Author Topic: RE or kids college  (Read 8483 times)

kevj1085

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RE or kids college
« on: January 27, 2017, 06:36:54 AM »
Basically I have calculated it out and if my wife and I can pay off our mortgage in 5 more years she could retire and I could work 20-30 hours a week at a low key job. We would both be 36.

Dilemma is we have 2 kids age 3 and 1, and I really would like to pay for their colleges. This would easily imply we would need to work both full time (we are teachers and alone don't make a ton). How many people here plan to pay for their kids colleges? Everything else in our life points to being able to retire early except for this.

Heroes821

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Re: RE or kids college
« Reply #1 on: January 27, 2017, 06:43:10 AM »
Speaking from my personal experience only. I'm glad my parents didn't pay for my college. I would of squandered the time and money. College was not my solution after high school even though my parents told me my entire life that I had to go to college.

Having something set aside to help with trade school, or any hardships found in military service or whatever might be a good idea, but your kids might not choose to go to college.

mad9q

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Re: RE or kids college
« Reply #2 on: January 27, 2017, 06:48:26 AM »
We are in a similar situation except we are older and have more kids (5).   Having struggled with student loan debt myself, I absolutely want my kids to avoid debt.  So we will continue working to pay for college.  We are also prioritizing college savings over our mortgage.  My hope is that the older ones will get scholarships and we can transfer some of their savings and then retire.  We will see.   

Lucky Girl

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Re: RE or kids college
« Reply #3 on: January 27, 2017, 06:59:51 AM »
Seems to me this doesn't have to be an either/or decision.  Why not both work one extra year (or two), and use that final year to grow the college fund?  You don't have to completely cover college expenses, but you can put something away that will help.

We have a dollar goal on the college fund for our kids, and have projected out that we will roughly hit it (including investment returns) by the time they get to 18.  If the fund is a bit short, they'll need to hustle more/take more loans.  DH and I both had similar arrangements for college--tuition was mostly paid for (I had some loans), but we had to cover our own room and board for the last two years, and all spending money.  We both worked all through college, and I was also an RA.  There was some merit scholarship involved as well.

College expenses are a bit of a racket these days anyway.  People who work just to save for college are basically funding the college tuition arms race.  There is absolutely no reason for college to cost as much as it does, except that people are willing to pay for it!

Captain FIRE

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Re: RE or kids college
« Reply #4 on: January 27, 2017, 07:16:43 AM »
In reading, I was expecting you to say you'd be 50/55 or so by your projected retirement date.  But your projected retirement date is only 36!  You can absolutely "retire early" and still pay for part or all of your kids schooling, particularly because the kids are so young right now that savings will really have a chance to grow.  (Read up on Arebelspy's journal - two public school teachers that retired early around age 30.  It can be done, despite a lower salary than others.  And at 36, you are already ahead of me.)  Working just 1-2 extra years would like give the kids a substantial boost in college savings.  If you get a state 529 deduction, consider maxing it out.  If, however, the answer is you don't want to save for them, that's a different matter.

I'd suggest reading this thread if you want insight on how other ER folks are handling it: http://forum.mrmoneymustache.com/mini-money-mustaches/how-much-do-you-put-away-for-college-each-month/

My husband and I haven't yet decide how much we'll save.  We likely will save more than the average MMMer because he feels he was really helped by his mom early in life while in grad school, which boosted him on his road to FI.  He sees college debt as crippling, and we both see value in private colleges having attended one.  (This differs from a lot of people on this board, who see little to no added value in attending an ivy league college over the state one.)  Education is very important to both of us.  That said, I don't want to pay for all of it, because I think the child should have some skin in the game, incentive to get scholarships, and hold jobs which can resume build.  My parents paid 1/3 of my college, 0 of my grad school (but their income caused me to be ineligible for financial aid scholarships, which was frustrating, as I had been independent for 3 years by the time I went).  DH qualified for a substantial chunk of college financial aid, so he only had to pay back about 10% or so, and he had a grad school stipend.

MommyCake

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Re: RE or kids college
« Reply #5 on: January 27, 2017, 07:20:31 AM »
Why not save enough to cover SOME of the cost?  Your children may not expect you to pay for everything, especially if you start the conversations about it early.  We plan to pay for college for our daughter (and the next baby should we have one) but not housing/room & board.  Depending on the school/program, college could cost anywhere from 30 to 300k or more.  Saving a portion of this cost is doable.  Working one extra year as Lucky Girl said is a great idea, even though you don't make a ton you will be able to save a good amount in a year once you're already FI.

boarder42

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Re: RE or kids college
« Reply #6 on: January 27, 2017, 07:24:47 AM »
not paying off your mortgage and investing instead. would likely create enough capital that you could cover your kids college.

teen persuasion

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Re: RE or kids college
« Reply #7 on: January 27, 2017, 07:44:55 AM »
Have you looked at the FAFSA EFC calculations?  Google "EFC formulas 2017-18" and run thru the calculation.  This will show you that there are sweet spots in the income curve, especially for mustachians with a relatively low expense level.

We have 5 kids, and did not save for college - we've been focused on saving for retirement and paying down our high rate mortgage.  For the FAFSA, primary residence and retirement accounts are ignored as assets.  The EFC formulas are more advantageous to larger family sizes - higher income protection factors for more members of the family.  The difficulty is that the charts and cutoffs for certain nice options keep moving. So while we could easily make the $29-32k AGI limit for an auto EFC = 0 when DD1 began college, it was impossible to hit when the limit was retroactively dropped to $23k a few years later.  Family size at the time kept us at calculated EFC close to zero then.  The challenging part will be a few years from now when DS5 is effectively an only child, and if we are not yet FIRE DH and I have a greater income than a decade earlier.

So I am watching the formulas evolve, timing changes (recent switch to prior-prior year's tax info reporting shifted things one year earlier), changes to college payment options (my state governor is promoting free tuition, but details are few yet), and the interplay of FAFSA and FIRE (complicated).  Kids 1 and 2 are out of college, kids 3 and 4 are in now, DS5 is MS so has a time to wait.  To date, we've had zero or nearly zero EFC for all, but everything changes based on this tax year for DS4's senior college year (he's a freshman now).  I don't think we will still be eligible for the Simplified Needs Test (ignores assets) unless they add more ways to be eligible (we fell off reduced lunch with fewer kids, and can't file 1040A due to HSA).  For DS5 it may make sense to drop to one paycheck and coast to FIRE while filing FAFSAs.  Converting tIRAs to Roth may have to wait - the increased taxable income skews your AGI and thus EFC.  Withdrawals from Roth IRAs also skew EFC, despite being tax free.

So do your research on how EFC is calculated, what income/asset sources affect it (currently, income more than assets, over certain thresholds) and try to project where you will be when filing the FAFSA.  Realize everything is apt to change to some degree.  If you can frontload retirement, you may be able to back off on retirement savings during college years and cash flow college expenses instead, if you haven't quite reached FIRE and a lower AGI.

Iplawyer

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Re: RE or kids college
« Reply #8 on: January 27, 2017, 07:52:51 AM »
I don't remember when it because a requirement for parents to pay for college.  First - raise your kids to know they have to pay their own way.  Stress doing really well in school so that they can take AP classes.  Sometimes community colleges offer dual high school and college credit courses like a state history class.  Make sure your kids capitalize on these tuition free opportunities.  They could easily start with 60 college credits this way.  If they don't - they should live at home and go to community college for those first 60 credits unless they get scholarships or non-loan based financial assistance to go elsewhere.  In any case - that leaves only two years at a state university - and those are typically pretty well priced.  In any case - if your kids live in the dorm and don't borrow money for trips to Europe and other things over spring break and they work during the summer for spending money - they should graduate with very little debt and "skin in the game."  NOBODY HAS to take out big loans for school.  And part of avoiding that is parents teaching kids that private university is not a "need" but a "want" and if they want it they'll take on the financial burden of it.  I personally don't think it makes a difference anyway unless you went to high school at the likes of Sidwell (where Sasha currently goes).

teen persuasion

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Re: RE or kids college
« Reply #9 on: January 27, 2017, 08:07:08 AM »
I don't remember when it because a requirement for parents to pay for college.  First - raise your kids to know they have to pay their own way.  Stress doing really well in school so that they can take AP classes.  Sometimes community colleges offer dual high school and college credit courses like a state history class.  Make sure your kids capitalize on these tuition free opportunities.  They could easily start with 60 college credits this way.  If they don't - they should live at home and go to community college for those first 60 credits unless they get scholarships or non-loan based financial assistance to go elsewhere.  In any case - that leaves only two years at a state university - and those are typically pretty well priced.  In any case - if kids live in the dorm and don't borrow money for trips to Europe and other things over spring break and they work during the summer for spending money - they should graduate with very little debt and "skin in the game."  NOBODY HAS to take out big loans for school.  And part of avoiding that is parents teaching kids that private university is not a "need" but a "want" and if they want it they'll take on the financial burden of it.  I personally don't think it makes a difference anyway unless you went to high school at the likes of Sidwell (where Sasha currently goes).

Have to comment on the section I bolded above: the cost of living in the dorms (and the required meal plan) can be the deal breaker in college costs.  My two kids currently in college are attending excellent state universities, and tuition is $6k something.  Fees bring it to below $9k.  TAP (state) + PELL (fed) at EFC = 0 would cover this completely.  However, R&B exceed $12k per year.  The older kids have all learned how outrageous on-campus housing is, and eventually pursued other options with friends and no meal plan to cut costs way down.  Unfortunately, we are just too far from any colleges to allow living at home to be an option.

boarder42

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Re: RE or kids college
« Reply #10 on: January 27, 2017, 08:12:48 AM »
I don't remember when it because a requirement for parents to pay for college.  First - raise your kids to know they have to pay their own way.  Stress doing really well in school so that they can take AP classes.  Sometimes community colleges offer dual high school and college credit courses like a state history class.  Make sure your kids capitalize on these tuition free opportunities.  They could easily start with 60 college credits this way.  If they don't - they should live at home and go to community college for those first 60 credits unless they get scholarships or non-loan based financial assistance to go elsewhere.  In any case - that leaves only two years at a state university - and those are typically pretty well priced.  In any case - if kids live in the dorm and don't borrow money for trips to Europe and other things over spring break and they work during the summer for spending money - they should graduate with very little debt and "skin in the game."  NOBODY HAS to take out big loans for school.  And part of avoiding that is parents teaching kids that private university is not a "need" but a "want" and if they want it they'll take on the financial burden of it.  I personally don't think it makes a difference anyway unless you went to high school at the likes of Sidwell (where Sasha currently goes).

Have to comment on the section I bolded above: the cost of living in the dorms (and the required meal plan) can be the deal breaker in college costs.  My two kids currently in college are attending excellent state universities, and tuition is $6k something.  Fees bring it to below $9k.  TAP (state) + PELL (fed) at EFC = 0 would cover this completely.  However, R&B exceed $12k per year.  The older kids have all learned how outrageous on-campus housing is, and eventually pursued other options with friends and no meal plan to cut costs way down.  Unfortunately, we are just too far from any colleges to allow living at home to be an option.

on campus housing is outrageous now.  When i started in 2005 my fraternity was only 400 a month room and board.  by my senior year they were at 850 a month room and board - and we did work around the house and cleaned.  Now i hear they are 1k-1200 per month. and dorms cost around the same.

we moved out our senior year. - found an apt. for college kids 4 rooms all the same size each person had a private sink and walk in closet and each pair shared a toilet and shower.  there was also a guest half bath.  we set up a meal plan where 1 person would cook dinner each day m-th.  We learned to cook for ourselves and that transitioned great into real life.

Rent- 225 a month
Food - 120 a month
Utilities - 40 a month including cable and internet.

you can live affordably in college though.  was my main point.

Captain FIRE

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Re: RE or kids college
« Reply #11 on: January 27, 2017, 08:40:58 AM »
I don't remember when it because a requirement for parents to pay for college. 

I don't think anyone here is saying it is a "requirement", but rather that the helping leg up really makes a difference.  (That said I've actually had heated discussions over this point with a real life friend who truly believes it is a moral requirement for parents to pay for all of it.)  The desire to pay for college probably happened somewhere along the way when every job requires a college degree (even though a chunk of those don't really need it).

trollwithamustache

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Re: RE or kids college
« Reply #12 on: January 27, 2017, 09:01:33 AM »
We are contemplating a stepping down approach to paying for college. Its a bit of a balancing act, where I want them to feel like they need to be careful with money but not hamper them with too much debt at the end. The first year we would pay everything and ramp down 25% a year from there.

Its also worth doing your homework on the financial aid forms. If you are FIREing early and managing taxable income well, your kids may be eligible for a lot more assistance.

boarder42

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Re: RE or kids college
« Reply #13 on: January 27, 2017, 09:03:26 AM »
flat out paying for college is a HUGE mistake IMO and doesnt teach your children anything about money and how to manage it during their first time away from home.  Why would they look for lower housing mommy and daddy are paying why would they strive to get more scholarships.

Case and point the Alumni President of my fraternity when we moved out said, "But you can't really only be spending 120 a month on food per person, my daughter goes to Mizzou and i pay her credit card bill and she spends 300 a week going out."  Yeah congratulations you're not teaching your child crap about money.  This was all in response to him charging us 600 bucks each as broke college kids for moving out early and violating the lease(which technically we did but it had been done many times before and we followed that process)  I told him you can have 600 now when i'm broke and penniless, or you can have my donations as a greatful alumni once i have an engineering degree.  Take a guess which he chose.  I've been back to 50 dollar a plate alumni functions havent paid for it.  Never will.  Very poor decision on his part. I was planning to setup a scholarship fund linked to the house.  Now it will be linked to my engineering dept.

I know an open ended credit card wont be what people choose to do who are mustachian, but i think there is some skin in the game needed. 

Our plan - if college even exists in a similar format in 20 years is to give them around 4k per year in today dollars.  the rest they are expected to make up in scholarships/working/loans.  if and when they graduate lump sum pay off the loans. but let them manage their money and their finances and make sure they know what they are doing etc. understanding what taking on the debt means.  keeping skin in the game.
« Last Edit: January 27, 2017, 09:08:19 AM by boarder42 »

prognastat

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Re: RE or kids college
« Reply #14 on: January 27, 2017, 09:33:17 AM »
I would offer to cover the tuition for a reasonably priced and in state college, if they were willing to go to a local college and could stay in our house I would also let them stay rent free at the house and I would cover food costs if they ate at home as part of regular family meals just like while they were growing up, but I would not be covering eating out nor giving some kind of additional allowance. If they decided they wanted to move out of the home and live on campus elsewhere they would have to cover the additional costs involved with this. If they wanted to go to a more expensive out of state school they would have to cover this either through scholarships or paying for it themselves. I would also not cosign any loans nor provide my credit card or anything like that. I can understand wanting them to focus on their studies and this is important, but them learning the impact of their choices own finances is just as important. I would not support going in to student debt either.

If they stayed at home and attended a local college chances are they could get through college debt free and without really having to work part time. If they wanted to move out though and spend more than necessary they will need to work part time to cover for the additional expenses they decide to tack on unnecessarily.

I would also not be supporting a vanity degree. It would have to be some kind of degree with realistic career opportunities.
« Last Edit: January 27, 2017, 10:34:24 AM by prognastat »

Noodle

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Re: RE or kids college
« Reply #15 on: January 27, 2017, 10:32:19 AM »
College is a long way away for your little ones, and I predict that by the time your children are ready to enroll, the landscape may look different. The generation of young adults who got caught in skyrocketing education costs and came out with crippling debt will be of the age to have leadership roles and I suspect their perspective on education funding may be quite different than today's. I would go forward with your plans--with the power of compound interest, you could put some money aside now and let it grow, and perhaps also decide that any side hustle income that comes in goes to the college funds. Also, it's not all or nothing. My parents didn't come close to paying for college for any of their children, but with their contributions and some scholarships I earned on my own, I got out of college with very reasonable debt.

BeanCounter

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Re: RE or kids college
« Reply #16 on: January 27, 2017, 10:49:06 AM »
What about encouraging grandparents to contribute to a 529 plan for each child instead of giving gifts and then you all aim to contribute the difference up to a certain amount each year. Hopefully your state offers a tax credit for this.
Our state allows $2k toward a deduction. So we have been collecting gifts from relatives plus we put some in up to the $2k allowed. That will be all they get from us. They have to figure out how to use it wisely (we'll offer some guidance of course). We will provide them room and board at our house while they are in school or they can figure out how to fund it somewhere else.
So far my 8 year old has $20k in his account and my four year old has $9k in his account. So I think we are on the path to being able to cover a state school, and I don't feel like we've had to sacrifice much to get it there.
Also remember you can continue to work part time while they are in college or maybe even go back full time to help them if it is really important to you to pay 100%.

farmecologist

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Re: RE or kids college
« Reply #17 on: January 27, 2017, 11:20:18 AM »
We have a high school senior and are going through the 'college' thing.  Not a fun process!   Our strategy is for her to have some 'skin in the game'.  We have some money saved in a 529 plan...but not nearly enough to pay for 4 years of college.  Also made it clear we WILL NOT cosign on any loans. 

First off, she wanted to go to an ultra expensive college ( 60K a year ).  Had 'the numbers' talk with her and reality set in very fast for her ( although begrudgingly ).  She is now looking at a much more reasonable in-state university with costs around 25K net (and rising) a year.  She will be responsible for approximately 1/3 of the cost..via student loans, job, or what have you.

The thinking is that once she graduates, we will help payoff any outstanding loans as a 'graduation gift', etc...( the key here is she DOES NOT know this ).



boarder42

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Re: RE or kids college
« Reply #18 on: January 27, 2017, 11:26:44 AM »
We have a high school senior and are going through the 'college' thing.  Not a fun process!   Our strategy is for her to have some 'skin in the game'.  We have some money saved in a 529 plan...but not nearly enough to pay for 4 years of college.  Also made it clear we WILL NOT cosign on any loans. 

First off, she wanted to go to an ultra expensive college ( 60K a year ).  Had 'the numbers' talk with her and reality set in very fast for her ( although begrudgingly ).  She is now looking at a much more reasonable in-state university with costs around 25K net (and rising) a year.  She will be responsible for approximately 1/3 of the cost..via student loans, job, or what have you.

The thinking is that once she graduates, we will help payoff any outstanding loans as a 'graduation gift', etc...( the key here is she DOES NOT know this ).

sounds pretty much like our plan for our future children. 

Cgbg

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Re: RE or kids college
« Reply #19 on: January 27, 2017, 11:44:26 AM »
We have always told our kids we will pay the cost of them attending one of the two state flagships or the equivalent. We've also told them no loans, though short of refusing to fill out the FAFSA that's an empty threat.

Kids can only borrow $5500 as freshmen, $6500 as sophomores and $7500 each for the last two years. Those are the federal student loan limits. Beyond that, consigning of loans would be necessary. Please keep that in mind if you plan on having your kids have skin in the game. Sure they can work in high school and in college but their earning power may not close the gap. Just something to be aware of. If you can position yourself to be under the earning limit, your kid may get a Pell grant which is $5k-ish per year. Many many many colleges don't meet full need so even if you run the numbers and figure out your EFC you'll still find that colleges will "gap" you a substantial amount - and you are expected to fill that gap.

I have a college freshman and a high school senior. They have both taken college classes in high school (math whizzes) and they entered/will enter with a bit more then a year's worth of credits.

Oldest earned an actual full ride (tuition, fees, room, board, study abroad.) We pay his travel to/from and give him $150-200/month to spend as he sees fit. Sometimes he tells me he only needs the smaller amount. He works as a TA this term and will earn some money from that plus he will work this summer. He will earn an engineering degree with a math minor.

My high school kid will cost me between $5k and $18k per year depending on where he ends up. By the time he enters this fall, we will have the entire four years available in cash. He is also planning on engineering and like his brother, he will have finished all the math required for that degree before his freshman year. He will get the same amount of allowance in college as his brother. We will also pay for travel to/from.

They have 529 plans. We will continue to fund those for the foreseeable future. We do not plan on tapping them for undergrad. They can use the balance for grad school if they wish. At some point we will reassign the plans to each of them. Our state allows for a deduction and we will continue to take advantage of that until we turn the accounts over (or until the accounts reach the maximum - unlikely to happen but it is a way of passing along money.)

boarder42

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Re: RE or kids college
« Reply #20 on: January 27, 2017, 12:24:26 PM »
We have always told our kids we will pay the cost of them attending one of the two state flagships or the equivalent. We've also told them no loans, though short of refusing to fill out the FAFSA that's an empty threat.

Kids can only borrow $5500 as freshmen, $6500 as sophomores and $7500 each for the last two years. Those are the federal student loan limits. Beyond that, consigning of loans would be necessary. Please keep that in mind if you plan on having your kids have skin in the game. Sure they can work in high school and in college but their earning power may not close the gap. Just something to be aware of. If you can position yourself to be under the earning limit, your kid may get a Pell grant which is $5k-ish per year. Many many many colleges don't meet full need so even if you run the numbers and figure out your EFC you'll still find that colleges will "gap" you a substantial amount - and you are expected to fill that gap.

I have a college freshman and a high school senior. They have both taken college classes in high school (math whizzes) and they entered/will enter with a bit more then a year's worth of credits.

Oldest earned an actual full ride (tuition, fees, room, board, study abroad.) We pay his travel to/from and give him $150-200/month to spend as he sees fit. Sometimes he tells me he only needs the smaller amount. He works as a TA this term and will earn some money from that plus he will work this summer. He will earn an engineering degree with a math minor.

My high school kid will cost me between $5k and $18k per year depending on where he ends up. By the time he enters this fall, we will have the entire four years available in cash. He is also planning on engineering and like his brother, he will have finished all the math required for that degree before his freshman year. He will get the same amount of allowance in college as his brother. We will also pay for travel to/from.

They have 529 plans. We will continue to fund those for the foreseeable future. We do not plan on tapping them for undergrad. They can use the balance for grad school if they wish. At some point we will reassign the plans to each of them. Our state allows for a deduction and we will continue to take advantage of that until we turn the accounts over (or until the accounts reach the maximum - unlikely to happen but it is a way of passing along money.)

i find it hard tobelieve they have completed ALL math required for an engineering degree prior to school.  what school system are you in that offers differential equations and linear algebra and calculus 3 etc.

seattlecyclone

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Re: RE or kids college
« Reply #21 on: January 27, 2017, 12:57:45 PM »
First of all, if you use the 4% rule there's a small probability that you'll just barely have enough money to survive, and will almost run out by the time you die. There's a much larger probability that your investments will grow much faster than you need them to. In that case you'll have plenty of money to put toward your kids' education.

The point other posters made about how early retired people tend to have low enough incomes to qualify for some substantial financial aid is also worth considering.

Have to comment on the section I bolded above: the cost of living in the dorms (and the required meal plan) can be the deal breaker in college costs.  My two kids currently in college are attending excellent state universities, and tuition is $6k something.  Fees bring it to below $9k.  TAP (state) + PELL (fed) at EFC = 0 would cover this completely.  However, R&B exceed $12k per year.  The older kids have all learned how outrageous on-campus housing is, and eventually pursued other options with friends and no meal plan to cut costs way down.  Unfortunately, we are just too far from any colleges to allow living at home to be an option.

While I agree that dorms are expensive, I sort of disagree that the cost isn't worthwhile. I lived on campus for my entire time in school. I was studying during the time that my off-campus classmates were commuting to school, shopping for groceries, cooking, washing dishes, etc. The meal plan, expensive as it was, enabled me to take 18 credits of engineering classes most semesters and graduate in four years with a high GPA (3.5 years if you don't count the semester I spent earning money at an internship). I could have spent less on housing and food while I was there, but it would have added at least one more semester to my time in school. The salary I earned (and the tuition I didn't pay) during that semester more than made up for the cost difference in living arrangements.

farmecologist

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Re: RE or kids college
« Reply #22 on: January 27, 2017, 01:03:23 PM »
We have always told our kids we will pay the cost of them attending one of the two state flagships or the equivalent. We've also told them no loans, though short of refusing to fill out the FAFSA that's an empty threat.

Kids can only borrow $5500 as freshmen, $6500 as sophomores and $7500 each for the last two years. Those are the federal student loan limits. Beyond that, consigning of loans would be necessary. Please keep that in mind if you plan on having your kids have skin in the game. Sure they can work in high school and in college but their earning power may not close the gap. Just something to be aware of. If you can position yourself to be under the earning limit, your kid may get a Pell grant which is $5k-ish per year. Many many many colleges don't meet full need so even if you run the numbers and figure out your EFC you'll still find that colleges will "gap" you a substantial amount - and you are expected to fill that gap.

I have a college freshman and a high school senior. They have both taken college classes in high school (math whizzes) and they entered/will enter with a bit more then a year's worth of credits.

Oldest earned an actual full ride (tuition, fees, room, board, study abroad.) We pay his travel to/from and give him $150-200/month to spend as he sees fit. Sometimes he tells me he only needs the smaller amount. He works as a TA this term and will earn some money from that plus he will work this summer. He will earn an engineering degree with a math minor.

My high school kid will cost me between $5k and $18k per year depending on where he ends up. By the time he enters this fall, we will have the entire four years available in cash. He is also planning on engineering and like his brother, he will have finished all the math required for that degree before his freshman year. He will get the same amount of allowance in college as his brother. We will also pay for travel to/from.

They have 529 plans. We will continue to fund those for the foreseeable future. We do not plan on tapping them for undergrad. They can use the balance for grad school if they wish. At some point we will reassign the plans to each of them. Our state allows for a deduction and we will continue to take advantage of that until we turn the accounts over (or until the accounts reach the maximum - unlikely to happen but it is a way of passing along money.)

i find it hard tobelieve they have completed ALL math required for an engineering degree prior to school.  what school system are you in that offers differential equations and linear algebra and calculus 3 etc.

While I like hearing stories like this, you are in the extremely small (around 0.3 %) minority of families that have a kid earning a 'full ride'.  This just isn't reality for the vast majority of students...even very, very good students. In fact, substantial non-need based scholarships are becoming tougher to get. 

And the FAFSA...don't even go there.  It was a complete joke for us...literally.  I laughed pretty hard when I saw the number they thought would be an 'acceptable' family responsibility.  I feel bad in general about this entire system ( although I'm not sure of a better way to do it ).   What about all of those families where the parents outright refuse to pay for anything...but the FAFSA 'family responsibility' amount is high? 


I'm a red panda

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Re: RE or kids college
« Reply #23 on: January 27, 2017, 01:19:15 PM »
My parents paid my rent and associated expenses (gas, books, plus a monthly allowance for groceries or whatever I wanted) in college (I had scholarships that covered all my tuition; the state school I went to was not that expensive, so it wasn't hard to get enough scholarships- I applied for EVERYTHING.). I feel incredibly fortunate for it, as I was able to start adult life without loans.

I lived more frugally than most of my friends who were doing it "on their own dime"- as loans were completely abstract to them. They were out of college before they realized what their fancy pants apartments and international trips were going to end up costing them. (I had a decent, but modest appt- of my own choosing, my parents would have let me go fancy pants. They didn't pay for trips.)

My parents did not let me work freshman or sophomore year. They had a "school is your job" attitude.  I convinced them to let me work junior and senior year.  Some of that money was saved, most was spent.

My sister went to an expensive private school and they paid all her costs as well.  Basically, until we graduated, they covered us. College was never a choice- it was just an extension of high school.

I hope to do the same thing for my children.

I paid for my Masters degree out of pocket, no loans. About $4000 employer support, so a drop in the bucket.
« Last Edit: January 29, 2017, 11:19:10 AM by iowajes »

nexus

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Re: RE or kids college
« Reply #24 on: January 27, 2017, 02:03:39 PM »
Didn't read any of the other posts so sorry if I'm saying the same things, but if you retire early and live off your investments, your annual income (I assume) will be pretty low compared to what you were making while working.

Long story short, your children might qualify for all kinds of good grants. My parents made less than 20k per year (one worked FT low paying job, the other was disabled), which allowed me to go to a CSU for free basically. I worked part-time for any additional spending money or trips I wanted to take but the grants paid for my tuition, books, gas, meals, supplies, etc. I worked really hard and was super dedicated because I felt the need to do well so the grants went to good use. My parents still gave me a place to live for free, which was pretty much all they could offer. It was enough.

Had I not been able to have grants via the FAFSA (Federal Pell Grant, and I forget what all else), I probably wouldn't have gone. You may have an ethical issue about this, but I didn't. Your kids will probably get jobs and pay the taxes that feed the machine just as I'm now doing. Not sure if they check your net worth or ask how much you have in your bank account when filling out the FAFSA.

Per-semester tuition for my CSU went from about $1,800 in 2008 to over $3,000 by the time I graduated in 2012. There's no telling what it will look like by the time your kids are old enough or how everything will play into it. For me, at least, after the school took their chunk for tuition I had about $2,500-$3,000 to last me through the semester.

boarder42

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Re: RE or kids college
« Reply #25 on: January 27, 2017, 02:07:02 PM »
Agree with seattle cyclone.  FIRE and college costs arent mutually exclusive.. and you'll likely have piles of money b/c the 4% rule causes growth much more than it causes you to rewind or just get by


Cgbg

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Re: RE or kids college
« Reply #26 on: January 27, 2017, 09:06:41 PM »

(Snipped out a bunch of stuff)

I have a college freshman and a high school senior. They have both taken college classes in high school (math whizzes) and they entered/will enter with a bit more then a year's worth of credits.

(Snipped out more)

He is also planning on engineering and like his brother, he will have finished all the math required for that degree before his freshman year.

i find it hard tobelieve they have completed ALL math required for an engineering degree prior to school.  what school system are you in that offers differential equations and linear algebra and calculus 3 etc.

Our high school only offers up to the equivalent of Calculus 1 or AP Calc AB, but they don't do AP at our high school.

My oldest finished that class his freshman year of high school. He took algebra in 5th grade. He traveled to the high school for math in 7th/8th grade. The youngest didn't take calculus until his sophomore year.

They each took Calc 2 at the local state university in the summer. (Our deal is: job, internship or class for the summer- their choice.) There is a private college between our house and the school. 5 minute walk from either. The college requires an application each semester but "only" charges us $300/class. They can only take one class a semester, but it's a hella good deal.

So they've taken Calc 2, 3, and 4 as well as linear algebra and differential equations at the college level. Both dh and I are engineers and neither of us even had Calculus before we went off to the university.

The oldest is finding college physics to be a breeze.
« Last Edit: January 27, 2017, 09:08:56 PM by Cgbg »

Pigeon

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Re: RE or kids college
« Reply #27 on: January 27, 2017, 09:37:37 PM »
We pay 4 years room, board and tuition at a state university or the equivalent amount.  Our parents paid for our college educations and it, by far, was the best gift they gave us.   It's very important to us. 

Metric Mouse

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Re: RE or kids college
« Reply #28 on: January 27, 2017, 10:24:04 PM »
not paying off your mortgage and investing instead. would likely create enough capital that you could cover your kids college.

This would be my advice. Sock away whatever would be put towards extra on the mortgage for two years, and then return to the current plan. In 15 years, that money will be a surprisingly large amount, and you'll still be done early.

boarder42

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Re: RE or kids college
« Reply #29 on: January 28, 2017, 03:32:36 AM »

(Snipped out a bunch of stuff)

I have a college freshman and a high school senior. They have both taken college classes in high school (math whizzes) and they entered/will enter with a bit more then a year's worth of credits.

(Snipped out more)

He is also planning on engineering and like his brother, he will have finished all the math required for that degree before his freshman year.

i find it hard tobelieve they have completed ALL math required for an engineering degree prior to school.  what school system are you in that offers differential equations and linear algebra and calculus 3 etc.

Our high school only offers up to the equivalent of Calculus 1 or AP Calc AB, but they don't do AP at our high school.

My oldest finished that class his freshman year of high school. He took algebra in 5th grade. He traveled to the high school for math in 7th/8th grade. The youngest didn't take calculus until his sophomore year.

They each took Calc 2 at the local state university in the summer. (Our deal is: job, internship or class for the summer- their choice.) There is a private college between our house and the school. 5 minute walk from either. The college requires an application each semester but "only" charges us $300/class. They can only take one class a semester, but it's a hella good deal.

So they've taken Calc 2, 3, and 4 as well as linear algebra and differential equations at the college level. Both dh and I are engineers and neither of us even had Calculus before we went off to the university.

The oldest is finding college physics to be a breeze.

Yeah I took calc 1 and 2 in HS. Was a small town school wasn't even aware I could AP test them away when I got to college.

teen persuasion

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Re: RE or kids college
« Reply #30 on: January 28, 2017, 06:04:48 PM »
First of all, if you use the 4% rule there's a small probability that you'll just barely have enough money to survive, and will almost run out by the time you die. There's a much larger probability that your investments will grow much faster than you need them to. In that case you'll have plenty of money to put toward your kids' education.

The point other posters made about how early retired people tend to have low enough incomes to qualify for some substantial financial aid is also worth considering.

Have to comment on the section I bolded above: the cost of living in the dorms (and the required meal plan) can be the deal breaker in college costs.  My two kids currently in college are attending excellent state universities, and tuition is $6k something.  Fees bring it to below $9k.  TAP (state) + PELL (fed) at EFC = 0 would cover this completely.  However, R&B exceed $12k per year.  The older kids have all learned how outrageous on-campus housing is, and eventually pursued other options with friends and no meal plan to cut costs way down.  Unfortunately, we are just too far from any colleges to allow living at home to be an option.

While I agree that dorms are expensive, I sort of disagree that the cost isn't worthwhile. I lived on campus for my entire time in school. I was studying during the time that my off-campus classmates were commuting to school, shopping for groceries, cooking, washing dishes, etc. The meal plan, expensive as it was, enabled me to take 18 credits of engineering classes most semesters and graduate in four years with a high GPA (3.5 years if you don't count the semester I spent earning money at an internship). I could have spent less on housing and food while I was there, but it would have added at least one more semester to my time in school. The salary I earned (and the tuition I didn't pay) during that semester more than made up for the cost difference in living arrangements.

Didn't actually say the cost wasn't worthwhile, just that it can be an unexpectedly large proportion of "college expenses".  So far all 4 of my older kids have lived on campus for some length of time, but they all chose to explore options each year.  Different schools have different options.  DD1 tried grad school housing for a time - further off campus, but still dorms.  Eventually decided she preferred suite style with a big rotating group of friends.  DS2 got into a campus owned apartment after the requisite freshman box, but later moved to noncampus apartments with quidditch teammates.  They did things family style (meals, etc.).  He's moved again, but still with teammates (they expanded to a second apartment, basically) even after graduating.  DD3 moved out to an apartment on her own, directly across the street from campus. Now she's within walking distance, with her boyfriend.  DS4 lives on the South campus of his U, but has classes on North campus, so he spends a bit of time shuttling between them each day.

DH and I lived in an apartment directly across the street from our previous dorms, too.  Our next apartment was an easy walk a few blocks away - I walked it everyday, even when I was 8.5 months pregnant.  DH and I both found that working on campus to support ourselves got us more organized - we were better students while working than before, when it was pretty easy to get sucked into whatever stuff was going on around us in the dorms between classes.  Working on campus, I could get a lot of my classwork done, too - debug programs when no one came in for tutoring, grant work was for an independent study project.  Summer I had full-time duties testing incoming freshman, and a few side gigs - earn more off-semester to pay bills year round.  YMMV.

So, lots of different options for different personalities, different pros and cons to each. Figure out what works for YOU, don't just blindly do what everyone else has always done.

Metric Mouse

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Re: RE or kids college
« Reply #31 on: January 28, 2017, 06:38:00 PM »

 DS2 got into a campus owned apartment after the requisite freshman box, but later moved to noncampus apartments with quidditch teammates.  They did things family style (meals, etc.).  He's moved again, but still with teammates (they expanded to a second apartment, basically) even after graduating.

There are college quidditch teams? I'd never heard of this.

seattlecyclone

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Re: RE or kids college
« Reply #32 on: January 28, 2017, 11:04:31 PM »

teen persuasion

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Re: RE or kids college
« Reply #33 on: January 29, 2017, 10:06:34 AM »

 DS2 got into a campus owned apartment after the requisite freshman box, but later moved to noncampus apartments with quidditch teammates.  They did things family style (meals, etc.).  He's moved again, but still with teammates (they expanded to a second apartment, basically) even after graduating.

There are college quidditch teams? I'd never heard of this.

Yep, DS2 got in on the ground floor - his teams have gone to the world cup multiple times (there were complaints b/c it was nearly all North American, so things have been shuffling around in the last year or two), and has done a good bit of travel in the U.S. and Canada for games and exhibitions. He's playing on a regional team now that he's out of college (his whole gang of friends moved to it, even the ones still in undergrad). 

When DS4 started college this fall, he of course had to join his U's "team" (not official yet, a club team).  At the first exhibition (held at DS2's alma mater) DS4 was out of the game w/ a concussion in the first 30 seconds - he took a knee to the eye socket going for the quaffle!  His teammates were suitably impressed when they heard that his brother played on R-------- United.

waltworks

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Re: RE or kids college
« Reply #34 on: January 29, 2017, 10:36:01 AM »
i find it hard tobelieve they have completed ALL math required for an engineering degree prior to school.  what school system are you in that offers differential equations and linear algebra and calculus 3 etc.

I made it through diff eq by my junior year of HS, but then again I was in Los Alamos, which is just nutty (I wasn't one of the *really* smart kids at that school).

That's the only public school I know of like that, but there are a lot of private/magnet schools where you could conceivably do it as well. Many high schools offer concurrent enrollment for classes at the local college, too.

So it's certainly doable. I think it's worth noting that doing all your college math before college was (for me) a bad thing. I coasted through undergrad and then had a really rough time re-learning a lot of stuff in graduate school. Taking a 4 year break from hard math... dumb move. It would have been better to take it slower. But our culture is really into how young/fast you can do things (including us here at MMM...), c'est la vie.

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Fire2025

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Re: RE or kids college
« Reply #35 on: January 29, 2017, 11:16:58 AM »
I don't have kids, but I did pay for my own education (BFA and MFA), so I thought I would chime in a little.  College was always stressed at our house, but my parents were always broke, so I never thought my parents could afford to help pay for it.  So I just never had any expectation that they would help.

I also remember, I think Suzy O, had a program where she talked about the fact that students have their whole life to recover from the financial choice to go to school, but the parent she was talking to, only had a few working years left.  That made a lot of sense to me.

That said I got away cheap 98,000 for eight years of education, so I feel very lucky.  Also I consolidated at a time when you could get super cheap (4%) fixed rates for 30 years.  That's just not possible now for some reason.

It was important to me and so I found a way and I have never regretted it.   

Jakejake

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Re: RE or kids college
« Reply #36 on: January 29, 2017, 11:39:42 AM »
My parents paid for our tuition, but not extra fun money or clothing, etc, while we were in college. I was very grateful not to be saddled with debt before I even had a life. And I paid it forward and covered my kid's tuition.

There are a few people here with ideas about how paying, or not paying, for college will turn a college student into a saver or spender. I disagree with that - I think those dynamics are set up well before a person turns 18. If the parents put a value on designer clothes, fancy cars, eating out regularly, that will be the expectation for their child has for life. If the parents routinely hand their kid $50 for a fun night out, or spring break trips, etc, again, the child will expect handouts for life. If the parents never model cooking food from scratch, or expect their kid to prepare some of the meals, that will become their life.

I garden and know how to cook and preserve food and enjoy walking in the woods and shop at thrift shops and drink water instead of soda because those are the things I grew up with.

I don't have a definite answer on what you should do, although I would lean toward sacrificing the extra year or two to work and bank the tuition costs. But I really object to the idea that paying their tuition will turn them into lifelong economic outpatient stories. As someone who was a frugal non car owning thrift shopper going into college life, had college paid for, and came out still being frugal, that storyline just irks me.

waltworks

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Re: RE or kids college
« Reply #37 on: January 29, 2017, 12:22:46 PM »
I agree, there is probably basically zero correlation between paying for college and the resulting thriftiness of the child.

Those habits start at like age 4 or younger. By the time the kid is in college, they are either pretty set or not.

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Pigeon

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Re: RE or kids college
« Reply #38 on: January 29, 2017, 06:00:13 PM »
Quote
I also remember, I think Suzy O, had a program where she talked about the fact that students have their whole life to recover from the financial choice to go to school, but the parent she was talking to, only had a few working years left.  That made a lot of sense to me.

That's true if you're talking about not planning ahead, but usually by the time the kid is college age, the parents have had some inkling that they have a child. 

Metric Mouse

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Re: RE or kids college
« Reply #39 on: January 29, 2017, 08:48:57 PM »
Quote
I also remember, I think Suzy O, had a program where she talked about the fact that students have their whole life to recover from the financial choice to go to school, but the parent she was talking to, only had a few working years left.  That made a lot of sense to me.

That's true if you're talking about not planning ahead, but usually by the time the kid is college age, the parents have had some inkling that they have a child.

Yes, but the people who call into Suzy asking for advice on how to pay for their 17 year old's college probably are not models of forethought.

SwordGuy

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Re: RE or kids college
« Reply #40 on: January 29, 2017, 09:13:00 PM »
I checked on the costs for one of my state's public universities for a 4 year undergraduate degree.

Assumptions:   

Graduates in 4 years, Fall and spring semesters.  No summer school.
In state tuition because out of state tuition is insanely high.

A four year degree would run $28,000 in tuition and fees.   That's less than the cost of a median-priced new car in the USA.
Very affordable.  Books, of course, would be extra.   Books could be covered by a part time, 16 hr a week job during the school year and during the summer.  If a university isn't within commuting distance, then room and board for 8 semesters in a dorm with a meal plan would run another $37,000.   

That's definitely payable if someone gets a decent job after college.

Throw in a 3 years working before they go off to college at minimum wage, after taxes, and you could shave over $15,000 off that college bill.   Take a bunch of AP courses or college courses in high school and you could shave 1/8th to 1/4th off the overall bill.   If you qualify for grants or scholarships, it's even better.   

College is affordable if people make good choices.

Now, if the student instead:

1) Fails classes because they don't do their work in high school or college and has to pay to take them again, or
2) Takes the wrong classes because they were too lazy or inattentive to read the damn catalog and make sure they are taking the right ones, or
3) Changes their major late in the game so they have to take additional classes to graduate, or
4) Doesn't pay attention to when those final senior-level classes are offered and has to take an extra semester or two just to take one or two classes, or
5) Goes to an out of state university "for the experience" instead of there being a measurable, financially rewarding payback for doing so, or
6) Lives in a nice apartment with a nice car and eats in restaurants all the time and drinks like a fish...

...then college may become damned expensive.

Personally, I would work an extra year and toss all my net income from my salary into the college savings pile.  Then let it grow and teach my kid to start working in high school.  It will serve them well to learn that lesson.   Between those two actions your kid will but $15,000 skin in the game and you'll put in another [however much you earn after taxes].  $30,000 from you would get them into nearly free territory.   2 kids?  You would need $60,000 from you and 2x$15,000 from them.

Of course, if you follow the advice to not pay off your mortgage quite so early and invest the difference, that investment growth might very well reduce that 1 or 2 years extra to nothing.





boarder42

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Re: RE or kids college
« Reply #41 on: January 30, 2017, 05:05:01 AM »
Books can be a profitable endeavor in college. I bought books online and resold on campus to make money on the books vs making them a cost in college. Also I really don't think books will be used in 2035 when my first child enters college

MattC

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Re: RE or kids college
« Reply #42 on: January 30, 2017, 06:37:08 AM »
I would like to point out here $250,000 4-year college costs are NOT to be taken at face value.   The expensive private colleges all have "Robin Hood" tuition policies - they're taking $60k/year from families making hundreds of thousands a year, but kids from families making less pay less.  Apex universities like Princeton and Harvard publicize that if the parents make less than approximately $65k or so per year, you get free tuition, room and board; i.e. with a summer job covering incidentals; you're going for free.  No debt upon graduation.  And at about $120k in parent income, you're just getting free tuition; paying for room and board.  This is all need-based aid; no need to apply for fancy scholarships.  However, private colleges get less and less generous as they get less and less selective.  The bottom tier private schools give only token need based aid and only to really poor people. 

Basically, if you can get into a good enough private college, with low enough income, it will be cheaper than even an in-state college.  While there's nothing wrong with going the community college to state school route (that is going to be the most rational/cheapest route for *most* students), it's worth considering all options.  Even if it ends up costing a little more, the private U route still might be worth it depending on the circumstances. 

All of this dovetails nicely with an early-retirement, mustachian way of life.  Low income = high need based aid.  Sure, high savings will reduce aid, but colleges count savings differently and may or may not look at house or 401k/ira equity. 

I'm a red panda

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Re: RE or kids college
« Reply #43 on: January 30, 2017, 06:55:59 AM »
There are a few people here with ideas about how paying, or not paying, for college will turn a college student into a saver or spender. I disagree with that - I think those dynamics are set up well before a person turns 18. If the parents put a value on designer clothes, fancy cars, eating out regularly, that will be the expectation for their child has for life. If the parents routinely hand their kid $50 for a fun night out, or spring break trips, etc, again, the child will expect handouts for life. If the parents never model cooking food from scratch, or expect their kid to prepare some of the meals, that will become their life.


And I think it is possible to have parents who do all those things you name and still have a frugal kid.  My parents put huge value on savings (which is how they paid for college and ridiculous spendypants weddings for both my sister and I; it was nice that the market was up when we hit the need for these things)- but they also get brand new cars ever 2-3 years, wear designer clothes, belong to a ritzy county club and eat out all the time.  They think I am insane and constantly tell me to spend more money (as long as I'm saving and investing). The idea that I don't have cable, wear used clothing, is crazy.  They do love that my husband cooks all our food from scratch though :)  but that doesn't happen at their house.

But their paying for college didn't leave me expecting any handouts. In fact, the day I graduated my Dad put his hand out and expected the credit card he paid for (it was not a "free for all"; I had a budget) to be handed back!!! 


Gin1984

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Re: RE or kids college
« Reply #44 on: January 30, 2017, 07:03:29 AM »
We have always told our kids we will pay the cost of them attending one of the two state flagships or the equivalent. We've also told them no loans, though short of refusing to fill out the FAFSA that's an empty threat.

Kids can only borrow $5500 as freshmen, $6500 as sophomores and $7500 each for the last two years. Those are the federal student loan limits. Beyond that, consigning of loans would be necessary. Please keep that in mind if you plan on having your kids have skin in the game. Sure they can work in high school and in college but their earning power may not close the gap. Just something to be aware of. If you can position yourself to be under the earning limit, your kid may get a Pell grant which is $5k-ish per year. Many many many colleges don't meet full need so even if you run the numbers and figure out your EFC you'll still find that colleges will "gap" you a substantial amount - and you are expected to fill that gap.

I have a college freshman and a high school senior. They have both taken college classes in high school (math whizzes) and they entered/will enter with a bit more then a year's worth of credits.

Oldest earned an actual full ride (tuition, fees, room, board, study abroad.) We pay his travel to/from and give him $150-200/month to spend as he sees fit. Sometimes he tells me he only needs the smaller amount. He works as a TA this term and will earn some money from that plus he will work this summer. He will earn an engineering degree with a math minor.

My high school kid will cost me between $5k and $18k per year depending on where he ends up. By the time he enters this fall, we will have the entire four years available in cash. He is also planning on engineering and like his brother, he will have finished all the math required for that degree before his freshman year. He will get the same amount of allowance in college as his brother. We will also pay for travel to/from.

They have 529 plans. We will continue to fund those for the foreseeable future. We do not plan on tapping them for undergrad. They can use the balance for grad school if they wish. At some point we will reassign the plans to each of them. Our state allows for a deduction and we will continue to take advantage of that until we turn the accounts over (or until the accounts reach the maximum - unlikely to happen but it is a way of passing along money.)

i find it hard tobelieve they have completed ALL math required for an engineering degree prior to school.  what school system are you in that offers differential equations and linear algebra and calculus 3 etc.

While I like hearing stories like this, you are in the extremely small (around 0.3 %) minority of families that have a kid earning a 'full ride'.  This just isn't reality for the vast majority of students...even very, very good students. In fact, substantial non-need based scholarships are becoming tougher to get. 

And the FAFSA...don't even go there.  It was a complete joke for us...literally.  I laughed pretty hard when I saw the number they thought would be an 'acceptable' family responsibility.  I feel bad in general about this entire system ( although I'm not sure of a better way to do it ).   What about all of those families where the parents outright refuse to pay for anything...but the FAFSA 'family responsibility' amount is high?
It sucks.  I worked and went to school with a parent like that.  I was one of those kids who did get a free ride, but I'd still have to pay room and board.  My mom said no.  She said she would let me live at home and I could work and go to community college and than transfer.  Most of the classes I had to take to transfer were below my ability which after spending 3 years with easy classes (I was working full time so I could not take a full load), actual university was a harder transition.  I spent more overall doing this than just paying room and board but my mom would have not filled out the FAFSA (which would have meant no student loans) and pulled me from her health insurance if I did not do it her way.  I am still upset by it, to be perfectly honest. 

Gin1984

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Re: RE or kids college
« Reply #45 on: January 30, 2017, 07:07:41 AM »
If your kids are good but not great students, college will probably be really expensive. If they are really top notch though, they can probably get free tuition at the in-state flagship school through a merit scholarship or go to a prestigious school for even less if you structure your finances correctly for need based aid.

If you have 100% of FIRE money in 401k, IRA, & HSA accounts AND work enough to make say ~20k per year, you can get a ton of financial aid, even owning a house. If you have zero earned income and just live off of investments, you will get very very little financial aid. If you have money in taxable accounts or a 529 the school will make sure to take as much of it as they can. My university has a financial aid estimator people can play with and I imagine most others do to. Going to an out of state public or non-prestigious private will be the most expensive option.

It is important to recognize how wasteful universities have become financially and how they are arguably overfunded. This is particularly true of the schools with extensive need-based aid programs. Harvard really truly doesn't need your tuition dollars. If something isn't getting enough money, it's because the administrators don't care, not that it's infeasible. Approach financial aid as you would taxes. If you feel generous and want to give back, don't write the school a blank check donation, make it as targeted as possible so that it actually goes to something good.
That is not true.  State school do not have the funding to do that.  Most of my classmates paid less to go to private universities than I paid for state school because they could get merit aid which was not available at the state schools.

Rimu05

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Re: RE or kids college
« Reply #46 on: January 30, 2017, 07:45:28 AM »
While it would be great if I had graduated from college debt free. I certainly am more in tune with my finances having debt. Although to be honest, If I didn't have debt, I would be probably travelling the world versus going towards FIRE but student debt has chained me down.

I don't know if student debt teaches you about money. My sister has student debt and she never even looks at it and I have advised her to start getting a handle on her finances but I've given up on that.

There isn't a day though I don't wish I was free of this debt. The good thing is I set the expectation that I would cover my student debt myself.

acroy

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Re: RE or kids college
« Reply #47 on: January 30, 2017, 08:05:04 AM »
Great information in this thread!

If your kids are good but not great students, college will probably be really expensive. If they are really top notch though, they can probably get free tuition at the in-state flagship school through a merit scholarship or go to a prestigious school for even less if you structure your finances correctly for need based aid.

That is not true.  State school do not have the funding to do that.  Most of my classmates paid less to go to private universities than I paid for state school because they could get merit aid which was not available at the state schools.
From my understanding the state school itself generally does not provide merit based aid. Good schools do have a network of 3rd party merit based scholarship organizations looking for meritorious students.

farmecologist

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Re: RE or kids college
« Reply #48 on: January 30, 2017, 08:07:46 AM »
I would like to point out here $250,000 4-year college costs are NOT to be taken at face value.   The expensive private colleges all have "Robin Hood" tuition policies - they're taking $60k/year from families making hundreds of thousands a year, but kids from families making less pay less.  Apex universities like Princeton and Harvard publicize that if the parents make less than approximately $65k or so per year, you get free tuition, room and board; i.e. with a summer job covering incidentals; you're going for free.  No debt upon graduation.  And at about $120k in parent income, you're just getting free tuition; paying for room and board.  This is all need-based aid; no need to apply for fancy scholarships.  However, private colleges get less and less generous as they get less and less selective.  The bottom tier private schools give only token need based aid and only to really poor people. 

Basically, if you can get into a good enough private college, with low enough income, it will be cheaper than even an in-state college.  While there's nothing wrong with going the community college to state school route (that is going to be the most rational/cheapest route for *most* students), it's worth considering all options.  Even if it ends up costing a little more, the private U route still might be worth it depending on the circumstances. 

All of this dovetails nicely with an early-retirement, mustachian way of life.  Low income = high need based aid.  Sure, high savings will reduce aid, but colleges count savings differently and may or may not look at house or 401k/ira equity.

This is 100% true.  However, you need to be living the 'early-retirement, mustachian way of life' before filling out the FAFSA.  I'd bet that quite a few of us with kids are still in the 'stache accumulation phase'.  If you can get need-based aid, then great.  However, in reality that just doesn't work for many of us.  I'm not complaining...it is what it is.

I'd also like to point out that many of these high cost-to-attend private colleges do offer substantial non-need based aid.  However, they seem to use this as a carrot to get people to bite.  From our experience, at the few of these schools we have looked into, the average out of pocket cost was around 40K ( 60K-ish with 20K-ish or so "guaranteed non-loan aid" ).   Frankly, that's pretty ridiculous.


boarder42

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Re: RE or kids college
« Reply #49 on: January 30, 2017, 08:16:56 AM »
I would like to point out here $250,000 4-year college costs are NOT to be taken at face value.   The expensive private colleges all have "Robin Hood" tuition policies - they're taking $60k/year from families making hundreds of thousands a year, but kids from families making less pay less.  Apex universities like Princeton and Harvard publicize that if the parents make less than approximately $65k or so per year, you get free tuition, room and board; i.e. with a summer job covering incidentals; you're going for free.  No debt upon graduation.  And at about $120k in parent income, you're just getting free tuition; paying for room and board.  This is all need-based aid; no need to apply for fancy scholarships.  However, private colleges get less and less generous as they get less and less selective.  The bottom tier private schools give only token need based aid and only to really poor people. 

Basically, if you can get into a good enough private college, with low enough income, it will be cheaper than even an in-state college.  While there's nothing wrong with going the community college to state school route (that is going to be the most rational/cheapest route for *most* students), it's worth considering all options.  Even if it ends up costing a little more, the private U route still might be worth it depending on the circumstances. 

All of this dovetails nicely with an early-retirement, mustachian way of life.  Low income = high need based aid.  Sure, high savings will reduce aid, but colleges count savings differently and may or may not look at house or 401k/ira equity.

This is 100% true.  However, you need to be living the 'early-retirement, mustachian way of life' before filling out the FAFSA.  I'd bet that quite a few of us with kids are still in the 'stache accumulation phase'.  If you can get need-based aid, then great.  However, in reality that just doesn't work for many of us.  I'm not complaining...it is what it is.

I'd also like to point out that many of these high cost-to-attend private colleges do offer substantial non-need based aid.  However, they seem to use this as a carrot to get people to bite.  From our experience, at the few of these schools we have looked into, the average out of pocket cost was around 40K ( 60K-ish with 20K-ish or so "guaranteed non-loan aid" ).   Frankly, that's pretty ridiculous.

how are "quite a few" mustachians still working when their children go to college.  even if you had a child right when you started working or slightly before this would equate to an 18+ year working career.  which wouldnt really equate to a mustachian lifestyle.