Funding college for kids... ouch!

[Aiming_4_55]

It's been said before, kids will have an impact on FIRE. In 2012, DD will be 6 and DS will be 5, so when the college years come, we'll get hit hard with college related expenses, assuming things go well. I am openminded that college is not for everyone, but thinking $$ would go toward schooling or helping them if appropriate and/or deserving.

I was just rechecking numbers at MN 529 and the calculator estimates a 4 year, in-state university, (tuition, fees, housing, etc) will be estimated at $200k per kid when they start at age 18, so $400k should be saved outside of the ER fund.

Sure part time work, scholarships, loans, AP classes in HS, ROTC, etc will be options.

Is it really worth it with starting salaries (about 40k-50k nowadays) and not moving up much? Are there other creative ways to fund college?

 

[Amethyst]

Some Government agencies will take promising high school kids into entry-level jobs, and pay for evening/weekend college classes.

Having the kids live at home, eat at home, and commute to school is one way to save big $ on college costs. I turned out reasonably well, despite missing the "joys" of dorm life and cafeteria food.

A motivated youngster, who doesn't care for academics, could consider attending a technical institute. Those institutions' prestige has grown recently, since installing and fixing things is not exactly easy to outsource overseas. Some have become accredited as technical colleges.

Amethyst

 

[RetireBy90]

Couple thoughts

- My youngest is doing 2 yrs at local community college. This allows a time to work on studies without all the distractions; It is somewhat cheaper than 4yr college for tuition and they can live at home for 2yrs saving on the room and board (although mine eats so dang much).
- There are jobs they can get where they learn on the job. Although I would say the degree may not payoff like you would want from investment angle it CAN open options not available without one. So there are payoffs that don't hit the bottom line. Also can introduce them to fields they may not consider otherwise.
- Finally, there are options to help pay the costs, such as military service and others that can either provide $$ help or can provide experience that can be used for college credits. I was given about 40 credits when my service experience was evaluated. My son has been working and schooling, and his employer paid for most of first 2yrs before they had to close the shop. My employer also provides tuition assistance as do many.

Just my thoughts...

 

[Aiming_4_55]

Thanks Amethyst & Retireby90.

Good thoughts as I started at a technical college as I wanted to "get" something for my time if I could not get funding beyond 2 years.

My employer paid for my grad studies, so that will be a thought.

I'm not sure how I'll feel about this in 12 - 15 years, but maybe even buy a franchise that they can work vs the traditional college thing but I agree a degree will be a standard to even get a look at Megacorp.

 

[NW-Bound]

Having the kids live at home, eat at home, and commute to school is one way to save big $ on college costs. I turned out reasonably well, despite missing the "joys" of dorm life and cafeteria food.

Yep. My children originally wanted to go to an out-of-state university, but I told them that would be an option only if they got a scholarship. I knew they simply wanted a bit more freedom, so I did cut them some slack in their young adulthood, and they were OK with staying home (<10 mi to school).

Put both of them through an in-state university for all 4 years (no community college) completely out of my pocket. I did not even know what an FAFSA form was until recently.

 

[okbeachmouse]

This is an interesting topic.

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

In our case we opted not to fund college for my husbands daughter from his first marriage because she down right expected a blank check to use at a very expensive private school. When she made it clear she expected my husband to put off retirement to fund her college-- any college she chose-- it created so much resentment -- he ended up saying NO. She refused to consider a cheaper in state school.

She is still furious that she had to take out some student loans (and so is her mother who still "hates" my husband even though they divorced almost 20 years ago). What my stepdaughter doesn't know is that we intend to pay those loans -- or at least a big portion IF her entitlement attitude comes down a few notches. If not we will take a few more vacations.

 

[Aiming_4_55]

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

In our case we opted not to fund college for my husbands daughter from his first marriage because she down right expected a blank check to use at a very expensive private school. When she made it clear she expected my husband to put off retirement to fund her college-- any college she chose-- it created so much resentment -- he ended up saying NO. She refused to consider a cheaper in state school.

Good for your hubby for saying NO.

I will delay it a little as my goal is to cover 100% state school, if that's the route. If schooling is not an option/interest, then it will be applied to something else, if they are deserving. My DS is adopted so we went in knowing the "cost" and accepted it.

Sorry to hear about your step DD, entitlement is a terrible trait. Just wait for her wedding if you guys take care of the school loans.... a habit/trend to consider.

 

[eytonxav]

This is an interesting topic.

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

I am doing it now, not because my kids expected it, but seeing our kids well educated was something DW and I wanted to provide, without having them saddled with a lot of college debt in this brave new world.

 

[MichaelB]

There is a greater difference today than ever between median wages and those in the top decile, and a college degree is needed to get there. There are also very well paid opportunities in other countries, such as China, but once again people need the right academic preparation. If one's choice of field and college prepares the student for professions that have high value add, then yes, it is worth it. If the choice steers the student to professions that are close to median wages, it may never pay off.

 

[ERD50]

I was just rechecking numbers at MN 529 and the calculator estimates a 4 year, in-state university, (tuition, fees, housing, etc) will be estimated at $200k per kid when they start at age 18, so $400k should be saved outside of the ER fund.

Sure part time work, scholarships, loans, AP classes in HS, ROTC, etc will be options.

That sounds high. I just checked, and DD went to the more expensive in-state school, total costs were more like $20,000/year (tuition, room/board, books), so~ $80,000 for four years. Long shot from $200,000! That included car ins, but not other car expenses, and clothes and some other things were out-of-pocket, but mostly would have been needed in or out of college.

Plus, she worked each summer and some breaks, which softened the hit on the college fund.

My last one just started a private school, which is higher, but still roughly $32K per year - so even that is $128K for 4 years, far less than $200K. I'd dissect that number a bit.

EDIT [- sorry, I missed that your kids are ~ 5 & 6 YO - yes with inflation, it's a whole 'nother ball game.]

Is it really worth it with starting salaries (about 40k-50k nowadays) and not moving up much?

You need to measure against the alternatives. What are the starting salaries and job opportunities w/o college? Could your kids work the oil fields in the northern states (Dakotas, Montana?)? Is it what they want out of life? If so, I understand there are jobs available. It might be the right choice, college isn't for everyone (though I highly recc it).

Somewhat political note here (but hopefully not controversial/partisan): I found it interesting that this was brought up in the State of the Union speech. When there was talk about more student loans being made available, I was screaming 'great - but that's just throwing money at the problem', but then the Pres went on to talk about trying to get colleges to reign in costs, so that was good to hear (if it has an effect). It seems crazy to me that education has risen so much faster than inflation. It also seems odd to me that Student Loans are at these relatively high rates in this low interest rate environment.


-ERD50

 

[Aiming_4_55]

That sounds high.

EDIT [- sorry, I missed that your kids are ~ 5 & 6 YO - yes with inflation, it's a whole 'nother ball game.]

You need to measure against the alternatives. What are the starting salaries and job opportunities w/o college? Could your kids work the oil fields in the northern states (Dakotas, Montana?)? Is it what they want out of life? If so, I understand there are jobs available. It might be the right choice, college isn't for everyone (though I highly recc it).
-ERD50

Yup, inflation is the wildcard and projecting 2024 cost for year 1 of college. I will strongly recommend college too and prefer them work in Megacorp vs. oil fields. But sometimes a parent's knowledge is not valued until after the fact from what I've been told.

 

[Bestwifeever]

This is an interesting topic.

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

In our case we opted not to fund college for my husbands daughter from his first marriage because she down right expected a blank check to use at a very expensive private school. When she made it clear she expected my husband to put off retirement to fund her college-- any college she chose-- it created so much resentment -- he ended up saying NO. She refused to consider a cheaper in state school.

She is still furious that she had to take out some student loans (and so is her mother who still "hates" my husband even though they divorced almost 20 years ago). What my stepdaughter doesn't know is that we intend to pay those loans -- or at least a big portion IF her entitlement attitude comes down a few notches. If not we will take a few more vacations.

When did your DH tell his daughter he would not pay for her school? Before she applied and was accepted to the very expensive private school? But I really don't understand why you would pay for her student loans now if you wouldn't pay for her college to start with, and why her attitude would be a qualifier, and why it would be a secret from her.

It's important for kids to know what they can expect well in advance in terms of parental support when it comes to college, clothing, weddings, cars and car insurance.

 

[glippy]

$200k for an undergraduate education just doesn't seem like a sound investment no matter how you slice it. Under optimal conditions, with the right field and plans for a long career, the numbers can work out.

But that ignores all the risks involved. What if the kid turns out not to like the chosen field after a couple of years of working in it and decides to be a pet groomer instead (wouldn't they have been much better off with $200k going towards paying off a mortgage?)? Or what if they happen to be one of the 40% of people who start a bachelors degree, but never finish it? Or changing economic conditions undercut the value of their education soon after they enter the field?

If it were a stock with these ok returns in optimal conditions, but many avenues of opportunity for a 100% loss of investment, no one would buy it.

That said, I think college, as a luxury good, is one of the best things you can spend your money on. It's a great opportunity to be free to elevate your mind and help shape a way of understanding the world that will be with you for the rest of your life. That's the original reason colleges began and I think it's the reason people should continue to go.

Ultimately though, most people are simply there to get their "piece of paper" and "network" with other people who are also more interested in their resumes than their intellectual development.

 

[Amethyst]

Why are you 2 on the total hook for princess's fancy education? Mama has no resources? Didn't take anything away from the divorce? That's my first reaction.

Second reaction: Expecting anybody to adjust their attitude to suit you seems like a big gamble to me. Princess is the person she is, take her or leave her. I think you need to decide on "pay" or "no pay" regardless of what attitude she takes. Either it's the right thing to pay off your stepdaughter's loans, or it isn't.

Amethyst

T

In our case we opted not to fund college for my husbands daughter from his first marriage because she down right expected a blank check to use at a very expensive private school.....

What my stepdaughter doesn't know is that we intend to pay those loans -- or at least a big portion IF her entitlement attitude comes down a few notches. If not we will take a few more vacations.

 

[Mulligan]

Why are you 2 on the total hook for princess's fancy education? Mama has no resources? Didn't take anything away from the divorce? That's my first reaction.

Second reaction: Expecting anybody to adjust their attitude to suit you seems like a big gamble to me. Princess is the person she is, take her or leave her. I think you need to decide on "pay" or "no pay" regardless of what attitude she takes. Either it's the right thing to pay off your stepdaughter's loans, or it isn't.

Amethyst

Ok, my turn to rant. I dont understand the governments rules... Stay married and you can literally kick the kid out on to the curb at 18. Get divorced and you can be forced to pay child support through age 21 ( maybe more in some states) and be on the hook for college education. Seems odd doesnt it? I am in this situation, and I dont mind as daughter and ex are being reasonable about college and expenses, so I feel fortunate and happy to get her through debt free. But the "princess fancy education" would infuriate me!!!

 

[okbeachmouse]

When did your DH tell his daughter he would not pay for her school? Before she applied and was accepted to the very expensive private school? But I really don't understand why you would pay for her student loans now if you wouldn't pay for her college to start with, and why her attitude would be a qualifier, and why it would be a secret from her.

It's important for kids to know what they can expect well in advance in terms of parental support when it comes to college, clothing, weddings, cars and car insurance.

Her attitude definitely influenced things. She did not include my husband in any of the decision making process so the subject came up after she was accepted to the private school. They are pretty much estranged at this point and that is the reason she doesn't know we would be willing to help with the loans.

 

[SecondCor521]

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. Because I have "enough", I am able to and want to pay it forward.
2. I have "enough" to FIRE at about age 45. I can't imagine being able to say to my kid, in effect, "Sorry, you could have gone to Harvard if I had worked a year or two more, but I wasn't willing to work past 45, even though I am able to and most people do. Have a nice life."
3. In my case, it really only pushes out FIRE a few years. That's a price I'm willing to pay. If it were 20 additional years, the balance might swing the other way.
4. My kids are good kids. They appreciate it already, and I'm pretty sure at some point in the future they'll appreciate it even more when they notice that their friends have student loan payments and they don't.
5. I think a college degree is worth it for them. It has been for me, the statistics say it does right now, and I think it will be even more so in the future (I'm one who tends to believe that the gap between the college-educated and the non-college educated will widen in America in the future, not narrow).

2Cor521

 

[Brdofpray]

We also felt we should help our kids with their college. Both were very appreciative, and worked very hard. They realized the sacrifice we were making. Both helped by maintaining academic and athletic scholarships through their 4 years. This more than halved the overall burden for us.

When they both decided to go on, son to dental school, daughter to nursing school, we informed them that they were on their own at this point. Both realized this before we said anything, in fact they never expected anything else.

Currently, our dental plan in retirement is my son, and a future nurse practitioner will augment our medical plan. This was an unexpected benefit when they started their higher education, and well worth the original sacrifice.

 

[NW-Bound]

I have "enough" to FIRE at about age 45. I can't imagine being able to say to my kid, in effect, "Sorry, you could have gone to Harvard if I had worked a year or two more, but I wasn't willing to work past 45, even though I am able to and most people do. Have a nice life."

+1

However, I would not indulge their going to an out-of-state school not different or any better than the local university, just so that they had more freedom to party!

This is not a populous state, yet we have three state universities. I have seen people sending their children to an out-of-town university (still in-state), even though it was not for a special program of study that the local one did not have. In fact, some even went out-of-town to a lesser in-state one.

 

[Alan]

Between 1999 and 2007 we paid ~$100k for our 2 kids to get degrees. They were both bright and scored high in the academic tests, ACT and SAT, to indicate they were university material so there was never a question in our minds that the investment was to be worthwhile. That money included fees, transportation, lodging etc.

They both went to out of town universities, one 4 hours away, the other 7 hours away. DD went to a neighboring State but we paid in-State fees and she did work 10 hours a week at the university. DS didn't work but he went in-State and received much more in scholarships.

Yes, if it had delayed being FIRED then we would still have done it. I'm so pleased that we are through those years and that it worked out well for us as a family.

 

[flyfishnevada]

Our philosophy is we aren't paying. Well, we are in a prepaid tuition program and our kid's in state tuition will be paid in full or the equivalent will be paid at an out of state school. We started when they were 2 and a newborn. It's $110 a month total. Not bad. I'm sure it's much higher now and of course much more for older children.

Still, I advocate not paying at all. We arrived at that decision at after we started paying in and figured it wouldn't hurt to continue. 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. That's a personal choice and we've decided that beyond the pre-paid tuition we won't pay. We have advocated the military, part-time jobs, delaying college and even not going if their career doesn't demand it. I didn't go to college and even though my path to becoming an engineer isn't available anymore, their are many careers that you can do well in and not have a degree. College is not the end all be all. Neither are ivy league schools and master's degrees. Some fields, yes, but the vast majority no.

Food for thought.

 

[misanman]

We paid for bachelor's degrees for all three kids and then master's for two of them. All have done extremely well so we feel good about the investment. We contribute to 529 plans for all nine grandchildren. I don't know that the amount will get them very far but it should get them started at least.

 

[MBAustin]

I would and am, for several reasons:

1. My parents paid for mine. Because I have "enough", I am able to and want to pay it forward.
2. I have "enough" to FIRE at about age 45. I can't imagine being able to say to my kid, in effect, "Sorry, you could have gone to Harvard if I had worked a year or two more, but I wasn't willing to work past 45, even though I am able to and most people do. Have a nice life."
3. In my case, it really only pushes out FIRE a few years. That's a price I'm willing to pay. If it were 20 additional years, the balance might swing the other way.
4. My kids are good kids. They appreciate it already, and I'm pretty sure at some point in the future they'll appreciate it even more when they notice that their friends have student loan payments and they don't.
5. I think a college degree is worth it for them. It has been for me, the statistics say it does right now, and I think it will be even more so in the future (I'm one who tends to believe that the gap between the college-educated and the non-college educated will widen in America in the future, not narrow).

2Cor521

+1
It didn't really push out FIRE for me as I didn't even seriously think about FIRE until after DS was in college, and by the time I thought about it, we had enough set aside for 4 years private college for both. DD graduated in just a bit over 3 years of classes, so we gave her a graduation gift of part of what we didn't pay in tuition. DS is on track to graduate in 4 years with an engineering degree, which often takes 5 years.

One more way to save on costs for the academically motivated student is to load up on Advanced Placement courses as well as dual-credit classes that count both for HS graduation and college credit (they are usually through community colleges). If you plan well and choose the right classes, you can pretty much start college as a sophomore.

 

[W2R]

We each have our own perception of where our responsibilities lie when it comes to paying for a child's college expenses, and no one of us is more likely to be right than someone else IMO.

That said, if a kid is bright and has decent grades, and wants to go to college, personally I think the parents are responsible for paying for undergraduate college. If they can't afford more than the local state college, then fine. But let the kid give it a try, if he/she wants to, and demonstrates that by making decent grades. Let the kid believe that you are behind his/her efforts to do something with his/her life.

 

[Avalon]

We planned for and paid for both kids college educations. 10 years total. No regrets.