Paying for Childrens' College When You Have No Savings

[prof61820]

Public service is fine, but at the end of the day, someone has to pay. We don't live in a financial perpetual motion machine. We already support public services via the military (GI Bill), and many states have Teaching Fellows type programs (free schooling for 3-4 year of teaching afterwards). These services are needed and rightfully subsidized. There are likely others. But whether the service is before or after college, the service requires years of work--dishes might be a stepping stone to something that takes less time to degree.
3) (a) My older son got a job vacuuming/cleaning cars at a quick lube joint, learned how to do the under the hood tech work, became certified to do inspections/OBD II, etc. His pay has increased commensurate with his experience and skills, while he's watched over a dozen guys start, work a bit, and then leave after a few months with no additional skills and often no more than a single raise. He's getting a math degree and plans to get a master's in mathematical finance--nothing at all related to what he's doing now. And he moved out of our house to a town 2 hours away, so I had nothing to do with this job. He's helped two friends get jobs there, but neither lasted. Prior to that, while at home, he worked as a YMCA tutor and as a summer counselor--no help getting that job either. (b) My younger son is working in a fast food joint and at a higher-end restaurant. He started with cashier at the first and dishes at the second. Now he can get all of the hours he wants at the fast food shop, and he's a line leader at the restaurant. In both jobs, he can do almost anything in the kitchen. In both, he has watched 17-24 year olds come and go, including a couple managers, while he just keeps clicking along. He put in over 40 applications looking for these jobs back when he was searching for a job (both called him back within two weeks of each other, so he took them both). He has never quit or changed jobs, and he's called weekly by one place or the other to see if he'll cover for someone. Two jobs, ~22-25 hours/week while in school, ~50-60 hours/week during breaks and summer.

Congratulations on your kids' strong work ethic.  I suspect folks on this site hope to have kids just like your kids.

[Overseas Stache]

Anyone can go to college in the states without their parents cosigning on loans if they make the right choices. First, a parent does need to fill out their portion of the FAFSA so the student can get the Pell grant and federal student loans. Many colleges will also offer the perkins loan as well.

Do Federal student loans and Perkins loans not require parental co-signers?

That is correct Federal Stafford student loans (not the parent plus loans) and the Perkins loan do not require the parents to co-sign. They only thing the parent has to do is take about 20 mins to fill out their FAFSA.

[prof61820]

In California, you can get an associates degree (half your 4 year degree) at a 2 year community college for dirt cheap, less than 3 grand.  With books and other incidentals, I'd wager that comes out to 5 grand total.  Not that bad.  Ten years ago it was less than half of that when units were $20.  Taking out loans for the remaining two years, or working through it really isn't the end of the world.  I honestly don't see the big deal with college costs and do not understand the $50,000 or more people rack up in student loans.  To me it's about priorities. 

I can see how irritating it is for middle class students with parents obviously "able" to pay their way, unfortunately our generation is "all about me" instead of family.  Kind of sad, especially with the tax advantaged savings accounts that can be set up for kids.

I'd say a large part of the problem is the text book companies running amok with their price gauging efforts, especially putting out "editions" that are completely useless after the semester with "electronic keys."  No, calculus and history has not "advanced" that much, thanks anyway.  Rip off artists.  The "college experience" of dorm living and crap is a complete waste of time and money as well.  The high school counselors pushing people into 4 year universities doesn't really make sense for students in low income situations either when taking community college courses can slash the college bill 25% or more.  College doesn't have to be terribly expensive, at least in California.

Thanks for posting - I think the non-supportive parent issue crosses generational lines.  Some parents just don't value college or parental support (because they never had it themselves and turned out okay).  This is a real issue in the US and everyone knows we can't legislate parental support for higher education but yet somehow we expect ADULT children to get it when attending college.  Since our system assumes parental support (in a time when college costs/retirement costs/healthcare costs are increasing dramatically), a parent may have a legitimate reason for not parting with their savings.  This situation obviously creates conflict and puts ADULT children in horrible financial situations with no clear path to becoming an ADULT from a financial perspective.  This seems to be a part of the "rigged game" that is happening in the United States that Elizabeth Warren is now discussing on the campaign trail.

I agree that all students need to take into account debt when making higher education decisions.   You offer good advice on how a student can achieve their goals on a tight budget.  Maybe we need a free or cheap national system of Massive Online Open Courses "MOOCs" (http://en.wikipedia.org/wiki/Massive_open_online_course) that supplants the first 2 years of college.  I do think we need to think outside the box to reign in college costs.

I do not agree with you about textbooks.  It does seem like the textbook makers do have their cost inflation under control.  Check out the NCES (the federal education costs site) website here: http://nces.ed.gov/collegenavigator/ and type in University of Illinois and then go to the tuition and fees section for the Champaign campus.  You will see that over the last four years in-state tuition and fees at the U of I have gone from $12,116 to $14,522.  Over that same time period, textbook costs and supplies have remained constant at $1,200.  It's really a misnomer that textbook costs are increasing.  Textbooks are becoming less expensive because of new suppliers (Amazon, Chegg, etc) and new technologies such as ebooks, custom books and allowing students to purchase books by the chapter.  Students are typically not aware of these purchasing options.

Here are a few other interesting articles:

Chegg/Southern Connecticut State University: https://www.insidehighered.com/news/2014/09/02/chegg-takes-social-media-after-receiving-cease-and-desist-order-southern-connecticut

GWU:http://taxprof.typepad.com/taxprof_blog/2014/08/george-washington-tells-faculty.html

LSU: http://www.lsureveille.com/opinion/bookstore-overpriced-employees-incompetent/article_637b48be-3324-11e4-9caf-0017a43b2370.html

University of Maryland: http://www.diamondbackonline.com/news/article_abac46bc-33d6-11e4-ba6a-001a4bcf6878.html

Textbook Deals:  http://www.dailyfinance.com/2014/08/11/best-deals-college-textbooks/
 

[prof61820]

Anyone can go to college in the states without their parents cosigning on loans if they make the right choices. First, a parent does need to fill out their portion of the FAFSA so the student can get the Pell grant and federal student loans. Many colleges will also offer the perkins loan as well.

Do Federal student loans and Perkins loans not require parental co-signers?

That is correct Federal Stafford student loans (not the parent plus loans) and the Perkins loan do not require the parents to co-sign. They only thing the parent has to do is take about 20 mins to fill out their FAFSA.

Thanks - so the parents in the MSN article (5 kids/mid 5 figure income) might not have to co-sign for student loans if their children qualify (highly likely) and go to schools affordable enough to be paid for by grants and federal and Perkins loans?

[teen persuasion]

Anyone can go to college in the states without their parents cosigning on loans if they make the right choices. First, a parent does need to fill out their portion of the FAFSA so the student can get the Pell grant and federal student loans. Many colleges will also offer the perkins loan as well.

Do Federal student loans and Perkins loans not require parental co-signers?

Correct.

[Overseas Stache]

[/quote]

Thanks - so the parents in the MSN article (5 kids/mid 5 figure income) might not have to co-sign for student loans if their children qualify (highly likely) and go to schools affordable enough to be paid for by grants and federal and Perkins loans?
[/quote]

Exactly the only loans that require a co-signer are private student loans. These types of loans should be avoided at all costs anyways. The other option is a federal Parent Plus Loan, but this isn't actually co-signing this is signed only in the parents name, the student is not responsible for paying it pack and payments are not normally differed while the student is in college.

The amounts from a few years ago which may have changed are the following if the student is determined to have a financial need.
Freshman:
5550 Pell grant/year
9500 Freshman/ 10500 Sophmore/ 12500 Junior and Senior Federal Stafford loans sub and unsubsidized (interest accrues while in college).
5500 Perkins loan/year
Plus there are state programs as well depending on the state.
So I don't really buy the excuse "I can't go to college because my parents won't co-sign for me".

[prof61820]

So I don't really buy the excuse "I can't go to college because my parents won't co-sign for me".

I have to disagree with you here - and this is where we get into "rigged game" territory that can be horribly frustrating for a talented high school student.

If parents refuse to fill out the FAFSA, students cannot qualify to receive Pell Grants, Federal Loans, Perkins Loans and Private Loans until they are 24.

If parents fill out the FAFSA but do not qualify for Pell Grants, Federal Loans or Perkins Loans and will not co-sign on a Private Loan or take out a PLUS loan, there is no financial aid option for the student until they are 24.

As a result, an academically qualified high school student can have $20K of federal aid denied because his or her parents won't complete a FAFSA or make too much money (in the government's eye) to qualify for federal (non co-signer aid) but in reality, will not provide any financial assistance to the ADULT student by even co-signing for a Private loan (as you said, they should be avoided) or taking a PLUS loan.

I don't see why the US does not have a streamlined system so the ADULT student can more easily declare that they are independent and be able to access the financial aid system by just using their own ADULT income and assets.

[prof61820]

Are you suggesting that saving for retirement is not a need?

No, but when to retire, when to save, how much to save, etc., all involve ample room to characterize "saving for retirement" as involving not just needs, but priorities.

Who would you say has more "need?"

1.  A family of 4 with a $75,000 annual income and a government pension that allows retirement at 55 or

2.  A family of 4 with $75,000 annual income and no pension?

[Undecided]

Are you suggesting that saving for retirement is not a need?

No, but when to retire, when to save, how much to save, etc., all involve ample room to characterize "saving for retirement" as involving not just needs, but priorities.

Who would you say has more "need?"

1.  A family of 4 with a $75,000 annual income and a government pension that allows retirement at 55 or

2.  A family of 4 with $75,000 annual income and no pension?

If your point is that the FAFSA should ask about, and the EFC should consider, pension entitlements, I think that's totally reasonable. Perhaps as a factor in determining the extent to which retirement savings will be shielded from being considered as a source of contribution. 

[Overseas Stache]

I will never understand why a parent refuses to fill out a FAFSA, but if the person has parents like the student does have a few options. 
1. discover the parents SS # and fill it out without their knowledge. It even has a nifty feature to pull over tax records. It is very easy to do and the parents would have no way of knowing it happened.
2. Move out of your parents house and crash on someones couch. Ok now you are homeless or at risk of being homeless therefore considered an Independent and don't need your parents info.
3. Get married.
4. Say you will be a parent. You don't have to have a child yet just saying you will be a father or mother sometime during the school year even if that never happens will give you independent status. And yes you can independent for one year and then dependent the next.

Scenario number two. Parents fill out FAFSA but make to much but not enough to pay for any of the kids schooling.
The child can still qualify for federal Stafford loans even up to 9500 if the parents have bad credit. (if the parent gets rejected for the parent plus loan which is based off of credit worthiness) or 5000 if the parents have good credit. These loans however will be unsub if the parents make too much.
The child can also still qualify for for the Perkins loan, and other state programs. The only thing that goes away for sure is the Pell grant. So the child has to make some choices about community college or get scholarships or work their but off. Either way it can be done. Many places also pay tuition reimbursement. I think McDonalds pays up 10K a year of tuition reimbursement for their employees. So take the night shift at McDonald, or the night shift at a ATnT, Verizone, or Comcast center. Ya the job sucks but they have tuition reimbursement.

I stand by my statement "I don't really buy the excuse, I can't go to college because my parents won't co-sign for me".
Yes the system is flawed and yes the parents can make it harder on their child with their choices, but still it is no excuse.

[prof61820]

Are you suggesting that saving for retirement is not a need?

No, but when to retire, when to save, how much to save, etc., all involve ample room to characterize "saving for retirement" as involving not just needs, but priorities.

Who would you say has more "need?"

1.  A family of 4 with a $75,000 annual income and a government pension that allows retirement at 55 or

2.  A family of 4 with $75,000 annual income and no pension?

If your point is that the FAFSA should ask about, and the EFC should consider, pension entitlements, I think that's totally reasonable. Perhaps as a factor in determining the extent to which retirement savings will be shielded from being considered as a source of contribution.

The government should determine what is the value of let's say a $35,000 annual pension starting at 55 with a 3% COLA (or some amount it would determine would be a "secure" retirement pension income) and then figure out how much in savings a 401(k) family would need to replicate that type of retirement income in an annuity or other investment vehicles before determining the families "need."

[frugalnacho]

I went to school from 2002-2006, so this info is a little outdated.  At the time I went to school, no, there was no way for me to go without my parents co signing on the loans. 

Every year, they had to fill out the FASFA.  Since my parents were considered "high income," I received no grants, and I was eligible for approximately, $3,000 a year in government loans.  My tuition was $5,000 a semester.  When I went to the financial aid office, they could only recommend private student loans.  I tried several companies, and all of them required a co-signer.  At first, my parents refused to co-sign.  In the end, they realized that I would be dropping out of college in two weeks, if they didn't. 

I finished with $28,000 in loans and a degree in Chemical Engineering.  I paid it a point to pay the loans they had cosigned first, and I always had enough life insurance to pay them off, if something happened.  I now have about $6000 left, but I am taking my time since I locked them in at 2.25%.

One more thing, my parents refusal on a yearly basis, to fill out the FAFSA and co-sign on my loans completely destroyed any hope of a good relationship.  I am still very angry about the situation.  I will add that part of this resentment is fueled by the fact that within months of me moving out, they bought a new big screen TV, a new excursion truck, and an RV.  All the while, they told me that they couldn't afford for me to go to college or to ruin their credit by co-signing on loans.  If you are a parent, I suggest that you really think about the implications of not supporting (not necessarily paying), your children's education.

And the flip side of that is that my parents are on the hook for about $60,000 worth of my dead beat sister's loans.   She got caught up with the wrong people and ended up going to prison on drug charges.  They will never be able to pay them off, and are getting their wages garnished.  They were foolish to have cosigned for my sister.  I am glad I said no when she asked me.

I hope to be in a good enough position to cosign some small loans for my children, but $28,000 isn't a small amount of money, and not something I would take lightly or assume I had to sign for simply because they are my children.  I managed to get my chemical engineering degree without any cosigners.

My parents did allow me to stay at home rent free and commute to college though, so that was a huge help and very generous of them and greatly reduced my overall college cost.

[MrsPete]

In reality, parents want to be viewed positively in the break room when coworkers ask where their child is going after graduation
Disagree.  I think most parents who are willing to help their children pay for college genuinely believe they're giving their kid a leg-up for the future.  However, I do agree that some parents are very into "My kid's going to this or that expensive snooty school" instead of a less-expensive state school. 

Making good financial choices from early adulthood will prevent the problems that median income or higher parents face when Johnny turns 18 and wants to go to college. Saving for both retirement and the possibility of college from Johnny's infancy from the first x% of income annually and then living frugally off the rest would guarantee that most families had enough to escort Johnny through the post-secondary ceiling without worry.
Agree.  If you start early, you're going to be able to save for both, whereas if you wait . . . you may be screwed for both. 

Poor kids can go to college on their own--both my mom and dad did. Middle class kids can go to college on their own--my wife and I did.
I did too, but it's becoming less and less possible.

Also, as an aside--how many folks are trying hard to save for early retirement but are telling their kids they don't have any money to help with college?
Agree.  I earn enough in a year -- just me, not my husband -- to pay for my oldest child's college education.  She, on the other hand, only earns a little over $10/hour -- she'd have to put in MANY more hours, and it would delay her graduation.  I'm willing to work a little longer to put her through school.  It's a small sacrifice on my part, and the sooner she has her degree and can work for a professional salary, the better off she'll be -- and the happier I'll be.

[MrsPete]

That said, I don't think it makes any sense for a middle class kid, who has good grades and desire to complete a 4 year degree to spend 2 years washing dishes because their parents (who might not value college or haven't kept pace with the times) won't fill out a FAFSA form or co-sign on a loan.  Sure, it might build character but it would seem to be more useful to get that adult into the workforce at the highest job they are qualified to do via student loans where the government allows only the student to sign for (and repay) the loan. 

Yep, I built a great deal of character washing dishes, waiting tables, working in a factory, working in all sorts of low-level jobs.  I was constantly working when I was in college -- to the detriment of my grades. 

I also built up some resentment because SOME of this could've been avoided if my parents just would've helped me with the FAFSA form every year. 

[MrsPete]

I don't see why the US does not have a streamlined system so the ADULT student can more easily declare that they are independent and be able to access the financial aid system by just using their own ADULT income and assets.

The reason is easy to see:  LOTS of parents -- likely MOST parents -- would be very ready to say, "Oh, no.  I'm not supporting my adult child.  He's 18, a college graduate.  He needs to support himself."  in hopes of getting more grant money. 

As a teacher of high school seniors, I hear about kids' financial aid packages . . . and I see more than a few individual situations that really aren't fair -- but I can see that it'd be awfully hard to judge based upon just a FAFSA form. 

[Goldielocks]

Are you suggesting that saving for retirement is not a need?

No, but when to retire, when to save, how much to save, etc., all involve ample room to characterize "saving for retirement" as involving not just needs, but priorities.

Who would you say has more "need?"

1.  A family of 4 with a $75,000 annual income and a government pension that allows retirement at 55 or

2.  A family of 4 with $75,000 annual income and no pension?

I will go with
3.  A 22 yr old making 20k per year with parents making $120k per year who do not wish to contribute to their education further.

[sarah8001]

Does anyone consider just waiting until you're 24 to go to school, if that's the age when you don't need parents' help anymore? If you just CAN'T handle paying for your own schooling without loans, why not shop around, get a good job paying more than minimum wage right out of high school (they're out there, like a CNA or a phlebotomist) live on a super low budget, work like crazy, save like crazy, then go part time at 24 and go to school then. You lose some wage years vs going to college right out of school, but you will probably be more mature, get better grades, and know what degree will help you the most (ie, not an art history degree that cost 40,000 for your parents because you are "so passionate" about art). My fiance is just now going to school at 27. He picked a much better major financially than he would have at 18 (probably would have picked a theatre or music major, doing IT security instead) and we'll still start our family at 30 with a SAHP and be partially retired by 40.
I hate the attitude that children are children into their mid 20s and their parents should provide for their every need. My parents didn't, and I didn't expect it. They gave me 18 years of nurturing and support. Getting my adult life set up was my responsibility. They didn't choose my major. They didn't dictate how I lived or what I ate. Why should they be responsible for financing my decisions? Now flat out refusing to fill out the FAFSA is a bit of a dick move (my dad refused; but he thought it would cost him more money. There is a serious lack of education about the FAFSA. I didn't even know what it was, let alone was able to convince my dad it was harmless. Still got a degree) but it's not the end of the world. And it's the government and colleges who make college so FREAKING expensive and require your parents cooperation. I was always more pissed at them then my parents.

[prof61820]

Does anyone consider just waiting until you're 24 to go to school, if that's the age when you don't need parents' help anymore? If you just CAN'T handle paying for your own schooling without loans, why not shop around, get a good job paying more than minimum wage right out of high school (they're out there, like a CNA or a phlebotomist) live on a super low budget, work like crazy, save like crazy, then go part time at 24 and go to school then. You lose some wage years vs going to college right out of school, but you will probably be more mature, get better grades, and know what degree will help you the most (ie, not an art history degree that cost 40,000 for your parents because you are "so passionate" about art). My fiance is just now going to school at 27. He picked a much better major financially than he would have at 18 (probably would have picked a theatre or music major, doing IT security instead) and we'll still start our family at 30 with a SAHP and be partially retired by 40.
I hate the attitude that children are children into their mid 20s and their parents should provide for their every need. My parents didn't, and I didn't expect it. They gave me 18 years of nurturing and support. Getting my adult life set up was my responsibility. They didn't choose my major. They didn't dictate how I lived or what I ate. Why should they be responsible for financing my decisions? Now flat out refusing to fill out the FAFSA is a bit of a dick move (my dad refused; but he thought it would cost him more money. There is a serious lack of education about the FAFSA. I didn't even know what it was, let alone was able to convince my dad it was harmless. Still got a degree) but it's not the end of the world. And it's the government and colleges who make college so FREAKING expensive and require your parents cooperation. I was always more pissed at them then my parents.

At 18 you're an ADULT - except for financial aid.  Other than some folks that would game the system, what's the public policy rationale for making talented high school students wait until they are 24 before using only their income?  I can't think of one.  Rich and middle class kids - whose parents support them get into the work force at 22 because they start at 18.  The government supports students from poor families - irrespective of merit - so they can go to college starting at 18.  What's the rationale for forcing talented students without parental support to wait 6 years?  It doesn't seem like a good use of the nation's resources to make talented high school students that have no parental support wait 6 years and then give them grants and loans.  With college becoming more and more unaffordable, more and more students will find themselves in this position.

[prof61820]

I don't see why the US does not have a streamlined system so the ADULT student can more easily declare that they are independent and be able to access the financial aid system by just using their own ADULT income and assets.

The reason is easy to see:  LOTS of parents -- likely MOST parents -- would be very ready to say, "Oh, no.  I'm not supporting my adult child.  He's 18, a college graduate.  He needs to support himself."  in hopes of getting more grant money. 

As a teacher of high school seniors, I hear about kids' financial aid packages . . . and I see more than a few individual situations that really aren't fair -- but I can see that it'd be awfully hard to judge based upon just a FAFSA form.

I just don't buy this as a good rationale.  No one is arguing that we can't afford to provide grant and loan aid to poor families and 18-24 year olds that are married, have kids and are homeless or at "at risk" of being homeless, so why not also allow talented HS students - whose parents will not help - to tap this same aid as well?  Their parents have probably paid a lot more in taxes than other families that qualify for aid and their ADULT children can start college at 18.   Take grant money for ADULT students with no parental support off the table if fraud is a big problem and replace it with a low interest loan a parent doesn't have to co-sign for so a student can pay for college on their own without parental support.  I personally think we should allow grants to any independent student because an 18 year old is an ADULT and if their parents certify they won't pay, this should be enough for the ADULT to use their own income.  If the parents game the system and provide aid (it's getting easier and easier to track money) then the parents should be penalized in a way to deter others from cheating.

"How are we going to pay for all this?," you ask.  Simple, get out of Iraq and Afghanistan and invest the money in education.  The nation spends way too much on its military - mostly to the detriment of the middle class.  This is a perfect example of the "rigged game" and the middle class squeeze.   In the 1970s and 1980s most of the student education financial problems on here could be easily addressed by "get a job" because college was so affordable you could actually pay for it with a middle class job or the student by working in a minimum wage job. Most parents - like teachers - had pensions so they could devote a big chunk of their paycheck to college tuition if need be.  The financial aid system in the US has not adjusted fully to the nation's 401K retirement system for private sector workers.   This nation has no business fighting wars if it cannot educate its citizens and ensure a basic level of healthcare and retirement security.  Cutting spending on Iraq and Afghanistan - and making college affordable - should be a priority for American leaders but it is not.

[prof61820]

Are you suggesting that saving for retirement is not a need?

No, but when to retire, when to save, how much to save, etc., all involve ample room to characterize "saving for retirement" as involving not just needs, but priorities.

Who would you say has more "need?"

1.  A family of 4 with a $75,000 annual income and a government pension that allows retirement at 55 or

2.  A family of 4 with $75,000 annual income and no pension?

I will go with
3.  A 22 yr old making 20k per year with parents making $120k per year who do not wish to contribute to their education further.

I am sorry that you have to deal with this...getting a degree in 4 years was much easier when your parents were college age so it's understandable for them to have a 4 and done attitude.  Over the last 2 decades, colleges and universities - to boost revenue - have been turning the 4 year degree into a 5 year one.  It helps if you have a major picked out and stick to it but, as we all know, students change majors in college.  Sometimes they do it on their own, sometimes they realize the "practical" major their parents pushed them into isn't going to work - there are a myriad of reasons.

I hope that you're able to secure funding so you can finish before you are 24.  If you are only a few credits away from graduating, it seems like a huge waste of time and resources to not treat you like an adult for financial purposes so you can graduate, get a job you are best suited to do and start paying taxes and repaying your loans (if you have any). One commenter has suggested that you feign being or become "homeless" or "at risk" of being homeless so the government will treat you like an adult.  I hope the US financial aid system treats you better than that.

[Gimesalot]

So I don't really buy the excuse "I can't go to college because my parents won't co-sign for me".

Except you have to qualify for the government loans.  I did not quaify for more than $3000 a year in loans because of my parents' income.  I would have taken government loans if I could have.  Even at 18, I knew that 6% interest was beter than 10% interest.

By the way, I worked at least part time every year I was in school.  My first two years, I earned less than $6500 a year and I managed to have an apartment, enough food to not die, and somewhat decent winter clothes, in Chicago for that budget.  ALL of my loan money was used for tuition.  The private loan checks were sent to my university, and once a semester, I had to endorse them to the university.  ANY unused amout, was refunded to the loan company.  The only way to spend the money on living expenses was to live on-campus, which I did not.

[Cpa Cat]

There is no reason not to fill out the FAFSA. Even if you have a lot of assets and high income, your child will generally qualify for unsubsidized federal loans. It won't be enough to cover school, but I don't know why you would stick it to your kid and refuse to furnish your information so that they can at least explore their options. Also, it is probably required in order for their universities of choice to put together a financial aid package. At no time does filling out the FAFSA mean that you have to cosign.

But without filling out the FAFSA, you deprive your child of the information needed for them to even formulate a financial plan without you. They need to know how much they're coming up short in order to save that money. From an 18 year old kid's perspective, your refusal sounds like, "Eh, I don't care. I didn't bother saving anything and now I can't be bothered to fill out some form. I don't care if you go to college. Not only am I unwilling to help you financially, I am unwilling to spare a modicum of effort for you."

Not filling out the FAFSA is like refusing to go to the doctor even though you think you have cancer. You're going to die anyway, right? Wrong. You don't really know what the FAFSA is going to churn out - and neither does your kid, until you fill the darn thing out.

As for the OP's original post:  The military is an option, but any 4-year stint in the workforce can probably get you there. For example, if a child works and takes community college college classes half time while living at home. Save the salary, pick up whatever unsubsidized loans they can. Maybe the parents can scrape together $100/month for college savings during that time. Depending on the job, after 4 years they could be in a position to go to university full or part time (only 2 years behind, because they've taken the equivalent of 2 years' worth of community college classes).

The military has some obvious advantages over any other occupation, but it has some clear disadvantages too. For some people, free college just won't be worth it. For others, it's a no-brainer.

If the child has great grades, take the shotgun approach to university applications and scholarships applications. It is possible to get a full ride. Not all scholarships are need-based.

The most important thing is to let your child know early on that there won't be a lot of financial aid. My mom told me young that there would be no government aid (she was incorrect - she misunderstood the Canadian version of the FAFSA) and there was no college fund. So I worked in high school and saved money and I worked hard to get good grades. I ended up with a full-ride. If I had not gotten a scholarship, I would have continued working - since I had a job in high school, I already had my foot in the door for a transition to full-time. I have no hard feelings about my parents not being willing to cosign anything and not saving money because it was explained early (and often - since the message doesn't always sink in when you tell a 13 year old something) and I had a lot of time to prepare.

EDITED TO ADD: When I was in high school, the culture of the school definitely pressed people into immediately going to college. There was a feeling that everyone went to college right away and if you didn't, then you were a loser. On the other hand, I worked at a grocery store. I was surrounded by people who were out of high school and working to save for college/going part time. I think it helped with the bitterness to know that there was a different kind of normal out there. If the only people I knew were the kids who said, "Why don't your parents just co-sign?" then I think it would be hard not to be bitter.

[prof61820]

There is no reason not to fill out the FAFSA. Even if you have a lot of assets and high income, your child will generally qualify for unsubsidized federal loans. It won't be enough to cover school, but I don't know why you would stick it to your kid and refuse to furnish your information so that they can at least explore their options.

I think the counter argument to that is your "kid" is now an ADULT.  You are not required by law to pay for anything for them anymore or be held responsible for their criminal or civil actions.  An 18 year old is now required to buy Obamacare health insurance and qualifies for Obamcare subsidies with only their income.   Why is college financial aid the only exception for young ADULTS?

It seems like this double standard exists to suck money out of the middle class that should be going to retirement savings.  May of them dutifully comply without even asking for more affordable higher education options.

[sky_northern]

Canadian Info....
...

So -- To be eligible for loans and grants, independent of parent's resources,  a student is expected to work for 2 years minimum, OR to wait 4 years after graduation before applying.

This is a large change from the 90's when a student only had to wait until THIRD YEAR  before being eligible to apply independently of the parental assets.

Currently, Tuition costs at university (excluding room / board / transportation) run to $6000 per year, because of government funding for in-country / in-province students.   So that is a good thing, too.

End game - our RRSP's (retirement) accounts will always be too high to allow our kids to qualify for student loans.
Therefore, as parents, we need to borrow from our RRSP's to pay (no 10% penalty here), or have kids wait an extra 2 years before completing so they can apply as independents.

From a different Province/Territory: My experience was I applied for student financial assistance as a fresh faced High School grad, age 17, and they didn't even ask my parents name (or have them sign anything!). I only had to provide my own financial information!

[prof61820]

Canadian Info....
...

So -- To be eligible for loans and grants, independent of parent's resources,  a student is expected to work for 2 years minimum, OR to wait 4 years after graduation before applying.

This is a large change from the 90's when a student only had to wait until THIRD YEAR  before being eligible to apply independently of the parental assets.

Currently, Tuition costs at university (excluding room / board / transportation) run to $6000 per year, because of government funding for in-country / in-province students.   So that is a good thing, too.

End game - our RRSP's (retirement) accounts will always be too high to allow our kids to qualify for student loans.
Therefore, as parents, we need to borrow from our RRSP's to pay (no 10% penalty here), or have kids wait an extra 2 years before completing so they can apply as independents.

From a different Province/Territory: My experience was I applied for student financial assistance as a fresh faced High School grad, age 17, and they didn't even ask my parents name (or have them sign anything!). I only had to provide my own financial information!

What year did this happen?  From reading earlier posts, it seems like this is a very dated experience.

[sky_northern]

From a different Province/Territory: My experience was I applied for student financial assistance as a fresh faced High School grad, age 17, and they didn't even ask my parents name (or have them sign anything!). I only had to provide my own financial information!

What year did this happen?  From reading earlier posts, it seems like this is a very dated experience.

I'm not that old, lol. Early 2000's. It might be unique to the Territories? You do apply to Provence/Territory so might variy depending on how they work things. I did get a federal Canada Millennium Scholarship so the they must have passed my info. on to the Feds.

[Cpa Cat]

There is no reason not to fill out the FAFSA. Even if you have a lot of assets and high income, your child will generally qualify for unsubsidized federal loans. It won't be enough to cover school, but I don't know why you would stick it to your kid and refuse to furnish your information so that they can at least explore their options.

I think the counter argument to that is your "kid" is now an ADULT.  You are not required by law to pay for anything for them anymore or be held responsible for their criminal or civil actions.  An 18 year old is now required to buy Obamacare health insurance and qualifies for Obamcare subsidies with only their income.   Why is college financial aid the only exception for young ADULTS?

It seems like this double standard exists to suck money out of the middle class that should be going to retirement savings.  May of them dutifully comply without even asking for more affordable higher education options.

Once again - filling out the FAFSA in no way obligates a parent to pay for college. Filling out the FAFSA involves providing information ONLY. It obligates no parent and no student to take out loans. It is necessary for the student to be able to take out whatever federal loans they are eligible for - IN THEIR OWN NAME. Again - the only way for a student to collect federal loans is by filling out a FAFSA. Whatever federal loans are offered to the student based on the FAFSA do not require a cosigner.

Furthermore, many colleges require the FAFSA in order to offer the student financial aid at their institution. AGAIN - Some of this aid will not require the parent's involvement, but will not be available without the FAFSA.

In all likelihood, a student will not be able to get enough aid to attend university on their own, without any savings, help or merit scholarships. But without filling the FAFSA out, the student will have no way of knowing exactly what -is- available with or WITHOUT parental financial assistance. By refusing to fill out the form, a parent is only harming their child. You are depriving them of the opportunity to gather information so that they can plan for their future.

It may comfort you to justify this refusal to fill out an informational form by claiming you're doing it to "fight for affordable education options," but it will be cold comfort to your child, who is being deprived of accessing what little aid is available to them. 

[Señora Savings]

People who grow up in low income families are at a huge disadvantage in education.  The idea of helping low income kids go to college even though there parents can't afford to help them makes sense to me.

I know several people who didn't qualify for any aid and their parents didn't help them.  They still went to college, mostly to state schools.  That's too bad for them, but they had all sorts of resources (internet access, friends and teachers who understood the system) that low income students do not.  They have a worse relationship with their parents than they might otherwise have.  This isn't the ideal situation, but it's hard for me to get on the "nobody lent me $50,000 when I graduated from high school, I wish I had grown up homeless" bandwagon.  I have not yet seen a student who maintained a 3.5 and couldn't find a way to afford college.

Life isn't fair, but I can think of better uses for my money than subsidized loans for people with mean parents.

[MrsPete]

Who would you say has more "need?"

1.  A family of 4 with a $75,000 annual income and a government pension that allows retirement at 55 or

2.  A family of 4 with $75,000 annual income and no pension?

I will go with
3.  A 22 yr old making 20k per year with parents making $120k per year who do not wish to contribute to their education further.
[/quote]Having been the kid whose parents wouldn't help at all, I see the point. 

However, one big issue is that this kid who parents are just jerks and say, "It'll build character, go work your fingers to the bone" look just like these parents on paper:

- The parents who say, "College is expensive, and we don't care to spend our own money.  You SAY we won't pay, you collect the taxpayers' money, and we'll pay your rent quietly so no one knows what's going on." 
- The parents who know their kid has no business going to college (either because he isn't academic, or because he has a drug problem, or whatever), and they aren't willing to finance a situation they feel will end up in failure.   

Yet we as a society aren't willing to say, "This person is working hard, studying something that'll be useful to the world, and is moving towards graduation.  We will help him financially."  and to another student, "Dude, you've been in school for three years and are still a freshman, and you're pursuing a degree in Gender Studies.  This isn't really a worthwhile use of taxpayer money." 

[MrsPete]

At 18 you're an ADULT - except for financial aid.

Disagree.  An 18 year old isn't treated as an adult in many other ways:  Banks won't lend him money without a co-signer.  Nor will apartments or car rental places do business with him without a co-signer.  He might be legally able to enter into contracts, but quite a few businesses won't actually open their doors to him just yet. 

So while the 18 year old might legally be tagged an adult, on a functional level, his life probably looks much more like his 16-year old brother's than his 40-something parents. 

[prof61820]

At 18 you're an ADULT - except for financial aid.

Disagree.  An 18 year old isn't treated as an adult in many other ways:  Banks won't lend him money without a co-signer.  Nor will apartments or car rental places do business with him without a co-signer.  He might be legally able to enter into contracts, but quite a few businesses won't actually open their doors to him just yet. 

So while the 18 year old might legally be tagged an adult, on a functional level, his life probably looks much more like his 16-year old brother's than his 40-something parents.

He/She has to purchase Obamacare insurance.  He/she gets subsidies for this insurance for the high costs.  The government does not mandate that the parents of the ADULT student pay for health insurance for the ADULT child until he/she is 24.  Student loans are no different for an 18 year old student that wants to attend college without parental support.  The government can afford to help and it should - just like it's doing for health insurance.  And since it's a student loan (that you cannot erase in a BK), it's not the same as another kind of bank loan for an 18 year old.  Once a student gets financial aid, a lot of businesses will do business with an 18 year old.

And let's assume for a moment that parents who don't support qualified college students are "jerks."  Why punish the students? 

Are you okay with an 18 year old getting financial aid if they are "homeless" or "at-risk of being homeless?"  With the costs of college these days, being middle class without parental support for college seems to be worse than becoming homeless.

This Bob Dylan song just burst in my head: http://www.youtube.com/watch?v=zP4XP8CaX7k

Twenty years of schoolin'
And they put you on the day shift
Look out kid
They keep it all hid

Full Lyrics: http://www.bobdylan.com/us/songs/subterranean-homesick-blues

The Red Hot Chili Peppers do a good version as well: http://www.youtube.com/watch?v=YPAysHEZsvI

RHCP Live: https://video.search.yahoo.com/video/play;_ylt=AwrBTzlko0lU4CoA7x5XNyoA;_ylu=X3oDMTB0YXZzMnQwBHNlYwNzYwRjb2xvA2JmMQR2dGlkA1ZJUDUzN18x?p=Subterranean+Homesick+Blues+red+hot&tnr=21&vid=3B0F063387AABA7F76773B0F063387AABA7F7677&l=151&turl=http%3A%2F%2Fts4.mm.bing.net%2Fth%3Fid%3DUN.608026434393408411%26pid%3D15.1&rurl=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DNhoOOOln-Fw&sigr=11a6n3avt&tt=b&tit=Red+Hot+Chili+Peppers+-+Subterranean+Homesick+Blues+-+Live+...&sigt=11u0uef77&back=https%3A%2F%2Fsearch.yahoo.com%2Fsearch%3Fp%3DSubterranean%2BHomesick%2BBlues%2Bred%2Bhot%26fr%3Dyfp-t-644%26fp%3D1%26ei%3DUTF-8&sigb=130mbpgs0

[prof61820]

Who would you say has more "need?"

1.  A family of 4 with a $75,000 annual income and a government pension that allows retirement at 55 or

2.  A family of 4 with $75,000 annual income and no pension?

I will go with
3.  A 22 yr old making 20k per year with parents making $120k per year who do not wish to contribute to their education further.

Having been the kid whose parents wouldn't help at all, I see the point. 

However, one big issue is that this kid who parents are just jerks and say, "It'll build character, go work your fingers to the bone" look just like these parents on paper:

- The parents who say, "College is expensive, and we don't care to spend our own money.  You SAY we won't pay, you collect the taxpayers' money, and we'll pay your rent quietly so no one knows what's going on." 
- The parents who know their kid has no business going to college (either because he isn't academic, or because he has a drug problem, or whatever), and they aren't willing to finance a situation they feel will end up in failure.   

Yet we as a society aren't willing to say, "This person is working hard, studying something that'll be useful to the world, and is moving towards graduation.  We will help him financially."  and to another student, "Dude, you've been in school for three years and are still a freshman, and you're pursuing a degree in Gender Studies.  This isn't really a worthwhile use of taxpayer money."
[/quote]

*********

Yes, and our society is willing to give grants to and loan money to poor kids to go to for-profit diploma mill colleges where, even if they graduate, they will likely never earn enough to pay off the loans.

Yes, and our society is willing to give grants and loan money to poor kids with poor test scores and poor grades to attend poor (but pricey) private schools so long as their poor parents co-sign for a significant portion of the debt even though the banks all know that the chances for the student to graduate are poor and the chances for repayment from the student and/or the parents is even poorer in the event of a default.

[Señora Savings]

Are you okay with an 18 year old getting financial aid if they are "homeless" or "at-risk of being homeless?"  With the costs of college these days, being middle class without parental support for college seems to be worse than becoming homeless.

I'm not sure what the quotes around homeless are for.  Do you not believe kids are really homeless?  Or does it not count if the kid lives in a shelter?  The homeless kids I know who managed to graduate from high school are impressive.  They should be subsidized because they have the potential to either be great contributors to society or petty criminals and drains on the system.

[prof61820]

Are you okay with an 18 year old getting financial aid if they are "homeless" or "at-risk of being homeless?"  With the costs of college these days, being middle class without parental support for college seems to be worse than becoming homeless.

I'm not sure what the quotes around homeless are for.  Do you not believe kids are really homeless?  Or does it not count if the kid lives in a shelter?  The homeless kids I know who managed to graduate from high school are impressive.  They should be subsidized because they have the potential to either be great contributors to society or petty criminals and drains on the system.

No, I agree with you.  An earlier poster had suggested that students whose parents don't support them should feign "homelessness" or become "at risk of being homeless" to get aid because it's one way of being declared officially "independent" and allows a student to qualify for aid on their own.

What I don't get is that if you believe that homeless students or students at risk of being homeless "should be subsidized because they have the potential to either be great contributors to society or petty criminals and drains on the system" why don't you believe that middle class students - who do not have any parental support or as you put it earlier have "mean parents" - have that exact same potential? 

[Dee18]

We are in the midst of college applications and figuring out the financial aspects right now.  On other threads people have clearly explained the various methods used to calculate expected family contribution.  But those of us who have children going to college during our prime earning years are expected to contribute according to the current salaries.  FAFSA doesn't care that I am working extra to complete the last bit of my stash.  And most schools do expect me to contribute a big chunk of  the taxable part of my stash. That's the reality.  And even a child who has earned As all through high school, including in those AP classes, may score on the top 10% on college entrance exams rather than the top 3% needed for many merit scholarships.  There are still lots of options....applying to schools a notch lower academically to qualify for scholarships for example.  I am just chuckling at the MMMers who don't have kids yet planning on funding college with merit scholarships.  For those already retiring, factoring in a great state university system in choosing your retirement location may be worthwhile.  Like so many areas of life, we do our best, adjust to changing conditions (who knows what college will be like in even 10 years) and keep our optimism and stoicism in balance.

I realize I failed to mention we have been building a college fund for 13 years... :)

[prof61820]

The parents who know their kid has no business going to college (either because he isn't academic, or because he has a drug problem, or whatever), and they aren't willing to finance a situation they feel will end up in failure. 

How do you feel about parents - whose parents did not attend college - who "feel" their kid has no or little business going to college (either because they believe he isn't academically qualified (even though he is), or because he might have a problem with alcohol, drugs, or maturity, or whatever), and they aren't willing to finance a situation with a possibility of failure and significant debt on their end while they are in their prime earning years trying to build a stash to retire on?

This seems to be the area that many middle class children with non-supportive parents find themselves in.  It's not nearly as black and white as you (and the FAFSA folks) make it out to be or that these kids somehow have "mean" or "jerk" parents.  It's a lot easier to be a supportive parent if you have a pension - because you don't need to start saving $10K per child annually when they are 3 - you can just use your current salary because your retirement costs are covered.  The financial aid system does a very poor job recognizing this problem and the real costs and risks of retiring without a pension.  If college starts to cost $50K a year, there's going to be a lot of talented middle class ADULT children that will find themselves in this "gray" area.

MMM and other financial advisors regularly counsel parents that if have debt and/or are "catching up" on retirement savings not to co-sign for student loans.  The quick answer that is provided is that your kids should be able to borrow on their own to go to college.  I guess they leave out that little detail  that your talented high school ADULT children will they have to wait until they are 24 to borrow unless they join the army or feign homelessness.  This detail certainly gums up the "let your kids borrow on their own" solution. 

That said, I believe not co-signing for many parents, is very wise counsel but I didn't realize that it gets your ADULT children sideways with the FAFSA folks and incredibly limits their resources and options compared to rich and poor students.  Apparently, it also makes you a "mean" or "jerk" parent.

[prof61820]

I went to school from 2002-2006, so this info is a little outdated.  At the time I went to school, no, there was no way for me to go without my parents co signing on the loans. 

Every year, they had to fill out the FASFA.  Since my parents were considered "high income," I received no grants, and I was eligible for approximately, $3,000 a year in government loans.  My tuition was $5,000 a semester.  When I went to the financial aid office, they could only recommend private student loans.  I tried several companies, and all of them required a co-signer.  At first, my parents refused to co-sign.  In the end, they realized that I would be dropping out of college in two weeks, if they didn't. 

I finished with $28,000 in loans and a degree in Chemical Engineering.  I paid it a point to pay the loans they had cosigned first, and I always had enough life insurance to pay them off, if something happened.  I now have about $6000 left, but I am taking my time since I locked them in at 2.25%.

One more thing, my parents refusal on a yearly basis, to fill out the FAFSA and co-sign on my loans completely destroyed any hope of a good relationship.  I am still very angry about the situation.  I will add that part of this resentment is fueled by the fact that within months of me moving out, they bought a new big screen TV, a new excursion truck, and an RV.  All the while, they told me that they couldn't afford for me to go to college or to ruin their credit by co-signing on loans.  If you are a parent, I suggest that you really think about the implications of not supporting (not necessarily paying), your children's education.

And the flip side of that is that my parents are on the hook for about $60,000 worth of my dead beat sister's loans.   She got caught up with the wrong people and ended up going to prison on drug charges.  They will never be able to pay them off, and are getting their wages garnished.  They were foolish to have cosigned for my sister.  I am glad I said no when she asked me.

I hope to be in a good enough position to cosign some small loans for my children, but $28,000 isn't a small amount of money, and not something I would take lightly or assume I had to sign for simply because they are my children.  I managed to get my chemical engineering degree without any cosigners.

My parents did allow me to stay at home rent free and commute to college though, so that was a huge help and very generous of them and greatly reduced my overall college cost.

To get back to the original post, this seems like a very good reason for parents with 5 children, no college savings and no pension to not co-sign any of their childrens' student loans.

[prof61820]

While our plan is $50K per year per kid for our toddler & infant kids (a little aggressive, but it helps DH sleep at night), I really want our kids to have to earn a portion of their schooling and go to a reasonable state school. AP classes, community college classes (either summer before or the first two years), will go a long way to getting the bill down. I should also note that we are NOT putting any money away into a 529. Not enough tax incentive to earmark that money in its own account.

Agree with others that the "experience" of college has gotten some folks off their rockers on expenses. Nearly all of our close friends still have UNDEGRAD debt - even though we are all in our mid-30s. If not careful, SL debt can still be around when your kids go to school. Very scary stuff.

One of my kids is a 4 year old.  We are also using $50K per year as the goal for his higher education and are using, in part, a 529 plan.  We also have no debt and hope to have our mortgage completely paid off in 3 years.  We both would like to have him earn a portion of his way as well but the numbers are so high it's really much different than when my wife and I attended college.

It took me 18 years to pay my SL debt so I could have easily - had I not been patient with having children - went directly from my debt to their debt....

[prof61820]

We are in the midst of college applications and figuring out the financial aspects right now.  On other threads people have clearly explained the various methods used to calculate expected family contribution...And most schools do expect me to contribute a big chunk of  the taxable part of my stash. That's the reality. 

How do the FAFSA folks look at the equity in your home (or second home)?  My bet is that it's not a part of the calculation.

[teen persuasion]

The parents who know their kid has no business going to college (either because he isn't academic, or because he has a drug problem, or whatever), and they aren't willing to finance a situation they feel will end up in failure. 

How do you feel about parents - whose parents did not attend college - who "feel" their kid has no or little business going to college (either because they believe he isn't academically qualified (even though he is), or because he might have a problem with alcohol, drugs, or maturity, or whatever), and they aren't willing to finance a situation with a possibility of failure and significant debt on their end while they are in their prime earning years trying to build a stash to retire on?

This seems to be the area that many middle class children with non-supportive parents find themselves in.  It's not nearly as black and white as you (and the FAFSA folks) make it out to be or that these kids somehow have "mean" or "jerk" parents.  It's a lot easier to be a supportive parent if you have a pension - because you don't need to start saving $10K per child annually when they are 3 - you can just use your current salary because your retirement costs are covered.  The financial aid system does a very poor job recognizing this problem and the real costs and risks of retiring without a pension. If college starts to cost $50K a year, there's going to be a lot of talented middle class ADULT children that will find themselves in this "gray" area.

MMM and other financial advisors regularly counsel parents that if have debt and/or are "catching up" on retirement savings not to co-sign for student loans.  The quick answer that is provided is that your kids should be able to borrow on their own to go to college.  I guess they leave out that little detail  that your talented high school ADULT children will they have to wait until they are 24 to borrow unless they join the army or feign homelessness.  This detail certainly gums up the "let your kids borrow on their own" solution. 

That said, I believe not co-signing for many parents, is very wise counsel but I didn't realize that it gets your ADULT children sideways with the FAFSA folks and incredibly limits their resources and options compared to rich and poor students.  Apparently, it also makes you a "mean" or "jerk" parent.

IF college starts to cost $50k per year?  Lots of colleges are already over that threshold.  DD1's college expenses were $54k in her senior year, 2011-12.  DS2's college was closer to $40k per year when he started, but I was still shocked when he tallied college expenses (we were working thru his taxes and calculating taxable scholarships) and reached $56k because he added a summer semester. 

Even state universities add up, if you include R&B.  DD3's tuition is $8k+, while R&B adds another $10 -12k per year.

[frugalnacho]

IF college starts to cost $50k per year?  Lots of colleges are already over that threshold.  DD1's college expenses were $54k in her senior year, 2011-12.  DS2's college was closer to $40k per year when he started, but I was still shocked when he tallied college expenses (we were working thru his taxes and calculating taxable scholarships) and reached $56k because he added a summer semester. 

Even state universities add up, if you include R&B.  DD3's tuition is $8k+, while R&B adds another $10 -12k per year.

Yeah sounds like it's unsustainable.  At that point I would opt out of college and start on a skilled trade.  My chemical engineering degree was less that $50k TOTAL, and you can still go to the same university and get the same degree for under $50k total.  Either pick a cheaper university or forgo the degree altogether.  Their ridiculous university expenses are entirely optional.

[prof61820]

IF college starts to cost $50k per year?  Lots of colleges are already over that threshold.  DD1's college expenses were $54k in her senior year, 2011-12.  DS2's college was closer to $40k per year when he started, but I was still shocked when he tallied college expenses (we were working thru his taxes and calculating taxable scholarships) and reached $56k because he added a summer semester. 

Even state universities add up, if you include R&B.  DD3's tuition is $8k+, while R&B adds another $10 -12k per year.

Yeah sounds like it's unsustainable.  At that point I would opt out of college and start on a skilled trade.  My chemical engineering degree was less that $50k TOTAL, and you can still go to the same university and get the same degree for under $50k total.  Either pick a cheaper university or forgo the degree altogether.  Their ridiculous university expenses are entirely optional.

We have had discussions whether or not it makes more sense to give each of our children $200K in rental real estate at 18 rather than spend that same amount on a 4 year college.  This troubles us to no end because education - literally - has very positively changed both of our lives in a very dramatic way. 

That said, if they want to pursue higher ed (which we would encourage) - they would have a stream of income from the rental property and no room and board costs.  They would be free to choose the city they would want the real estate in and, at this point, I would be open to them experimenting with MOOCs and other online options or community colleges to reduce costs.  If they don't want to take this route, then they can get into real estate investing at a very early age without a college degree.

[frugalnacho]

IF college starts to cost $50k per year?  Lots of colleges are already over that threshold.  DD1's college expenses were $54k in her senior year, 2011-12.  DS2's college was closer to $40k per year when he started, but I was still shocked when he tallied college expenses (we were working thru his taxes and calculating taxable scholarships) and reached $56k because he added a summer semester. 

Even state universities add up, if you include R&B.  DD3's tuition is $8k+, while R&B adds another $10 -12k per year.

Yeah sounds like it's unsustainable.  At that point I would opt out of college and start on a skilled trade.  My chemical engineering degree was less that $50k TOTAL, and you can still go to the same university and get the same degree for under $50k total.  Either pick a cheaper university or forgo the degree altogether.  Their ridiculous university expenses are entirely optional.

We have had discussions whether or not it makes more sense to give each of our children $200K in rental real estate at 18 rather than spend that same amount on a 4 year college.  This troubles us to no end because education - literally - has very positively changed both of our lives in a very dramatic way. 

That said, if they want to pursue higher ed (which we would encourage) - they would have a stream of income from the rental property and no room and board costs.  They would be free to choose the city they would want the real estate in and, at this point, I would be open to them experimenting with MOOCs and other online options or community colleges to reduce costs.  If they don't want to take this route, then they can get into real estate investing at a very early age without a college degree.

You're missing my whole point which is $200k is an entirely self imposed budget.  I'm positive they could get equivalent degrees at a cheaper university if that's the route they really want to take.

Education has improved my life too, I just chose a reputable university that was 1/6 the cost of the large state universities.   I didn't impose massive debt onto my parents or myself, and I still got an engineering degree and an engineering position.

[prof61820]

IF college starts to cost $50k per year?  Lots of colleges are already over that threshold.  DD1's college expenses were $54k in her senior year, 2011-12.  DS2's college was closer to $40k per year when he started, but I was still shocked when he tallied college expenses (we were working thru his taxes and calculating taxable scholarships) and reached $56k because he added a summer semester. 

Even state universities add up, if you include R&B.  DD3's tuition is $8k+, while R&B adds another $10 -12k per year.

Yeah sounds like it's unsustainable.  At that point I would opt out of college and start on a skilled trade.  My chemical engineering degree was less that $50k TOTAL, and you can still go to the same university and get the same degree for under $50k total.  Either pick a cheaper university or forgo the degree altogether.  Their ridiculous university expenses are entirely optional.

We have had discussions whether or not it makes more sense to give each of our children $200K in rental real estate at 18 rather than spend that same amount on a 4 year college.  This troubles us to no end because education - literally - has very positively changed both of our lives in a very dramatic way. 

That said, if they want to pursue higher ed (which we would encourage) - they would have a stream of income from the rental property and no room and board costs.  They would be free to choose the city they would want the real estate in and, at this point, I would be open to them experimenting with MOOCs and other online options or community colleges to reduce costs.  If they don't want to take this route, then they can get into real estate investing at a very early age without a college degree.

You're missing my whole point which is $200k is an entirely self imposed budget.  I'm positive they could get equivalent degrees at a cheaper university if that's the route they really want to take.

Education has improved my life too, I just chose a reputable university that was 1/6 the cost of the large state universities.   I didn't impose massive debt onto my parents or myself, and I still got an engineering degree and an engineering position.

I get your point.  My point is why drop $100-200K on a compromise/2nd, 3rd choice education without thinking of new and better ways to use that kind of cash?  Owning $200K in real estate in a college town, living free and collecting rents from other students (subsidized by the fed government) may be a better strategy for paying for college than just forking over $50k annually to live in a dorm.  Plus, you can borrow against the real estate or sell it if the strategy doesn't work.  If it does work, you have a degree and real estate when you graduate. 

I love this site because it forces you to challenge accepted practices and think outside of the box.  That's what I was doing with my post.  I doubt we will actually do it (we have 529 accounts).  I was throwing that out there to see if other parents on this site are having similar thoughts or discussions.  Unlike even 10 years ago, the shear size of the expenses - if you won't qualify for government aid - warrants the time and effort to explore alternative ways to fund it.

As an aside, Northern Illinois University (a second tier state school in IL) just crossed the $25k mark for tuition and R&B for in-state students.  In 2013-14, in-state tuition and fees was about $13,000 annually and R&B was about $12,000 annually.  Textbooks and other supplies were another $1,300.

I suppose that - due to higher ed inflation - when my 4 year old is ready for college, tuition and fees alone at NIU could easily be $20-35K (if this price point doesn't collapse attendance).  What Illinois' state schools are doing to prevent attendance collapse is admitting more international - primarily from China - and out of state students (http://www.chicagotribune.com/news/nationworld/ct-university-of-illinois-chinese-students-d1-20140801-story.html#page=1) because they can afford the higher tuition and fees and  it generates a lot more revenue.

Link to NIU costs: (http://www.collegecalc.org/colleges/illinois/northern-illinois-university/?ab=b&utm_expid=62470058-0.Zc3IOjeiSMqz2dVm8G3ToA.2&utm_referrer=http%3A%2F%2Fr.search.yahoo.com%2F_ylt%3DA0LEV1Pic0pUcPsAGn9XNyoA%3B_ylu%3DX3oDMTEzYTdlNWJtBHNlYwNzcgRwb3MDMQRjb2xvA2JmMQR2dGlkA1ZJUDQ0Ml8x%2FRV%3D2%2FRE%3D1414194275%2FRO%3D10%2FRU%3Dhttp%253a%252f%252fwww.collegecalc.org%252fcolleges%252fillinois%252fnorthern-illinois-university%252f%2FRK%3D0%2FRS%3DQ85b84d6l.V_VnPAU9OBW6M7D38-)

[MrsPete]

While our plan is $50K per year per kid for our toddler & infant kids (a little aggressive, but it helps DH sleep at night), I really want our kids to have to earn a portion of their schooling and go to a reasonable state school. AP classes, community college classes (either summer before or the first two years), will go a long way to getting the bill down. I should also note that we are NOT putting any money away into a 529. Not enough tax incentive to earmark that money in its own account.

Agree with others that the "experience" of college has gotten some folks off their rockers on expenses. Nearly all of our close friends still have UNDEGRAD debt - even though we are all in our mid-30s. If not careful, SL debt can still be around when your kids go to school. Very scary stuff.

We're pretty similar:  We're very willing to pay for our kids' college expenses -- but we set limits and expect them to do their part.  They're both on board with this idea, and we've actually spent less than we expected thusfar. 

I think you're over-saving, but that's vastly superior to under-saving.  You can always use the "leftover" for other things. 

However, I think the desire to have "the college experience" is an idea that has peaked and passed.  A decade ago people told me I was WRONG and perhaps even BAD to "limit" my kids by telling them I wouldn't pay for absolutely everything they wanted in the way of college.  Today with so many people saddled by debt, that attitude seems to have mellowed significantly. 

[MrsPete]

I am just chuckling at the MMMers who don't have kids yet planning on funding college with merit scholarships.

Yes, as the mother of a current college student and a high school senior -- and a teacher of high school students -- it's not as easy as saying, "Oh, yes, scholarships!  That's our plan!"  A number of posters on this site have the idea that everyone who really tries will see scholarships pile up at their feet. 

It just isn't so. 

My oldest is a genuinely exceptional student who is entering a scholarship-heavy field.  She was the #2 scholarship winner in her graduating class.  She has about 50% of her education paid through scholarships, still leaving us with a hefty bill. 

Dream, apply, give it your best shot -- but save money too. 

[MrsPete]

The parents who know their kid has no business going to college (either because he isn't academic, or because he has a drug problem, or whatever), and they aren't willing to finance a situation they feel will end up in failure. 

How do you feel about parents - whose parents did not attend college - who "feel" their kid has no or little business going to college (either because they believe he isn't academically qualified (even though he is), or because he might have a problem with alcohol, drugs, or maturity, or whatever), and they aren't willing to finance a situation with a possibility of failure and significant debt on their end while they are in their prime earning years trying to build a stash to retire on?

This seems to be the area that many middle class children with non-supportive parents find themselves in.  It's not nearly as black and white as you (and the FAFSA folks) make it out to be or that these kids somehow have "mean" or "jerk" parents.  It's a lot easier to be a supportive parent if you have a pension - because you don't need to start saving $10K per child annually when they are 3 - you can just use your current salary because your retirement costs are covered.  The financial aid system does a very poor job recognizing this problem and the real costs and risks of retiring without a pension.  If college starts to cost $50K a year, there's going to be a lot of talented middle class ADULT children that will find themselves in this "gray" area.

MMM and other financial advisors regularly counsel parents that if have debt and/or are "catching up" on retirement savings not to co-sign for student loans.  The quick answer that is provided is that your kids should be able to borrow on their own to go to college.  I guess they leave out that little detail  that your talented high school ADULT children will they have to wait until they are 24 to borrow unless they join the army or feign homelessness.  This detail certainly gums up the "let your kids borrow on their own" solution. 

That said, I believe not co-signing for many parents, is very wise counsel but I didn't realize that it gets your ADULT children sideways with the FAFSA folks and incredibly limits their resources and options compared to rich and poor students.  Apparently, it also makes you a "mean" or "jerk" parent.

Yes, I've seen some parents who buy into the idea of, I didn't go to college, and I'm just fine!  Kids coming from those homes sometimes agree, sometimes don't. 

I agree that the FAFSA folks are not particularly good at figuring our who really needs aid and whose family could help . . . but won't.  But I don't think pensions are the issue that you're making them out to be.  Note that people who have pensions tend to be in low paying jobs.  A pension is typically a deal that says, You work for a low salary for X number of years, and we'll provide you with retirement income.  People who are pension-jealous tend to overlook the "low salary for X number of years" portion of the equation. 

However, let's be realistic: 

The choice isn't "Save 10K per year for 15 years -- or nothing".  Realistically, any amount will be helpful.  Most of us include items in our budget that could be cut out for the sake of educating our children.  Tuition only is still massively helpful (and more than I had).  Housing and half tuition is still massively helpful (and more than I had). 

[MrsPete]

My chemical engineering degree was less that $50k TOTAL, and you can still go to the same university and get the same degree for under $50k total.  Either pick a cheaper university or forgo the degree altogether.  Their ridiculous university expenses are entirely optional.

Yeah, my oldest is currently pursuing a nursing degree.  Total, when all is said and done, a person walking in with no aid and no scholarships of any type -- a person paying straight from his own pocket -- would pay around 45K.  That's total:  Tuition, books, room and board.  I think that's a fair price for a degree that will allow her to support herself and her future family for the rest of her life.

[Undecided]

I agree that the FAFSA folks are not particularly good at figuring our who really needs aid and whose family could help . . . but won't.  But I don't think pensions are the issue that you're making them out to be.  Note that people who have pensions tend to be in low paying jobs.  A pension is typically a deal that says, You work for a low salary for X number of years, and we'll provide you with retirement income.  People who are pension-jealous tend to overlook the "low salary for X number of years" portion of the equation. 

That's relevant when a person who does some job expresses jealousy for the pension attached to the closest corresponding government job, or similar complaints, but it has nothing to do with making a comparison of the ability to pay for school between, for example, one family of 4 that makes $X/year and gets no pension benefit and another family of 4 that makes these same amount and does get a pension benefit.

[prof61820]

However, let's be realistic:  Most of us include items in our budget that could be cut out for the sake of educating our children. 

Except that most folks without pensions in 401K land - and especially those here on this site - are cutting out those budget items for their retirement security.  Folks with pensions have retirement security (and likely a retirement that begins well before 67).  If FAFSA doesn't recognize this fact, then the middle class using 401Ks and other savings for retirement will get squeezed even further.  FAFSA needs to adjust to the 401K world most if the middle class is living in now.