends/college-pricing

It's done by the College Board (people who do the SAT), seems to be updated every fall, and has loads of detailed numbers for people.

I used it as a proxy for how much to save for college as well as what the college inflation rate was doing.  I also use it to equalize how I distribute leftover college funds to my three kids - it helps me adjust for the fact that my DS25's freshman year cost less than my DD18's senior year will due to college cost inflation.

[Runrooster]

We’re asking financial creativity for costs approaching $200k now from 18 year olds that barely know anything about the world or finances and who rarely have jobs that earn more than poverty level. C’mon people.

That’s at the top end for the Ivies, the most that anyone will pay currently. Also though, for some new parents, what will tuition be 18 years from now? Hell, if you want to be really Mustachian, have your kid learn German and send the kid there for a free university education. Honestly don’t care as long as the kid gets a degree without owing anyone a dime, that’s the singular goal.

My niece is paying $80K including room and board for Duke this year, which will be $320K if she goes 4 years, $400K if she goes 5.

[StarBright]

We’re asking financial creativity for costs approaching $200k now from 18 year olds that barely know anything about the world or finances and who rarely have jobs that earn more than poverty level. C’mon people.

That’s at the top end for the Ivies, the most that anyone will pay currently. Also though, for some new parents, what will tuition be 18 years from now? Hell, if you want to be really Mustachian, have your kid learn German and send the kid there for a free university education. Honestly don’t care as long as the kid gets a degree without owing anyone a dime, that’s the singular goal.

My niece is paying $80K including room and board for Duke this year, which will be $320K if she goes 4 years, $400K if she goes 5.

Yep. I just checked my alma and room and board alone is 18k now. Tuition is in the mid 50s.  It is a highly ranked private school but not an Ivy.

[mm1970]

We’re asking financial creativity for costs approaching $200k now from 18 year olds that barely know anything about the world or finances and who rarely have jobs that earn more than poverty level. C’mon people.

That’s at the top end for the Ivies, the most that anyone will pay currently. Also though, for some new parents, what will tuition be 18 years from now? Hell, if you want to be really Mustachian, have your kid learn German and send the kid there for a free university education. Honestly don’t care as long as the kid gets a degree without owing anyone a dime, that’s the singular goal.

My niece is paying $80K including room and board for Duke this year, which will be $320K if she goes 4 years, $400K if she goes 5.

Yep. I just checked my alma and room and board alone is 18k now. Tuition is in the mid 50s.  It is a highly ranked private school but not an Ivy.

Same.

$200k isn't top tier ivies...I think he was referring to a typical state school for 4 years.  Our local state school is about $37k for a year, including room and board.  That's pretty typical. 

[MrThatsDifferent]

Oh, happy to be wrong and the numbers are actually much higher. Some were writing that $200k was way too much for an undergraduate degree. Seems about right. The point though is, we’re talking insane amounts of money, education dwarfing what many play for their homes (typically the most expensive purchases of someone’s life) and we’re expecting 18-22 year olds to pull this off well? These costs outstrip inflation and wage growth. Parents, you brought your kids into this world, your job isn’t done unless/until they have a viable qualification that doesn’t start their journey in debt. I will die on this hill.

[mm1970]

Oh, happy to be wrong and the numbers are actually much higher. Some were writing that $200k was way too much for an undergraduate degree. Seems about right. The point though is, we’re talking insane amounts of money, education dwarfing what many play for their homes (typically the most expensive purchases of someone’s life) and we’re expecting 18-22 year olds to pull this off well? These costs outstrip inflation and wage growth. Parents, you brought your kids into this world, your job isn’t done unless/until they have a viable qualification that doesn’t start their journey in debt. I will die on this hill.

I went to a private school that was expensive.  Many of my college classmates have kids in college or going, and the classmates complain about the cost of school nowadays and "I can't afford to send my kid there."

Which, #1, duh.  Cost for one year at my alma mater is now $77,000 all in.
But #2, um we were all in ROTC...so, news flash, ya parents couldn't afford to send you either.

The big difference being that the median family income to cost of 1 year ratio, back in 1988, was about 1.75.
The median family income to cost of 1 year ratio now, is 0.80.  That's a huge difference.

Anyway, we have too much money and make too much money to get any kind of need-based financial aid.  That does NOT mean we won't encourage our children to be fiscally responsible.  Choose wisely.  If you get scholarships or merit aid to attend a state school, maybe consider that instead of expecting your parents to fork out money for Stanford or Cornell (the actual schools that one of our couple-friends kids are attending).

[researcher1]

Oh, happy to be wrong and the numbers are actually much higher. Some were writing that $200k was way too much for an undergraduate degree. Seems about right. The point though is, we’re talking insane amounts of money, education dwarfing what many play for their homes and we’re expecting 18-22 year olds to pull this off well? Parents, you brought your kids into this world, your job isn’t done unless/until they have a viable qualification that doesn’t start their journey in debt. I will die on this hill.

You don't have to spend anywhere need $200K to get a reasonable college degree.

Lots (most) kids and parents spend WAY more than needed.
In the same way that many people will lease a ridiculously expensive car.

Earlier I quoted actual costs that come straight from the university's website in my area.
- Annual tuition at the local state school is $11K.
- Students can attend 1 of 2 satellite schools for the first year or two for $6K.

The kid can live at home and commute to class, eliminating over $12K in room/board per year.
Work on the weekends/summer to earn money.

[Chrissy]

Going back to the original question of how do we plan to do it...  Our kids are 2 & 4 years old right now.  We will have a pot of money for each child.  The goal is to be able to fund in-state undergrad.  With the right circumstances, it might fund private undergrad or grad school.  Anything left over will go to future grandchildren. 

At this moment in time, the total costs for Husband's alma-mater, in-state, is $31k/yr--tuition, housing, meal-plan, books, fees--slightly more than doubled what it was 20 years ago.  We have to think it might double again by the time our children attend.  So, that would be $240k per kid, without aid or scholarships.  We want to have half in the 529s and half in taxable or ROTH or something.  Now, hopefully, the costs won't double, and we'll be retired by that time, so the kids should be eligible for aid/scholarships, but... you never know.

We put $20k in the 529 the year each kid was born, and the year they were 1 for a total of $40k per kid.  With compound interest, it should reach $120k by college.  We'll figure out the other $120k at a later date.

[la Condessa]

We don’t want to give the kids a full ride (I think there’s a lot of benefit to students having skin in the game) but we would like to help them like our parents did, and make graduating debt-free without having to work full time during school terms attainable.  We would like to offer them up to the amount of tuition at our alma mater, for them to put towards their college or other career-training of choice, and they can cover anything over that and their living expenses. 

That’s significantly less than it sounds like (our school is a private, church-owned university that is highly ranked but far more affordable than most schools, at just under $6000 per year currently), but I’m not sure if it will be attainable.  Also, we don’t know at this time whether we will be launching four or eight kids into adulthood, as our foster kids’ future is up in the air.

[Michael in ABQ]

We have six kids and are a single-income family. There's simply no way we're going to be able to pay tens of thousands of dollars a year towards college for the oldest, let alone when we have 3-4 potentially in college at once.

I went to college about 15 years ago and certainly enjoyed myself there. I didn't work a part-time job other than being in the National Guard which was only one weekend a month and two weeks a year. I did deploy right at the beginning of my sophomore year so when I returned I was considered independent for financial aid and received a lot of grants and subsidized loans - after all I was a poor student making $4-5k/year from the National Guard and that was it. My parents paid for most of my first year with about $15k they had saved up - the original plan was $5k per year per kid and college at the time was probably about $12-15k/year all in.

For a lot of careers a college degree is a required box to be checked. But frankly, I don't consider it nearly as important as I once did. It's a credential and a signal. For the vast majority of people and jobs, a degree from a state school is equivalent to a private college costing 2-3x more. After your first job nobody cares about your GPA and by your second job most people don't really even care that much about college other than if you check the block. There are certainly exceptions, i.e. Goldman Sachs isn't hiring random business school graduates with a 3.2 GPA from Western Nebraska University - but then again they represent the 0.001% of jobs for college grads. If some of our kids want to start a business or learn a trade then we'll encourage that. A 4-year degree is not the only path to future success and it's really not for everyone.


All that being said, we will help our kids out somewhat, but it will be only a small fraction of what a college education will cost. A couple of our kids have already expressed a strong interest in the military, not surprising since I've been in the National Guard their entire lives. Plus their grandpa is retired military, my dad served his four years, three of their four uncles are retired military or still in the National Guard, etc. Our oldest is interested in a military service academy which would be a great opportunity for him - excellent education and you get paid to attend. Some of the rest may join the National Guard and get tuition assistance or potentially go active duty for a few years first. With the latter they will probably get a lot more out of college coming in at 22 compared to 18. I know in retrospect I could have gotten so much more out of it if I had been more mature and I was pretty mature already having complete basic training and a deployment. But there's no substitute for time and the older I get the more I realize how naïve and ignorant we are as teenagers/young adults.

I've still got a portion of my post 9/11 GI Bill which I transferred to my kids so that will cover about a year and change for one of them, including a stipend for books and a small housing allowance. As for the rest, it's going to be cash flow. We're doing alright for retirement but we still haven't bought a house and are paying for private school tuition now. There's no 529 plans or other big piles of cash waiting for them.

[BTDretire]

We’re asking financial creativity for costs approaching $200k now from 18 year olds that barely know anything about the world or finances and who rarely have jobs that earn more than poverty level. C’mon people.

$200K?

I live in a fairly sizeable Midwestern city.
Annual tuition at the local state school is $11K.
Students can attend 1 of 2 satellite schools for the first two years for $6K.

It can be more, my daughters tuition for dental school has been $60k to $68k per year, for 4 years. Thankfully, only 1-1/2 years of tuition to go.

[Steeze]

Son due March 2021. Will put 10k/yr in a 529 for 4 years and let it grow until he needs it. If we have a second kid they will split it. If I overshoot my FI goals then I will do more.

Just got a raise today, now we can fully fund the 529 (10k/yr) which is the max that is tax deductible in NY.

Now just need to figure out how to fund daycare in a year or two!