Should I be worried about kids college fund?

[Duke03]

I have a 4 year old and a 8 month old and was wondering what others felt as far as college funds go.  I currently only have about $2500 set aside for them, but don't routinely add to it.  Mostly just here and there.  Financially we just figured when the time comes and if they are good kids we'd just cash flow it.  Not sure if this is the right move or not.  Right now I max out my 401k and my current house will be paid for in 3 more years it's worth about 400k.  I figured when the house is paid off I could catch up on the college funds real quick if I need to or even want to.  I have a golden pension and realistically will not need my 401k money to survive.  My current net worth is close to 600k.  If you where in my shoes would you

A: Start adding to their college fund each month
B: Wait till the house is paid for and attack it for 2 years
C: Cash flow it out of 401k, cash on hand, stocks, ect
D: Guilt the Grandparents into it.....

I'm reverting back to what my old high school history teacher always said.  When in doubt pick D. JK

[Chris22]

I have a 4 year old and a 8 month old and was wondering what others felt as far as college funds go.  I currently only have about $2500 set aside for them, but don't routinely add to it.  Mostly just here and there.  Financially we just figured when the time comes and if they are good kids we'd just cash flow it.  Not sure if this is the right move or not.  Right now I max out my 401k and my current house will be paid for in 3 more years it's worth about 400k.  I figured when the house is paid off I could catch up on the college funds real quick if I need to or even want to.  I have a golden pension and realistically will not need my 401k money to survive.  My current net worth is close to 600k.  If you where in my shoes would you

A: Start adding to their college fund each month
B: Wait till the house is paid for and attack it for 2 years
C: Cash flow it out of 401k, cash on hand, stocks, ect
D: Guilt the Grandparents into it.....

I'm reverting back to what my old high school history teacher always said.  When in doubt pick D. JK

We do small contributions into my daughter's 529 now ($50/mo) plus the odd deposit of birthday money, etc, because she's currently in daycare, with the intention of ramping way up when she goes to public school.  However, there's gotta be a level where we stop going with the 529 and switch to something more universal like a mutual fund with better chances at growth and the ability to redirect it to something else as needed.  Always wondering what that number is; I think her 529 is a little short of $10k, but I have to think when I hit, say, $50-75k I might stop and let it ride for a while given that she'll probably be ~10-12 at that point.  Not sure I want to load it up too heavily, might be better to direct the funds elsewhere. 

[Syonyk]

My daughter is 2, and I can't say I have any specific college savings for her.

At the current rate of increase of college costs, in another 16 years, either something will have broken (cost of tuition, government will get coerced into paying for it, etc), or a college degree won't be worth it.

I have a degree that was quite useful, but at $300k or so for it?  Eh, I'd still be paying it off, and would have been better learning on the job with stuff.

The rate of increase of cost is blowing well past the rate of increase in value, sadly.

[MDM]

If you where in my shoes would you
...
C: Cash flow it out of 401k, cash on hand, stocks

Perhaps with a small amount of targeted 529 contributions (primarily for the state tax deductions), that seems best.

In other words, ensuring your own retirement security first, and only then funding college expenses to the extent you wish.  YMMV.

[MayDay]

We have a bit saved, and my grandfather is contributing maybe one year's worth.

Well cash flow the rest. They'll work for some. They may take small loans. We have non retirement savings we could pull from. I'm not super worried about it.

[calimom]

If you where in my shoes would you
...
C: Cash flow it out of 401k, cash on hand, stocks

Perhaps with a small amount of targeted 529 contributions (primarily for the state tax deductions), that seems best.

In other words, ensuring your own retirement security first, and only then funding college expenses to the extent you wish.  YMMV.

You can borrow for college, but you can't borrow for retirement.

[sparkytheop]

I'm 38, my son just started college this year (at a community college).  I don't have a paid off house, but have a pretty good TSP balance, and a "comfortable mortgage", only other debt is property I'm paying off (to build on, hopefully soon).  I was planning to save more for him, but shit happened, and that didn't.

However, I have told him he is responsible for saving/earning some money, and I'll contribute as well.  His senior year, I started saving an average of $1k/month.  Between $600/month he is supposed to be getting in child support, and a part time job working 24 hours/week (two 12 hour shifts), he's also saving $1k/month, minimum (I do make him pay some bills, and he keeps a little spending money).

If he stays at the community college one more year, we should be able to cash flow his education.  If he goes to a state school next year (he has his Junior transfer degree now), he may need to take out a loan his senior year, but it shouldn't be very much.

I do sometimes wish I'd saved a little more earlier, but we're doing ok.  He is forced to be pretty reasonable about things, since he knows I'm not going to run out and get a parent plus loan for him.

In your case, I'd do a mix of B and C.

[milliemchi]

My employer will pay for majority of kid's college tuition, if not for all of it (we'll see). My kids are both in gifted programs and I fully expect them to be awarded significant merit scholarships. Our mortgage will be paid off the month before my older one starts college, freeing up ~$10k/year of cash flow. There is of course all the cash flow that goes directly into savings/retirement now (about $20k/year or just about). With all that, the plan is to cashflow college. HOWEVER... We still put away money aggressively for their college expenses - about $12k/year, with the idea that we will have ~$80k when the older one starts college, and then it should either work out for both, or there will be some loans that we will help pay off.

It's an overkill, but I would not be complacent. College is only going to get more expensive, and judging by experience, we are probably not even able to imagine the scale for 20 years from now. The way for the oversaving to make sense is the following: A) use your Roth IRA to sock away money. This is what we're doing. You can access your contribution money after 5 years, and you may even be able to take out the earnings for educational purposes, I'm not sure. If the kids don't need it, great. B) Put any additional contribution funds in a 529. If you use it for education, great. If not, the fact that it's a tax-sheltered account will make up for the 10% penalty in about 15-20 years. If it ends up being your retirement fund, that's a long horizon, and it will have still performed better than a taxable account.

[Valhalla]

College tuition and medical insurance has skyrocketed in comparison to everything else.  Personally, I'm skeptical that the average college tuition hasn't skyrocketed past a reasonable expectation of return on investment.

Jobs are being automated, and artificial intelligence is going to have a huge impact on the job market.  In 10 - 20 years perhaps the standard STEM degrees may be less valuable than arts degrees where creativity will be more valued than scientific fields, or there may be far fewer STEM jobs due to A.I. and far more opportunity for the arts.

Hard to say, but work is changing faster than ever. There has been more changes in the last 5 years than the previous 10 years, and the previous 10 years has had more changes than the previous 30 years, and the previous 30 years has had more changes than the previous 60 years... etc.   Work is changing faster than society to keep up.  Good luck to us all.

[Tom Bri]

College is really cheap.

My daughter goes to a really good school, recently rated one of the top 40 in the world, and we pay essentially nothing, since she is paying for it with scholarships. Last year she decided to move into an expensive private dorm, and we paid for that, $11,000 for a year. Considering how much she has paid for her own schooling, I didn't quibble. In the past two years, aside from that dorm, we have paid about $3000.

The trick is to avoid the really pricey private schools and go to a good public school. Apply for every scholarship you can find; money is sloshing around the education field, free for the taking. All you have to do is ASK for it.

My younger daughter is currently applying for scholarships to go to the same school. She has already been offered a full ride at another state school, but will turn it down because she thinks her choice is better for her. I expect her to also pay for the great majority of her college with scholarships. We are available for extras, and as backup if she doesn't quite cover her costs, but a few thousand here and there won't break us.

My kids are smart, but not genius level. This kind of money is available for any ambitious, fairly smart kid. They just have to get out and actually spend the hours it takes to fill out all the applications, write all the essays, do the research needed.

I read somewhere that kids should treat scholarship applications as a part time job. They should devote a certain number of hours each week in their senior year to applications just as if they were on a regular job.

My advice? Just keep on saving money and investing as you normally would, so that you have plenty of reserve when the time comes. If the kids are smart enough to be in college, they will find a way to cover the costs.

[somers515]

College is really cheap.

My daughter goes to a really good school, recently rated one of the top 40 in the world, and we pay essentially nothing, since she is paying for it with scholarships. Last year she decided to move into an expensive private dorm, and we paid for that, $11,000 for a year. Considering how much she has paid for her own schooling, I didn't quibble. In the past two years, aside from that dorm, we have paid about $3000.

The trick is to avoid the really pricey private schools and go to a good public school. Apply for every scholarship you can find; money is sloshing around the education field, free for the taking. All you have to do is ASK for it.

My younger daughter is currently applying for scholarships to go to the same school. She has already been offered a full ride at another state school, but will turn it down because she thinks her choice is better for her. I expect her to also pay for the great majority of her college with scholarships. We are available for extras, and as backup if she doesn't quite cover her costs, but a few thousand here and there won't break us.

My kids are smart, but not genius level. This kind of money is available for any ambitious, fairly smart kid. They just have to get out and actually spend the hours it takes to fill out all the applications, write all the essays, do the research needed.

I read somewhere that kids should treat scholarship applications as a part time job. They should devote a certain number of hours each week in their senior year to applications just as if they were on a regular job.

My advice? Just keep on saving money and investing as you normally would, so that you have plenty of reserve when the time comes. If the kids are smart enough to be in college, they will find a way to cover the costs.

Can you share some tips that you and your kids have learned to find these scholarships?

[firelight]

We put in 10k in our kid's 529 and are planning to cash flow it from Roth IRA when time comes. She is only 2 at this point, so I'm not sure how college will change by the time she reaches age 18. I don't want to lock up money in an account with lot of restrictions and pay penalty on it later on. But we'll pay for all her college costs (minus any scholarships she gets and any part time job that would help her career) within a reasonable level (that said, we'll pay for MIT, Harvard or Stanford if she can get in and keep good grades - I just view it as a different type of inheritance). Also I want her to be happy and responsible, so if she decides college is not for her, I don't want her to take it up just because a lot of money is locked up for her college and she has to use it.

[protostache]

We put in 10k in our kid's 529 and are planning to cash flow it from Roth IRA when time comes. She is only 2 at this point, so I'm not sure how college will change by the time she reaches age 18. I don't want to lock up money in an account with lot of restrictions and pay penalty on it later on. But we'll pay for all her college costs (minus any scholarships she gets and any part time job that would help her career) within a reasonable level (that said, we'll pay for MIT, Harvard or Stanford if she can get in and keep good grades - I just view it as a different type of inheritance). Also I want her to be happy and responsible, so if she decides college is not for her, I don't want her to take it up just because a lot of money is locked up for her college and she has to use it.

This is the philosophy we're taking. My 9mo daughter has a very small 529 where we're going to put gifts from relatives, but the bulk of her college savings is currently in a taxable brokerage account jointly held by my wife and me. We're contributing $400/mo because that should give her at least $25,000/year for four years of tuition according to cfiresim projections. At some point we may gift her some of that via a UTMA account or transfer a chunk of it into her 529 if it's advantageous, but right now we want her to have the most options available for that money.

[Davids]

My goal will be to have enough saved in my kids 529 plan to pay for 4 years at a state university. Anything extra (or grad school) they will have to make up the difference

[GU]

I have a 4 year old and a 8 month old and was wondering what others felt as far as college funds go.  I currently only have about $2500 set aside for them, but don't routinely add to it.  Mostly just here and there.  Financially we just figured when the time comes and if they are good kids we'd just cash flow it.  Not sure if this is the right move or not.  Right now I max out my 401k and my current house will be paid for in 3 more years it's worth about 400k.  I figured when the house is paid off I could catch up on the college funds real quick if I need to or even want to.  I have a golden pension and realistically will not need my 401k money to survive.  My current net worth is close to 600k.  If you where in my shoes would you

A: Start adding to their college fund each month
B: Wait till the house is paid for and attack it for 2 years
C: Cash flow it out of 401k, cash on hand, stocks, ect
D: Guilt the Grandparents into it.....

I'm reverting back to what my old high school history teacher always said.  When in doubt pick D. JK

It sounds like you are in a very good financial position.  I wouldn't worry about it in your case.  You'll have 11 years of mortgage-less living prior to the first kid going to college, should allow you to build a pretty fat stache.  I wouldn't save specifically for it if I were in your situation.  Worst case scenario, if you're retired by the time college starts and you don't feel comfortable cash-flowing it, just do some work on the side to pay for it. 

[GU]

College tuition and medical insurance has skyrocketed in comparison to everything else.  Personally, I'm skeptical that the average college tuition hasn't skyrocketed past a reasonable expectation of return on investment.

Jobs are being automated, and artificial intelligence is going to have a huge impact on the job market.  In 10 - 20 years perhaps the standard STEM degrees may be less valuable than arts degrees where creativity will be more valued than scientific fields, or there may be far fewer STEM jobs due to A.I. and far more opportunity for the arts.

Hard to say, but work is changing faster than ever. There has been more changes in the last 5 years than the previous 10 years, and the previous 10 years has had more changes than the previous 30 years, and the previous 30 years has had more changes than the previous 60 years... etc.   Work is changing faster than society to keep up.  Good luck to us all.

Totally agree with that bolded point.  And given the overt politicization of college these days, I would find it hard to shell out a lot of money to have my kids choose between being indoctrinated or being ostracized.  I'm not one of those "STEM is the only useful degree" people, but to the extent that rigorous humanities and social science programs are being replaced by mediocre, radical politics in disguise, STEM might be the last refuge for people who actually want to learn things (which is not to say there is no political bias in these fields, but rather, it is not as omnipresent and probably more benign).

[honeybbq]

If you have a tax incentive for doing so, (state write off) I'd consider at least doing enough to get the break.

[Syonyk]

My goal will be to have enough saved in my kids 529 plan to pay for 4 years at a state university. Anything extra (or grad school) they will have to make up the difference

If you're paying out of pocket for grad school, you're doing it wrong...

The deal, usually, is that you work your tail off, are barely paid anything for being a TA/RA, but they cover tuition and enough for a dump of a living situation and some food.  There's a reason that grad students know the cheapest liquor in town on any given night!

[Chris22]

My goal will be to have enough saved in my kids 529 plan to pay for 4 years at a state university. Anything extra (or grad school) they will have to make up the difference

If you're paying out of pocket for grad school, you're doing it wrong...

The deal, usually, is that you work your tail off, are barely paid anything for being a TA/RA, but they cover tuition and enough for a dump of a living situation and some food.  There's a reason that grad students know the cheapest liquor in town on any given night!

That's as a full time grad student.  The other option is to go to grad school at night, while working a full-time job.  You'll be out of pocket for tuition, but on the other hand you're making a real salary in the mean time.  Could go either way on what's cheaper. 

The pro strategy is to do what I did and go to grad school at night and have your employer pay for it, but I understand that's becoming harder to come by these days.  I do appreciate my free MBA though. 

[Tom Bri]

College is really cheap.

Can you share some tips that you and your kids have learned to find these scholarships?

First, she has a good advisor at school who maintains lists of local scholarships and actively looks for more for particular kids. That was a big help.

Second we Googled. There are lots of websites that have long lists of scholarships. Google first for general lists, and then for lists targeted for particulars. For example, race, field of interest, sex, particular school.

Then, go to the school itself. We had the assistant dean (his job is recruiting kids) suggesting which of their scholarships/fellowships/honors programs my daughter should apply to. 

She was offered a full ride at a different school, and she emailed the recruiter at her school and got a couple more scholarships added to what he had already offered her to sweeten the deal. For the schools, the kids are a resource, and they are willing to pay bucks to catch them, if your bargaining position is strong.

[MrsPete]

We do small contributions into my daughter's 529 now ($50/mo) plus the odd deposit of birthday money, etc, because she's currently in daycare, with the intention of ramping way up when she goes to public school. 

This is a good plan in that your elementary school years will probably be your "cheapest" in terms of kid-costs.  They're out of day care, they don't eat like teens, it's still easy to find their clothing used, and their activities probably don't cost as much as they will later. 
It's a bad plan in that -- if you're typical -- your day care costs won't go down to zero because you'll probably still need before and/or after school care.   

I have a degree that was quite useful, but at $300k or so for it?  Eh, I'd still be paying it off, and would have been better learning on the job with stuff.

A degree doesn't have to cost 300K.  I paid about 22K total for my daughter who graduated last May ... and she was in an expensive major.  She went straight to a 4-year state university and graduated on time.  She's not worked a full year yet, but she's already earned more than I paid for her education. 

How much is the right amount?  I'm aiming for 100k per kid currently, but I'd also have to increase contributions a fair bit to get there.

My goal was 40K per kid; that is, 10K per year, and I figured that beyond that we'd be fine cash-flowing it.  One kid's finished with school, and we over-saved for her.  Our second is still a college student, but when all is said and done, I suspect I'll say the same thing for her.

You can borrow for college, but you can't borrow for retirement.

Sure you can.  You can opt for one of those reverse mortgages, and you can use a credit card to live beyond your means, figuring you'll leave the bill for your estate to handle.  I'm not saying it's a wise choice, but I'm sure lots of people are borrowing to fund their retirement lifestyle. 

But you shouldn't cheat either of these goals for the other.  Both matter. 

My kids are smart, but not genius level. This kind of money is available for any ambitious, fairly smart kid. They just have to get out and actually spend the hours it takes to fill out all the applications, write all the essays, do the research needed.

Disagree.  I teach high school seniors, and every year I encounter "smart but not genius level" kids who work very hard at getting scholarships ... and still come up empty.  Yeah, some will win, but don't assume that everyone -- even those who put in the hours and write the essays -- will walk away with a pile of scholarships.  Some majors are more scholarship-heavy than others, many scholarships require financial need, and many scholarships have very specific requirements such as living in a specific area or having parents who were in the military.  And a situation I've seen all too many times:  Good student leaves high school, starts poorly in freshman year and fails a couple classes, but figures out what he should've done and improves ... still, with all the competition out there, the majority of scholarships just closed to him.  And often enough the student who goes down that pathway is the one you were sure would succeed. 

If you save for college and the scholarship thing works out, great!  You still have the money saved.  But assuming that your kids will all earn scholarships and saving is unnecessary is a risky business. 

[rg422]

I have a 4 year old and a 8 month old and was wondering what others felt as far as college funds go.  I currently only have about $2500 set aside for them, but don't routinely add to it.  Mostly just here and there.  Financially we just figured when the time comes and if they are good kids we'd just cash flow it.  Not sure if this is the right move or not.  Right now I max out my 401k and my current house will be paid for in 3 more years it's worth about 400k.  I figured when the house is paid off I could catch up on the college funds real quick if I need to or even want to.  I have a golden pension and realistically will not need my 401k money to survive.  My current net worth is close to 600k.  If you where in my shoes would you

A: Start adding to their college fund each month
B: Wait till the house is paid for and attack it for 2 years
C: Cash flow it out of 401k, cash on hand, stocks, ect
D: Guilt the Grandparents into it.....

I'm reverting back to what my old high school history teacher always said.  When in doubt pick D. JK

I would recommend A.

My wife and I took out student loans to afford going to college and barely paid them off (we are 32), so we’re doing what we can now to prevent this burden on our girls. We have a 4 year old and 1 year old. We put $250 a month per child into their own 529. To us, that should be enough; if they decide to study at ‘expensive’ schools, that’ll be on them. We do put money into our 401Ks, ROTHs, and my HSA; to us, it’s just better to keep these separate from saving for college.

[Laura33]

My kids are smart, but not genius level. This kind of money is available for any ambitious, fairly smart kid. They just have to get out and actually spend the hours it takes to fill out all the applications, write all the essays, do the research needed.

Disagree.  I teach high school seniors, and every year I encounter "smart but not genius level" kids who work very hard at getting scholarships ... and still come up empty.  Yeah, some will win, but don't assume that everyone -- even those who put in the hours and write the essays -- will walk away with a pile of scholarships.  Some majors are more scholarship-heavy than others, many scholarships require financial need, and many scholarships have very specific requirements such as living in a specific area or having parents who were in the military.  And a situation I've seen all too many times:  Good student leaves high school, starts poorly in freshman year and fails a couple classes, but figures out what he should've done and improves ... still, with all the competition out there, the majority of scholarships just closed to him.  And often enough the student who goes down that pathway is the one you were sure would succeed. 

If you save for college and the scholarship thing works out, great!  You still have the money saved.  But assuming that your kids will all earn scholarships and saving is unnecessary is a risky business.

This.  I am honestly not sure where these "cheap" state schools are, but my state flagship is currently around $25K/yr for tuition, room, and board (and we don't live close enough for my kid to commute).  The local branch that would allow living at home runs around $15K, and the local CC around $4K (both tuition-only).  So our cheapest scenario is around $40K, assuming CC for 2 years, transferring to the local institution, and living at home; the more routine State Flagship path is closer to $100K in present dollars.  And it's a mediocre school, to boot.  Oh, and a lot of kids are taking 5 years to graduate because they can't get into the classes they need for their majors in a timely manner because the classes are overbooked.  So there's another $25K.

These schools also don't have a lot of scholarship money to hand out -- aid is by and large need-based, and what the colleges think people "need" is typically at least an order of magnitude lower than the parents think they need.  In some cases, private may even be cheaper than public -- the list price is higher, but they also have more aid to offer to offset that.  One thing I plan to do is look at private options where my kid would be in the top part of the incoming class (vs. focusing on the best schools they can get admitted to) -- at least some second- or third-tier schools offer merit aid to lure bright kids to improve their overall numbers and move up the college rankings.  And I am paying very, very close attention to 4-year graduation numbers, both for the school and the intended major, so that 4 means 4 and not 5 or 6.

It also depends on what you want for your kid.  I have one hothouse flower and one sidewalk weed.  For the former, it is a real priority for me to have the option to choose the school at which she will most likely succeed, so she doesn't crash and burn and blow that first year's tuition money.  And that means saving money on the assumption that the place that fits her best is likely to look at our income and laugh at our request for aid.  For my son, OTOH, he will be Just Fine anywhere he goes, so we can look more closely at value-vs.-cost. 

We also have a state tax deduction for the local 529, and a pretty decent plan. So we save up to the tax deduction in the 529, because our basic math shows it is highly likely we will need it -- and, really, in the very unlikely scenario that we don't use it and either roll it over to someone else or pay a 10% penalty on earnings, that's not exactly the end of the world.  Then we save extra in VSTAX, so it's there for college if we need it, and there for us if we don't. 

[asauer]

We're aiming for 75K/ kid for tuition (both 10yo).  They will be expected to pay for books and 'fees' on their own to put a little skin in the game.  They will also be expected to get scholarships b/c they're smart and darn well better work hard.

[Livingthedream55]

 
[/quote]
  I have one hothouse flower and one sidewalk weed.
[/quote]

This tickled my funny bone!  I got me the same two (daughters) - Funny!!  Took hothouse flower five years to obtain a (two year) associate's degree and sidewalk weed is getting a (four year) bachelor's at a public university in three years.  : 0 )

[acroy]

Good info here!
We have a bunch of little people. I set aside $1k/yr for each of them; into a 'needs-based kid fund', NOT a 529 or 'College' fund. And, I hope they will not need it.
- we pay little in Fed income taxes, so limited benefit from 529
- college is but one of many career choices - so we do not even call it college fund
- I hope (and plan and push) for the kids to 'self-launch'. I will not do them the disfavor of making maturation too easy.
- the kiddoes are required to save 50% of a) allowance b) any earned money. Son #1 has a $1300 stash of his own money this way; kid #2 is closing in on $500.
- Of college costs are at or near 'list price', you're doing it wrong. As other posters mentioned, there is a $hit ton of money out there looking for good students.

Good luck!!

[Proud Foot]

I have a 4 year old and a 8 month old and was wondering what others felt as far as college funds go.  I currently only have about $2500 set aside for them, but don't routinely add to it.  Mostly just here and there.  Financially we just figured when the time comes and if they are good kids we'd just cash flow it.  Not sure if this is the right move or not.  Right now I max out my 401k and my current house will be paid for in 3 more years it's worth about 400k.  I figured when the house is paid off I could catch up on the college funds real quick if I need to or even want to.  I have a golden pension and realistically will not need my 401k money to survive.  My current net worth is close to 600k.  If you where in my shoes would you

A: Start adding to their college fund each month
B: Wait till the house is paid for and attack it for 2 years
C: Cash flow it out of 401k, cash on hand, stocks, ect
D: Guilt the Grandparents into it.....

I'm reverting back to what my old high school history teacher always said.  When in doubt pick D. JK

What is your goal for your kids college fund? That will be a first step in deciding how much you need to start saving or if it could be done out of your cash flow. Make sure your priority first is to set up your retirement.  Your kids can always work or get student loans to cover school costs but its a lot harder for you to go back to work or get loans for your retirement.

[Bucksandreds]

I've read that to pay for the average 4 year instate public University with room and board and average investment gains, one should save $250 per month per child from birth. If your child gets scholarships, grants, or if you don't plan on paying 100% or if you plan on using another funding source then you could get by with less.  I save $250 per month, per child in low cost funds in a 529 and I don't think about it very often.

If my kids go to grad school then I will help them all I can as I left dental school with $220,000 in loans with parents worth maybe $2 million. I don't resent them for helping nothing after undergrad. In that situation borrowing $1000 less per month when considering that most of the loans were accruing interest at 6.8% from the day I received them would have lowered my debt at graduation to the $150,000s- $160,000s.  That $1000 per month would have lowered my total payments by almost double the total amount that would have been given.  My advice. Raise good kids and then help them as much as you can.

[MrsPete]

This.  I am honestly not sure where these "cheap" state schools are, but my state flagship is currently around $25K/yr for tuition, room, and board

If you paid full price at the state school from which my oldest just graduated, you'd pay roughly 14K/year.  That's tuition, fees, books, dorm and meal plan. 

I have one hothouse flower and one sidewalk weed. 

I understand what you're saying:  One of mine is definitely "stronger" than the other; by that, I mean more capable of finding her own way, knows what she wants and will go after it.  The other is just as capable but requires more hand-holding along the way.

Makes me think of a friend of mine years ago who adopted a child, then almost immediately gave birth to a biological child.  She said the nicest thing about her two kids:  She said she had one Homegrown and one Gourmet Special. 

- Of college costs are at or near 'list price', you're doing it wrong. As other posters mentioned, there is a $hit ton of money out there looking for good students.

Myth.  Having taught high school seniors for quite a few years, I assure you this is a myth.  The reality is that scholarships for needy kids are widely available, and scholarships for specific majors are still relatively easy to get, but the majority of our students -- even the very smart and motivated students -- just aren't getting them like they did in the past. 

If you want to groom your kid for scholarships, here's what you should do:

- Focus on grades, obviously.  Without the grades, you have no chance ... but grades alone aren't enough.  But the student must make the grades in the highest level of coursework available at your high school.  For example, the student who makes all As in General Math won't get a scholarship ... it'd be better to take Calculus or Trig and earn a B. 
- Schools want students who are involved in extra-curriculars.  The kid who makes straight As but does nothing but go to class will not win a scholarship.  On the other hand, don't go overboard with an excessive number of clubs.  It's better to be involved long-term in 2-3 activities ... and show a progression towards leadership over the high school years:  Become a member of the school paper staff as a freshman; move up to section editor as a junior; serve as editor-in-chief as a senior. 
- Build relationships with teachers who might one day be called upon to write recommendations.  Don't be fake about it, but show enthusiasm and participation so you'll have someone to call upon when asked for a recommendation.
- Scholarships want to see participation in volunteerism.  This can be through a school club, but the more the better. 
- Be involved in at least one sport ... even if it's at a minimal level.  The student doesn't have to be a super-star, and it could be a small team like tennis or golf, or a no-cut sport like cross-country, but being involved in a sport shows school participation /school spirit, and it's looked at very positively by scholarship committees. 
- Write the essays.  The average senior won't bother to write an essay, so scholarships that include essays have smaller pools of competition.  The student should stay organized and keep copies of everything because very often it's possible to "teak" an essay and send it to a different scholarship organization. 
- Neatness matters.  Following directions matters; you'd be surprised how many students send in incomplete scholarship forms -- those are never even read.  Examples:  If the scholarship asks for a printed official transcript, don't give them something you printed off yourself.  If the scholarship asks for recommendations, don't bother to send in an application without recommendations. 

And keep in mind that even if you do everything right, you may end up scholarship-less.  Most students -- even those in the top 5-10%, even those who have really worked at it -- most students end up with nothing.

[Tom Bri]

This.  I am honestly not sure where these "cheap" state schools are, but my state flagship is currently around $25K/yr for tuition, room, and board

If you paid full price at the state school from which my oldest just graduated, you'd pay roughly 14K/year.  That's tuition, fees, books, dorm and meal plan. 

I have one hothouse flower and one sidewalk weed. 

I understand what you're saying:  One of mine is definitely "stronger" than the other; by that, I mean more capable of finding her own way, knows what she wants and will go after it.  The other is just as capable but requires more hand-holding along the way.

Makes me think of a friend of mine years ago who adopted a child, then almost immediately gave birth to a biological child.  She said the nicest thing about her two kids:  She said she had one Homegrown and one Gourmet Special. 

- Of college costs are at or near 'list price', you're doing it wrong. As other posters mentioned, there is a $hit ton of money out there looking for good students.

Myth.  Having taught high school seniors for quite a few years, I assure you this is a myth.  The reality is that scholarships for needy kids are widely available, and scholarships for specific majors are still relatively easy to get, but the majority of our students -- even the very smart and motivated students -- just aren't getting them like they did in the past. 

If you want to groom your kid for scholarships, here's what you should do:

- Focus on grades, obviously.  Without the grades, you have no chance ... but grades alone aren't enough.  But the student must make the grades in the highest level of coursework available at your high school.  For example, the student who makes all As in General Math won't get a scholarship ... it'd be better to take Calculus or Trig and earn a B. 
- Schools want students who are involved in extra-curriculars.  The kid who makes straight As but does nothing but go to class will not win a scholarship.  On the other hand, don't go overboard with an excessive number of clubs.  It's better to be involved long-term in 2-3 activities ... and show a progression towards leadership over the high school years:  Become a member of the school paper staff as a freshman; move up to section editor as a junior; serve as editor-in-chief as a senior. 
- Build relationships with teachers who might one day be called upon to write recommendations.  Don't be fake about it, but show enthusiasm and participation so you'll have someone to call upon when asked for a recommendation.
- Scholarships want to see participation in volunteerism.  This can be through a school club, but the more the better. 
- Be involved in at least one sport ... even if it's at a minimal level.  The student doesn't have to be a super-star, and it could be a small team like tennis or golf, or a no-cut sport like cross-country, but being involved in a sport shows school participation /school spirit, and it's looked at very positively by scholarship committees. 
- Write the essays.  The average senior won't bother to write an essay, so scholarships that include essays have smaller pools of competition.  The student should stay organized and keep copies of everything because very often it's possible to "teak" an essay and send it to a different scholarship organization. 
- Neatness matters.  Following directions matters; you'd be surprised how many students send in incomplete scholarship forms -- those are never even read.  Examples:  If the scholarship asks for a printed official transcript, don't give them something you printed off yourself.  If the scholarship asks for recommendations, don't bother to send in an application without recommendations. 

And keep in mind that even if you do everything right, you may end up scholarship-less.  Most students -- even those in the top 5-10%, even those who have really worked at it -- most students end up with nothing.

I bow to your experience! I only have my two anecdotal daughters to refer back to. And, reading your points, they did pretty much everything you say kids should do, get grades in tough classes, join and participate and lead extra-curriculars, all without me pushing much at all. They just like doing this stuff.

It helps that they are choosing majors that have scholarships available, and also that the alumni of this school are rabidly supportive, and fund lots of scholarships. These things can be hard for kids to know about when choosing a school/major, yet they weigh so heavily.

I won't back away from one comment though. There IS an ocean of money sloshing around in education. It is available if the kids look for it and plan how to get it.

[I'm a red panda]

My goal will be to have enough saved in my kids 529 plan to pay for 4 years at a state university. Anything extra (or grad school) they will have to make up the difference

If you're paying out of pocket for grad school, you're doing it wrong...

The deal, usually, is that you work your tail off, are barely paid anything for being a TA/RA, but they cover tuition and enough for a dump of a living situation and some food.  There's a reason that grad students know the cheapest liquor in town on any given night!

I paid out of pocket for grad school. I worked full time and my salary minus tuition was greater than the stipend plus tuition would have been if I got an assistanceship, which are pretty rare in my field anyway.  It would have been a financial mistake to not pay out of pocket. My employer offered meager assistance, but I didn't take it because I left them for a higher paying job when I finished. (5 years post masters, and 2 job changes I have doubled my salary)

[MustachianKentuckian]

My goal will be to have enough saved in my kids 529 plan to pay for 4 years at a state university. Anything extra (or grad school) they will have to make up the difference

My plan exactly!  :)

[Camarillo Brillo]

My oldest enters college in the fall and my youngest is finishing his highschool frosh year.  I can tell you what we did, but, of course, everyone needs to figure out their own plan and what works best for them.

We always planned to fully pay for an in-state University for each boy.  In our state that ranges from $15K to $26K. We put $85K in 529 plans for them, splitting that amount across each of their names around 14 years ago.  Those accounts now total $210K.

As it turns out, we now want the boys to spread their wings and get out of Dodge.  We want them to experience living outside of our state and we want them to live on campus at a bigger University.  My oldest chose Colorado State where total yearly expenses come to $46K.  My guess is that the youngest will want to follow him.  We're willing to pay for 4 years for each of them.  If they take longer, that will be on them.

I'm going to cash flow my oldest son's first year so that the 529 can continue growing.  But, we still need to contribute another $100K after cash flowing that first year.  I expect to sell 1 or 2 of my Porsches to do that since we'll be working on downsizing as I move into retirement anyway.

And, as a side note, the oldest has been working during highschool and has already saved $16K.  My agreement with him is that I'll fully fund a Roth IRA each year as long as he earns at least $6K.  I suspect he'll have saved at least $40K when he graduates, and I expect my younger son will do the same thing.

Lastly, as another poster noted, it's a myth that scholarships are widely available.  I think, as that person pointed out, they are there for very specific situations, but not for the majority of students.

[boarder42]

I have a 4 year old and a 8 month old and was wondering what others felt as far as college funds go.  I currently only have about $2500 set aside for them, but don't routinely add to it.  Mostly just here and there.  Financially we just figured when the time comes and if they are good kids we'd just cash flow it.  Not sure if this is the right move or not.  Right now I max out my 401k and my current house will be paid for in 3 more years it's worth about 400k.  I figured when the house is paid off I could catch up on the college funds real quick if I need to or even want to.  I have a golden pension and realistically will not need my 401k money to survive.  My current net worth is close to 600k.  If you where in my shoes would you

A: Start adding to their college fund each month
B: Wait till the house is paid for and attack it for 2 years
C: Cash flow it out of 401k, cash on hand, stocks, ect
D: Guilt the Grandparents into it.....

I'm reverting back to what my old high school history teacher always said.  When in doubt pick D. JK

if you dont pay down your house and actually remortgaged it today at a 4% for 30 years the investment gains on your 320k vs the cost of the loan would likely more than cover you kids college.

[startingsmall]

I have a 4 year old and a 8 month old and was wondering what others felt as far as college funds go.  I currently only have about $2500 set aside for them, but don't routinely add to it.  Mostly just here and there.  Financially we just figured when the time comes and if they are good kids we'd just cash flow it.  Not sure if this is the right move or not.  Right now I max out my 401k and my current house will be paid for in 3 more years it's worth about 400k.  I figured when the house is paid off I could catch up on the college funds real quick if I need to or even want to.  I have a golden pension and realistically will not need my 401k money to survive.  My current net worth is close to 600k.  If you where in my shoes would you

A: Start adding to their college fund each month
B: Wait till the house is paid for and attack it for 2 years
C: Cash flow it out of 401k, cash on hand, stocks, ect
D: Guilt the Grandparents into it.....

I'm reverting back to what my old high school history teacher always said.  When in doubt pick D. JK

if you dont pay down your house and actually remortgaged it today at a 4% for 30 years the investment gains on your 320k vs the cost of the loan would likely more than cover you kids college.

Oh no. Here we go again.

[Jenny1974]

I didn't read the replies but our approach is to just handle it as it comes.  There are so many variables to think about and I don't want to be left with huge penalties.  Oldest went to local college (free to county residents) for  a semester or two so we didn't really need the money for her.  MDD is going to a regional school next year and we'll help out of pocket.  YDD has some chronic health issues so it's hard to say what will happen there.  We've have enough in our investments to help as needed.

Honestly though, I'm not a big proponent of parents bankrolling the whole thing.  My parents made me take out loans, etc. with the agreement that IF I finished, they would help pay it off.  I finished and they stuck to their word.  It was a combined effort to get it paid off but I was debt free within about 5 years.  I saw too many kids just crap away their parent's money and walk away with nothing.  Kids need to have some skin in the game.

[Jrr85]

It's an overkill, but I would not be complacent. College is only going to get more expensive, and judging by experience, we are probably not even able to imagine the scale for 20 years from now. The way for the oversaving to make sense is the following: A) use your Roth IRA to sock away money. This is what we're doing. You can access your contribution money after 5 years, and you may even be able to take out the earnings for educational purposes, I'm not sure. If the kids don't need it, great. B) Put any additional contribution funds in a 529. If you use it for education, great. If not, the fact that it's a tax-sheltered account will make up for the 10% penalty in about 15-20 years. If it ends up being your retirement fund, that's a long horizon, and it will have still performed better than a taxable account.

Things that can't go on forever, won't.  The costs of higher education won't continue to outstrip inflation.  The only reason it has been able to get so ridiculously expensive is because of government guaranteed loans.  If you are dead set on going to an Ivy or near Ivy, they will probably be extremely expensive indefinitely.  But if you just want your kid to have marketable skills that will get them a good job, I think that will be relatively cheap in another two decades.  You can already get by pretty cheaply in most places by doing two years of community college and then two years of public school, and get a STEM or accounting degree that will punch your ticket to upper middle class.  I suspect this route will stay the same real cost or get cheaper as more options for computer based learning recognized by the market place.  You are already seeing distance learning for nurse practitioner schools where you only have to travel to the physical campus once or twice a month.  As more options like that become available, only the richest people or the biggest suckers will continue to pay big money for less marketable college degrees. 

[acroy]

- Of college costs are at or near 'list price', you're doing it wrong. As other posters mentioned, there is a $hit ton of money out there looking for good students.

Myth.  Having taught high school seniors for quite a few years, I assure you this is a myth.  The reality is that scholarships for needy kids are widely available, and scholarships for specific majors are still relatively easy to get, but the majority of our students -- even the very smart and motivated students -- just aren't getting them like they did in the past. 

Then, they're doing it wrong - follow the money ;)

[boarder42]

I have a 4 year old and a 8 month old and was wondering what others felt as far as college funds go.  I currently only have about $2500 set aside for them, but don't routinely add to it.  Mostly just here and there.  Financially we just figured when the time comes and if they are good kids we'd just cash flow it.  Not sure if this is the right move or not.  Right now I max out my 401k and my current house will be paid for in 3 more years it's worth about 400k.  I figured when the house is paid off I could catch up on the college funds real quick if I need to or even want to.  I have a golden pension and realistically will not need my 401k money to survive.  My current net worth is close to 600k.  If you where in my shoes would you

A: Start adding to their college fund each month
B: Wait till the house is paid for and attack it for 2 years
C: Cash flow it out of 401k, cash on hand, stocks, ect
D: Guilt the Grandparents into it.....

I'm reverting back to what my old high school history teacher always said.  When in doubt pick D. JK

if you dont pay down your house and actually remortgaged it today at a 4% for 30 years the investment gains on your 320k vs the cost of the loan would likely more than cover you kids college.

Oh no. Here we go again.

he was asking for help with it ... that solves his problem with no effort.

[boarder42]

College tuition and medical insurance has skyrocketed in comparison to everything else.  Personally, I'm skeptical that the average college tuition hasn't skyrocketed past a reasonable expectation of return on investment.

Jobs are being automated, and artificial intelligence is going to have a huge impact on the job market.  In 10 - 20 years perhaps the standard STEM degrees may be less valuable than arts degrees where creativity will be more valued than scientific fields, or there may be far fewer STEM jobs due to A.I. and far more opportunity for the arts.

Hard to say, but work is changing faster than ever. There has been more changes in the last 5 years than the previous 10 years, and the previous 10 years has had more changes than the previous 30 years, and the previous 30 years has had more changes than the previous 60 years... etc.   Work is changing faster than society to keep up.  Good luck to us all.

these are many of the same thoughts i share.  and why i think everyone here is ahead of the curve.  we're buying the robots by investing in index funds of the largest companies and startups in the world we will own the future.  To me i like to think outside the box of what society says you should do.  i followed rail road tracks society set forth up til when i retire in 5-7 years but i'd like to give my kids the opportunity to explore and create wealth with the wealth i have created and my family before me has created.  whether they need a formal college education is up to them.  But with things like Kahn accademy etc. the landscape of schooling - college and traditional i think will change dramatically over the next 20 years as well. 

[MrsPete]

It helps that they are choosing majors that have scholarships available, and also that the alumni of this school are rabidly supportive, and fund lots of scholarships. These things can be hard for kids to know about when choosing a school/major, yet they weigh so heavily.

Yes, if you're a teacher or a nurse in training, you can likely get some type of scholarship.  If you're military-oriented, ROTC is looking for you.  But if you're majoring in art, business, psychology ... and a whole lot of other things, your chances of getting scholarship are greatly reduced.  And if you're needy, your chances are much, much better regardless of your major.  But everyone doesn't have an equal chance.

I won't back away from one comment though. There IS an ocean of money sloshing around in education. It is available if the kids look for it and plan how to get it.

Then, they're doing it wrong - follow the money ;)

You'll believe what you want to believe, but if this is so, I've seen more than a decade of students actively trying to learn to swim in that ocean ... and the majority of them fail at it.  I'm talking about a wide variety of students ... some with parental support, some without ... with a variety of talents and interests ... applying to a variety of schools ... some who even hire professionals to help them navigate those waters.  Oh, some are winning the game -- both of my kids did, in part because I swim well -- but most of my students do not.   

My big point: Apply for scholarships.  Give it everything you've got.  But at the same time, SAVE.  Do not assume that money is out there waiting for you.  If you save and don't need the money, no problem -- you still have the money -- but if you don't save and the money fails to materialize, you're screwed.

Honestly though, I'm not a big proponent of parents bankrolling the whole thing.  My parents made me take out loans, etc. with the agreement that IF I finished, they would help pay it off.  I finished and they stuck to their word.  It was a combined effort to get it paid off but I was debt free within about 5 years.  I saw too many kids just crap away their parent's money and walk away with nothing.  Kids need to have some skin in the game.

You've been living with this kid for 18 years.  You know how responsible he or she is /isn't.  That, not some vague idea about skin-in-the-game, should be your decision maker. 

Personally, my oldest paid only her spending money /incidentals.  She graduated on time wearing an honors cord.  She worked hard and made good connections in school.  She took the NCLEX (test to become an RN) on the earliest possible day (30 days after college graduation) and passed it in the minimum number of questions.  Within six weeks of graduation, she started working in the job of her choice.  At every point she honored our financial sacrifices by working hard, and she succeeded.  Thing is, she was already this responsible kid in high school -- I wasn't worried about spending on her education. 

Our second is only halfway through college, but we are going down the same path. 

[Jenny1974]

It helps that they are choosing majors that have scholarships available, and also that the alumni of this school are rabidly supportive, and fund lots of scholarships. These things can be hard for kids to know about when choosing a school/major, yet they weigh so heavily.

Yes, if you're a teacher or a nurse in training, you can likely get some type of scholarship.  If you're military-oriented, ROTC is looking for you.  But if you're majoring in art, business, psychology ... and a whole lot of other things, your chances of getting scholarship are greatly reduced.  And if you're needy, your chances are much, much better regardless of your major.  But everyone doesn't have an equal chance.

I won't back away from one comment though. There IS an ocean of money sloshing around in education. It is available if the kids look for it and plan how to get it.

Then, they're doing it wrong - follow the money ;)

You'll believe what you want to believe, but if this is so, I've seen more than a decade of students actively trying to learn to swim in that ocean ... and the majority of them fail at it.  I'm talking about a wide variety of students ... some with parental support, some without ... with a variety of talents and interests ... applying to a variety of schools ... some who even hire professionals to help them navigate those waters.  Oh, some are winning the game -- both of my kids did, in part because I swim well -- but most of my students do not.   

My big point: Apply for scholarships.  Give it everything you've got.  But at the same time, SAVE.  Do not assume that money is out there waiting for you.  If you save and don't need the money, no problem -- you still have the money -- but if you don't save and the money fails to materialize, you're screwed.

Honestly though, I'm not a big proponent of parents bankrolling the whole thing.  My parents made me take out loans, etc. with the agreement that IF I finished, they would help pay it off.  I finished and they stuck to their word.  It was a combined effort to get it paid off but I was debt free within about 5 years.  I saw too many kids just crap away their parent's money and walk away with nothing.  Kids need to have some skin in the game.

You've been living with this kid for 18 years.  You know how responsible he or she is /isn't.  That, not some vague idea about skin-in-the-game, should be your decision maker. 

Personally, my oldest paid only her spending money /incidentals.  She graduated on time wearing an honors cord.  She worked hard and made good connections in school.  She took the NCLEX (test to become an RN) on the earliest possible day (30 days after college graduation) and passed it in the minimum number of questions.  Within six weeks of graduation, she started working in the job of her choice.  At every point she honored our financial sacrifices by working hard, and she succeeded.  Thing is, she was already this responsible kid in high school -- I wasn't worried about spending on her education. 

Our second is only halfway through college, but we are going down the same path.

Yes, I've lived with her for 18 years and she is a good kid . .  but, at the end of the day, we feel she needs to have an investment in her education.  I was a responsible student and I know for sure that having some "skin in the game" pushed me to trudge forward when it would have been easier to take it easy for a semester or two when burnout hit.  I saw too many kids I thought would knock it out of the park in college not invest themselves fully in the process and ended up taking longer than should have taken to complete their degree or . . . even worse . . burning out without a degree.  Their parents were left with the financial hit and nothing to show for it.

At the end of the day, it's all a personal decision.  This worked for me when I was in school so we are continuing with this philosophy.  Now, that's not to say that we won't help her out at all.  We will cover some of her basic bills and provide spending money and food and other necessities on a regular basis.  And, when she's all done, we'll stick to our word and help her pay off any debt she has incurred.

To each his own!

[Scandium]

College tuition and medical insurance has skyrocketed in comparison to everything else.  Personally, I'm skeptical that the average college tuition hasn't skyrocketed past a reasonable expectation of return on investment.

Jobs are being automated, and artificial intelligence is going to have a huge impact on the job market.  In 10 - 20 years perhaps the standard STEM degrees may be less valuable than arts degrees where creativity will be more valued than scientific fields, or there may be far fewer STEM jobs due to A.I. and far more opportunity for the arts.

Hard to say, but work is changing faster than ever. There has been more changes in the last 5 years than the previous 10 years, and the previous 10 years has had more changes than the previous 30 years, and the previous 30 years has had more changes than the previous 60 years... etc.   Work is changing faster than society to keep up.  Good luck to us all.

Totally agree with that bolded point.  And given the overt politicization of college these days, I would find it hard to shell out a lot of money to have my kids choose between being indoctrinated or being ostracized.  I'm not one of those "STEM is the only useful degree" people, but to the extent that rigorous humanities and social science programs are being replaced by mediocre, radical politics in disguise, STEM might be the last refuge for people who actually want to learn things (which is not to say there is no political bias in these fields, but rather, it is not as omnipresent and probably more benign).

As usual, it depends. Most give a pretty good return I'd say.
http://www.economist.com/news/united-states/21600131-too-many-degrees-are-waste-money-return-higher-education-would-be-much-better

[boarder42]

So that table just does salary to cost of college. It really should be compared to what a hs diploma would get you and investing the cost of college. To determine real ROI. It's not like it's college or you make 0.

[Jrr85]

College tuition and medical insurance has skyrocketed in comparison to everything else.  Personally, I'm skeptical that the average college tuition hasn't skyrocketed past a reasonable expectation of return on investment.

Jobs are being automated, and artificial intelligence is going to have a huge impact on the job market.  In 10 - 20 years perhaps the standard STEM degrees may be less valuable than arts degrees where creativity will be more valued than scientific fields, or there may be far fewer STEM jobs due to A.I. and far more opportunity for the arts.

Hard to say, but work is changing faster than ever. There has been more changes in the last 5 years than the previous 10 years, and the previous 10 years has had more changes than the previous 30 years, and the previous 30 years has had more changes than the previous 60 years... etc.   Work is changing faster than society to keep up.  Good luck to us all.

Totally agree with that bolded point.  And given the overt politicization of college these days, I would find it hard to shell out a lot of money to have my kids choose between being indoctrinated or being ostracized.  I'm not one of those "STEM is the only useful degree" people, but to the extent that rigorous humanities and social science programs are being replaced by mediocre, radical politics in disguise, STEM might be the last refuge for people who actually want to learn things (which is not to say there is no political bias in these fields, but rather, it is not as omnipresent and probably more benign).

As usual, it depends. Most give a pretty good return I'd say.
http://www.economist.com/news/united-states/21600131-too-many-degrees-are-waste-money-return-higher-education-would-be-much-better

That's an interesting graph, but looking at it broken down by majors probably shows better information.  UVA is probably a good return for most people as it's not that expensive for a high quality school, but an engineering degree from any public university in the top 100 engineering schools probably has a better return than UVA's average return. 

[47%MMM]

My goal will be to have enough saved in my kids 529 plan to pay for 4 years at a state university. Anything extra (or grad school) they will have to make up the difference

If you're paying out of pocket for grad school, you're doing it wrong...

The deal, usually, is that you work your tail off, are barely paid anything for being a TA/RA, but they cover tuition and enough for a dump of a living situation and some food.  There's a reason that grad students know the cheapest liquor in town on any given night!

That's as a full time grad student.  The other option is to go to grad school at night, while working a full-time job.  You'll be out of pocket for tuition, but on the other hand you're making a real salary in the mean time.  Could go either way on what's cheaper. 

The pro strategy is to do what I did and go to grad school at night and have your employer pay for it, but I understand that's becoming harder to come by these days.  I do appreciate my free MBA though.

Agreed! Employer paid-for MBA has the best ROI! My company had a low amount they were willing to pay in tuition each year so instead of dragging it out, I choose a local branch of a state school where I could take enough credits to finish in two years. Less than 6 months after I finished my degree I bounced. The fact it's a state school MBA verse fancy private hasn't impacted my career either.

[Scandium]

- Of college costs are at or near 'list price', you're doing it wrong. As other posters mentioned, there is a $hit ton of money out there looking for good students.

Myth.  Having taught high school seniors for quite a few years, I assure you this is a myth.  The reality is that scholarships for needy kids are widely available, and scholarships for specific majors are still relatively easy to get, but the majority of our students -- even the very smart and motivated students -- just aren't getting them like they did in the past. 

I thought of this when I found this page
https://nces.ed.gov/collegenavigator/

It has neat sections for "tuition", "aid" and "net price". I just checked a random school (CA Institute of Technology) but this kinda tells the same story MrsPete says above. Cost is $45k.  But hey, it says average aid is $30k. Not bad right? But the useful breakdown by family income put a damper on this. Most of that goes to the ones at the lower end of the income bracket. In the income category we're in now ($100k+) the kids received basically no aid. So even though "average price" is advertised as $23k, we would pay double that! i.e. $200k+ for a 4 year degree.

Here's the poorly formatted table:

Average net price by Income   2014-2015
$0 – $30,000:   $10,064
$30,001 – $48,000:   $8,328
$48,001 – $75,000:   $10,264
$75,001 – $110,000:   $31,931
$110,001 and more:   $42,695


My wife keeps saying she paid almost nothing at a fancy liberal arts school. But her parent's were divorced, her dad retired and her mom working minimum wage! We make almost $100k each so there's no way our kids would get same deal.

[better late]

One good source for scholarships is the PSAT. Your child's school might have the kids take it once for practice sophomore year of high school and then in October of Junior year.  The scores on the Junior year PSAT are what each state uses to determine which kids take the National Merit Scholarship competition to the next level. If you have kids that are pretty good at testing start test prep early. Everyone else starts test prep junior year and focuses on the SAT/ACT (which for high scores can also be a source of big discounts/scholarships at certain schools). If you are open to "following the money" the NMS program is tried and true.

[stashing_it]

It's an overkill, but I would not be complacent. College is only going to get more expensive, and judging by experience, we are probably not even able to imagine the scale for 20 years from now. The way for the oversaving to make sense is the following: A) use your Roth IRA to sock away money. This is what we're doing. You can access your contribution money after 5 years, and you may even be able to take out the earnings for educational purposes, I'm not sure. If the kids don't need it, great. B) Put any additional contribution funds in a 529. If you use it for education, great. If not, the fact that it's a tax-sheltered account will make up for the 10% penalty in about 15-20 years. If it ends up being your retirement fund, that's a long horizon, and it will have still performed better than a taxable account.

Things that can't go on forever, won't.  The costs of higher education won't continue to outstrip inflation.  The only reason it has been able to get so ridiculously expensive is because of government guaranteed loans.  If you are dead set on going to an Ivy or near Ivy, they will probably be extremely expensive indefinitely.  But if you just want your kid to have marketable skills that will get them a good job, I think that will be relatively cheap in another two decades.  You can already get by pretty cheaply in most places by doing two years of community college and then two years of public school, and get a STEM or accounting degree that will punch your ticket to upper middle class.  I suspect this route will stay the same real cost or get cheaper as more options for computer based learning recognized by the market place.  You are already seeing distance learning for nurse practitioner schools where you only have to travel to the physical campus once or twice a month.  As more options like that become available, only the richest people or the biggest suckers will continue to pay big money for less marketable college degrees.

This is 100% true.    Online & distance education can cut the cost of the learning by an order of magnitude.  People will not take on ruinous debt into their 30's when the market begins to accept those degrees more and more.  And they will, many tech companies already care more about skills than degrees

[jjandjab]

It's an overkill, but I would not be complacent. College is only going to get more expensive, and judging by experience, we are probably not even able to imagine the scale for 20 years from now. The way for the oversaving to make sense is the following: A) use your Roth IRA to sock away money. This is what we're doing. You can access your contribution money after 5 years, and you may even be able to take out the earnings for educational purposes, I'm not sure. If the kids don't need it, great. B) Put any additional contribution funds in a 529. If you use it for education, great. If not, the fact that it's a tax-sheltered account will make up for the 10% penalty in about 15-20 years. If it ends up being your retirement fund, that's a long horizon, and it will have still performed better than a taxable account.

Things that can't go on forever, won't.  The costs of higher education won't continue to outstrip inflation.  The only reason it has been able to get so ridiculously expensive is because of government guaranteed loans.  If you are dead set on going to an Ivy or near Ivy, they will probably be extremely expensive indefinitely.  But if you just want your kid to have marketable skills that will get them a good job, I think that will be relatively cheap in another two decades.  You can already get by pretty cheaply in most places by doing two years of community college and then two years of public school, and get a STEM or accounting degree that will punch your ticket to upper middle class.  I suspect this route will stay the same real cost or get cheaper as more options for computer based learning recognized by the market place.  You are already seeing distance learning for nurse practitioner schools where you only have to travel to the physical campus once or twice a month.  As more options like that become available, only the richest people or the biggest suckers will continue to pay big money for less marketable college degrees.

This is 100% true.    Online & distance education can cut the cost of the learning by an order of magnitude.  People will not take on ruinous debt into their 30's when the market begins to accept those degrees more and more.  And they will, many tech companies already care more about skills than degrees

Another reason the increase cannot continue forever is that so much of the cost of higher education is no longer going to the "education" part. I live in a town with the #1 liberal arts college in the country. In the past 5 years they have honestly spent hundreds of millions of dollars on a new library, athletic complex, bookstore, some new dorms and now a science building. Most of this is unbelievably gorgeous. But it is all cosmetic. The old football field and track were really nice and homey - and guess what, the games looked the same as they do now. The old library held books and had study areas, as does the new one that cost almost $80 million (for a school of about 2100 kids). I can't imagine the scale of these projects at larger places. The new dorms look like a Westin hotel...Also, kids now have dining options that are crazy, looking like a food court - so they need a team of chefs... The gym is nicer than almost any other I have been in. And the tuition costs are also driven by healthcare, pensions, professor benefits, etc... Sure they have a large endowment, but total cost without financial aid is 70k.

Not to bemoan my friends, but I have many professor friends who literally teach two classes, a total of 6 hours a week, with lab time and office hours. They are tenured and can't be fired. And they do this Sept-early May. Then do some "research" over the summer with motivated students. I wish I had gone the professor route.

So the cost is dramatically increasing but not sure the education is getting better. The "college experience" might be, whatever that means, but not the learning. And for that I think there must be a ceiling. I went to a top 25 private school in the early 90s and total cost was 28k per year. It is now 72k per year. No way I want to send my kids there without financial aid.