Kids college: Let them pay?

[sengsational]

I thought about buying a house near campus, but the first one was required to stay on campus 3 years. The next one could move off campus, but I didn't feel there was enough extra bandwidth there to be a property manager.



I agree with the idea that college is a bridge to adulthood; any marketable skills are a plus, but I always told my kids I'd fund any 4 year degree program they were interested in. One got a tech degree, one a liberal arts. Both are professionally employed. The world recognized good character

 

[daylatedollarshort]

One of our relatives during college lived in a house with roommates where one of the roommate's parents had bought the house and then the roommate either flunked out or dropped out and the parents were left with the house. Which maybe was still a good investment but not how they had planned it out. Kids that age don't always graduate as planned or even if they do may have good reasons to transfer schools and graduate from a different college from where they started.

 

[mpeirce]

Another item to think about is that in some fields, the master's degree is the new bachelors degree.

I know the last place I worked I started to think they'd never hire me given the criteria they used to filter out candidates. Of course, the folks with MS degrees didn't seem to know much more than those of us who got BS degrees back in the olden days.

 

[EvrClrx311]

I will likely do similar to what my parents did...

Pay for the first 75% of it, and have my children pay for their final year(s) as well as any post grad work (I was lucky enough to find a company who paid for my grad school). With the focus being on them recognizing the importance of financing and managing their own lives. I will be on the side to help should life present any catastrophic tragedies... but my hope is life will throw some minor stresses on them, because that's how we learn.

I had to manage monthly payments on my student loans (in the $25,000 neighborhood) and it really taught me a lot. I also felt a difference, which I can't quite quantify, in my final year of school... a combination of pride to be finishing my degree, but also a realization that it was on me to finish. I worked harder, that's for sure. I was paying for it, kind of thing.

Managing the loans right out of school was a gift. I'm glad I learned there, rather than on consumer debt... like so many of my friends did. As soon as I had paid off the student loans I had a sense of pride and realization I never wanted to carry (avoidable) debt again.

 

[rothlev]

I paid for most of my children's college. state schools, and they both went on scholarship. It was important to me that they not graduate upside down and owe student loan debt. They both contributed with their scholarships, summer job income, etc... Do not let your children graduate with massive debt if you can possibly avoid it.

 

[Brat]

I think kids ought to have some skin in the game. Starting in HS I brought my kids (now in their mid-40s) into the college savings that we had set aside for them. I let them make investment allocation decisions. There wasn't enough to pay fully for the schools the attended. That said they managed carefully, working during school and vacations. Eventually, we paid off their school loans (but this was never promised or mentioned until after they graduated). As a result, they made practical decisions.

Looking back we shouldn't have paid off DD's loans... she is a CFO in SV and what we paid is chump change based on her current income. All I can say is that it was a GREAT investment.

 

[MI-Roger]

One thing I'm surprised hasn't come up here is whether anyone is considering purchasing or has purchased a condo or house for your kid while he or she is in college. The idea is that your kid could rent out the other rooms and use that for spending money/defraying college costs. Then as college is over the condo or house could be sold at a slight profit.

I believe it would be tremendous experience for my daughter being a landlord, financially as well as learning responsibility. And moving the assets around for a few years would be no big deal. Does anyone have experience with actually doing this?

The slang term for these is "Kiddie Condos" and we investigated this model back when our sons were in college nearly 20 years ago. My God how time flies!

Anway, the oldest attended Univ of Miami in Coral Gables and there was no way we could afford a home there for him to manage. The youngest attended Rensselaer Polytechnic in Troy NY and things looked positive for a Kiddie Condo there from a price standpoint, except no local Real Estate Agents were willing to work with us in this quest. In the end he and his friends found a fully furnished, 4 BR, upper floor home in a beautifully maintained house (owners lived on first floor) that only cost them $600/month total. My sons's share was naturally only $150/month. And Mrs G would provide the four boys with home baked cakes/cookies/pies a couple time per week!

So yes, we attempted this technique but it didn't work for either of our two sons for two very different different reasons.

 

[big-papa]

The slang term for these is "Kiddie Condos" and we investigated this model back when our sons were in college nearly 20 years ago. My God how time flies!

Anway, the oldest attended Univ of Miami in Coral Gables and there was no way we could afford a home there for him to manage. The youngest attended Rensselaer Polytechnic in Troy NY and things looked positive for a Kiddie Condo there from a price standpoint, except no local Real Estate Agents were willing to work with us in this quest. In the end he and his friends found a fully furnished, 4 BR, upper floor home in a beautifully maintained house (owners lived on first floor) that only cost them $600/month total. My sons's share was naturally only $150/month. And Mrs G would provide the four boys with home baked cakes/cookies/pies a couple time per week!

So yes, we attempted this technique but it didn't work for either of our two sons for two very different different reasons.

I've been wondering about a kiddie condo, but for a different reason. I'm sure I can find the info I need, but one question that has come up is whether, after establishing residency and starting college, is that residency established for the entire time spent at college? The scenario: parents and kids live in a state and kid starts college with in-state tuition. After a semester or two the parents move to another state. Does the kid lose residency since the permanent address is now in another state?

 

[MI-Roger]

I've been wondering about a kiddie condo, but for a different reason. I'm sure I can find the info I need, but one question that has come up is whether, after establishing residency and starting college, is that residency established for the entire time spent at college? The scenario: parents and kids live in a state and kid starts college with in-state tuition. After a semester or two the parents move to another state. Does the kid lose residency since the permanent address is now in another state?

Provided the student's permanent address doesn't change (I am assuming the student will use the address of the Kiddie Condo close to campus as their permanent address), it shouldn't matter, but it might matter.

Our oldest attended Law School in Florida. He and a couple other law School students rented a small house near the Law School. He formally rescinded his Michigan residency via letter, registered his car in Florida, secured a Florida Driver's License, registered to vote in Florida, obtained Auto & Rental Insurance in Florida; all using the address of the rental house. He legally became a Florida Resident in the eyes of the University of Florida and paid the lower In-State tuition for all but the first semester of Law School.

Every State and School is different but it MAY be possible for your child to retain their previous in-state status after you move out of state.

The Univ of Michigan is the worst that I know about. Spouses of all U of M Hospital Residents are considered Out-of-State students if the Resident was not a Michigan citizen when they attended Med School. For example: a student from Illinois graduates Med School and accepts a Residency position at U of M Hospital for four years. The Med School graduate moves to the Ann Arbor area and brings their spouse with them who is working on their own advanced degree. The spouse transfers to U of M to start or complete their degree. Even though the couple are now legally Michigan citizens by virtue of living address and employment, the University refuses to allow the spouse to pay the lower In-State tuition.


With greater consideration this may apply to Doctoral Candidates and not necessarily MD Residents. Same foolish logic in my mind since PhD Candidates are often employees of the University where they are studying, and a PhD degree requires 5 to 7 years of effort.

 

[Philliefan33]

I've been wondering about a kiddie condo, but for a different reason. I'm sure I can find the info I need, but one question that has come up is whether, after establishing residency and starting college, is that residency established for the entire time spent at college? The scenario: parents and kids live in a state and kid starts college with in-state tuition. After a semester or two the parents move to another state. Does the kid lose residency since the permanent address is now in another state?

It would depend on the specific state/university. Some colleges are more liberal with the definition of “resident” than others.

 

[mpeirce]

The youngest attended Rensselaer Polytechnic in Troy NY and things looked positive for a Kiddie Condo there from a price standpoint, except no local Real Estate Agents were willing to work with us in this quest. In the end he and his friends found a fully furnished, 4 BR, upper floor home in a beautifully maintained house (owners lived on first floor) that only cost them $600/month total. My sons's share was naturally only $150/month. And Mrs G would provide the four boys with home baked cakes/cookies/pies a couple time per week!

I went to RPI (a "couple" of years ago). Had pretty much the same setup. Upper floor of a two family house. Three bedroom place was $300/month, so it cost me $100 per month.

Good ol' Troy, NY.

 

[MI-Roger]

I went to RPI (a "couple" of years ago). Had pretty much the same setup. Upper floor of a two family house. Three bedroom place was $300/month, so it cost me $100 per month.

Good ol' Troy, NY.

I received my Masters from RPI and never set foot on campus until our son visited the school when deciding where to attend!

Distance Learning, 100% paid for by my employer, except the final two text books which I had to pay for after my employer decided to rein in costs somewhat.

 

[Walt34]

One thing I'm surprised hasn't come up here is whether anyone is considering purchasing or has purchased a condo or house for your kid while he or she is in college. The idea is that your kid could rent out the other rooms and use that for spending money/defraying college costs. Then as college is over the condo or house could be sold at a slight profit.

I have a cousin who did exactly that when his youngest daughter was in college. She went to Shepherd University (then Shepherd College) in Shepherdstown, WV. He bought a townhouse in Martinsburg, WV, about a 15-minute drive away. The house was ~$72k (~15 years ago) and since he lived in MD after the first year that got her and her roommates in-state tuition rates. After graduation she continued to live in it for a while until she got married, and when kids came along they needed a bigger place.

He said the rent from the roommates almost completely covered expenses and he sold it at a profit so the whole deal worked out great for him and his daughter.

 

[MarieIG]

For those of you who think kids should pay, I have to ask:

On what part time/summer job (while also attending school) do you expect your child to net ~$25k per year to then pay for school?

Sure, I can see you want your kids to strive for scholarships, etc., and for some student loans might be a consideration.

I don't have kids, but I would not want them to come out of college laden with debt if I could afford to avoid that. Neither do I think would I push them to college if they weren't ready, nor fund a super expensive school if a decent public option was available.

This is my opinion. The only difference was I did have kids - six of them, and they ran the gamut.

 

[Fedup]

One of my kids earned between $25k-$35k in the summer from her CS internship. Even though I pay for everything, she also worked part time as a TA and received about $500 a month. I never took any money from her, I gave her money for room and board plus tuition. But I’m sure if she had to pay, she could.