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Old 03-02-2014, 01:33 PM   #61
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Good grief. Now I know how the newest generation is considered the entitlement generation. LOL.

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One must consider when to pass assets to children as the 5 year look back period is in effect. That is, of course, if you want to help your children get a good start in life rather than spend your funds on yourself or give them to the tax man or Medicaid.

Some people's preferences are to pass funds to children when they are starting out in life, other will leave them the remnants of an IRA instead, while other will not do either or will do both.

At 70 years of age, I helped DD with a new home purchase. We are helping fund our granddaughter's college expenses. I suppose that providing for the "entitlement generation" too?
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Old 03-02-2014, 02:02 PM   #62
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I appreciate all the responses.

Some of them surprise me.

For example, my wife and I (she works half time) make right on $90,000 a year, and we qualify for HUGE financial aid provided by the schools we are looking at for our now HS junior daughter (we also have an 8th grade son). For example, most of the schools use all of the following to figure yearly cost:

Tuition
Room and Board
Books
Travel
Personal Expenses

With all of those things considered, the schools we're looking at all range from about $58,000-$62,000 per year. BUT, based on financial need only (using their online calculators), our costs are down to anywhere from $11,500-$14,000 per year.

We are actually going to let our daughter take a small loan to help...that will be her contribution. A loan of $3500 per year is figured in, so she would graduate with $14,000 in loans...that seems reasonable and acceptable to me, and who knows, depending on how things are going, we might help her pay those off when she's done (perhaps a nice graduation present).

So, our cost is expected to be anywhere from $8,000 to $10,500 per year. When you consider that $1300 of that is for "personal expenses" which we would be paying if she still lived at home anyway and some of that is for "board" which we would also be paying, this seems very doable to me.

One of the ways to get that type of financial aid is to make sure not to have a ton of liquid cash. So, we had started to accumulate some, so we did something about that...replaced the siding on our house now (it needed it soon) rather than wait until after she starts college, and we're going to pay our lone car loan off a year early...it's at 0% interest, but we don't want the extra cash sitting there in our bank account, because the university will just take it. Any additional extra money we accumulate from now until our financial awards are given next year will be thrown at the mortgage.

I don't want to cheat anyone, and we will be truthful about how much money we have (not going to hide cash in a jar somewhere and say we don't have it), but we will use the rules in place to our advantage.

The weird thing about all this college researching is that for my family, it costs significantly less to send my daughter to an Ivy League school or several other top-tier schools than it would be to send her to a mediocre private school and even most state schools. Ivy League schools don't give athletic or academic scholarships...it is all based on financial need.

Here's a list of colleges that meet 100% of demonstrated need (many of these have online calculators where you can get a very good estimate of the amount you will have to pay):

Colleges That Claim to Meet Full Financial Need - US News

Also, if the loan you get is a subsidized student loan (most are), then the government pays the interest while you are in school, so if you take $14,000 in loans while a student, it's just $14,000 on the day you graduate. If you have that money then, you can simply pay it off and never have to pay interest.
Does qualifying for financial take into account the amounts you have saved in IRAs and taxable account? If so, can the taxable accounts be considered your retirement account if you've earmarked it for retirement.
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Old 03-02-2014, 10:53 PM   #63
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We are helping fund our granddaughter's college expenses. I suppose that providing for the "entitlement generation" too?
No, no no, of course not...that would be the generation after the Entitlement Generation which has no identification yet.
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Old 03-03-2014, 10:36 AM   #64
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Skilled trade jobs are going unfilled yet we continue to pump out 50 times more education grads than teacher positions avail in this country.
Do you have any stats to back up that? Everything I see says that there is expected to be a 5.5+% growth in public school teaching jobs between now and 2022.
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Old 03-03-2014, 10:56 AM   #65
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Do you have any stats to back up that? Everything I see says that there is expected to be a 5.5+% growth in public school teaching jobs between now and 2022.
What Teaching Jobs Are in High Demand? | Everyday Life - Global Post

Article makes claims based on what type of teacher. Too many K-5 (oversuppy), but not enough science and tech types (undersupply).

ETA: Article feels right to me, based on what I see where I live.
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Old 03-03-2014, 11:04 AM   #66
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What Teaching Jobs Are in High Demand? | Everyday Life - Global Post

Article makes claims based on what type of teacher. Too many K-5 (oversuppy), but not enough science and tech types (undersupply).

ETA: Article feels right to me, based on what I see where I live.
Ok...BIG difference between DOUBLE the k-5 teachers and 50 TIMES more teachers than jobs as the person I was responding to said.

Actually, with the Baby Boomers beginning to retire en masse, the school district we're in has set a record for number of retiring teachers the last 2 years, and they predict that will be the case for each of the next 5 years (which is pretty good because my daughter begins college in fall 2015 and wants to be a teacher...HS English). I think she will find a job quickly.
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Old 03-03-2014, 11:08 AM   #67
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Ok...BIG difference between DOUBLE the k-5 teachers and 50 TIMES more teachers than jobs as the person I was responding to said.

Actually, with the Baby Boomers beginning to retire en masse, the school district we're in has set a record for number of retiring teachers the last 2 years, and they predict that will be the case for each of the next 5 years (which is pretty good because my daughter begins college in fall 2015 and wants to be a teacher...HS English). I think she will find a job quickly.
Understand that I don't disagree with you. I was just throwing some info in that I was reading because of the discussion in this thread.
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Old 03-03-2014, 01:16 PM   #68
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I am saving in 529 plans. I plan to save a sum per kid greater than 4 years public, less than 4 years private. If they go private they will either need loans, aid or scholarships. If they did the community college and transfer route, I'd probably eventually pay them out the surplus, although I might hold the cash a few years incase they need it for grad school (or their kids perhaps).

My wife and I were both significantly helped, so we feel its appropriate to help our kids. We have saved a bit more than 50k so far, and the kids are 10 and 13 years away.

I'll add that I think the opaque pricing (net aid) is borders on used car sales tactics.
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Old 03-03-2014, 02:16 PM   #69
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We are saving in a 529 plan. I'm not sure how much to save. I have no idea what the college landscape will look like in 13 years though or what kind of education DD will want. I went to a small private school and loved it (with F/A it was cheaper than our state flagship). I think I would have floundered in a giant state school though, but DD may feel differently. I'd like to be prepared for any possibility.
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Old 03-03-2014, 09:20 PM   #70
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Is $25k a year for tuition considered expensive for an engineering degree?
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Old 03-04-2014, 12:04 AM   #71
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Is $25k a year for tuition considered expensive for an engineering degree?
Is that just tuition or does that include room and board and books?

To me, I guess that depends on what the alternative is. My son is a CS major. I would consider $25k a year for tuition to be very expensive since he can get a degree in CS for much less than that (first 2 years of credit at CC, then transfer to a state university). So, for him, I think that $25k in tuition would be very expensive when his tuition for a full year at the state school is much less than that (and was even less when he was at the CC).

On the other hand, if he didn't have that option, then maybe I wouldn't feel that way.

I would feel the same way if he was an engineering major (which he also considered as an option).
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Old 03-04-2014, 12:39 PM   #72
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For us, educating our only child was absolutely our responsibility unless he blew up and the $ would have been wasted. We didn't qualify for aid, but he did receive full tuition based on test scores so meals, housing, books were our costs (state school). We cash flowed those out of current income (rather than use his college savings) plus he was well paid for his intern semesters. When he graduated (engineer) we gave him the $ we'd saved for his college as a down payment on his first home. He has turned out to be a really good kid, has a good career going and makes his parents very proud. So, we don't regret a dime of the decisions we made regarding his education costs.
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Old 03-04-2014, 11:10 PM   #73
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For us, educating our only child was absolutely our responsibility unless he blew up and the $ would have been wasted. We didn't qualify for aid, but he did receive full tuition based on test scores so meals, housing, books were our costs (state school). We cash flowed those out of current income (rather than use his college savings) plus he was well paid for his intern semesters. When he graduated (engineer) we gave him the $ we'd saved for his college as a down payment on his first home. He has turned out to be a really good kid, has a good career going and makes his parents very proud. So, we don't regret a dime of the decisions we made regarding his education costs.

Sounds like an exceptionally well grounded and rounded kid. Congrats!
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Old 03-05-2014, 12:44 PM   #74
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We are saving in a 529 plan. I'm not sure how much to save. I have no idea what the college landscape will look like in 13 years though or what kind of education DD will want. I went to a small private school and loved it (with F/A it was cheaper than our state flagship). I think I would have floundered in a giant state school though, but DD may feel differently. I'd like to be prepared for any possibility.
I went to a small private school for undergrad and then a large state school for graduate school. I MUCH preferred the smaller school. My wife did the same (small college initially and then larger universities (not state schools though) for graduate degrees), and she also preferred the smaller environment, so my kids have heard us talk about that, and we have perhaps swayed them toward the smaller school. I don't think we steered them though, and knowing both of them, I do believe they would like the smaller school better (they do have our DNA after all!).

Regarding the 529 plans, I have heard people with kids in college both cheer and not cheer those. In part it depends on where your kid will go to school and what kind of student they are. Got a full tuition ride but need to pay for room and board, then the 529 works out well for that. Got a very smart kid who goes to a college that only gives aid based on need, then they will make sure to take all of that 529 money where if you didn't have it, your financial aid award would be much higher.

Too bad things aren't a little more cut and dried.
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Old 03-05-2014, 12:47 PM   #75
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Sounds like an exceptionally well grounded and rounded kid. Congrats!

Thank you!
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Old 03-05-2014, 01:19 PM   #76
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Got a very smart kid who goes to a college that only gives aid based on need, then they will make sure to take all of that 529 money where if you didn't have it, your financial aid award would be much higher.
If the 529b's are in grandpa's name, then the school does not even know they exist. And the money still comes out tax free.

For our son we just paid his out of state public university costs as they occured.

For his kids, we fund Coverdells (held in my son's name) and 529b's (held in my name).
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Old 03-05-2014, 03:52 PM   #77
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We paid for both DW and DS's college. However, a friend of mine told me what I think is the best way. He told his kids that they were to take student loans for college. When they graduated he would assume the loans and pay them off. If they did not graduate the loans were theirs to pay off. As DS took almost 10 years to graduate (we paid for 4), I think he would have done it in 4 or 5 if the student loan bill had started coming in. In fact that happened to one of his son's that quit school and when the bill came he ask his father if the deal was still good. He said yes, son went back to school, graduated life is good.
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Old 03-05-2014, 04:08 PM   #78
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If the 529b's are in grandpa's name, then the school does not even know they exist. And the money still comes out tax free.
Shows up as income (for aid purposes) to the kid and impacts the following year's aid. So the ideal scenario is grandpa funds the senior year.
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Old 03-05-2014, 06:44 PM   #79
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Does qualifying for financial take into account the amounts you have saved in IRAs and taxable account? If so, can the taxable accounts be considered your retirement account if you've earmarked it for retirement.
What is the earmarking you mention? From what I understand, its not up to you to say what you consider retirement funds and what are not. Why wouldn't everyone just move their after tax money to a separate account, earmarked for retirement and cash in on the big financial aid windfall? No, I think its limited to IRA, 401k, annuities, etc... only those things that are considered tax advantaged by the IRS. I'm sure there would be questions about how you made $10k in dividends and interest when you had only 10k of taxable assets, hehe. You could, I suppose, buy something that didn't throw off anything reportable on your taxes and not report it, but that would be fraud.
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Old 03-05-2014, 07:01 PM   #80
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What is the earmarking you mention? From what I understand, its not up to you to say what you consider retirement funds and what are not. Why wouldn't everyone just move their after tax money to a separate account, earmarked for retirement and cash in on the big financial aid windfall? No, I think its limited to IRA, 401k, annuities, etc... only those things that are considered tax advantaged by the IRS. I'm sure there would be questions about how you made $10k in dividends and interest when you had only 10k of taxable assets, hehe. You could, I suppose, buy something that didn't throw off anything reportable on your taxes and not report it, but that would be fraud.
Yep, makes sense.
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