Do you save for kid's college?

[freeazabird]

Do you save for your child to go to college? If so, how much? Does anyone feel it is not their responsibility to save fully for their kid's college?

[golden1]

Yes.  It isn't my responsibility, but it is something I would like to help with as much as I can.  Not having that student loan is a big help coming out of school.

[MayDay]

We don't feel that we are responsible to save fully for their college, but we plan to contribute some (goal is at least half, but it will be highly dependent on their choice of school, major, and keeping their grades up). 

I do feel that it would be wrong for us to retire early without saving for their college.  It's one thing if you can't afford it, but unless we are retiring for health reasons, we can work a few extra years to help them get a better start. 

We currently do the following:
My grandpa puts 60$ a month in a 529 for each kid.  This should pay for one year. 
We have a Fidelity AmEx that we use for all purchases.  It is 2% cash back into a 529.
We will increase contributions to either our 529, or a brokerage account of some kind, after a few other financial goals are met (like paying down mortgage enough to get rid of PMI).  We won't go crazy though, we will put most savings to retirement still. 
We will cash-flow most of it either through my H's normal employment, or through me getting a job (currently a sahm). 

Basically, we aren't stressing about it too much yet.  Our kids are 6 and 4.  I will encourage them to take a gap year, consider trade school, get as many college credits as they can during high school, etc.  and like I said, just me going out and getting any kind of job would be $$$ that can go straight to college payments. 

[matchewed]

http://forum.mrmoneymustache.com/mini-money-mustaches/college/
http://forum.mrmoneymustache.com/mini-money-mustaches/kids-and-college-will-you-pay/

[stuckinmn]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.   

[SunshineGirl]

We plan to pay up to $10K per year for tuition at a state school, and their first year in the dorms. We've saved 20% of this, and the rest will either be saved haphazardly in the next few years or paid for out of cash flow. We financed a rental on a 15-year term with the express purpose of using the income after it was paid off for college expenses; glad now to have made that decision 13 years ago!

During the years they are in college, we'll likely save less for ourselves, but we'll be going into those years with a decent net worth and an ever-closer pension, so our savings can take the hit for a few years.

[hybrid]

We paid for most of our daughter's college, but she went to school in town and covered her own room and board, so it was a lot less for us than others. We hadn't saved for it however, we paid as we went (about 4K a semester at the time, perhaps 5.5K now).

As for our son, he is utterly disinterested in college at the moment. He will either pay rent if he opts to just work or not pay rent if he eventually decides he wants something more.

[Zikoris]

Don't have or want kids, but here's my perspective.

My parents didn't pay for any education costs for me. I don't feel like they were obligated to, because one adult is not obligated to fund the lifestyle choices of another adult.

My boyfriend's parents paid for his creative writing degree, but not his bookkeeping classes that he enrolled in after realizing after graduation that he picked a pretty bad major. I thought that was a little douchey as they had ample education funds set aside for him but pulled a "Surprise! We're not going to pay for it!" at the last minute.

Both of us have ended up in a similar position - similar types of jobs, salary, and net worth.

I think it's a nice gesture to help out with post-secondary, but certainly not required. However, I do think not teaching your kids basic life skills and money management makes you a bad person.

[MooseOutFront]

I intend to pay for large state school one way or another.  They're both in diapers still.  I'll be long FIREd by then so maybe we ramp up self employment during those years or maybe the stache will be able to support it as is or maybe they'll get scholarships or maybe their grandparents will help with it or maybe it will be near free by then or maybe they won't go.  Either way I'm saving as much as I can already so I don't see a need to view kids college as a separate money bucket.  All in all not a huge concern to me as yet.

[gobius]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.

From what I understand colleges are asking about parents' net worth as well.  They didn't when I went to college (graduated 6 years ago) but a friend of mine said he was asked about it when his kid was going to college.  I could be wrong on this; they always just asked for parents' income when I went to school. 

My parents made good money but not in the top 10% and I still paid full tuition at the state school I attended (in fact it was tiered and engineering students paid more, so I paid higher than most).  The only ones I'm aware of with potential discounts like what you're talking about are private schools.

[Emilyngh]

From what I understand colleges are asking about parents' net worth as well. 

The FAFSA (federal aid) only asks about net worth outside of retirement accounts (so IMO, fund these first) and IME the vast majority of state and medium tier private schools only request the FAFSA.   The schools that ask more questions regarding total net worth do so b/c they offer more generous need-based aid *in addition to* the state/federal aid.   They also tend to be generous with this aid, and IME one's aid won't be lower at schools that ask for this extra info than at a school that only requires FAFSA, but could be much much higher.

I'm helping DSD prep to apply to college this fall.   I just went through and made a spreadsheet of 13 schools that dsd is interested in with estimated total cost based on financial info, the tuition exchange  I'm eligible for, average sats and gpas, etc and DSD will choose 7-8 to apply to.   We have a set max amount we'll help her with, which will completely cover the estimated cost of 1 school on the list (b/c she'd live with us, so no room and board) and about 1/3rd to 1/2 of most of the rest of the schools with room and board.    If she chooses a school that's more than our contribution plus what her mom offers to pay she'll have to get loans/figure out how to pay.   I feel that this is reasonable and won't impede her ability to get a good education.

We do have a 529 for DD (age 3), but only put $50 a mo in.    I really prefer to put money in tax deferred and Roths instead.   It really makes more sense for us to save primarily in retirement accounts, but for some emotional reason I want a small amount in the 529 in her name.   We'll probably cover a set amount for DD, which will be somewhere around the cost of in-state tuition with room and board, but it'll probably be mostly funded from Roth accounts.   

[Freedom2016]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.

I'm trying to get my head around this right now, as DH and I are debating how much to fund our 2-year old's 529. We have maxed out our available tax-deferred retirement vehicles, so any extra cash we have is going to go into taxable investments and likely be considered in parental contribution calculations... so why not gain the tax benefits of a 529 while we're at it?

Maybe we don't yet understand enough about what schools look at and what they don't...

[Gin1984]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.

From what I understand colleges are asking about parents' net worth as well.  They didn't when I went to college (graduated 6 years ago) but a friend of mine said he was asked about it when his kid was going to college.  I could be wrong on this; they always just asked for parents' income when I went to school. 

My parents made good money but not in the top 10% and I still paid full tuition at the state school I attended (in fact it was tiered and engineering students paid more, so I paid higher than most).  The only ones I'm aware of with potential discounts like what you're talking about are private schools.

They ask for assets, not net worth.  And any money in a retirement account is excluded.

[Emilyngh]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.

From what I understand colleges are asking about parents' net worth as well.  They didn't when I went to college (graduated 6 years ago) but a friend of mine said he was asked about it when his kid was going to college.  I could be wrong on this; they always just asked for parents' income when I went to school. 

My parents made good money but not in the top 10% and I still paid full tuition at the state school I attended (in fact it was tiered and engineering students paid more, so I paid higher than most).  The only ones I'm aware of with potential discounts like what you're talking about are private schools.

They ask for assets, not net worth.  And any money in a retirement account is excluded.

Oh, and the value of the home you live in is also excluded.

[ketchup]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.

From what I understand colleges are asking about parents' net worth as well.  They didn't when I went to college (graduated 6 years ago) but a friend of mine said he was asked about it when his kid was going to college.  I could be wrong on this; they always just asked for parents' income when I went to school. 

My parents made good money but not in the top 10% and I still paid full tuition at the state school I attended (in fact it was tiered and engineering students paid more, so I paid higher than most).  The only ones I'm aware of with potential discounts like what you're talking about are private schools.

They ask for assets, not net worth.  And any money in a retirement account is excluded.

Oh, and the value of the home you live in is also excluded.

If I live in a single unit of a 100-unit apartment building that I own (and provides me with an amazing amount of income), would that also be excluded (theoretical: I own no such building, and have no children)?

[Erica/NWEdible]

Yes. My parents paid for my undergraduate (I did some things that meant that was pretty inexpensive, but still, I came out of college debt free which is a big advantage I think) and I will pay tuition and necessary books for my kids undergrad, up to the level of in-state public uni tuition levels. If they want to go to a $60,000 a year private school they will have to figure out how to pay the difference.

[Emilyngh]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.

From what I understand colleges are asking about parents' net worth as well.  They didn't when I went to college (graduated 6 years ago) but a friend of mine said he was asked about it when his kid was going to college.  I could be wrong on this; they always just asked for parents' income when I went to school. 

My parents made good money but not in the top 10% and I still paid full tuition at the state school I attended (in fact it was tiered and engineering students paid more, so I paid higher than most).  The only ones I'm aware of with potential discounts like what you're talking about are private schools.

They ask for assets, not net worth.  And any money in a retirement account is excluded.

Oh, and the value of the home you live in is also excluded.

If I live in a single unit of a 100-unit apartment building that I own (and provides me with an amazing amount of income), would that also be excluded (theoretical: I own no such building, and have no children)?

It's my understanding that rental properties (so all the units you are renting out, I assume) are reported in the FAFSA.   Here's an article that discusses the specifics of assets and the FAFSA and CSS (what some schools use in addition to the FAFSA). http://www.forbes.com/sites/troyonink/2014/02/14/how-assets-hurt-college-aid-eligibility-on-fafsa-and-css-profile/

[begood]

We took the appreciation we got on a house sale (about $50K in 2002 on a house we bought in 1996 - luck of timing) and invested it in mutual funds that are earmarked in our heads as our DD's college fund. She had just turned 1 at the time. Our hope has been to never need that for anything else and have it available to pay for college (or at least pay the lion's share) when the time comes.

I wish the state I currently live in had better state-school options. I'm not an education snob, but I'd like my kid to aim a little higher than what's on offer for cheap around here. Okay, maybe I am an education snob.

[Undecided]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.

Under nearly all scenarios, having $X in 529s vs. $X in (non-retirement) investment accounts isn't going to matter under current financial aid formulae. Others have pointed out that assets in retirement accounts generally aren't going to be treated as assets for financial aid purposes, but remember that withdrawals from those retirement accounts will be treated as income (while withdrawals from investment accounts will not be, although it may trigger some income via capital gains). The interplay of funding retirement, minimizing taxes and optimizing financial aid is very complicated.

[Emilyngh]

I have a few grand in each kids' 529 for but stopped contributing a few years ago.  I do plan on paying for their undergrad tuition at a public school (or the equivalent value at a private school if they choose to go there) but I'll figure out some other way to do it.  My undergrad tuition was paid for and I figure it's my turn to bite the bullet.

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I've got no problem paying but IMO universities are playing a retailer's game of pricing things far more than the market will bear, seeing which suckers will pay full retail, then discounting the product to a fair price for the remainder.  I did not get this close to FIRE by paying full retail.

Under nearly all scenarios, having $X in 529s vs. $X in (non-retirement) investment accounts isn't going to matter under current financial aid formulae. Others have pointed out that assets in retirement accounts generally aren't going to be treated as assets for financial aid purposes, but remember that withdrawals from those retirement accounts will be treated as income (while withdrawals from investment accounts will not be, although it may trigger some income via capital gains). The interplay of funding retirement, minimizing taxes and optimizing financial aid is very complicated.

This is a good point.   Although, I don't think it's that complicated compared to the other financial topics/plans that people on here regularly deal with.   For example, I'm aware of people who have enough in Roth accounts to cover college who then get loans (esp if their kid qualifies for subsidized loans) for the first 2.5 years and only start to withdraw from their Roth starting Jan of their kid's junior year (since financial aid is determined using the previous full tax year's info).  This way the Roth withdrawals aren't recorded in years used for financial aid.   

 One just has to weigh the interest in carrying these loans vs the amount of aid it would afford.   Also, schools and the feds are getting pretty open about how things are calculated; there are many detailed calculators out there.   So, one can run a variety of sitches ahead of time and have a pretty good idea exactly how an extra "x" of income would influence aid.

I'm not saying it's trivial, but I don't think it's something folks on hear should be scared of (frankly, I'm finding my wade in pretty enjoyable in my own twisted way).

[Lady from Joppa]

Our oldest is in college now at a private school in VA; we live in TN. We are paying around $2500 per semester. She does have an outside scholarship that covers about 1/3, another scholarship from the college and she takes out whatver aid (grants and/or loans) that FAFSA says she is eligible for so we are just paying the balance left due.

These funds are coming from a savings account (not a 529 because we wanted the flexibility if she didn't go to college) that we have for her education. Once that runs out we will either use a portion of our tax refund, cash flow it, or use some of my DH's GI Bill.

For our younger 3 children (6 and under), we have a savings account for each one (also not a 529 but that will probably change soon) to pay for higher education (vocational training or college), braces, or whatver. We set aside $65 mo per child for that.

Neither my DH or myself have a college degree which probably affects how we view financing college for our children. We don't feel we have to but we do want to help as we can.

[nvmama]

I do not believe paying for college is a parent's responsibility.  Teaching their children about money is.  Neither my parent's or my husbands parents paid for our college education.  I never had to take out loans because I worked while in school to pay for school.  I paid each semester as I went along. 

As we are still struggling to max out our retirement savings, saving for our kids is not even a priority.  If we reach FI we may reconsider our position on the matter, but I'm still not convinced my children will go to college.

An avenue to remember, is that many employers will help with tuition remission if the job one is working is directly related to your area of study.  I wish my employers told me about this when I was in school, because I would have been able to take advantage of this, but I was too young/inexperienced to even know about these types of things.   I will make sure my children know.

[Cwadda]

I am in college right now and I was raised with the idea that I would be paying half of everything. And my goodness, it had such a large influence on me - it's unbelievable. It taught me to get involved with budgeting, frugality, working hard, reality of life, etc. I am so thankful for that.

So for my kids I'm going to do the same. In the meantime though, I'm going to save for my kids (once I have them).

[soccerluvof4]

This is one of two topics I struggle with Daily. The other being when in total FIRE exactly our needs etc...

Anyhow we have 4 kids entering Tenth Grade, 9th Grade, 5th Grade and 3rd Grade.  Early on before we smartened up a bit we were one of those that though $ would just always flow in and just pay for it when it comes....college that is.  My wife went to College full ride for both Academics and Athletics and I went into the Service.  My feeling is I wanted to do something and that increases with the more articles I read about Kids debt after College. My wife thought got everything handed to her feels the same way they should pay part of it.  So a while back we decided to Start 529s and in our State there is a State Tax deduction. They all have currently in the mid 20's in there account so there will be something for all of them.  As they go to College we can determine then based on our own financial situation if we will help out or not plus based on how responsible they are being.  So i have come to terms with more a wait and see approach because I dont want to ruin our future when at the very least I feel they will have mid 30'sk to help already. I'm not going to put anymore pressure on us that its our responsibility. The older ones if they stay healthy have good opportunity's for sports to help and academics. Time will tell but not counting on anything. Do what we can and teach them to have to do the rest by setting hopefully a good example.

[Gin1984]

My problem is that kids no longer can truly pay for college with full time work over the summer and part time (12-15hours) during the school year.  I worked my way through and it required part time school or taking semesters off sometimes and I did do community college to university.  Also, my state's requirements to transfers as a junior meant over 15 units more than going straight through. 
Aid awards do take into account parental income so, those who can, IMO, should pay. 

[Davids]

I have a newborn 2 month old (Probably will be our only child). I opened up a 529 account for him last week. I put in $1K initial contribution and plan to do $250 monthly (over time will probably increase monthly contribution). His grandparents will be opening up a 529 account for him as well, they have not yet but probably will this week. Not sure what they plan to contribute. College is so expensive and I do not want him saddled with ridiculous student loans so I figure what our contributions and grandparents he will have enough to cover his college education (or at least at a state school). Also it is state tax deductible in my state (PA) so nice little added benefit for me. One question I do have is what if after all this my son were to get a scholarship and not need the 529 funds, what would happen then.

[Gin1984]

I have a newborn 2 month old (Probably will be our only child). I opened up a 529 account for him last week. I put in $1K initial contribution and plan to do $250 monthly (over time will probably increase monthly contribution). His grandparents will be opening up a 529 account for him as well, they have not yet but probably will this week. Not sure what they plan to contribute. College is so expensive and I do not want him saddled with ridiculous student loans so I figure what our contributions and grandparents he will have enough to cover his college education (or at least at a state school). Also it is state tax deductible in my state (PA) so nice little added benefit for me. One question I do have is what if after all this my son were to get a scholarship and not need the 529 funds, what would happen then.

If a child gets a scholarship, to the point that they do not need the 529, you can withdraw it penalty free.

[MrsPete]

Do you save for your child to go to college? If so, how much? Does anyone feel it is not their responsibility to save fully for their kid's college? 

Yes, I did save.  I am now paying, and I've found that paying for college has not been nearly as difficult as anticipated.  We set limits on what we would pay -- what type of school, how many years -- and we've had no problem. 

Yes, I feel it is my responsibility to help my child into the world of adulthood, and part of that is helping her prepare for her career -- for that, she must have a college degree.  My husband and I can pay for college with only small sacrifice; on the other hand, it would be very difficult for our daughter to do it on her own. 

Balance is a good word to use when discussing finances.  If we were unable to save for our own future, I wouldn't put aside money for college -- but then, if we were truly unable to save, our kids would probably qualify for a PELL grant.  On the other hand, I would not feel good about retiring early so I could relax and do my own thing, while saying to my 18-year old (who isn't really an adult at all), "Go figure it all out!"  I'm willing to work a couple more years to see my kids through university without debt.  I'll still retire early and comfortably, and they'll begin their professional lives without the burden of debt. 

The reason I stopped using the 529 is a few years ago I was talking with a recent college grad and asked him about what it cost.  He said, "oh about $X per year, but only the very richest kids pay that, 90% of the kids get some grant or tuition reduction."  It hit me that if I save 200K in a 529, then my kids tuition cost will conveniently be 200K.

I don't think that's true.  I hear a whole lot of parents saying they were expecting grants, and they were offered only loans. 

From what I understand colleges are asking about parents' net worth as well.  They didn't when I went to college (graduated 6 years ago) but a friend of mine said he was asked about it when his kid was going to college.  I could be wrong on this; they always just asked for parents' income when I went to school. 

My parents made good money but not in the top 10% and I still paid full tuition at the state school I attended (in fact it was tiered and engineering students paid more, so I paid higher than most).  The only ones I'm aware of with potential discounts like what you're talking about are private schools.

I have a college student and a high school senior, and no college has asked about our income. 

I wish the state I currently live in had better state-school options. I'm not an education snob, but I'd like my kid to aim a little higher than what's on offer for cheap around here. Okay, maybe I am an education snob.

It may vary from place to place, but in my state the average state school is vastly superior to the average private school.  We have a number of small, un-prestigious private schools whose "target student" is a high school slackard from a moderately wealthy family (or one willing to borrow).  As such, I am firmly in the camp of, State schools are an amazing value for the money, and we have at least one that will fit every student's academic and career needs. 

You also need to consider what the student plans to study.  I am a teacher; my salary is set by the state, and no one cares where I went to school -- the name on my diploma will not help me advance or get me more money.  Likewise, my oldest child is studying nursing.  It won't matter where she studied; what will matter is that she can pass the test that will make her an RN.  In contrast, someone planning a career in politics might benefit from being able to show off a class ring from Snooty-U.

My problem is that kids no longer can truly pay for college with full time work over the summer and part time (12-15hours) during the school year.  I worked my way through and it required part time school or taking semesters off sometimes and I did do community college to university.  Also, my state's requirements to transfers as a junior meant over 15 units more than going straight through. 
Aid awards do take into account parental income so, those who can, IMO, should pay.

Yes, it is much, much harder to "pay your own way" than it was back in the 80s when I did it -- and it was pretty bone-crushingly difficult then to pay for college without any help. 

[sleepyguy]

Yes, my kids about 3 and 1 now.  Gov't kicks in 20% grant up to $7200 (max per year though) over the lifetime.  All B-day money and cash gifts go towards it.  I'm front loading so we already have close to 20k already.  If they choose to decide to attend post secondary education this is available to them.  We're playing with the idea they we pay 1/2 and they pay 1/2 over the course of the university life (if they choose).  Of course we're just investing their share.  Then when they graduate or land their first job or whatever, hand over the investment account to them as a 'FIRE' starter, lol.  Notice I say 'choose' to go to university... I didn't go and never will, I will understand if they don't want to either.

[rocketpj]

Canadian here, so our University costs are not so absurd as they are in the States.

We have saved a little for our kids to go to college.  Some of it from grandparents that was earmarked for exactly that, and some of our own money.  In Canada we have the RESP thing that provides a 20% grant up to $500 per year (with a few qualifications etc) into a tax deferred investment account.  There is an incentive to save for the kids education.

On the flip side, tuitions are rising dramatically here in Canada (though the quality of education does not seem to be rising alongside it).  So my kids' first year tuition will likely be equivalent to the tuition I paid for all 6 years of my university education.

My grandmother left me some money earmarked for school, and my parents helped with the tuition.  In the end I was responsible for paying my living costs and everything other than tuition and books, as well as a (small) portion of my tuition.  I had a lucrative but intensive job in the summers (treeplanting) that covered the rest fairly comfortably, though I would have picked up a p/t job if I had needed to.  I'm sure my parents could have helped me more (they both retired at 55 while I was in school), but I didn't want them to because I didn't like the dependency.

It is my hope to make sure the kids have tuition covered, unless they go to Harvard or something, in which case I'll only be able to help a little.  Adults can and should pay their own living expenses.  Every kid needs to learn some of the basics of money the hard way (not matter what their parents try to teach them), and I'd prefer they do it while in school than afterwards.

[oldladystache]

I've never saved for anything.

I've just spent less than my income.

When it came time to buy a car I had the money and bought one. And I had enough for the down payment on my house. When it was time for the kid's college he paid for part and we paid the rest.

If you just save there's enough money for when you need to buy something.

I've never had an emergency fund, either. Never needed one.

That's what worked for me, and it worked very well.

[RFAAOATB]

I'm going to take care of future kid by putting some money into a 529 and encouraging looking at the ROTC scholarship for the rest.

[davisgang90]

I have the GI Bill and 3 boys.  Oldest tried CC (which I funded as long as he got a B or higher) and didn't like it.  He is now working full time and paying us rent.  If he finished CC I would have let him use 1/2 of GI Bill for last 2 years at state uni.

2nd son has Autism and most likely won't attend.

3rd son is 10 and at this point will have the whole GI bill available for school. 

[soccerluvof4]

I have a newborn 2 month old (Probably will be our only child). I opened up a 529 account for him last week. I put in $1K initial contribution and plan to do $250 monthly (over time will probably increase monthly contribution). His grandparents will be opening up a 529 account for him as well, they have not yet but probably will this week. Not sure what they plan to contribute. College is so expensive and I do not want him saddled with ridiculous student loans so I figure what our contributions and grandparents he will have enough to cover his college education (or at least at a state school). Also it is state tax deductible in my state (PA) so nice little added benefit for me. One question I do have is what if after all this my son were to get a scholarship and not need the 529 funds, what would happen then.

The grandparents shouldn't have to open there own 529. In every case I have know they can contribute to the same 529 as you have set up and receive the same benefits the 529 might offer.  I.E. my state you get a tax deduction up to 3k a year.

[Malaysia41]

one acronym: CLEP.

Don't throw money at the first two years of college at a university. Today there are a crazy number of online courses from Duke, Stanford, etc.  Take the free online course and pay $80 to sit the CLEP exam and whammo you have 3-4 college credits.  Put $ into the last 2 years undergrad.  Not the first two.

http://forum.mrmoneymustache.com/share-your-badassity/frugal-parents-and-frugal-high-school/msg300293/#msg300293

[gobius]

I have a college student and a high school senior, and no college has asked about our income. 

From what I understand, you are paying for your kids' college educations.  My parents didn't, so when I filled out my FAFSA (applying for federal loans, grants and scholarships), I had to submit my and my parents' income tax information each year.  This is also because my parents claimed me as a dependent (technically they weren't supposed to but I didn't mind at the time).  I actually would fill out my FAFSA on January 1st to be eligible for grants requiring application by February 14th, which was before my parents filed their taxes, so I had to estimate their income and mine.  Later in the year I had to fill out an Income Verification Form (April timeframe).

If a student isn't applying for federal grants/loans then the university/federal government probably doesn't care what the parents make.  Same with if the kid is applying but isn't claimed as a dependent by anyone else (they still want the applicant's income info though).  Did your children apply for grants or fill out a FAFSA?  If so and you haven't been asked, then rules have changed since I was in college (I graduated 6.5 years ago).

[Gin1984]

I have a newborn 2 month old (Probably will be our only child). I opened up a 529 account for him last week. I put in $1K initial contribution and plan to do $250 monthly (over time will probably increase monthly contribution). His grandparents will be opening up a 529 account for him as well, they have not yet but probably will this week. Not sure what they plan to contribute. College is so expensive and I do not want him saddled with ridiculous student loans so I figure what our contributions and grandparents he will have enough to cover his college education (or at least at a state school). Also it is state tax deductible in my state (PA) so nice little added benefit for me. One question I do have is what if after all this my son were to get a scholarship and not need the 529 funds, what would happen then.

The grandparents shouldn't have to open there own 529. In every case I have know they can contribute to the same 529 as you have set up and receive the same benefits the 529 might offer.  I.E. my state you get a tax deduction up to 3k a year.

It is better for the grandparents to set up their own because it is not counted in the FASFA calcs.

[BarkingSquirrel]

I would really like to hear anyone's experience in paying for college from divorced parents. 

My ex has a very high income but nearly no savings.  I have a very low income but strong savings/home equity.  When we were married, he used to scoff at saving for college, saying he'd just pay out of his paycheck -- and he probably can.

Our divorce agreement pushes the problem off, leaves it to state law which won't require either parent to pay more than the in-state public rate.  My current impression is that my personal situation would qualify for financial aid, but because of my ex's income, the kids will not.   

Has anyone lived through this, can tell me how it works?  Is there a presumption divorced parents will split the costs 50/50 or is the ratio need-based?  Can you get your financial profiles evaluated separately under FAFSA or the other scheme? 

[Frugalicious]

I have about $5k in a 529 account for my 14 year old that I stopped funding several years ago in order to focus on funding retirement and the last remaining amount of my student loans.

I am fully prepared to pay for the full amount for a 4 year degree at a public, state school, but only if the grades are right.  This will be modelled on a tuition reimbursement plan from work.  So, if she gets an A or B, I will pick up the tab.  If she gets a C, I will pay half.  I will not pay for Ds or Fs.

She needs some financial incentive to work hard, so this should work for us.

[Gin1984]

I would really like to hear anyone's experience in paying for college from divorced parents. 

My ex has a very high income but nearly no savings.  I have a very low income but strong savings/home equity.  When we were married, he used to scoff at saving for college, saying he'd just pay out of his paycheck -- and he probably can.

Our divorce agreement pushes the problem off, leaves it to state law which won't require either parent to pay more than the in-state public rate.  My current impression is that my personal situation would qualify for financial aid, but because of my ex's income, the kids will not.   

Has anyone lived through this, can tell me how it works?  Is there a presumption divorced parents will split the costs 50/50 or is the ratio need-based?  Can you get your financial profiles evaluated separately under FAFSA or the other scheme?

Are you the custodial parent?  If so, for state schools, his income/assets do not count.  There are some private schools that will count both.

[Davids]

I have about $5k in a 529 account for my 14 year old that I stopped funding several years ago in order to focus on funding retirement and the last remaining amount of my student loans.

I am fully prepared to pay for the full amount for a 4 year degree at a public, state school, but only if the grades are right.  This will be modelled on a tuition reimbursement plan from work.  So, if she gets an A or B, I will pick up the tab.  If she gets a C, I will pay half.  I will not pay for Ds or Fs.

She needs some financial incentive to work hard, so this should work for us.

I would change it to say if she gets an A you will pay for whole, B is half and C or below is NIL.

[Gin1984]

I have about $5k in a 529 account for my 14 year old that I stopped funding several years ago in order to focus on funding retirement and the last remaining amount of my student loans.

I am fully prepared to pay for the full amount for a 4 year degree at a public, state school, but only if the grades are right.  This will be modelled on a tuition reimbursement plan from work.  So, if she gets an A or B, I will pick up the tab.  If she gets a C, I will pay half.  I will not pay for Ds or Fs.

She needs some financial incentive to work hard, so this should work for us.

I would change it to say if she gets an A you will pay for whole, B is half and C or below is NIL.

Lol, certain classes are harder than others.  I certainly would not want to discourage my daughter from trying certain classes because she might get a C.  I am in grad school, but the hardest course I ever had was my Ochem class and I worked my ass off for that C.  I am much prouder of that C than the muliple As I got in some much easier classes.

[Emilyngh]

I would really like to hear anyone's experience in paying for college from divorced parents. 

My ex has a very high income but nearly no savings.  I have a very low income but strong savings/home equity.  When we were married, he used to scoff at saving for college, saying he'd just pay out of his paycheck -- and he probably can.

Our divorce agreement pushes the problem off, leaves it to state law which won't require either parent to pay more than the in-state public rate.  My current impression is that my personal situation would qualify for financial aid, but because of my ex's income, the kids will not.   

Has anyone lived through this, can tell me how it works?  Is there a presumption divorced parents will split the costs 50/50 or is the ratio need-based?  Can you get your financial profiles evaluated separately under FAFSA or the other scheme?

Are you the custodial parent?  If so, for state schools, his income/assets do not count.  There are some private schools that will count both.

*most* state schools only require the FAFSA.   There are a few (more prestigious wealthier, like UVa) that do require info from non-custodial.   But, these schools are generally more generous than other less wealthy state schools, so even with submitting this info, they may still be less expensive if your child gets in.

[Gin1984]

I would really like to hear anyone's experience in paying for college from divorced parents. 

My ex has a very high income but nearly no savings.  I have a very low income but strong savings/home equity.  When we were married, he used to scoff at saving for college, saying he'd just pay out of his paycheck -- and he probably can.

Our divorce agreement pushes the problem off, leaves it to state law which won't require either parent to pay more than the in-state public rate.  My current impression is that my personal situation would qualify for financial aid, but because of my ex's income, the kids will not.   

Has anyone lived through this, can tell me how it works?  Is there a presumption divorced parents will split the costs 50/50 or is the ratio need-based?  Can you get your financial profiles evaluated separately under FAFSA or the other scheme?

Are you the custodial parent?  If so, for state schools, his income/assets do not count.  There are some private schools that will count both.

*most* state schools only require the FAFSA.   There are a few (more prestigious wealthier, like UVa) that do require info from non-custodial.   But, these schools are generally more generous than other less wealthy state schools, so even with submitting this info, they may still be less expensive if your child gets in.

I had NEVER heard of a state school requiring anything except for private scholarships.  Learn something new.

[BarkingSquirrel]

Are you the custodial parent?  If so, for state schools, his income/assets do not count.  There are some private schools that will count both.

Hm.  Legally no, we technically have joint custody.  But in practice, yes.  They live here, visit there, and he pays child support.  And I declare all the kids on my taxes. 

Hey!  I just looked it up at FAFSA:

The custodial parent for federal student aid purposes is the parent with whom you lived the most during the past 12 months.  . . . Note that this is not necessarily the same as the parent who has legal custody.

Sounds promising, at least if we qualify for federal aid.   

[Malaysia41]

one acronym: CLEP.

You needn't throw money at the first two years of college at a university. Today there are a crazy number of online courses from Duke, Stanford, etc.  Take the free online course and pay $80 to sit the CLEP exam and whammo you have 3-4 college credits.  Put $ into the last 2 years undergrad.  Not the first two.

http://forum.mrmoneymustache.com/share-your-badassity/frugal-parents-and-frugal-high-school/msg300293/#msg300293

[BarkingSquirrel]

one acronym: CLEP.

Very few places accept them; none in our state.  In neighboring states, it's mostly community colleges.

[darkadams00]

Older son is in college, and younger son starts this fall. We're operating on the limited 50% plan--tuition, books, and other approved education expenses only. Our home is a 30-minute bus ride from one Division I university (public), and a 45-minute bus ride from another Division I university (public). Owning a car and its numerous expenses are unnecessary. Paying for rent, utilities, laundry, and groceries in an apartment or college dorm is unnecessary.

My older son bought our old car and chose to move 2 hours away to go to another university, so he's working quite a bit to foot those additional bills (I strongly advised otherwise, but your child has to hear you and then make his/her own choices). The younger son is very frugal, working two jobs in the summers, banking 90+% of his pay, and plans to live at home and forego the car route. Given his hard work thus far, savings rate, and plans to continue to work weekends during the school year, he is considering moving on campus on his own dime for his final two years--cash up front. Time will tell what he eventually decides to do. He's often taken the more frugal route when decision time came. Last month, he even broke up with his senior year girlfriend after 8 months because of continuing differences about personal finances with respect to driving and dating vs longer-term financial goals.

No regrets with our advice and decisions thus far even though the sons chose two different paths. That is always a possibility, no matter what choice you put in front of two teens who are just beginning to test their wings.

[iwasjustwondering]

What about taking actual college classes during high school?  My older son has been taking high school classes since sixth grade, and enters high school in the fall.  He has completed Latin I, and the equivalent of a year of college organic chemistry.  If he substitutes some college classes for some of the regular high school classes, will his eventual college accept the credits?  He is nowhere near ready to go away to university yet, academically or socially/emotionally.  I'm not interested in grade acceleration, really.  But I do think he needs some additional challenge over the next few years.

I'm a late college savings starter.  My kids will not get financial aid if I stay in my current job.  So I'm saving as much as I can.  So far this year I've put $25K in their 529 plans (combined, not each).  My goal is $40K for the year.  I'm also still working the adjunct professor angle, and have been given an additional project at the uni where I teach.  So there is always the possibility that I could go full-time there before older son hits college and get the significant tuition discount.

[Malaysia41]

one acronym: CLEP.

Very few places accept them; none in our state.  In neighboring states, it's mostly community colleges.

If you get them accepted in a community college, most 4 year universities will accept the transfer credits.  It can be a cheap way to do the first year or two of school, and still get a degree from a big name university.