Should we be letting kids handle more of college costs?

[rob in cal]

I realize college costs have skyrocketed since my time in the late 1980's, but I'm wondering if many parents are wasting huge amounts of money on helping their kids through college. In our case, assuming our kids go to college they would be going to community college for two years, and for the last two years they would be funding big chunks on their own, their grandparents are helping out, and we would help out somewhat also. Grandparents are going to give them 3k a semester for tuition, and I'd have no problem doing that as well, for their last two years of college. During all this time the kids will also likely be working and they'll be contributing the rest of the money hopefully.
It seems that such a plan makes sense, of 1) going to the much much cheaper community college route for years 1 and 2, and then going to a moderately priced university for 3 and 4, and have the kids fund a significant, perhaps a majority of it, amount. In our case, I can see our son likely working at our restaurant as a busser/waiter or maybe delivery driver as he gets older, not sure about our 17 year old daughter who will be babysitting alot this summer. In this way, parents are not the key figures in financing what is often an overrated, overpriced education industrial complex. Separation of parents and college funding is my approach.
Now, I must admit that in my case my parents more or less helped me out significantly, in that my step-dad allowed me to help out in his business and gave me 10% of the profits we made on art buying trips. I basically helped out as general travel assistant as we bought artwork from people in California. But, I also lived frugally, and of course tuition was so much less back in the late 1980's.

 

[braumeister]

I really like the approach used by a friend of mine.
He told his two sons "I'll give you the best education I can, all the way through high school (private schools). If you work hard at it, you'll probably be able to get scholarships and go to college, but that will be on your own."

One of them got a full ride academic scholarship and went to college (which led to a successful career).

The other only got a partial scholarship, so took a different route. He went in the service and then used the GI Bill to cover his college costs (along with part time jobs). He was equally successful afterward.

 

[LOL!]

I will have 2 kids in college next semester --- one getting a Masters and one a freshman, so one might say I have some experience in this regard.

One can plan all they want, but then reality arrives.

While community college may sound great now, folks who attend community college have a low chance of graduating in 4 years. While it may not be the case where you live, around where I live, community college is like another year of high school. Indeed, my youngest was able to get take his last year of English in high school at the community college and get "dual credit": it counted for both his high school graduation requirements and will count towards his college GPA.

Some folks feel their kids need "skin in the game". I had skin in the game when I went to college. In high school I worked 40+ hours a week and in college 20+ hours a week to help pay for it. My kids work now and my college college graduate worked in college, too. But college is so expensive now that part-time work during the school year and full-time work in the summer will not be enough to get most kids graduated in 4 years. Nevertheless, it is good for kids to handle more of the college costs.

OTOH, everyone does not need to graduate in 4 years. Folks don't need a useless degree either.

Are parents wasting money paying for college? Probably not if their offspring graduates with a useful degree and gets a good job. What's a useful degree? Easy: A degree that gets them a good job that they like. For example, I know someone with a music degree from the Juilliard School. They have a good job.

There are many good jobs where a college degree is not needed or is a hindrance. That's reality again.

Bottom line: One should prepare for many scenarios. Otherwise one may be disappointed in the outcome.

 

[Katsmeow]

We have elected to start kids at CC. We have a son now who is at a state university but he did CC first. We have chosen to pay for it. I originally had the idea of him working to earn some of the money. We also have a daughter at CC. We have found that we prefer to have them spending time on school than trying to earn money to contribute to college. The goal is to have them finish their education and do well, which I think goes better without them working. In our case, we have kids with ADHD so that plays a factor as well.

FWIW, now that my son has been at a state university for a year, I haven't found that the CC is less demanding. In fact, in some courses - the core courses everyone has to take - the CC is more demanding. Example, DS took one semester at American history at CC and another at the university.

In one of the semesters he had to read several books, answer essay questions on exams and write a paper. In the other course, no writing at all was required, the book was entirely optional and the professor said was really unneeded as everything would be said in class, and all quizzes and tests were multiple choice or true/false.

The first course described above was the CC course. The second was at the university.

 

[Mulligan]

Having one child and currently in college, I have not found it to be expensive at all. Two years paid tuition by state at local CC. Being divorced, I am paying one year, and ex is paying other, which is about $16,000 per year room and board. Get to collect that juicy Opportunity Credit for 3 years off 2 years of university, knocks $7500 off the bill. So we are only out about $25k. If she goes on to get her masters, well then it is time for her to learn how to fill out a student loan application. Or learn to get a part time job to pay for it, because she is getting off way easier than I did going through college back in the 80's.


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[FUEGO]

We plan on funding somewhere around the full tuition price at an in state school (currently $8600/yr IIRC) for four years. Maybe a bit more, maybe a bit less (depending on how our portfolio does in the next 9 to 16 years).

My 9 year old just deposited her first $200 into her 529 account (at her suggestion). She's already keen to the concept of sharing the cost of education.

We are raising the kids to be Value Conscious Consumers (tm) and the analytical part of the brain doesn't get shut off when it comes time to consume a college education (glossy alluring sales brochures from institutions of higher ed notwithstanding). Between loans, scholarships, assistanceships, grants, co-op, work study, part time jobs during HS, college and breaks, and entrepreneurship, there are so many ways for today's college kids to wrangle up some money.

My breakfast chat with DW and DD9 this morning centered around "will college even be essential in 9 more years"? Given advances in free/cheap distance ed, I'm not persuaded that the bachelor's degree will be the golden ticket valid for guaranteed admission to a successful middle class existence. It is (to a certain extent for certain majors) today. Will it be tomorrow?

If, for example, college costs are $250,000 or $500,000 when my 2 year old faces the first tuition bill in 16 years, could that money be better kept and spent on setting him up in his own business or trade, or invested in the market where he can supplement his lower income with the earnings? Or used to buy a house (to live rent free) and save what's left? I value education for the sake of education, but at some point it won't make sense in present value economic terms. My hunch is that college costs won't grow to the moon due to some disruptive technology or social advance providing an alternative route.

 

[Independent]

I have to agree that for lots of kids, a college education is a bad financial decision. Too many of them don't graduate at all (about 40%, IIRC) or end up working in jobs they could have done in HS.

But, for some kids, it's the best possible route. I was in that category, I'm glad that my folks picked up most of the costs (tuition, room, and board). I took care of my own graduate school.

So, to me, the OP leaves out some critical information. Do the kids have academic talent? Do they have a driving need to use it? Are they targeting careers that make sense given their talents and the job market?

 

[LOL!]

@Katsmeow, your story might speak to the quality of the state school (at least that one professor) and not to the quality of the CC. Do you think your kids will have a bachelors in 4 years of college?

 

[Animorph]

I had plenty of help. I gave plenty of help. We're all engineers, so we all got good value for our degrees. I'd have been less generous for a degree with no job prospects, mostly in choice of college I think.

 

[steelyman]

I went to two state schools. One incredibly lame, in fact I dropped out and went to play jazz for a couple of years. The second was good, a "name" university, and I am convinced that helped me snag a job. I left with $14K in student debt (back in the 80s), but chipped away at it.

 

[Bestwifeever]

It is really important to think well in advance about how we parents will contribute to our kids' college expenses, and just as important that our children know early on where we stand on this issue. Really no right or wrong in what each family decides is best, but the kids need to know.

 

[Katsmeow]

@Katsmeow, your story might speak to the quality of the state school (at least that one professor) and not to the quality of the CC. Do you think your kids will have a bachelors in 4 years of college?

Well, the quality of the state school is overall fine. The courses my son has taken in his major (computer science) have been far more demanding than the history course. I just think that in universities an actual professor has more interest in his/her research and teaching higher level courses than teaching a first year history course that every student has to take and which is largely populated by people (like my son) with zero interest in the course. A professor in that situation really doesn't have much interest in grading papers written by those students not particularly interested in the subject. And, they want tests that can be graded without the professor doing anything.

On the other hand, in CC, the professors or instructors are generally more interested in teaching and they don't have competing research or higher level courses. All they are teaching are lower level courses so I think they are more inclined to put a lot more effort into it.

As far as getting a bachelors in 4 years:

DS started college at 16, having graduated high school. While really a very smart kid (hence him graduating high school at 15), he has ADHD and is dysgraphic. So we started him with a lower level course load. So he has 3 or 4 courses a semester rather than 5. He probably would have graduated in 5 years or so, but for the fact that he made a significant change in major (he started as a CS major, switched to English, switching to Business and is now --happily -- back as a CS major). So some courses he took for those other majors is now utterly useless of him as a CS major. He will graduate when he is 22 after 6 years but bear in mind that he lived at home for the first 4 years.

DD is not getting a bachelors degree. She recognized awhile ago that she has no interest whatsoever in obtaining a bachelor's degree. She might possibly get an associates degree but is leaning against it at this point. She is taking a course of study at the CC that will lead to a certificate in office communications (basically she is taking courses in MS Word, Excel, administrative procedures, PowerPoint, Photoshop, Publisher, etc.). She is happy with this course of study which should take about a year and a half to complete.

 

[LOL!]

Thanks for the info. It seems like CC classes were the right choices for your family's situation.

 

[aim-high]

We're paying it all, tuition, books, room & board. We wouldn't if we couldn't afford it. Nor would we if our kids didn't work hard in school and have a good work ethic outside of school. They both have jobs and are working, saving money. If they were wasting it, we'd have a conversation.

They understand how fortunate they are to get a college education, without debt, and come out with a healthy amount of savings.

 

[ohyes]

It is really important to think well in advance about how we parents will contribute to our kids' college expenses, and just as important that our children know early on where we stand on this issue. Really no right or wrong in what each family decides is best, but the kids need to know.

Agree. Three kids - three very different scenarios.

Oldest did not graduate until age 30. We paid his way until he started screwing up--have no idea what he owes in student loans. It must be horrendous--not our problem. Need I mention things are not great between us? Degree - political science--but, hey, that is his passion. Is he using it to his advantage? N.O.

Second--full ride scholarship through B.S. She took loans, paid off now, for Masters. Psychological Examiner and is doing great.

Youngest, brainiest, had hard time with college. Dropped out for 1.5 yrs and eventually went back--with loans. We pay for most his textbooks...which are expensive enough. His major? Creative writing. Not what I would have chosen for him, but once he decided on this, it is like he found his calling. He loves it and receives plenty of accolades. It is fun to watch his successes.

So, yeah, three kids and I have no answers.

 

[aja8888]

@Katsmeow, your story might speak to the quality of the state school (at least that one professor) and not to the quality of the CC. Do you think your kids will have a bachelors in 4 years of college?

Both our girls went to a Texas CC and then on to a state University as juniors starting in. Both graduated after the 4th year and went on to careers. This is not a phenonom around here as we have very good CC's and state universities accept students with no problem. And I mean schools like UT, Texas A&M, Sam Houston U, etc.

 

[bizlady]

We paid tuition, books and housing, and told her she had 4 years to get in and out. Anything after that was hers, and she had to work to pay for her car, clothes, food, utilities and fun.

She got in and out in 3 1/2 years, with honors, learned to budget and is doing great.

Many of her friends are really strapped with loans, and DD and SIL have just a few thousand left to pay on her husbands student loans.

We wanted her to have some stake in this, and learn to mange her money. We also did not want to see her strapped with student loans.

 

[RetireAge50]

We are paying their college expenses. Daughter will be a junior in a state school and son will be a freshman at community college.

We think the ROI is still there but getting smaller. We have always told them we would support them until they graduated from college. So far they have taken advantage of this (in a good way).

They both work a lot more hours than I do at homework and part time jobs. Also they will get a good start without debt and some savings.

Once they are done I will be done

 

[daylatedollarshort]

We are covering the cost for everything at public schools - books, spending money, cars, tuition and housing. They have to get good grades and do resume building activities like volunteer work, internships and career related clubs and meetup groups. With some online and community college credits, tax credits and financial aid the cost for us has not been bad at all. They will graduate with no loans and nice cars, so they won't have to go into debt for a car for years either.

The life time earnings difference between average salaries in their chosen fields and minimum wage jobs will be over $2M each, so I think college is a great investment.

Starting salaries by school, starting salaries by major, college ROI, etc. have always been big topics of discussion at our house. I do feel bad for some of their friends who are graduating with large debts and poor job prospects.

 

[Balance]

DW and I have been saving for both children's college and to provide them with a late model (new to them) car once they graduate HS. Our position is to pay for tuition, fees, books, room & board and misc expenses up to the projected budget established by our state for a public 4yr college. For instance, this year the budget is projected to be $19,500 per year. The budget covers basic expenses to get an education NOT extracurricular costs. For that, they will need to find a part-time job during school and/or work summers in between. If they want to go to a private or out-of-state school, then they must find scholarships and/or work more to cover the extra tuition. We are going to be adamant about not procuring loans.

I am in agreement that our kids need to have skin in the game, so we will have a strict budget. Interestingly, we have put our oldest on a budget when she started H.S. (minimum allowance) and she covers everything else with money she earns in part-time work. She has done a good job not asking for more, so hopefully we are instilling a LBYM's habit for the future.

If they want or need to go to graduate school, then they are on their own.

 

[Fishingmn]

My grandparents and parents paid for my college so I was determined to pay for our kids.

Our deal was 100% of tuition/room & board at the rate of the local large state school (where DW and I both went). They were responsible for anything more expensive as well as books & expenses.

DD graduated, went to grad school (on her dime) and has a good job. Also a huge saver with a goal of retiring at 40.

DS child just graduated last month & has a job starting soon!

 

[REWahoo]

DD graduated, went to grad school (on her dime) and has a good job. Also a huge saver with a goal of retiring at 40.

DS child just graduated last month & has a job starting soon!

Congratulations.

If your experience is like ours, you just got the largest 'pay raise' you'll ever see!

 

[panacea]

We've been saving for several years with a plan to cover costs equal to 100% of 4 years of a state college. Anything above that would be on them. So far our children have kept up good grades and scholarships of some kind are a good possibility. As events begin to unfold I can see how our plans will change (who will actually need how much) so we're trying to remain flexible at this point.

 

[retire2020]

I had plenty of help. I gave plenty of help. We're all engineers, so we all got good value for our degrees. I'd have been less generous for a degree with no job prospects, mostly in choice of college I think.

I had no help at all. I got scholarship, work study, took the loan and funded my BS+MS but I'm planning to fund 100% of my 3 Kids' college. I'll make them take stafford loan, pay the interest while they're in college and pay the loan in full when they graduate just to keep them in check. DD starts PharmD this fall in state college five minutes drive from my home(I would let her stay on campus first year though..)

 

[BBQ-Nut]

I have a son starting college this fall and another two years after that, so there will be some years of overlap.

We started saving for their college fund as soon as our first was born and have quite a stash that should cover most of their college expenses: cash, 529, and equity funds.

The last thing we want is to have our sons run up student loan debts (I had $20K loan to see me thru my last 2 years of college - was on the 6 year engineering program after switching my major).

I hated having that loan debt.

I am all for them getting part time jobs and helping with expenses or pocket money for their own 'fun money', gas, their own car insurance, etc.

And if they decide on post grad study - well, then they are on their own.