Author Topic: Thoughts on saving for children's college education  (Read 9735 times)

turtlefield76

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Thoughts on saving for children's college education
« on: January 22, 2013, 04:30:25 PM »
Hi MMM community -

I'm pretty new here but have been enjoying reading through MMM's blog and finding a group of people with a similar frugal lifestyle and rejection of our out of control consumer culture. 

What I've gleamed from some of MMM's posts is that he believes that kids should earn their way through college.  I'm not sure if this entirely accurate as I haven't read a post where he has laid out his ideas about his son's education clearly but I'm wondering what the rest of you think.  Are you saving for your children's college education?  How big of a priority is it? 

While I abhor the "ivy league" syndrome while raising children I completely believe in an ivy league university education.  A bit of a contradiction I suppose.  So while I will be avoiding ridiculously priced pre-school and plan to send my daughter to public schools when she reaches that age I'm also planning on sending her to one of those top tier Universities and I plan on her not accruing any debt while she is at it. 

I'm the guy that opened a 529 plan in her name the day I got her social security card.  I'd like to hear other people's strategies.  I want to teach my daughter great financial skills and maybe having her work for her education is a part of that.  What are you strategies for teaching your children about money?

RoseRelish

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Re: Thoughts on saving for children's college education
« Reply #1 on: January 22, 2013, 04:42:39 PM »
First off, I would think MMM would be helping with his son's college education - as his parents helped him. Maybe he'll require his son to work during school/summers, but I would think he'll contribute.

And as far as paying for my future children's education - I agree with you. I don't want my children to incur debt to pay for school. I may require them to work during the summers (or be in class year-round), but I think I'll make up any gap in cost/earnings that they encounter - so long as they're fairly frugal.

I do disagree with you on an Ivy League education. I'll plan for the cost of it, but will steer them to state schools. I was given the choice of any college I wanted and ended up at a state school because of the educational style and location. My wife went to a private school for the same reasons. I think education is all about what your child wants from the experience and how specialized you hope to be someday.

turtlefield76

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Re: Thoughts on saving for children's college education
« Reply #2 on: January 22, 2013, 04:52:42 PM »
ahhh... i must've mis-interepreted his comment.  i certainly believe in having my child work summers and during the school year at college.  i'm all for that.     

iamlindoro

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Re: Thoughts on saving for children's college education
« Reply #3 on: January 22, 2013, 04:55:06 PM »
Also bear in mind MMM's son is already doing paid jobs and having the importance of savings and investments ingrained.  In the 10+ years until he goes to college, it's quite likely he could save up enough to cover his entire tuition and then some.

mushroom

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Re: Thoughts on saving for children's college education
« Reply #4 on: January 22, 2013, 05:54:20 PM »
I went to an Ivy League and got so much financial aid that I had no loans and had to turn down some outside scholarships I had gotten. I had low enough expenses that I was able to save money and felt like they were "paying" me to attend. It was way cheaper for me to attend than any state school. A lot of Ivy Leagues are dripping with money from large endowments and offer grants even to families that make up to $160K or something ridiculous.

The situation may be different if you have a very high income or a lot of savings, but I think it's a common misconception that Ivy Leagues are always expensive, and I think it's great when they can attract smart kids from lower socioeconomic backgrounds.

I plan on putting aside a certain sum (say 100K or so?) for college and expecting them to apply for scholarships and work and such.

sol

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Re: Thoughts on saving for children's college education
« Reply #5 on: January 22, 2013, 06:43:10 PM »
An ivy league schools are full of two types of students.

Group A are the smartest kids, who got into every school they applied to and can take their pick of colleges for free.

Group B are mediocre kids with rich parents.

If you plan to have a mediocre kid and lots of money, you can choose to send your kids to a top tier school to be surrounded by these two groups of people.  But I bet you can guess which group he'll gravitate towards, given his background.

onehappypanda

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Re: Thoughts on saving for children's college education
« Reply #6 on: January 22, 2013, 06:59:12 PM »
I would say it's a good idea in general to save SOMETHING for your kid's education, especially if you aren't low-income and/or have savings as that'll knock them out of financial need based awards.

That said, good performance in high school + good test scores + a few well-written essays can get a college degree pretty well funded if you're strategic about it. So it's not a matter of "your pocket or mine" necessarily. Though funding is getting cut back in some areas so you never know what kinda support will be around by the time your kid is college-aged.

I paid for my 4 years of college through merit scholarships, need-based grants, part-time jobs, and a smallish number of loans. Family didn't help much financially because they couldn't. I DO think in many regards that not having college 100% paid for (and often working my butt off to make ends meet) might have made me value the opportunities more. But I wouldn't necessarily wish that on someone else and there were a lot of things, like good study abroad opp's, that I missed out on because I couldn't get the funds.

I'm a far cry away from parenthood planning but I've considered this myself and sometimes I think the idea of saying "I"ll give you this much (preset amount) and you figure out the rest" might not be a bad strategy. They can cover some of it through scholarships, loans, a job, their choice. Assuming your kid has the financial experience/skills to work it out. That and emphasizing how high school performance is linked to being able to pay for college, because that's sometimes underestimated.

As far as planning which college your kid will go to: my opinion on that is leave it up to your kid. An Ivy League education has its purposes, as do some other expensive private schools, but it's not right for everyone. Often that's not even the best choice, depending on their field.  I had a huge argument with my parent who really wanted me to go to a more prestigious school than the state school I went to, but I don't regret my decision at all. I landed some really good opportunities at my state school that wouldn't have necessarily been an option elsewhere. It all depends on the context, so I'd leave the specific planning until you're a bit closer. Just my .02.

maryofdoom

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Re: Thoughts on saving for children's college education
« Reply #7 on: January 22, 2013, 07:02:21 PM »
A small thing, but a thing that may help, was that when I was in college, my dad reimbursed me for my textbooks. I had to put up the money up front, then bring him the receipt and he'd pay me back.

This made me more motivated to find deals on textbooks, since it was my money going out the door at the beginning.

totoro

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Re: Thoughts on saving for children's college education
« Reply #8 on: January 22, 2013, 07:10:52 PM »
Canada does not really have a tier system for universities, although some are ranked higher for certain programs.

I have some savings for my kids through RESP but they will likely qualify for student loans/scholarships as I will be probably retire by the time they attend.  I'm happy to help out but they need to work for it too.

onehappypanda

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Re: Thoughts on saving for children's college education
« Reply #9 on: January 22, 2013, 07:16:58 PM »
Adding, whatever you do, just don't let your kid be like one I volunteered with in college who had NO IDEA what any of his expenses (tuition, fees, rent, utility bills, NOTHIN') even cost because his parents had the bills sent to their house and paid it all for them.  Dude couldn't even ballpark what rents cost in our area and had never set a budget in his life. Truly clueless.

To this day I still wonder if he ever learned to pay his own bills.

cacaoheart

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Re: Thoughts on saving for children's college education
« Reply #10 on: February 12, 2015, 12:23:41 PM »
I considered starting a new thread but it seems that my thoughts fit best within this one. In deciding whether to focus on filling your 401k vs saving for college keep in mind that your 401k doesn't count toward assets when the FAFSA is calculated for how much financial aid your kids can receive, while 401k contributions in the year that the FAFSA was filed count as regular income and reduce aid:

http://www.forbes.com/sites/troyonink/2013/01/09/save-for-retirement-now-get-more-college-aid-later/

I would also look at colleges that are shifting to providing grants instead of loans for families below a certain income level:

http://www.finaid.org/questions/noloansforlowincome.phtml

Essentially you could have $900,000 in your 401K and have your kids be eligible for a full ride to many colleges if your past year's income is low enough. If you've already done most of your retirement saving and you don't have a massive mortgage payment, the acceptable income range is quite manageable.

catccc

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Re: Thoughts on saving for children's college education
« Reply #11 on: February 12, 2015, 12:51:58 PM »
I opened up 529s a couple of years ago for both of my kids, now 3.5 and 6.  They will likely be underfunded when the tuition bill actually comes, but that's okay with me.

Retirement savings are the focus right now.  We put what extra we can into the 529s, but it isn't that much.

The combined balance in both accounts is now about $43K.  We were lucky to have 8K per kid gifted into the account when we opened them, and put maybe 10K cash they had from past gifts (my dad handed me 2K in cash in a pretty red envelope when our 1st was born.)  That's $26K.  The remaining 17K is from our additional savings, more gifts from family, and gains.

It's also part of our tax strategy being in a state that taxes 401K contributions (boo) but allows a deduction for 529 contributions.

ThatGuyFromCanada

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Re: Thoughts on saving for children's college education
« Reply #12 on: February 12, 2015, 03:15:38 PM »
We're saving for our three kids (ages 0, 2, & 3) education and hoping to pay for a significant chunk. In Canada we get a "Universal Child Care Benefit" which has been $100/kid/month and is soon going up to $160/kid/month (it's an election year...) We invest that money in an RESP, and the government matches 20% of the money you put in up to a certain amount. You can invest it in the market and since it's a long timeline until my kids the need the money I can handle a decent amount of risk.

We've found it's an excellent way to leverage the UCCB, we already have a 5-figure number saved and the oldest isn't even in Kindergarten yet!


GizmoTX

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Re: Thoughts on saving for children's college education
« Reply #13 on: February 12, 2015, 03:21:34 PM »
While I abhor the "ivy league" syndrome while raising children I completely believe in an ivy league university education.  A bit of a contradiction I suppose.  So while I will be avoiding ridiculously priced pre-school and plan to send my daughter to public schools when she reaches that age I'm also planning on sending her to one of those top tier Universities and I plan on her not accruing any debt while she is at it. 

I'm the guy that opened a 529 plan in her name the day I got her social security card.  I'd like to hear other people's strategies.  I want to teach my daughter great financial skills and maybe having her work for her education is a part of that.  What are you strategies for teaching your children about money?

Don't just dismiss private schools as being ridiculously priced -- some can make a big difference in the preparation a child gets for being able to be admitted to a top tier university as well as getting top grades. Our son has a high IQ but exhibited significant learning differences in grades 1 & 2. Moving him to a great small LD school for grades 3-8 gave him the attention & tools to excel in high school & university.

Teaching financial skills should start young & be aimed at self sufficiency. We started with games that involved play money to teach making change. Then a small weekly allowance for chores so that DS had his own funds for purchases -- this also cuts out endless requests & handouts in stores & other places. As he became more adept at math, we had him figure a tip amount when we ate in a restaurant. We took him to the bank so he could purchase I-bonds with his cash savings, since at the time they paid 4% & banks were paying 0.1%. Around age 13 we helped him open a student checking account with checks & debit card, & taught him how to write real checks & reconcile his account. We also showed him how to track his spending & saving using manual tracking, then Excel & Quicken. Since I had to be on the account, I could & did check it periodically online. When he entered HS, we bumped his allowance to include necessary expenses like clothing that he was responsible for, & paid it monthly to his checking account. If he overspent, it was his problem -- we didn't rescue him. When he started driving, he was responsible for filling the gas tank. At that point we went back to the bank for him to get a starter credit card that he had to pay in full every month. We wanted him to make any mistakes well before university. He started working summers after his HS sophomore year, & we matched those earnings in a Roth IRA.

We started funding an Educational Trust for DS when he was 1, since 529s didn't exist, & when they did, weren't as flexible. DS chose a good private university that awarded him substantial merit scholarships which reduce the amount that the trust pays for his tuition. He knows that he will receive anything left in the trust after he graduates or reaches age 30, so it is in his best interest to limit its spending. He rents or gets used textbooks as much as possible. He now funds his Roth himself from his summer internships & discovered Mint & Splitwise on his own. I'm coaching him on preparing & filing his tax returns.



Retire-Canada

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Re: Thoughts on saving for children's college education
« Reply #14 on: February 12, 2015, 03:38:52 PM »
ahhh... i must've mis-interepreted his comment.  i certainly believe in having my child work summers and during the school year at college.  i'm all for that.     

MMM says...

Quote
Hmm.. What I see is $7932 per year for tuition and fees. If your kid is like I was, and is willing to pay for his own education with no loans, and live at home with the parents for free rent and food to achieve this, he can accomplish this with only 528 hours of paid work (3 months at 15 bucks an hour) per year. In other words, working during the summer as a landscaper or painter already pays for your whole education, debt-free.

and...

Quote
Mrs. MM and I are more excited about supporting our son than anything else in life. We’ve got his back. So in the likely event that he chooses to get a university education and the unlikely event that he has not found ways to earn his own money in advance and/or get enough scholarships, we have the resources to pay whatever bills might come up.

-- Vik

Yankuba

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Re: Thoughts on saving for children's college education
« Reply #15 on: February 12, 2015, 05:51:17 PM »
I think a college education is a necessity (you actually need some college to be a cop in NYC) so I will put money aside in a 529. I would feel guilty retiring early while my kids took on debt to pay for what is becoming a requirement. My plan is to fund the 529s with tax returns and gifts until they hit $50k and hopefully they will grow a bit and I will worry about the fourth year (and graduate school) later.

SilveradoBojangles

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Re: Thoughts on saving for children's college education
« Reply #16 on: February 12, 2015, 09:55:47 PM »
My university was paid for through a combination of scholarships, student loans, work (part time during the year, full time during summers), and parental support. My time in college was extremely educational on the financial front. My parents deposited money into my account, so it was up to me to budget, pay rent, buy books, etc. The scholarship I won paid most of tuition, and my parents helped me with a monthly stipend, but it only supplemented my income. I graduated with about $4,000 in federal student loans. It was the experience of paying these off, combined with the relief of finally being done with them, that made me truly understand what it means to take on debt, and to avoid it at all costs. In addition, at one point someone asked what the tuition was at the University my husband and I attended, and he (having been the recipient of an all-expenses paid education from his grandparents) had absolutely no idea. I couldn't believe he could be so clueless, but I guess he never had to think about it.

I plan to save for my (not yet existent) children's education so that they don't have to take on lots of debt, but I will expect them to be an active participant in the funding of said education via work and applying for scholarships. And honestly, I will require them to take out a small amount of low interest federal student loans. I think it's a worthwhile lesson in debt if it can be acquired at a low interest rate.

Goldielocks

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Re: Thoughts on saving for children's college education
« Reply #17 on: February 12, 2015, 10:01:39 PM »
Canada does not really have a tier system for universities, although some are ranked higher for certain programs.

I have some savings for my kids through RESP but they will likely qualify for student loans/scholarships as I will be probably retire by the time they attend.  I'm happy to help out but they need to work for it too.

Hmm. My initial check showed that student Loan application includes all savings in your retirement accounts, too, until they can apply without parent info. As we will have the money to ER, I know my kids won't qualify for much help/loans, if anything.  That is for first  4 years from high school, or married, or two years with a job first, etc.

If I have this wrong, please let me know, I would hate to get this one wrong, it is worth a lot to us!
« Last Edit: February 13, 2015, 01:34:20 AM by goldielocks »

MrsPotts

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Re: Thoughts on saving for children's college education
« Reply #18 on: February 12, 2015, 11:32:19 PM »
There are plenty of ways to give kids a work ethic and a sense of responsibility without throwing them to the student loan sharks.   Bare bones at a state school is $ 18K a year; there is no way a kid can earn that working summers and part time. 

Goldielocks

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Re: Thoughts on saving for children's college education
« Reply #19 on: February 13, 2015, 01:35:38 AM »
There are plenty of ways to give kids a work ethic and a sense of responsibility without throwing them to the student loan sharks.   Bare bones at a state school is $ 18K a year; there is no way a kid can earn that working summers and part time.
Is that just tuition and books at your state school? Or living accommodation too?

Paul der Krake

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Re: Thoughts on saving for children's college education
« Reply #20 on: February 13, 2015, 03:10:11 AM »
There are plenty of ways to give kids a work ethic and a sense of responsibility without throwing them to the student loan sharks.   Bare bones at a state school is $ 18K a year; there is no way a kid can earn that working summers and part time.
Is that just tuition and books at your state school? Or living accommodation too?
The local flagship state school recommends almost $16,000 for non-tuition expenses (24k including tuition), and from direct experience it is far from bare bones.

ShoulderThingThatGoesUp

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Re: Thoughts on saving for children's college education
« Reply #21 on: February 13, 2015, 05:30:50 AM »
My wife and I went to and met at Cornell, so it's something we're thinking about. Our strategy is that (1) college costs can't keep accelerating the way they have (2) if we are set with 401k and other savings, we can easily pay for college when it happens, so we're focusing on making sure our investments are solid before putting money in 529s that might end up getting taxed or subsumed into some sort of scholarship fund anyways.

Goldielocks

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Re: Thoughts on saving for children's college education
« Reply #22 on: February 13, 2015, 08:25:10 AM »
There are plenty of ways to give kids a work ethic and a sense of responsibility without throwing them to the student loan sharks.   Bare bones at a state school is $ 18K a year; there is no way a kid can earn that working summers and part time.
Is that just tuition and books at your state school? Or living accommodation too?
The local flagship state school recommends almost $16,000 for non-tuition expenses (24k including tuition), and from direct experience it is far from bare bones.

I think a kid could earn most of the $8k for tuition and books, though...  Renting a room off campus, and food varies widely by region, but $700 per month, maybe? X8 months is $5600+$8000.

With a couple small scholarships, a couple thousand saved from summer highschool jobs, and co-op program, at $15 per hour, this should be doable.  Throw in some parent summer support, and it is good to roll, with a small loan, say $10k, from final year, paid off a few months after school is over.

I say to my kids that I will pay for tuition and books, and they can live at home for free, or pay their own accommodation..  Which is doable for them using the above formula without needing a loan..

trailrated

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Re: Thoughts on saving for children's college education
« Reply #23 on: February 13, 2015, 10:25:33 AM »
I went to a private college and was incredibly fortunate that my grandmother covered all tuition as well as housing/meal plan. The experience, along with the people I have formed relationships with, and having that degree have been immensely helpful to me. I feel like it is my responsibility to "pay it forward" and give my son the same opportunity that I was so fortunate to receive. That being said, he is a little under 1 1/2 and I have a little over $5,000 in a 529 so far.

CommonCents

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Re: Thoughts on saving for children's college education
« Reply #24 on: February 13, 2015, 10:32:13 AM »
An ivy league schools are full of two types of students.

Group A are the smartest kids, who got into every school they applied to and can take their pick of colleges for free.

Group B are mediocre kids with rich parents.

If you plan to have a mediocre kid and lots of money, you can choose to send your kids to a top tier school to be surrounded by these two groups of people.  But I bet you can guess which group he'll gravitate towards, given his background.

False choice.

Most ivys actually don't give scholarships except need-based.  My ivy college certainly didn't.  So while you do have some of the two you describe above, you get a lot of smart students who paid their way through (loans for the most part), like me. 

goatmom

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Re: Thoughts on saving for children's college education
« Reply #25 on: February 13, 2015, 10:42:31 AM »
Yes, and many schools ask you to report any outside scholarships and then just deduct that from any aid you would get.  One option is to be super smart and not got to a top ranked school.  That is where the scholarship money is for smart kids. 

mm1970

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Re: Thoughts on saving for children's college education
« Reply #26 on: February 13, 2015, 10:57:57 AM »
My wife and I went to and met at Cornell, so it's something we're thinking about. Our strategy is that (1) college costs can't keep accelerating the way they have (2) if we are set with 401k and other savings, we can easily pay for college when it happens, so we're focusing on making sure our investments are solid before putting money in 529s that might end up getting taxed or subsumed into some sort of scholarship fund anyways.
Yeah, so my spouse went to Cornell and I went to CMU, so ... I feel you.  But we both went on ROTC scholarship (him: 4 years no debt, me: 3 years with some debt for year 1 and room and board).

I keep whispering to my kids while they sleep "UCSB" or "Cal Poly". :)

A quick look right now (my oldest is almost 9, I have a ways to go)
UCSB tuition and fees: $14k (live at home)
SBCC tuition and fees: $6300 (live at home, transfer to a uni after 2 years)
Cal Poly tuition and fees: $13k, but he'd need room and board too, so closer to $22k.

Interestingly, back in the dark ages when we went to college, it was about that much.  Tuition in the late 80's/early 90's at our schools was $12k-16k.  Of course, they are higher tiers than the state schools, but I'm no snob.  CMU gave me a lot of aid the first year and ROTC paid for much of the last 3.

Lyngi

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Re: Thoughts on saving for children's college education
« Reply #27 on: February 13, 2015, 10:02:35 PM »
Sending DS off to college this fall.  I put some money into his education savings account,  pre 529 and pre MMM.  I stopped funding the accounts (DS and DD) and started maxing out my 401K about 5 years ago.   So the account balances are not as high as they could be.    Punching my past self as I could have funded my 401k and their education pretty easily. 
           DS wasn't terribly motivated in high school, had a few rough patches and didn't get the grades he could have.  Having an angst ridden teenager is HARD WORK!!   He also didn't seem to be terribly motivated to go to college right after graduation,  so I helped him make the decision to work for a year and save up.  It has made a  difference, he is a lot more mature than he was a year ago.    He decided on a small state college with low tuition, away from home.  Away from mom and dad.   He could have gone to the local university, but it is too close,  he needs to get out into the real world.       Several people have mentioned to me that it is like high school, but you've got to pay for it..   He did get a small scholarship,  he'll use his savings and I'll kick in some.  DD is 3 years away from graduating high school and  our house will be paid off about that time.   I've been talking up the scholarship angle with her.  I also have changed my spendy ways and will have more savings by then.

Unique User

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Re: Thoughts on saving for children's college education
« Reply #28 on: February 14, 2015, 08:45:10 AM »
We're four years away from freshman year and I've put a fair amount of thought into this.  We're maxing our retirement accounts (both 401ks and IRAs) and have a minimum of savings in a 529 plan, maybe $10k.  And we have about $60k in ESPPs and a taxable money market, which is also earmarked for college.  We do have three rental properties, one which used to be our house so that will get counted by fafsa, but the other two are in an LLC so are excluded with the small business exclusion (if I read the paperwork correctly).  I don't think we'll get much, if any aid, but since most of our assets won't get counted, hopefully she'll qualify for low cost loans and a work study program.  I think mine were under 3% and I took out $5,500 per year. 

Our plan is to continue to max those accounts until she hits school and then sell assets/cash flow college.  Since we're socking away $65k per year, I think that is more than doable.  We do expect her to work summers and part time during school, but anything she earns before school, we are going to strongly encourage her to put into an IRA rather than save for college.  We also will have her take out the $5,500 in loans each year and we'll pay those off for her after she graduates, but we're not going to tell her that. 

Exhale

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Re: Thoughts on saving for children's college education
« Reply #29 on: February 14, 2015, 09:29:48 AM »
Student advisor weighing here.

There are many great strategies already mentioned on the forum. Here are my two cents.

Before college
1) Instill financial intelligence/frugal habits in child before they hit college age
2) Instill excellent study skills, life balance and self-knowledge/-advocacy habits before they hit HS age
3) Work w/child to determine the education and living environments in which they do best (e.g., big class/little class, what depts/progs need to be strong, big city/town/rural area, live on or off campus, sunny weather needed/grey skies okay, etc.)
4) It's more important to do well one or two extracurricular things the student cares about than to dabble in a million. For parents, investment (time and finances) in helping your child develop and then meaningfully deepen these extracurricular interests/skills can pay off in terms of admissions (and funding) offers
5) Don't discount a school due to price tag. I went to two different expensive Ivy League-type schools for cheaper than state/local schools due to their offers of need- and merit-based aid
6) If a student is focused, directed and has the study skills, it's possible to get a great education almost anywhere

During
1) Some possible ways to save:
a) Take core/basic requirements (science 101, writing 101, etc.) at a local/inexpensive school then go to a more expensive school for 2-3 years in order to do the more advanced work
b) Spend a year abroad (either as exchange student or as a nanny/other type worker) in order to learn a foreign language. In that way you can waive out of foreign language requirement and have more world experience/maturity
2) If your child might want to go on to graduate/med/law school these are areas to focus on:
a) Excellent GRE scores (some schools use this as basis for funding offers) - take the time to prep/practice
b) Strong-to-excellent grades (be sure to explain any low grades in personal statement)
c) Research and/or meaningful applied experience in the field. This is often where committees look when they have to decide between two otherwise equally qualified candidates. By this I mean internships and/or research programs (especially during the summer when the student can do it full-time and, thus, prove themselves capable of sustained endeavor in/knowledge of field). 2-3 summers of internship/research are one the most important things a student can do to improve chances of grad/med/law admission (and funding). In science fields these undergraduate science experiences often come with R&B as well as a stipend. Note: Even if the experience(s) show you that you don't want to do that particular thing, it's fine because you have that knowledge and you have transferable skills.
d) Strong acad/prof relationships w/professors and/or internship/research supervisors => excellent rec letters

Good info here (I've no affiliation). I use often in my advising => http://www.collegeology.com/

Good luck!

« Last Edit: February 14, 2015, 09:35:46 AM by Exhale »

nobody123

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Re: Thoughts on saving for children's college education
« Reply #30 on: February 14, 2015, 10:51:49 AM »
Due to their financial circumstances, my parents could not offer much financial support for college, but they let me know it when I entered 7th grade so I knew to take my studies seriously and save my money from part-time work.  I was lucky enough to earn enough scholarship money to supplement my savings from my part time jobs during breaks from school (winter, spring, and summer) to graduate debt free.  They did let me live at home rent free and fed me whenever I was home on breaks, so that was awesome.  The most actual cash I ever received from them was the occasional $10 in a card with the "DON'T SPEND THIS ON BEER!" note under my parents' signatures mailed to my dorm room.

My wife did work study and her parents co-signed student loans for her to cover the difference for her tuition.  They made the entirety of the loan payments, and they paid them off a couple of years after she graduated.  They would give her some cash for expenses every now and then.  My wife did rack up a couple thousand dollars in credit card debt for living expenses as well (usually when her class load didn't let her work enough hours to pay for everything -- she did not spend foolishly).  She paid those off within a couple of months of having a real job after graduation.  In my wife's mind, she translates that to her parents paid for her college in its entirety, and expects us to do the same for our two kids. 

Based on what I've learned from reading about the FAFSA and 529 plans, I am of the opinion that I'd rather throw as much as possible into our tax-advantaged retirement accounts and pay our mortgage off by the time the first one graduates from high school, and then offer whatever free cash flow we can towards their college education.  I love my job most of the time, and am planning on working until at least the younger one graduates from college.  I have no idea what life will bring over the next 18 - 21 years, so making a more concrete decision at this point seems foolish to me.  If we can help them out, great, but I will let them know that they are responsible for their college education and not to count on anything other than whatever cash they have in hand.

Right now, I figure the best that my wife and I can do is to get ourselves to the point where we are in the financial position to potentially help our kids out when the time comes.  We will do our best to make sure our kids have a good financial head on their shoulders and will make responsible decisions.  If both of those things happen, we'll probably have enough flexibility when the time comes to work something out.  I really like the idea floated on the forum elsewhere where the parents make the student front their expenses for a semester, and they then reimburse some of it based on the grades achieved, staying out of trouble, etc.


WESTOFTHEHUDSON

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Re: Thoughts on saving for children's college education
« Reply #31 on: February 14, 2015, 02:33:38 PM »
Here in Canada we enjoy a " family allowances", we receive government funds monthly for each child we have under 6 ( and there is talk of extending some form of payment until they 're 17). We just take that $ and place it directly into a registered education account. We expect it to net about $16,000 per kid by the time they're in college. That is the basis of their funding and as we can, we'll,top it up along with expecting them to apply for scholarships and carry a job over summers.

I think kids benefit from contributing to the Cost of their education.