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Old 04-21-2016, 03:34 PM   #21
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DH and I both graduated from private universities mostly funded by our parents, and we were able to earn and save to do the same for our two children. Both looked at both private and public schools and picked the one they felt was the best fit (smallish private schools for both). Both graduated in 4 years or less and got an excellent education that has served them well in their early careers.

I think allowing Grandpa to provide the "extra" to give them a broader choice is a wonderful gift. Addressing your concerns from post #9:

1. The right to brag about his grandkids to such an excessive degree that he is living vicariously through them and taking away from their accomplishment and making it his.
If you have a serious concern about this, I assume there is some history with him doing similar things in the past. Perhaps you should discuss your concerns with him if so.

2. The right to have undue influence or say on which colleges get applied to, which colleges are attended, what major is chosen, etc., especially the pressure to attend a more prestigious school or select a more prestigious major even if it is not the best fit for the kid.
Very reasonable concern. Again, I think an honest discussion with him (and perhaps with the kids also) would make sense.
3. The right to hang an asterisk on my FIRE accomplishment and imply that I couldn't have done it without him.
I'm not sure I understand this one. If it is based on things he has said to you in the future, it sounds like you may have other issues with your relationship and I would be careful not to have that cloud making a good decision for your children.

Good luck in working through this.
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Old 04-21-2016, 03:38 PM   #22
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Originally Posted by SecondCor521 View Post
I am concerned that his "gift" would come with strings attached, specifically any or all of the following:

1. The right to brag about his grandkids to such an excessive degree that he is living vicariously through them and taking away from their accomplishment and making it his.
2. The right to have undue influence or say on which colleges get applied to, which colleges are attended, what major is chosen, etc., especially the pressure to attend a more prestigious school or select a more prestigious major even if it is not the best fit for the kid.
3. The right to hang an asterisk on my FIRE accomplishment and imply that I couldn't have done it without him.
You have a reasonable concern IMHO. Helping can be a form of stealth meddling, an unwelcome attempt by the grandfather to circumvent the parents. It might interfere with the values and attitudes you are trying to teach your children.

OTOH, as a parent and grandparent, I want to have the option of helping my children, and contributing to the cost of higher education for their children is easily my first choice for "how to help". If my kids don't need it, great, but if they do, I'd rather that money be available, and contribution to a 529 now is a reasonable way to do it.

My experience with meddling parents and grandparents, FWIW, is that they don't meddle in just one thing, the do it everywhere (or nowhere). A grandfather that wants to be heavily involved in the child's higher education will probably have tried to influence other schooling (and parenting) choices much earlier.
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Old 04-21-2016, 03:45 PM   #23
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I thought the penalty was only on the GAINS in the 529. The original contributions were post-tax and could be withdrawn without penalty (similar to a Roth).


What Is the Penalty on an Unused 529 Plan?


I looked at this pretty hard to decide if I wanted to continue funding in a 529 or in a regular after tax account.
Thanks for the correction on what portion is penalized rodi. I would note that the "gain" might be the majority of the money if the account was fully funded when the child was an infant. But, yes, the penalty is on the "gain."

Thanks for the link too! I read in depth about 529b's before opening them years ago. But adding to them has become more of a blind habit over the years and I haven't refreshed myself on the rules for some time. Actually, I need to have my son read the rules. I don't really want to be involved beyond the fact I'll need receipts and details for my tax returns once the withdrawing starts in about 4 years..
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Old 04-21-2016, 04:31 PM   #24
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meddling parents and grandparents.
It is a fine line, isn't it? When are you helping and when are you meddling?

When I got the bright idea of contributing to ESA's and 529b's 12 - 13 years ago, I had a discussion with the kids. I suggested I'd like to sign up to pay for the grandkid's post-secondary education and they could focus on saving for retirement. But, greedy me, I wanted to harvest the tax advantages since, back then, I had the tax problem, not them.

It seemed simple enough to me. I stash dough in college savings accounts which gives me an immediate Illinois income tax deduction (up to $20k/yr) and which can be withdrawn to pay for college with no fed or state cap gain tax due on the gains. Nice........

But it means that when my son or a grandkid pays qualified college expenses, I'll need a receipt to justify the corresponding 529b withdrawal. That means I'll know what they're spending and maybe they wouldn't want me to know.

In that regard, just giving them the money a priori (and filing the appropriate gift tax forms) would allow them to spend it without disclosing details. But I'd get no tax benefit and I'm a frugal guy........

So, while I think I've done the right thing, I'm not completely positive. I'm really being careful to not inject any feelings about the grandkids education into conversations to reduce any possibility they think they're doing something that wasn't my first choice, etc. I've just told them I'll pay and have the money set aside in a dedicated way so that it will be available at the time even if I've croaked by then.
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Old 04-21-2016, 04:46 PM   #25
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My best friend (an Ivy Leaguer) put his two kids thru Dallas and Atlanta's finest primary and secondary schools. The daughter went to Washington and Lee and the son went to a military college.

While his friends are retiring in their late 50's and early 60s, he's having to work until he's almost 70. He sure wishes he had some of that $2 million gross income he spent on the kids' educations. The daughter is a M.D. in residency and the son is an Army Ranger somewhere nobody will talk about.

My father always told me state universities were good enough for my sister and me. There were no student loans in our family--a cancer on the pocket of the middle class.
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Old 04-21-2016, 04:50 PM   #26
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My best friend (an Ivy Leaguer) put his two kids thru Dallas and Atlanta's finest primary and secondary schools. The daughter went to Washington and Lee and the son went to a military college.

While his friends are retiring in their late 50's and early 60s, he's having to work until he's almost 70. He sure wishes he had some of that $2 million gross income he spent on the kids' educations. The daughter is a M.D. in residency and the son is an Army Ranger somewhere nobody will talk about.

My father always told me state universities were good enough for my sister and me. There were no student loans in our family--a cancer on the pocket of the middle class.
The mistake wasn't sending the kids to expensive schools. The mistake was forgetting to offset the additional expenditure with additional income at the time. Turn up the spending dial. Turn up the income dial to correspond and keep plans intact.
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Old 04-21-2016, 07:00 PM   #27
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I can't agree that where you go to school only matters for investment banking. Many companies only recruit on certain campuses because of the stature of those schools - whether real or imagined - especially for science and engineering majors. Take a look at payscale.com at the college return on investment survey. I would agree that if you want to be an english major, where you go to school may not be as important. But if you want to get into a really good graduate program, going to podunk state will not help any and could hurt you. Say a graduate program has 15 spots and get a number of qualified applications from high ranking schools and an equally qualified applicant from a small no-name state school. The no-name graduate loses out - the graduate program will assess that the great schools presented far more competition for the undergraduates and their accomplishments are entitled to more weight that a supposedly equal accomplishment at the no-name school.
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Old 04-21-2016, 07:10 PM   #28
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I'm not sure about graduate programs but for our family we did take a look at the starting salaries on payscale.com and we couldn't see a benefit from paying more than an in-state, public school in California. Which may not meet the definition of podunk as that includes some name brand schools like Berkeley and UCLA as well as many less famous but still good value schools. I am not sure what people here consider a good job as that varies widely but companies like Apple hire many candidates from San Jose State and other CA public colleges and universities.
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Ethics/boundaries-related question about college funding
Old 04-21-2016, 07:21 PM   #29
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Ethics/boundaries-related question about college funding

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Originally Posted by marinauser View Post
I can't agree that where you go to school only matters for investment banking. Many companies only recruit on certain campuses because of the stature of those schools - whether real or imagined - especially for science and engineering majors. Take a look at payscale.com at the college return on investment survey. I would agree that if you want to be an english major, where you go to school may not be as important. But if you want to get into a really good graduate program, going to podunk state will not help any and could hurt you. Say a graduate program has 15 spots and get a number of qualified applications from high ranking schools and an equally qualified applicant from a small no-name state school. The no-name graduate loses out - the graduate program will assess that the great schools presented far more competition for the undergraduates and their accomplishments are entitled to more weight that a supposedly equal accomplishment at the no-name school.

I was thinking of the UCs as good enough(from my California point of view), even Cal Polies, you don't get denied from top graduate schools if you have high GPAs. Especially not for engineering. Also payscale is very location specific, when I last looked it was more schools from California or close proximity to Silicon Valley, like SJSU and Cal Poly SLO are on the top 20 lists.
I don't know what you mean by top science programs. All the UCs have excellent science and engineering programs. If a kid can get into an Ivy, that same kid can get into the top few UCs.

I've been checking my kid's school, if she gets 3.9 and above GPA, she will have no problem getting into PhD at Stanford and MIT for Computer Science, this is if she has desire to do that.


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Old 04-21-2016, 07:23 PM   #30
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At first I was reading your post thinking "Dad is 80, let him do this..." but then I read your thoughts about the issues and see there's some history/baggage there, so it's a tough one. Say yes and you have the potential issues, say no and you might cause a riff that you'll regret in later years.

Have your kids been accepted at these high end schools even? If not it might be less of an issue...
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Old 04-21-2016, 07:38 PM   #31
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I paid for both my children to attend private out of state schools and would have loved some help from a grandparent but my parents did not have money to spare . They had educated four children. I am now a grandmother and every birthday and Christmas I give my grandsons money towards college along with a few toys . I don't do it for anything other than I love them and want the best for them. Maybe this is how your Dad feels ?
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Old 04-21-2016, 07:58 PM   #32
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Originally Posted by MBAustin View Post
1. The right to brag about his grandkids to such an excessive degree that he is living vicariously through them and taking away from their accomplishment and making it his.
If you have a serious concern about this, I assume there is some history with him doing similar things in the past. Perhaps you should discuss your concerns with him if so.

--> Yes, there is history of him doing similarly in the past with me, my sister, and my nephew, and he tried to do it with my oldest son. I don't know if a discussion would work, since one of my Dad's mottos is "It ain't bragging if it's true" and I don't think he is willing to try to understand how what he does affected me.

2. The right to have undue influence or say on which colleges get applied to, which colleges are attended, what major is chosen, etc., especially the pressure to attend a more prestigious school or select a more prestigious major even if it is not the best fit for the kid.
Very reasonable concern. Again, I think an honest discussion with him (and perhaps with the kids also) would make sense.

--> Thanks. I think my kids could withstand the pressure, but I think it could make them feel pretty uncomfortable.

3. The right to hang an asterisk on my FIRE accomplishment and imply that I couldn't have done it without him.
I'm not sure I understand this one. If it is based on things he has said to you in the future, it sounds like you may have other issues with your relationship and I would be careful not to have that cloud making a good decision for your children.

--> I came to a similar conclusion after posting. Any issue(s) between my father and I should not be cause to prevent or limit opportunities for my kids (except to the degree that it mightn't an opportunity at all; viz. concern #1 above).

Good luck in working through this.

--> Thank you.
--> See embedded replies.
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Old 04-21-2016, 08:21 PM   #33
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If your children are academically inclined and can make the grades to get into a more prestigious university and want to attend that university, I would take your father's offer. It is a good use of your future inheritance. It does not have to be some hotsy totsy private liberal arts college. Public state universities can be very good but are not all the same, e.g., California will have better public universities than Idaho. Several of my engineer co-workers have sent their children to out of state schools (e.g., Michigan State, U. of Colorado, Colorado School of Mines, Colorado State, Arizona State) which are better academically than my state's universities. First their kids had to have great grades to be accepted and then it cost significantly more although many of them had partial scholarships to offset the costs.
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Old 04-22-2016, 08:07 AM   #34
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You received lots of help here. I am a public college person. And, I am adamantly against a child selecting an out of state public college that simply costs more. For example, I know WI residents who selected University of Michigan vs. the University of Wisconsin. The cost was doubled. The education and reputation, the same. It was just cool not going to college with people from your HS, at least for an 18 year old not responsible for cost.

The one thing I have not seen on this thread are scholarship opportunities. My daughter worked hard to find as many as she could. (My son was not as ambitious). She did the same when she received her advanced nursing school degree, which she paid for herself. Actually, her 'scholarship' allowed her to make money while going to nursing school. Not everyone will get a scholarship but I think many people do not look deeply enough for scholarship opportunities.
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Old 04-22-2016, 08:20 AM   #35
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Background: parents paid about 90% of education for all 5 of us at good state schools. We all chose decent majors and had good, solid careers although 2 of us are now retired. We appreciated our education even though we didn't have to go into hock for it or earn 100% of the cost. Same for DS, my only child. He had summer jobs but we paid half the rest. A wealthy Aunt (my Ex's sister) contributed the remainder. I would have paid 100% happily, but was OK with accepting their contribution. (I'd funded the military boarding school for HS that helped DS get his act together all by myself.) DS is a claims adjuster and has been promoted several times.


I'm putting money into a 529 for our 2-year old granddaughter and they're expecting another little one in November (woo-hoo!). DDIL is a SAHM and she's wonderful at it, so I want to provide what help I can.


Long way of saying: I come at this from multiple perspectives and all of them say that you're fortunate to have your father's offer of help. It won't necessarily make your kids parasites who major in drinking and partying, nor will it take away from what you've done to get them this far. If Dad refuses to pay for a major in Dance Education at an expensive school, that's his prerogative. Launching a kid without student loans is a gift in this day and age. Hey, maybe you can pay it forward with grandkids someday!
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Old 04-22-2016, 10:02 AM   #36
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My husband and I were self funded. It's hard for us to imagine getting so much help from our parents. Even though we provided for our kids, we didn't want them to take things like college tuition as a birth right either.


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Old 04-22-2016, 10:15 AM   #37
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Let your father help!! There's nothing wrong with that. It's very kind that he wants to help your kids go to whatever school they may be dreaming about.

I think you are SO very lucky to have a father who cares that much and is willing to step up to the plate like that. My own father was a surgeon and would not pay a dime of my college expenses or even room and board. I think that reluctance to pay anything for college even if the money is there, is probably more common than we know. I will always wonder what life would have been like if I had college paid for. Your father's offer sounds like a dream come true to me.

Besides, if he is 80 years old, there is probably no way he would be able to spend that money in any other way that would make him as happy. So let him pay, as a favor to him.
To OP: I totally agree with W2R. If the grandpa has funds and offers to pay, I'd definitely accept that unless you see that your own kids will totally not appreciate it.

To W2R: your story sounds kind of sad. Have you ever talked to your dad and discussed your feelings? OTOH, don't you think that caused to work much harder for your own success? If he saw you totally struggled, he might have stepped in to help you...you never know
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Old 04-22-2016, 11:20 AM   #38
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To W2R: your story sounds kind of sad. Have you ever talked to your dad and discussed your feelings? OTOH, don't you think that caused to work much harder for your own success? If he saw you totally struggled, he might have stepped in to help you...you never know
He's been dead since 1981, and your speculation is a great daydream but unfortunately unfounded. Nobody cried at his funeral. I had a wonderful mother, though, so overall I was pretty lucky in the "parent lottery".
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Old 04-22-2016, 01:04 PM   #39
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One other thought....Our kids' GPs have given them some pre-inheritance kinds of money gifts now, and I would just say from personal experience there are more frivolous things kids that age can find to spend money on than a college education. If they are going to inherit or be gifted the money eventually anyway, college may not be a bad use of the funds.
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Old 04-22-2016, 04:52 PM   #40
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Your Dad got a good education for a medical career so he may be somewhat biased.

Personally I think there's a difference between a kid who's gifted and wants to go to MIT or Harvard and one who wants to study Japanese art--not that there's anything wrong with that--but IMO there should be a cost/benefit to the discussion.

A mind is a terrible thing to waste, but so is money.
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