Author Topic: How much should FIREd parents pay for kids' college?  (Read 1680 times)

firefamily

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How much should FIREd parents pay for kids' college?
« on: February 23, 2023, 08:16:10 AM »
My husband and I are trying to decide how much and in what ways to help pay for our childrens' college. We are financially able to pay all of it, but it's important to us to have them motivated to do their best and make wise choices, and keep from becoming entitled or irresponsible. We also want to help them not be burdened with debt or overwhelmed with costs. Here is a little bit about our family:

-We FIREd in 2017, and have sufficient money saved to pay tuition (and probably a lot more if needed) for 4 years for each child at an in-state university.
-We have 4 children, ages 12 to 19. All 4 are good students, either straight A or close to it, but they are also all slower than their peers at getting homework done and test-taking, partly due to ADHD for the 3 oldest. They tend to not be as good at standardized tests. They will probably all get at least some scholarships. They tend to use almost all their time trying to keep up with homework (one is consistently behind, and he also has some health issues that make him tired all the time). With their challenges and based on the extracurricular activities we have had to make some of them drop out of, I think they would struggle to keep their grades up in college if they were working even part-time during the school year (we would want them to work summers to contribute).
-All 4 children have been saving their own money for college their whole lives so far, some more diligently than others. They have between $3000 and $5000 saved each. The 19-year-old (currently a missionary who deferred 2 years and will start college this fall) has 2 scholarships for $1000 each (one time only) that he earned and no others. The 17-year-old, a high school senior, qualifies for a Florida Bright Futures Scholarship which will get him 75% of tuition paid at an in-state public university, and he plans to utilize that.
-All 4 children are reasonably careful with their money and pretty frugal compared to most kids their age. They don't seem to be entitled so far, but they are fully aware of our financial ability to pay for things. They already use their own money that they earn (from us hiring them for various jobs around the house and yard and on our rental properties) to buy things they want, and they never ask us to buy them anything, or if they do, they are always willing to pay part of it.
 
-Both of our parents (who were financially secure but not anywhere close to retiring and each had several more children to support) expected us to pay for all of the college ourselves (my husband's parents gave him food money, my parents nothing), and we worked hard and got scholarships to cover everything. That worked for us. My husband and I were both highly motivated students and did not have as much trouble with executive functioning as our children. My husband is leaning toward doing it just like his parents and expecting them to pay for everything except food. I am not sure they can handle paying that much, except maybe the two youngest who seem the strongest academically and may get full scholarships.

-We want to come up with an arrangement for the first child that we can do something similar with the rest of them and have them all feel fairly treated without having to do it exactly the same since they will get different amounts of scholarships, go to different schools, and they have different abilities and strengths.

What would be a good balance? Should we create some kind of "parent scholarship" with requirements for renewal that they apply to us each year or semester to make sure they're still on track with their academic and financial goals? How should we figure out how much to help each one?

JGS1980

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Re: How much should FIREd parents pay for kids' college?
« Reply #1 on: February 23, 2023, 08:51:46 AM »
Hi,

I live in a state with expensive in-state tuition. It looks like we have similar values in education.

What we decided as a family is that we would cover the full cost of in-state tuition or 4 years. If they needed another year to graduate, preferred to go to out of state university, or wanted to go to grad school, than they would be on their own.

On the other hand, as this money is already earmarked for college, it's theirs! That means that if they opt for cheaper trade school, get scholarships, or finish school in 3 or 3.5 years, than they get any remaining money transferred to them to use for grad school, buy their first home, etc...

Everything is in 529 plans right now, and we are done contributing.

Hope this helps,

JGS

Laura33

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Re: How much should FIREd parents pay for kids' college?
« Reply #2 on: February 23, 2023, 10:40:42 AM »
Don't let the tail wag the dog.  You paying for college will not convert a mature, frugal child into an entitled twit, nor will forcing your child to pay for college convert an immature spendthrift into the next MMM.  You know your kids; they have shown you who they are over their entire lives.  Is your 19-yr-old mature and responsible?  Sure sounds like.  So why impose artificial financial penalties by forcing him to pay for something that you can easily cover? 

IMO, college is an investment in your kids' futures.  You can decide whether or not to make that investment.  But once you decide to make it, your attention needs to turn to how you can get the most out of it.  In your case, it sounds like your 19-yr-old has some ADHD issues that mean that homework and keeping up in classes takes more of his time/energy than for another kid.  At the same time, he is mature, responsible, and fiscally prudent.  So what will help him more long-term, now that you've made the commitment to a college degree?  Is he better served to re-learn the lesson of paying his own way, even if that means he doesn't do as well in his classes?  Or is he better served to focus on doing well in his classes?  Everything is a lesson; the key is to pick the one that your kid actually needs to learn.

Also:  please, please treat your kids as individuals.  Each one will have different needs, abilities, goals, desires, etc. (not that I need to tell you that).  "Fair" doesn't always mean "doing exactly the same thing for each kid"; fair is not always equal, and equal is not always fair.  So don't approach this decision as Determining The Course Of Four Kids' College Educations.  Figure out what's best for the kid who's going to college in 6 months.  When it's the next one's turn, figure out what's best for him.  Rinse, repeat.

Finally:  please note that my advice is coming from someone who was very firmly in your DH's camp; I believed kids needed skin in the game, and that paying for college would create entitled twits.  Except:  my own DH came from a wealthier family than my own, and his dad fully paid for his private college, and he is the least entitled person I know -- yeah, he doesn't always see the financial world the same way I do, but he works his ass off and expects absolutely nothing to be handed to him, ever.  So that kinda shot my prejudgment to hell, ya know?  The reality is that the parenting you do in the first 18 years has infinitely more impact on who your kids are than the single decision whether to fund college. 

I've done a complete about-face.  My own DD has ADHD, and I was very much worried about her getting lost and overwhelmed.  So we chose a smaller private school, even though it cost more, so she'd have more personal connections and be able to work closely with professors from day 1.  We chose to have her do research for credit instead of getting a part-time job, because if we're paying that much for school, why would I want to distract her from her studies for $10/hr?  And you know what?  She worked her ass off.  She ended up with four part-time positions (some credit, some volunteer, some pay*), including being basically handed what was supposed to be a full-time post-grad job by her professor for her senior year.  She is graduating in 4 years, with an engineering major and a math minor, flirting with summa cum laude, and with a job offer in hand that will pay enough to allow her to be completely independent and start saving for her own future.  She went from being a spendthrift in HS to frugal AF now that it's her money.  In short, she is a fully-fledged, independent, un-spoiled adult at the age of 21, ready (and determined) to go off and blaze her own way, with no parental oversight or financial support required.  I could not be prouder or happier that our decisions over the past 21 years helped her get to this point -- and I do not regret one single penny I spent this past four years. 

Might she have ended up here if we'd forced her to get a part-time job to cover part of her costs?  Maybe.  But more likely she'd have had to settle for an easier major -- that engineering and math homework took LOTS of time -- or be graduating with lower grades and fewer on-campus jobs/activities that she both enjoyed and that gave her an attractive resume to potential employers.  And it sure as hell would have been a lot more stressful -- again, not great for a kids whose ADHD tends to trigger periodic anxiety spirals. 

Obviously, YMMV.  But I repeat:  you know who your kids are, based on everything you've seen over the past 19 years.  Paying for college -- or not -- will not change that.  So why impose some artificial constraint to teach fiscal responsibility when (a) you can afford to cover the costs, and (b) your kid doesn't actually need to learn that lesson?  Focus on the kids you have, not the lessons of your own (or your DH's) past.**


*She's the one who insisted on chasing the paid positions for her junior/senior year, because she didn't want to be on our dime more than she had to be, and by that time I was confident in her ability to handle the juggle.

**I am a huge fan of demotivational posters.  I have one in my office that seems appropriate here:  Tradition:  just because you've always done it that way doesn't mean it's not incredibly stupid. 

Chris Pascale

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Re: How much should FIREd parents pay for kids' college?
« Reply #3 on: February 23, 2023, 10:42:51 AM »
I have told the kids they must go to community college. They pay $500 towards it each semester, and buy their own books.

2 down, 2 to go. The older one is at a local public 4-year now. I would pay up to the state cost for dorming and tuition if she wanted to go away since she saved me the money initially. I would also pay for an Ivy League school. Anything in between at a higher price, they need to cover the gap.

My 2nd daughter was contemplating going away her freshman year and it was going to be $22,000 after scholarship. We worked out that she could work 70 hours a week over the summer or sell her car to cover the difference. She slept on it (and maybe cursed my name 1000 times) and concluded that the car was more valuable as a car, and didn't feel it would be worth it spend all her money on tuition at a mediocre college that honestly should have offered her a better scholarship (A-student, science major, athlete who went to states for one sport and sectionals for another).

cheaplynn

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Re: How much should FIREd parents pay for kids' college?
« Reply #4 on: February 23, 2023, 12:03:48 PM »
Hi! I'm a high school teacher who works extensively with seniors getting ready for their college journey. I have a few thoughts that might be helpful for you as you figure this out:

1. A lot of kids don't know exactly how much their parents will contribute, and they  don't feel comfortable asking...however, they can't really make a smart decision about what school will be affordable for them if they don't know this information. If your kids know this information up front, they'll be able to use this and plan with it when they compare financial aid offers. I've also seen that having this information can make kids more motivated since they know that a few decent scholarships can cover most of the rest. My friend's daughter took a gap year and worked in order to save up 2 year's worth of housing.

2. It seems like you're already leaning towards covering full tuition for an in-state school. I'm not familiar with in-state tuition costs in Florida, but in my home state, the flagship university is much more expensive (like 10k) than one of the smaller, less selective state universities. So just be clear--would you offer to pay  the tuition bill, regardless of where they attend? Would you just give them a chunk of money equivalent to that year's tuition (if they get scholarships for part of their tuition, yay; if they choose to go out of state, they will have to cover the rest)? Honestly, there's no one right answer here, and it really just seems like what qualifies as "fair" in your family system is the best. [In my family, "fair" meant that we all got the exact same thing. In the case of college, it was 4 years of tuition; because I graduated a year early, my parents still felt like they 'owed' me one year's worth of tuition, so they offered in a lump sum after I graduated so I could buy a car.]

3. If you'd like to incentivize them to keep working hard and saving responsibly while they're young, you could offer to match scholarships they earn or whatever they save. (That said, offering to match whatever they save might be more equitable, since that's what they can most control)

4. If you'd like to tie the money to a level of academic performance, consider making the terms clear up front, as opposed making them 'apply' for the money every year. Like, you'll continue paying for tuition as long as they maintain at least a 2.5 average and are enrolled full time. Having that certainty and clarity before hand will make one thing less stressful for them.

My husband and his ex-wife had said (when they were married) that they weren't going to pay for their kids' college tuitions. This DID certainly motivate them to work hard in high school, but they also both are attending schools much below their selectivity level ("under-matched") in order to graduate without debt. On one hand, great. On the other, both of them very much have the mentality of "let's just get this over with" which isn't a very good/fun/enriching college experience. (My stepdaughter refused to even consider taking out student loans, even though she would have only had to take out a small amount to attend a school she was more interested in; my stepson only applied to ONE college, where he knew he'd get a very generous scholarship.) I do believe that if they (my husband and his ex) had been willing to contribute a little more and had been much clearer with the kids about *exactly* how much they'd be able to support them on a monthly basis, then the whole process would have been more positive for the kids. As it is right now, my husband and I bought each kid a new laptop before their first year, give them $250 for books at the beginning of each semester, and give them $100 a month to help cover living expenses.

Good luck figuring out what's best for your family!


EscapeVelocity2020

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Re: How much should FIREd parents pay for kids' college?
« Reply #5 on: February 23, 2023, 12:37:40 PM »
In addition to saving toward FIRE, I also contributed to our kid's 529's, targeting roughly $100k for the two children.  I met both targets, so now we all have lots of options.

I was going to ER to save money on FAFSA EFC, but decided not to.  Then my first decided to go to technical college, which was a significant savings vs. expected cost.  This will allow us to eventually roll $35k from the unused 529 in to his Roth IRA in the future.

Our second child is getting wrapped up and will likely go a more traditional college route.  We will use the 529 toward that and not have the Roth IRA.  Maybe I'll ER this year, maybe I won't.

My personal feeling is that the kids do not have much control over the financial contributions their parent's make, nor can they effectively save for college prior to 18 yo, and very little influence over the EFC outcome.  I don't want to saddle my kids with school loans or limit their options if I can still have FI for myself either way.  Contributed $400/mo for those 18 years while contributing much more to my own FI.

These are all personal decisions and we have different situations, but you can certainly have it all if you plan appropriately, but I would say that it is a reasonable expectation for a responsible parent to put some money aside each month for 18 years to help your kids get a good start on their adult life.  Should also make them more independent in the future further improving your enjoyment of FIRE.

JupiterGreen

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Re: How much should FIREd parents pay for kids' college?
« Reply #6 on: February 23, 2023, 01:42:18 PM »
Whatever you decide, please do not use the college money as blackmail to get them to do something that you specifically want. If you want to give them a figure that you are willing to spend on college, great. I'm not commenting on that part. But if you do, don't tie strings to it (like what school they attend, their major, where they live etc). Sometimes this can blow up your relationship. They are their own humans, educate and support them if you can/are willing but don't be a bully (not saying you are, just pointing out this perspective). Ideally, the natural evolution of a human being maturing is supported by unconditional love and family support but also without constraints that limit who they are becoming. 

secondcor521

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Re: How much should FIREd parents pay for kids' college?
« Reply #7 on: February 23, 2023, 04:45:40 PM »
Overall this is a highly individualized decision and there are a million different ways people choose to do things.  Whatever you end up deciding to do, I would strongly encourage you to share your plans with your kids as they start the college application process or even a year or so before.  I think it is parental malpractice to let the kid apply to a school, get accepted, then find out Mom and Dad won't help enough to make it workable.  They should know "the college deal" up front.

-We FIREd in 2017, and have sufficient money saved to pay tuition (and probably a lot more if needed) for 4 years for each child at an in-state university.

Good for you.  I personally decided to delay FIRE until I had reached my college savings goal for my kids.  Since I reached that point before they started, I mentally committed to going back to work if I needed to to meet my college commitment to them (4 year degree no debt for each of my three kids, basically).

-We FIR-We want to come up with an arrangement for the first child that we can do something similar with the rest of them and have them all feel fairly treated without having to do it exactly the same since they will get different amounts of scholarships, go to different schools, and they have different abilities and strengths.

What I do is probably more complicated than necessary, but it's this:

1.  I consider all of their college savings plans to be communal.  I freely move money back and forth between their accounts as their funding needs change.
2.  I keep track of my out of pocket college expenses per child per semester.  I convert this into inflation-adjusted equivalent semesters.  I inflation adjust because college gets more expensive each year and my kids are spread out in age somewhat.
3.  Right now, there is projected to be funds left over.  Each kid will receive from the left over funds in inverse proportion to their inflation-adjusted out of pocket costs.

The result of this is that my kids know (a) they'll get their undergrad paid for, and (b) there is somewhat of an incentive for them to spend carefully - if they do, then more money will be left over, and they'll get a bigger proportion of it.  But if they need to spend it for college, it's there.

-We FIRWhat would be a good balance? Should we create some kind of "parent scholarship" with requirements for renewal that they apply to us each year or semester to make sure they're still on track with their academic and financial goals? How should we figure out how much to help each one?

I would not do the parental scholarship idea.  I do make my support contingent on my kids having a plan and pursuing a degree that will result in marketable job prospects.  I did have grade contingencies as well that I did not enforce.  In retrospect that was a mistake because my two sons spent a few years wandering in the college wilderness not doing well, and that wasn't good for anyone really.

Honestly, you'll probably know if they're on track or not.  You can, if you feel it's necessary, have the kids sign a FERPA release so the school will release their grades to you.  No FERPA release means you can pay their tuition but can't see their grades.

kanga1622

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Re: How much should FIREd parents pay for kids' college?
« Reply #8 on: February 24, 2023, 01:35:30 PM »
My kids are younger but both ND and we likely won't be able to to pay their tuition completely.

DH and I have been toying with the idea of providing a "refund" after a semester of adequate grades. That doesn't mean straight As but could be dependent upon the best ability of the individual child. Essentially the kids would be responsible for putting up the money for their first semester and then we would pay them back for expected performance in their coursework. They could then apply that funding to the next semester.

We are trying to strike a balance between making them feel invested in the process and having to put forth appropriate effort. But we don't want them weighed down by huge loans after college or trade school.

My parents paid for my car expenses but I was responsible for the rest of my school and living expenses that weren't covered by scholarships.
DH had his AS degree paid by his dad and took out loans for his BS. By that time we lived together so he worked enough to cover basic living expenses and took out minimal loans to cover tuition and books.

But 20 years ago we could easily pay back our loans very quickly after graduation because we had a total of about $15,000.

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Re: How much should FIREd parents pay for kids' college?
« Reply #9 on: March 14, 2023, 07:36:02 AM »
We are in a very expensive in-state tuition state.  The last goal I had before allowing myself to FIRE was to put 4 years worth of tuition/room/meal plan at the flagship university into 529s for each of my 3 kids, which was not cheap (basically $400k total).  I told my first kid that's what he was getting from us, and he could have the money leftover.  I send payment each semester for tuition/room/meal plan from the 529.  His own savings/work is his spending money.  He's done well with it and as he's nearing graduation already has a plan for getting a masters over the summers (he'll be a teacher) with his remaining money due to some scholarships and attending a somewhat less expensive school.  Even after that it looks like he'll have some money left over.  For his graduation present I'm gonna buy him a new car in return for his word he'll never go into debt except for a mortgage.  Sending a kid out into the world with a college degree and no car payment seemed like the best way to put them in as good a financial shape as possible without interfering with their monthly finances after school was done, which seems detrimental.

There's no real "should" here for me wrt what I'm doing.  I basically achieved a much higher salary in my career than I had ever assumed I would and so ended up in a position to do this (which is MUCH more than I had ever planned when they were little) with what seemed relatively little pain.

firefamily

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Re: How much should FIREd parents pay for kids' college?
« Reply #10 on: March 16, 2023, 12:39:33 PM »
Update:
After reading all your comments and discussing and calculating, we realized that our comparisons of college costs for our children were very different from our own when we were in college in a couple of ways, and we couldn't fairly assume our children could realistically pay everything on their own like we did. Since our time in college, the same schools increased tuition by about 250%, and basic (frugal) living expense are about 350% higher at one of our kids' college choice and 600% higher at another of our kids' colleges (higher housing cost area). Over the same time, minimum wage has slightly more than doubled. While my husband and I when we were students making low wages, were able to each earn enough in a summer to pay our living expenses for the school year, our kids probably could only earn about a third or less of what they need just to live for that time.

So we decided to have them pay for half of their tuition (in-state level) and any of their discretionary spending for things that are not required (clothes, eating out, entertainment, miscellaneous purchases) from their savings and summer job money. If they got scholarships, they could allocate those to their portion first before ours (financial aid would cover ours if any received). We are planning to pay for their rent, utilities, and enough for basic groceries, textbooks, and the other half of tuition. We get the final say in what those amounts are once we know what is reasonable for the area (which they get a say in), so we won't pay for fancier than needed apartments, etc. This can go for 4 years, and after that, no promises for us to help.

Zamboni

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Re: How much should FIREd parents pay for kids' college?
« Reply #11 on: March 16, 2023, 01:42:11 PM »
Update:
After reading all your comments and discussing and calculating, we realized that our comparisons of college costs for our children were very different from our own when we were in college in a couple of ways, and we couldn't fairly assume our children could realistically pay everything on their own like we did. Since our time in college, the same schools increased tuition by about 250%, and basic (frugal) living expense are about 350% higher at one of our kids' college choice and 600% higher at another of our kids' colleges (higher housing cost area). Over the same time, minimum wage has slightly more than doubled. While my husband and I when we were students making low wages, were able to each earn enough in a summer to pay our living expenses for the school year, our kids probably could only earn about a third or less of what they need just to live for that time.

So we decided to have them pay for half of their tuition (in-state level) and any of their discretionary spending for things that are not required (clothes, eating out, entertainment, miscellaneous purchases) from their savings and summer job money. If they got scholarships, they could allocate those to their portion first before ours (financial aid would cover ours if any received). We are planning to pay for their rent, utilities, and enough for basic groceries, textbooks, and the other half of tuition. We get the final say in what those amounts are once we know what is reasonable for the area (which they get a say in), so we won't pay for fancier than needed apartments, etc. This can go for 4 years, and after that, no promises for us to help.

I'm glad that you've come to this conclusion! "Working your way through school" is not at all what it used to be even 20 years ago.

It is hard for me to understand expecting someone to work a lot of hours to pay for their own schooling while they are in school AND go to school full time. It's a recipe for disaster for many young people. We used to be able to make enough money in summer jobs to pay tuition, and that is rarely the case at 4-year colleges anymore, unfortunately.

So, instead of focusing on who is going to pay for it, ask yourself:
Why do I want my kids to go to college at all?

My kids are in college to learn as much as they can about how to think and reason and argue and read complicated material and write, and I want them to make strong connections with peers since this is often what leads to an inside track to great jobs later. I want them to gain outside perspectives so they can work with all kinds of different people, and honestly I want them to gain some of the humility that comes from trying to solve really, really difficult problems, which can be mathematical or philosophical. Which means they have to have time to actually "do the readings" and "meet with their group." If your children go to a strong school, then they will indeed have a full time amount of work assigned to them (and hopefully they will choose to do it!)

Many of their peers will have only one job: doing well in school. So bear in mind that if you expect your college-aged child to do that full time job of doing well in school AND another job, then they might burn out. Or their grades will suffer. I see it all of the time.

This is all coming from the perspective of someone who both had scholarships and worked throughout school. I have a job that is impossible to get without my formal education. My brother went to college and now works in a blue collar trade. A big part of the reason why he is so extremely successful in that trade is what he learned while he was in college: how to think and reason and learn even the most complicated material.

It sounds like you've raised responsible young people who value what they have. Focus on why they are going to college and get them to be serious about that part rather than focusing so much on the money.
« Last Edit: March 16, 2023, 04:00:11 PM by Zamboni »

MaybeBabyMustache

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Re: How much should FIREd parents pay for kids' college?
« Reply #12 on: March 16, 2023, 03:00:27 PM »
A few thoughts on this, as someone who has a 16 & 17 year old.
-To some of the points up thread, college is significantly more expensive (even inflation adjusted) from when I went to college. Working a summer job & part time during school is not going to offset much of the cost proportionally.
-I've heard in other threads (not necessarily this one) that posters plan to do what their parents did, because they turned out fine, & bootstrapped their way through. That's cool for some, but I'd note my first point, and add that many of us are in vastly different financial positions than our parents are. Why does that matter? Well, i got a ton of financial aid for college, because my parents made very little money. We make a ton of money, and our kids will qualify for zero financial aid. For our family, that means we plan to use our high income to save for college, given we don't want our kids to bear the brunt of not being eligible for financial aid to our income, but us also not saving.
-We are encouraging our kids to look at a variety of colleges, and have saved in 529s. I'm planning to FIRE in a few months, but will plan to go back to work if needed to pay for their last few years of college. My kids have summer jobs & work very part time during the school year. I'd rather them focus a lot on learning during the year (particularly my kid with ADHD) vs trying to juggle school & a job. If the first year demonstrates he can successfully juggle, great. He can get a job.

StarBright

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Re: How much should FIREd parents pay for kids' college?
« Reply #13 on: March 16, 2023, 03:39:07 PM »

It is hard for me to understand expecting someone to work a lot of hours to pay for their own schooling while they are in school AND go to school full time. It's a recipe for disaster for many young people. We used to be able to make enough money in summer jobs to pay tuition, and that is rarely the case at 4-year colleges anymore, unfortunately.


^ this. I started working to pay for college when I was 13, and came really close to clocking full time hours for extended periods a few times while I was in high school. Worked two jobs most summers and all through college and got great scholarships and did everything right and I have a nice job that requires lots of hours a week.

And now I've hit my 40s and my doc says my actual age markers are like 10-15 years older mostly just from stress and fatigue. We will be realistic with our kids about what secondary education might be appropriate for them, but I never went them to be run ragged to the detriment of their health.


MaybeBabyMustache

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Re: How much should FIREd parents pay for kids' college?
« Reply #14 on: March 16, 2023, 03:47:45 PM »

It is hard for me to understand expecting someone to work a lot of hours to pay for their own schooling while they are in school AND go to school full time. It's a recipe for disaster for many young people. We used to be able to make enough money in summer jobs to pay tuition, and that is rarely the case at 4-year colleges anymore, unfortunately.


^ this. I started working to pay for college when I was 13, and came really close to clocking full time hours for extended periods a few times while I was in high school. Worked two jobs most summers and all through college and got great scholarships and did everything right and I have a nice job that requires lots of hours a week.

And now I've hit my 40s and my doc says my actual age markers are like 10-15 years older mostly just from stress and fatigue. We will be realistic with our kids about what secondary education might be appropriate for them, but I never went them to be run ragged to the detriment of their health.

Very much agree. I worked three jobs in college, and started working when I was 13 as well. I did not enjoy college, and want something different for my kids, given we are in a different financial position.

I also think it contributes to why I want to FIRE now. I'm burned out!

dabighen

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Re: How much should FIREd parents pay for kids' college?
« Reply #15 on: March 17, 2023, 05:36:31 PM »


Hi,

I live in a state with expensive in-state tuition. It looks like we have similar values in education.

What we decided as a family is that we would cover the full cost of in-state tuition or 4 years. If they needed another year to graduate, preferred to go to out of state university, or wanted to go to grad school, than they would be on their own.

On the other hand, as this money is already earmarked for college, it's theirs! That means that if they opt for cheaper trade school, get scholarships, or finish school in 3 or 3.5 years, than they get any remaining money transferred to them to use for grad school, buy their first home, etc...

Everything is in 529 plans right now, and we are done contributing.

Hope this helps,

JGS

This is our plan as well.  4 going on 5 kids.  However, we are kid poor so FIRE is unlikely in our future until we turn 52 or so.  I am 38.

Blissful Biker

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Re: How much should FIREd parents pay for kids' college?
« Reply #16 on: March 19, 2023, 11:27:48 AM »
Our strategy was to fund the first three years of university for our two kids (currently 18 and 19 yrs old) so they had a big leg up but still some skin in the game.

But the RESP (Canadian version of the american 529) ballooned during the decade long bull market so even with the recent correction and inflation there's still enough to fund four year degrees for both.  A good problem to have indeed.

A couple of years ago we stopped contributing and "turned the money over" to the kids.  They log into the brokerage, watch the market fluctuation, watch the dividends come in and run the calculations to rebalance.  It's been a good financial learning tool for them.

I'll pull what ever they request from the RESP provided they have a detailed budget to support the request.  Our oldest is striving to make very frugal decisions with the goal of having leftover RESP money and a fully funded TFSA when he finishes his four year degree.  Our youngest is also making frugal decisions to minimize the student debt he will incur for his planned 8 years of university.

Giving them the freedom to "own" their RESP with some guidance has been a good choice.  They are learning to be responsible  and make their own good financial choices, while pursuing careers they are excited about.

StarBright

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Re: How much should FIREd parents pay for kids' college?
« Reply #17 on: March 19, 2023, 02:55:08 PM »

^ this. I started working to pay for college when I was 13, and came really close to clocking full time hours for extended periods a few times while I was in high school. Worked two jobs most summers and all through college and got great scholarships and did everything right and I have a nice job that requires lots of hours a week.

And now I've hit my 40s and my doc says my actual age markers are like 10-15 years older mostly just from stress and fatigue. We will be realistic with our kids about what secondary education might be appropriate for them, but I never went them to be run ragged to the detriment of their health.

Very much agree. I worked three jobs in college, and started working when I was 13 as well. I did not enjoy college, and want something different for my kids, given we are in a different financial position.

I also think it contributes to why I want to FIRE now. I'm burned out!

I totally agree on the burn out.

And also, I feel like the constant working while still a really young person led me to make some really disastrous relationship decisions.  I absolutely ignored major red flags while dating because I was so tired that I didn't have the energy to change my situation or told myself I was so exhausted that I was misunderstanding.

And I 100% stayed in a very bad relationship because my ex threatened to sue me me for the cost of wedding went I wanted to back out- I had no money so I got married! (I wasn't thinking clearly, and I was all of 22, and I was basically hungry and sleepless and working multiple jobs while just trying to figure out how to ALSO pay for my cap and gown).

Neither of my kids will ever be put in a position to make horrible choices because I want them to have "skin in the game."
« Last Edit: March 20, 2023, 07:33:41 AM by StarBright »

yachi

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Re: How much should FIREd parents pay for kids' college?
« Reply #18 on: March 24, 2023, 02:31:59 PM »
Update:
After reading all your comments and discussing and calculating, we realized that our comparisons of college costs for our children were very different from our own when we were in college in a couple of ways, and we couldn't fairly assume our children could realistically pay everything on their own like we did. Since our time in college, the same schools increased tuition by about 250%, and basic (frugal) living expense are about 350% higher at one of our kids' college choice and 600% higher at another of our kids' colleges (higher housing cost area). Over the same time, minimum wage has slightly more than doubled. While my husband and I when we were students making low wages, were able to each earn enough in a summer to pay our living expenses for the school year, our kids probably could only earn about a third or less of what they need just to live for that time.

So we decided to have them pay for half of their tuition (in-state level) and any of their discretionary spending for things that are not required (clothes, eating out, entertainment, miscellaneous purchases) from their savings and summer job money. If they got scholarships, they could allocate those to their portion first before ours (financial aid would cover ours if any received). We are planning to pay for their rent, utilities, and enough for basic groceries, textbooks, and the other half of tuition. We get the final say in what those amounts are once we know what is reasonable for the area (which they get a say in), so we won't pay for fancier than needed apartments, etc. This can go for 4 years, and after that, no promises for us to help.

I like where you ended up.  My main comment was going to be that tuition, room, & board costs for college have not remained as affordable for young people as they may have been at some point.

But the other point I want to make is that the cost to attend also depends on the family income & assets.  When I went to college, the FAFSA application my parents filled out meant we only needed to contribute 1/4 or so of the cost.  My parents were low income, with not much in savings outside of retirement accounts.  My now-wife (then just a friend)'s parents did things differently, their FAFSA showed they could afford the whole thing, but they were proud that their kids were going to do it all on their own, and the 3 siblings did it with student loans.

With help from their parents they took out crazy levels of student loans.  My wife made out the best of 3 siblings because she had a 1/3 scholarship, lived on campus, and begged her parents not to take out another loan her senior year.  Because her mom was just matching her sibling's student loan amounts, she had saved enough from the previous 3 years to cover a full year's expenses.  That sibling wasn't always able to make the loan payments, so the loan provider would come to the parents.  Her other sibling went for a year and a half or so to a program their parents somewhat randomly chose, didn't graduate, and now works a job without a degree requirement, but still has to pay off the student loans.

You seem to have raised your kids to be responsible and not entitled.  I don't see how all that hard work would be undone by helping with college.

Our personal approach for our kids will be to keep our assets outside of retirement accounts low.  It's one reason we'll rent a vacation spot instead of owning a cabin in the woods.  I was very surprised how high our income can be and still quality for need based student aid.