Paying for College?

[Htown Harry]

DD started college in September and DS will start in two years...

I transferred $25k into the oldest's bank account at the start of the academic year and told her that was enough for the year and she had to manage it. I'm hoping this will be a lesson in financial responsibility. She just paid for 2nd quarter expenses and so far I think that she is on track academically and financially.

Interesting that you went with this approach right off the bat, during freshman year. $25k a big number for an 18 Y.O.

My DD is a junior and we started down this path only recently, for the money needed to cover expenses during a study abroad semester.

I like the feedback I am getting so far, so we'll probably go for the full lump sum payout for her senior year.

That's two data points on the early end of the time scale. Do others have experiences (pro or con) to share on Junior spending the parent funds contributed to education?

 

[Boxkicker]

I don't have any kids, but my fiance has 3 teenagers who want to go to college. Even though the oldest failed 2 classes this semester, he still wants to go to college.

Not sure how this will all play out, but the reason I joined the Navy was because my parents didn't have the money for college. So I was going to do 4 years and get out and go to college. While I was in, I went to night school and paid between 0-25% of the tuition via Tuition Assistance and got a Bachelors Degree before I retired. Now, I am using my GI Bill for a Master's Degree. It feels great to be able to go to post-grad school for free and get a little $500 cash every month after books/fees!

 

[flyfishnevada]

The downside of that is now you'll have a shitbox or two in your driveway for at least four years.

Oh ya, but I'm on 5 acres and have plenty of room.

Your father supported you. Don't your kids deserve the same support from you?

Well, they are getting the prepaid tuition we have been investing in and that gets them full tuition paid at an instate school or the equivalent sum out of state. But I watched my dad go broke on a postal carriers salary putting my sister through career college, paying for her son's daycare and making her car payment.

I guess my feeling is that while I made the choice to have kids and support them, nurture them, etc., I didn't sign up for a lifetime of giving them my money. And it is MY money. I am not opposed to helping out here and there, but I won't go into the poor house or work till I die making sure they become brain surgeons and rocket scientists (actually a chef and a video game developer, at least for now). I see my job being to develop independent adults. Let them start being an adult ASAP and figuring out how to manage their money and time, so we can begin enjoying our retirement.

Again, I am not passing judgment. Their are many ways to skin this cat. You just have to have a plan and decide what is important to you.

 

[youbet]

Their are many ways to skin this cat. You just have to have a plan and decide what is important to you.

That's right. Sitting in the audience as DS graduated from a well known university with a BS in engineering was well worth the price of the ticket! So much so that we've decided to fund his three children, our beloved grandkids, to the universities of their choice. It's a great feeling and well worth the expenditure!

It's a simple and affordable gesture that yields unmeasurable satisfaction.

And it's a family team thing that, along with other sharing of assets, pulls us all together as we tread through this adventure of life.

 

[LOL!]

Interesting that you went with this approach right off the bat, during freshman year. $25k a big number for an 18 Y.O.

This is OK if both parents give the $25K gift. Otherwise, it means filing a gift tax return since the limit is $13K per person per year given to same person. If parents pay the college directly, no gift is involved.

 

[Katsmeow]

Considering the options for getting additional money for school (scholarships, grants, loans, military, jobs, etc.) they should not have too much trouble doing it. I think the lessons learned and the sense of ownership and pride that will instill will far out weight the financial obligations they will incur.

Well, these options are available for some but not all. We have always had a high enough income that our expected family contribution is extremely high even for what we project to soon be 2 kids in college. That is, paying for it ourself is less. I would feel terrible to tell my kids to get loans when I know they won't qualify for any low cost loans due to our income.

I also think you have to deal with individual situations. Due to health reasons, for example, miltary is not an option.

For 3 kids they each have different situation.

Oldest son is about to graduate, will start college next fall. We told him we would pay for room and board at any state university in the state. He would pay for books and spending money. He has chosen to go for the first two years to a residential junior college even though he could get into a 4 year school. However, the cost is much, much less and the credits are fully transferable to the 4 year schools he is most interested in attending.

Younger son is a more complex situation. He is graduating from high school this semester. He is 15 so the financial aspects of paying for college are quite different given that he is a minor and is actually not eligible for much financial aid even if we would otherwise qualify. He will live at home and attend community college (fully on our nickel) for the first couple of years and then once he is 18 he will have a similar deal as his brother.

Daughter is about to start high school and I'm not sure she will actually go to college. She is not academically inclined. DH is planning to soon retire and she and her 15 year old brother (who will be 16 by then) will receive SS benefits (yes children of retired worked get benefits until 18). Whatever is not spent on expenses before she is 18 (same for her brother) will be available to her for college or other vocational training.

 

[Bestwifeever]

I think the most important thing in the "who will pay for the kids' college" discussion is telling the children what the decision is well ahead of time (same for weddings, cars, whatever). Their expectations may be different than what the parents actually plan to do.

And if your family decides it will be up to the children to fund their own college, let them know if you will help them with the paperwork, meet deadlines, cosign, etc. to make that process smoother. Just so they know everyone's on the same page.

 

[skyvue]

My daughter is 14 and in the 8th grade but I am waffling on the right approach for paying for college.

My parents deal was they would pay for both room and board (state school) as long as I kept my gpa above a 3.0. I was in engineering so this wasn't a piece of cake for me. My second year spring quarter I did a bit too much partying and my overall dropped below 3.0 so I paid the next semester myself. That was the last time that happened and this "pay for performance" approach successfully motivated me. I was the type of kids who needed that.

My plan for my daughter was going to be similar though I was only going to pay half because her mother and I are divorced and I assumed she would pick up the other half. Recently though she just got accepted into a fairly exclusive and expensive high school. This high school is almost as much as I originally planned to pay for college. Since I will be paying for half the high school cost, I probably won't have enough to pay for as much college as I planned. My ex-wife also recently said she wasn't planning to help dd with college because she would have 3 other kids in private high schools at the same time.

I believe in making the kids pay for part of it. I likely will ask her to work and take out student loans for part of it. Once she graduates and gets a job, I think will probably pay off her student loans as long as she agree to start saving for ER!

It's going to be very hard for me to not butt in and try to micro manage her finances. I very much want her to start saving early and not repeat the mistake I made. I was around 28 before I got serious about saving and now at 42, will have to work 10 more years before I can retire. I did some calculations a few months ago and figured I could have called it quits in 2 years at 44 if I had started saving and living on a budget at 22.

 

[Lusitan]

My thoughts on this have evolved from "not going to pay anything for my kids' college" to "will pay up to the amount of tuition/room/board at a state school for 4 years of undergrad".

I paid for my undergrad and graduate degrees on my own, and did well enough to be contemplating FIRE. But in retrospect, it was a burden that, especially if I'm considering FIRE, I would like to help reduce if not eliminate for my own kids.

Part of this also has to do with the evolving economy; by the time my little ones are college-age, it seems that a BS will be the new "high school diploma" -- more of a requirement than an option.

Still not sure whether I will agree to pay it up front, or condition it on decent academic performance, or not tell them anything and surprise them with a "surprise - your loans are now repaid" at the end of it all. Probably I'll sit down with them when it comes time to think about college and I'll let them know what they can expect from me, and what (if anything) else they'll need to cover. And I'll definitely have a good talk with them about how the decision they make regarding student loans can impact them for many years to come.

 

[Sam]

But I watched my dad go broke on a postal carriers salary putting my sister through career college, paying for her son's daycare and making her car payment.

Your father is very generous.

I pay for all my kids' undergraduate education with conditions: They have to maintain a minimum 3.00GPA, they are not allowed to major in Liberal Art or in other useless field such as Psychology. So far, it's working out great. One more year to go.

 

[Lusitan]

... they are not allowed to major in Liberal Art or in other useless field such as Psychology.

Interesting -- that may be a very smart idea I need to consider ... not sure I am crazy about the idea of in some way trying to steer my kids in one career direction or another, but in the end, it's (IMO) unavoidably true that some majors are simply worthless in today's economy.

 

[Alan]

Interesting -- that may be a very smart idea I need to consider ... not sure I am crazy about the idea of in some way trying to steer my kids in one career direction or another, but in the end, it's (IMO) unavoidably true that some majors are simply worthless in today's economy.

DD was very talented at music but we were fortunate that, through the church choir, we made a lot of good adult friends who were also very talented at music, earning money in their spare time for singing, playing instruments and theatre. However they all had good jobs to make money for a living - lawyer, doctor, computer programmer etc.

I also gave her publications each year from our local university on the average starting salaries of their graduates by degree. When it came to her going to college she did a degree in Computer Science with a minor in Music.

 

[W2R]

Interesting -- that may be a very smart idea I need to consider ... not sure I am crazy about the idea of in some way trying to steer my kids in one career direction or another, but in the end, it's (IMO) unavoidably true that some majors are simply worthless in today's economy.

I dunno...

My cousin and I both loved music in high school (went to the same school and lived down the beach from one another, too, within walking distance). Her father decided she was not going to major in music.

My cousin refused to change majors so she ended up teaching music lessons to fund her college education. I don't recall if she ever finished college, but she had enough pupils to keep her busy more than 40 hours a week very quickly. She was able to give music lessons at home while bringing up her babies, and she has taught music for at least 40 years by now. She also plays organ at her church and has organized the church choir, and she married a conductor so their lives are centered around music. She has had a happy life.

Maybe she didn't need college to do that, but I know she would have benefited as a human being from a greater breadth of knowledge that she would have developed with a college education. I have forgotten (and haven't seen her since the 1970's) but I hope she finished college.

 

[Alan]

My cousin and I both loved music in high school (went to the same school and lived down the beach from one another, too, within walking distance). Our fathers were brothers and both decided that we were not going to major in music.

Just to be clear - we never once suggested that we would oppose or not pay for a degree in music for DD and we would have been happy to do so. We just helped provide an environment to allow her to see other alternatives to maintaining her love and involvement in music without committing herself 100%.

 

[W2R]

Just to be clear - we never once suggested that we would oppose or not pay for a degree in music for DD and we would have been happy to do so. We just helped provide an environment to allow her to see other alternatives to maintaining her love and involvement in music without committing herself 100%.

That was a much more graceful way to handle it, than the way her father handled it. She (of course) rebelled, and there was a rift in her family for years until they finally made peace with one another.

(also, I hadn't seen your post when I was writing mine)

 

[Sam]

I pay for all my kids' undergraduate education with conditions: They have to maintain a minimum 3.00GPA, they are not allowed to major in Liberal Art or in other useless field such as Psychology.

Clarification: They are allowed to study Liberal Art and even Psychology as a second major or as a minor. In fact I encourage them to do so. But the major has to be something practical, and the minimum GPA applies to the practical major. I couldn't care less if they fail miserably in their hobby field.

 

[Independent]

I also gave her publications each year from our local university on the average starting salaries of their graduates by degree. When it came to her going to college she did a degree in Computer Science with a minor in Music.

I don't remember that any of the colleges my kids were interested in provided this type of information. I think it ought to be a basic part of any college advertising.

Is the publication you're referencing available on the internet?

 

[Independent]

We had four kids. The "best" approach certainly varied between them. I think anything that you decide when they are pretty young is subject to revision when you get to know them as teenagers.

 

[Sam]

... not sure I am crazy about the idea of in some way trying to steer my kids in one career direction or another,

I'm probably old fashioned. In my book, "steering" your children (in all facets of life, education included) is the utmost important job of a parent.

I had the unfortunate opportunities of seeing numerous parents letting their teenage kids making less (much less) optimal decisions without interfering. Those parents say that they RESPECT their kids' opinion/way of life. I say (to myself) that those parents are simply taking the easy way out.

 

[Nords]

Interesting that you went with this approach right off the bat, during freshman year. $25k a big number for an 18 Y.O.
That's two data points on the early end of the time scale. Do others have experiences (pro or con) to share on Junior spending the parent funds contributed to education?

We've been ramping up our kid's bucket-handling skills. She gets a monthly allowance and a semi-annual clothing/toiletries allowance. A portion of her allowance goes to a "Bank of Kid" CD that she's allowed to make semi-annual withdrawals from. On her own she nailed down a part-time job that's now paying $100/week.

I'd be comfortable with writing her a $25K check for annual expenses. She'd freak out, but I'd be comfortable knowing that she'd settle down and handle it.

Even though the oldest failed 2 classes this semester, he still wants to go to college.

Heh. We have these kinds of "wants vs actions" conversations in our house all the time.

You know how a steely-eyed command master chief would respond to those sentiments... which, of course, the board's profanity filter would prevent me from repeating here.

 

[Alan]

I don't remember that any of the colleges my kids were interested in provided this type of information. I think it ought to be a basic part of any college advertising.

Is the publication you're referencing available on the internet?

This was back in 1997 and was not on the internet, Looking around I see the following on starting salaries for new graduates:


Most lucrative college majors - highest starting salaries - Jul. 24, 2009

This looks like a very good site to see not only salaries but also the types of jobs that degrees typically get you

Most Popular Jobs By Major

 

[youbet]

Clarification: They are allowed to study Liberal Art and even Psychology as a second major or as a minor. In fact I encourage them to do so. But the major has to be something practical, and the minimum GPA applies to the practical major. I couldn't care less if they fail miserably in their hobby field.

How about chosing their dinner entre' at the dorm cafeteria? Are they on their own for that?

 

[NW-Bound]

I am in the camp that, as a parent, I should provide some guidance to my children regarding their choices of a major. As it turned out, they realized on their own that they would need to make a living in a few years, and I did not have to do much persuasion.

As I recently posted in another thread, we had dire financial difficulties when I was in my late teens. My parents could hardly afford to help me with school costs, and in fact, I stayed at home and worked part time to help with the living expenses. I knew they would not spare the money for my schooling if they were well-to-do.

I am in a position now to pay for my children school costs at the same state U that I attended. If they were able to secure admission or scholarship at a better out-of-state school, I would support them in one way or another. However, as they are underachievers (perhaps I did not know how to motivate as they were growing up), I would not spend the money to send them to a state U in another state, just so they can party without me knowing. I have not even looked at any school financial forms, leave alone filling them out. I knew we would not get any "free" money, and I also do not want my children burdened with debt when they graduate. Their school costs are low enough that we only have to "sacrifice" some travels (which we shall resume in earnest when they are done

Helping them to finish college without being in debt pretty much concludes our duties as parents. I am free to spend the rest of money, though am not likely to do so (frugal habits die hard I do not understand when people leave an inheritance to their children, yet would not help them with school.

 

[Alan]

I do not understand when people leave an inheritance to their children, yet would not help them with school.

My sentiments exactly Teach them to fish, and they'll feed themselves.

 

[NW-Bound]

My sentiments exactly Teach them to fish, and they'll feed themselves.

And to be sure that they will use that "fishing skill", we have not told them about the size of our stash. Someday, once they are established but not now. Hopefully, when we do, they would think to themselves, "Is that all they've got left?".