Funding college for kids... ouch!

[Katsmeow]

Our son is currently doing his first two years of college at community college. It started out that way because he was younger than usual when starting so wasn't really ready to live in a dorm. However, now that he is in his second year there we have been very pleased with the quality of the education he has been receiving and it is very inexpensive. We plan for him to complete his associate's degree and then transfer to a state university for the last 2 years. Even among state universities there are many choices. There aren't really any that are close enough to commute to but that would otherwise be an option. Even so, for those with dorms they vary quite a bit in cost.

 

[skipro3]

Well, I put two boys through a private college, the youngest graduated 5 years ago. It was around $20,000 per year, so that totaled about $160,000. To pay for it they both were required to take student loans, work summers, worked as RA's to cover their room and board and apply for all scholarships they could. DW went back to work, (we never have included any money she earned as part of the family budget and used it all for special projects like college) to make up the rest of it. We did a 'pay-as-you-go' plan and had not saved anything for college. Worked out fine and both boys got jobs that ended up paying off their student loans.

DW and I agreed that we would not stop funding the retirement for college.

Believe me, if there is a will, there is a way. I would not sweat college tuition. You are more likely to need to worry about sweating getting accepted to a private college. Kids these days... who knows what they are thinking?

BTW, the older boy had a major in business and worked summers for some surf board company. (They went to school in the San Diego area). The younger one had taken 2 years of auto cad and worked high school summers for a drafting company. He continued working CAD and also made friends with a city bus driver in San Diego who eventually helped him get his commercial driver license. He spent the last two years driving the campus bus around San Diego picking up and dropping off students around town. His major was in broadcast communications with a dual degree in music. Between junior and senior year he drove a touring bus for some rock group on a US tour. He also got on as a freelance camera man for NBC sports and ESPN sports. He ran a camera for the Del Mar raceway. Then one day he overheard some guys arguing about some 'live van'. Turns out the local FOX news affiliate needed a new driver, the old one had too many points on his license. He talked to them and did both driving and cameraman work. Moved up to the studio doing the morning news before classes, then ESPN sent him to Las Vegas for a world tennis competition. They had some sort of graphics computer that puts scores, names and such as banners on the broadcast but they didn't realize it was all in French. I made both boys take 3 years of foreign language in high school and he had chosen French. From there, he did every home game for the San Diego Padres and the Chargers. He now lives in Napa, CA and works at a recording studio, TRI Studios and freelances for the Giants and 49er games. He even did the world's series last summer. (click the link for TRI and listen to the music a bit on the home page video. The owner of the studio is Bob Weir (guitarist for the Grateful Dead. Some great jazz and folk, rock, blues sorta sounding stuff)
The point being on all this is that kids will find a way, parents will find a way to pay for it and by making the kids think about how they are going to get this done can and does lead to some great opportunities.

 

[Bestwifeever]

....Why should I pay for my adult child to go to college at the expense of my retirement and enjoyment of life so they can get a high paying job and do what I only wished I could do? Why should I fork out hundreds of thousands of dollars and postpone or destroy my retirement so my kid can go out make way more than I ever thought of making all at my expense. How is that teaching a child to become an adult?

I don't look down on those parents that pay. ....

Are you sure about that?

 

[growing_older]

Quote:
Originally Posted by okbeachmouse
This is an interesting topic.

How many here would put off FIRE in order to pay for their children's college tuition?

I would and am, for several reasons:

1. My parents paid for mine. It was a huge help to me not to have to worry about tuition while I was also working on what do I want to do with my life and sometimes struggling with the academic (and party) load as well.
2. My college education has opened employment possibilities which I could never have had without it, and it seems like many fields are even harder to break into without a degree now.
3. Each child is different in personality, interests and readiness to make their own way in the world. I think I am helping my child and am seeing positive results.

It probably helps a lot that my kids don't seem to feel entitled and appreciate the assistance. It makes it easy to delay personal gratification by a few years to see them getting something so valuable.

 

[kz]

DH and I paid the college bills for our two sons. We never felt it was a requirement of being a parent....just something we always planned on doing. We started a savings plan when they were quite small and just continued on until the last bill was paid. We were extremely fortunate to still retire fairly early (me at 39, DH at 53) but we definitely would have sacrificed a few years (or toys or vacations) in order to cover college costs. Not a single regret about it. And, yes, both boys are probably doing much better in their late 20s, early 30s than we did at that age and I'm extremely happy for them.

 

[Brett_Cameron]

I put myself through college with grants, loans and the US Navy NUPOC program. My parents let me live at their house for two years of community college and during the breaks between regular semesters and summer school.

I have two older children ( 26-30) that I saved enough for 4 years of college at an in-state college. One changed majors a couple of times and never graduated after 4-5 years. The other went 3 years and dropped out. Both used all the money available. I told them both that when the money was used up they were on their own as far as college financing.

I have two younger children (8-15) that I will provide the same opportunity and rules for. #15 said he wants to go to an out of state school and we have had the discussion that he would have to figure out how to make up the difference in costs between the in-state school and the out of state school.

An ex co-worker has two children and he is paying the costs for both. One is going to be a doctor and the other is going to be a lawyer. He is adamant that doing less is not fair to his children.

Different people have different standards for obligations to their children. I am happy to help because I am able to, my parents were not able to. I want to help them with the opportunity to go to college.

 

[Nords]

FWIW, Bankrate.com claims that the unemployment rate for college students is half of the current unemployment rate.

And you're right, that $400K is retail. You gotta know your kids, but if you can push them into the high school AP classes then they'll start college with one semester in the bag. If they're even mildly interested in NROTC then encourage them to do the first year free and bail after that if they want to. Or, heck, they could even go enjoy a two-year free ride at a service academy. Otherwise the most cost-efficient route seems to be a two-year junior college followed by transferring to State U. Commuting is probably cheapest, but if they can live in a campus dorm at a large town then they'll have more opportunities for work-study and internships.

In three semesters, our daughter has twice had a scholarship form shoved at her and been told "Fill this out, include an essay, and turn it in by Friday." That's all it took for her to win $1250 cash. I've read that several million dollars of scholarships go unused each year.

This is an interesting topic.
How many here would put off FIRE in order to pay for their children's college tuition?

Um, no. Not even for FIRE. My money, I worked for it, I earned it, it's all mine mine mine. Kids can get their own college money in a variety of ways. Not so easy for their retiring parents.

I put myself through college with grants, loans and the US Navy NUPOC program.

Have you mentioned this before and I forgot? (Gumby & M_Paquette are nukes too.) What boats/ships were you on?

 

[Mulligan]

NORDS SAID: In three semesters, our daughter has twice had a scholarship form shoved at her and been told "Fill this out, include an essay, and turn it in by Friday." That's all it took for her to win $1250 cash. I've read that several million dollars of scholarships go unused each year.


This is so true! Many schools have modest $500 to $1000 scholarships, that very few apply for. Many kids will not even make the effort to walk into the counselors office to see what are available, let alone the effort to fill out an app. Just because they see the word essay. We made our daughter last year write an essay on healthcare reform ( which was the topic) and she bagged a quick $1000. Then she got another one for $500 because her mother happened to be told an organization was giving 3 $500 scholarships, but only 2 people had bothered to apply (graduating class of over 200). Guess who was forced into becoming the third applicant? If I was a parent with a senior, I would call counseling office and find out what local scholarships are available, then make junior bring them home and fill them out.

 

[Aiming_4_55]

OP here. Even though I raised the topic and the 400k number, I will plan toward the kids' college fund without question. Between savings, bonus income, rental income (my part time j*b), and gifts (grandmother), I should reach the target within the next 7-8 years (by age 50) as I started saving a few years ago.

I do not really feel I can reach FI or take full ER knowing I can assist in giving my kids' the tools for life and step away. It will not be a blank check as I'll have expectations.

My situation - I paid for my own as my parents did not have the means, but know I would of enjoyed life as a student more if I had just a little more time to be a young adult.

 

[Aiming_4_55]

...mildly interested in NROTC then encourage them to do the first year free and bail after that if they want to. Or, heck, they could even go enjoy a two-year free ride at a service academy.

Agreed Nords, I was creative with funding my college fund, first semester was on a credit card, then never looked back with various full time work at Walgreens, small scholarships, Army ROTC (2 years), Resident Assistant job, etc. I graduated with zero loans and 2k in my pocket. After 2 years in ROTC, I was faced with graduation with a BS or stay another year for a BS and commission in the Army not in a field of my choice. I landed a job at Megacorp, so I graduated on Saturday, relocated on Sunday, and started on Monday.

 

[NW-Bound]

I realized that my earlier post might have given the impression that my children were party-goers, and I had to keep them under leash.

No, they were not wild kids. But raising them and watching them growing up, I knew they were not as independently minded as I wished them to be. They could be swayed by the bad company they might take, if they were away from home at such a young age. If they were competitive enough to get a scholarship, then they would have a strong personality to have been safe to be on their own.

My situation - I paid for my own as my parents did not have the means, but know I would of enjoyed life as a student more if I had just a little more time to be a young adult.

For this same reason, I did not push my children hard. I often wondered if they were underachievers because I let them have it easy. They still turn out OK. I love them, and they love and respect me. What's more to ask?

There is more to life than a diploma from a prestigious school, and then a stressful career in the business world or politics. My children are not type-A, nor am I, and as long as they can make enough to sustain themselves, that's a good life.

 

[Nords]

After 2 years in ROTC, I was faced with graduation with a BS or stay another year for a BS and commission in the Army not in a field of my choice. I landed a job at Megacorp, so I graduated on Saturday, relocated on Sunday, and started on Monday.

I think service academies still offer the first two years free of obligation, but NROTC changed their rule in late 2009 or early 2010 and now only gives the first year for free.

Our daughter's unit is a mishmash of nursing students, Navy & Marine enlisted on various commissioning programs, other students not on scholarship, and probably a few more niches I haven't encountered yet.

I enjoy talking with all of them. It's funny-- the enlisted OCs are my daughter's age or a bit older, but their commanding officers are my age (or a bit younger). If their COs are submariners then I usually know them. It really bugs the heck out of my daughter to find out that a former CO of one of her classmates used to be one of my shipmates... and even worse, maybe someone who I trained.

But she found it tremendously amusing that I had a USNA yearbook photo of her CO from his plebe year that she could scan in and edit for her unit's entertainment.

 

[aleabo]

I'm putting some money in Vanguard 529 for my daughter but there is no way it will be sufficient (200k is too much for me to put in this fund. After all you can borrow for education but cannot borrow for retirement ). Now I'm wondering if having some money in 529 plans will undercut her ability to get scholarship or student loans.

 

[Aiming_4_55]

I'm putting some money in Vanguard 529 for my daughter but there is no way it will be sufficient (200k is too much for me to put in this fund. After all you can borrow for education but cannot borrow for retirement ). Now I'm wondering if having some money in 529 plans will undercut her ability to get scholarship or student loans.

It depends if it is a "needs based" scholarship or loan, however it's better for the 529 to be in the parent's name vs. kids' name. (I hold the 529 in my name).

From Does a 529 Plan Affect Financial Aid?
529 Plans owned by the student

Beginning with the 2009-2010 school year, student- and UGMA/UTMA-owned 529 accounts are to be reported as parental assets, if the student files the FAFSA as a dependent and has to include parent assets and income. This treatment confers a financial aid benefit as the parental rate of 5.64% is considerably less prejudicial than the 20% rate on non-529 assets owned by the student.

 

[jazz4cash]

Two down and one to go. So far so good. We made it clear to our children at a young age that they would be responsible for a significant portion (1/3) of thier college education cost. I think it helps them approch the cost more responsibly.....skin in the game. Thier cost is reduced by scholarships earned and increase by room and board. They are paying thier portion with summer jobs student loans. They went to nearby out of state public colleges. We saved 1/3 and borrowed the other 1/3 with parent loans. Our contribution for grad school is limited to room and board in our home. We also made the choice/sacrifice for private (Catholic) schools for 1-12, so that impacted our financial options as well.

 

[Brat]

When my kids were in middle school I sat each of them down and provided a print out of each of the accounts we had established for their college expenses and a sheet showing what it cost to attend our state university. Then I gave them investment options for that money. Son, my risk taker, told me to put it all in the Magellan Fund; daughter said to split is between the Magellan Fund and CDs.

When they were in college my plan was to divide the account by 4 years and make up the difference. Party money they had to earn. Each worked the 'system' for their situation.

Son, who had out-of-state tuition, figured out what it took to be in-state and cut his costs significantly. His education investments had grown significantly. He also developed a little business on the side as working a job wasn't an option.

Daughter went to a private university, applied for scholarships, work-study jobs and worked in her campus community during the summer. She obtained a couple school loans which we paid off after she graduated. That was probably a 'mistake' on our part as she is earning more than enough to have done that herself. On the other hand we made only a modest contribution for her wedding expenses so, frankly we came out ahead.

Personally I am concerned about the cost of a university education for our grand children. Daughter should be able to fund her kids but her brother has a business and, who knows. We have pre-paid one year's tuition for each of his kids (2 and nearly 4 as I write).

 

[Brett_Cameron]

Have you mentioned this before and I forgot? (Gumby & M_Paquette are nukes too.) What boats/ships were you on?

Yeah in a thread where we listed our previous occupations. I was in for minimum obligation plus about 4 months. I went to OCS in Newport in 1977, Nuke school in Orlando in 77-78, prototype at Ballston Spa (S7G MARF), sub school in New London and one sea tour on USS Haddo SSN 604 out of San Diego then separated from service in 1982 to raise my children and to pursue a glorious career in commercial nuclear power.

 

[Texas Proud]

I did not read the whole thread, but what I did read nobody posted about this...

To the OP... you have mixed things on your decision... you state that it will cost $200K in the future, but then compare it to a $40K or $50K job which is todays dollars... apples and oranges...

As someone did mention, what is the income if they do not... heck, it might be a LOT... I have a neice whos husband works in the oil field and is making about $150K per year... with NO college education... and he is in his early 30s...

Or, it could be $20K to $30K per year... who knows for sure...

 

[Bestwifeever]

When my kids were in middle school I sat each of them down and provided a print out of each of the accounts we had established for their college expenses and a sheet showing what it cost to attend our state university.

....
Son, who had out-of-state tuition, figured out what it took to be in-state and cut his costs significantly.

....
Daughter went to a private university, applied for scholarships, work-study jobs and worked in her campus community during the summer. She obtained a couple school loans....

I love this post--the parents sat the kids down and told them exactly what they could expect (and it doesn't matter if it was 100, 50, or 0 percent--that is each family's own decision). The children then had several years to plan around that amount and each did it differently.

 

[Brat]

It makes no sense to hide the ball. For one thing they knew that there was an account for them for education beyond high school. No school, no money. It also was the start of an education about investing.

One of the more interesting parental lessons is that a child's attitude about investing reflect the way they approach life and the work world. As I mentioned one who went all equities has a business, what I didn't say is that the other who took a balanced approach is a CFO.

 

[ERD50]

It makes no sense to hide the ball. For one thing they knew that there was an account for them for education beyond high school. No school, no money. It also was the start of an education about investing.

One of the more interesting parental lessons is that a child's attitude about investing reflect the way they approach life and the work world. As I mentioned one who went all equities has a business, what I didn't say is that the other who took a balanced approach is a CFO.

I like it and I'm glad it worked for you and your family.

That said, I'm not sure that all kids are ready to fully contemplate that financial decision. I think someone here posted a report about how many kids brains just aren't wired to think through these issues - for some it just comes with age, regardless of how intelligent/responsible they may be in other areas.

I've taken a more step-wise approach with our kids, building some responsibility step-by-step. I'm not saying that's right or wrong, just saying that some families may need to adjust based on just how ready their kids are. So far so good, maybe jumping in earlier would have worked as well or better for us? I'll never know!

-ERD50

 

[landover]

I doubt that the price of tuition will go up as fast as it used to be. Going forward there will be fewer university aspirants. And after current prolonged moderate stock market, no pay raises, high unemployment especially for new graduate and older people, and education loan horror stories.

As far as I am concerned, I have a dilemma, as I am living overseas my kids are not classified as in-state in any state. Most of countries are not generous to foreign students, foreign students tuition is much higher than for local candidates. And I am not earning in $s anymore.

 

[Brat]

ERD50, I had concerns about my son in high school but thankfully he didn't step off the edge.

One of the advantages of most education savings plans is that you can transfer the $ to another student or pull it out. Sometimes finding their currency is currency you control.

 

[Nords]

Yeah in a thread where we listed our previous occupations. I was in for minimum obligation plus about 4 months. I went to OCS in Newport in 1977, Nuke school in Orlando in 77-78, prototype at Ballston Spa (S7G MARF), sub school in New London and one sea tour on USS Haddo SSN 604 out of San Diego then separated from service in 1982 to raise my children and to pursue a glorious career in commercial nuclear power.

Thanks! I'd forgotten.

 

[JakeBrake]

My Vietnam era VA benefit totally paid for my college education. DW had already completed college when we met. DD earned a full academic scholarship that paid for her college education. DS also had an academic scholarship, but flunked out of college after a year or so. He was suspended from college for a year. During that year he held some pretty awful temporary jobs. He is large and strong, which is a major asset on many temporary jobs. When he re-entered college, he paid his own way by working temporary jobs while going to school. If he borrowed money, he did not tell me. He graduated from college and has been gainfully employed for several years.

So, I suppose I lucked out and have not had to pay any college tuition.