Kids college: Let them pay?

[Aerides]

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.

 

[freedomatlast]

We paid tuition, room, & board for each of our DDs. They had summer and part-time jobs to pay for books and social life. Grad school is their responsibility.

DH and I planned to fund their undergrad without loans, and our plan worked. Each of the girls has thanked us for making it possible to start life on their own without student loans. They see how some of their friends have to struggle to make ends meet while paying back the loans on an entry-level salary.

Same here.

 

[FlaGator]

I'm one who responded in the "how much saved" thread, and it's more than enough for each to get a BS/BA degree at a state school, and possibly a master's.

My wife's mother paid for her degree, but I was on my own. We both worked during the summers. Graduated with debt that didn't get paid off for 10 years. After that experience, it was important to us to have the kids get through school promptly and without debt. Saved and invested a lot for each before they were 5 years old, and investment returns took care of the rest. (they are now HS senior and 8th grade).

I continually remind my kids there needs to be a ROI on their degree, so no $200K private school if they want to be a teacher. They also understand they need to get a degree that enables them to be self-sufficient when they graduate.

 

[athena53]

<snip> I applied to, was interviewed by, and accepted into an Engineering Co-Op program where I made enough money to pay for my own education. My Dad insisted on paying $500 to me each semester toward Tuition. I didn't need the money but it made my parents feel better for me to accept it.

That's how Dad got his education- the University of Cincinnati pioneered the concept of Co-Op programs. It's been expanded to many more majors- not available to me when I went there as a Math major. The Co-Op jobs usually involve increasingly complex work as you progress through your education and most of the Engineering students I knew graduated with an offer from the company where they co-opped, as well as others, because they had real experience in addition to the degree.

 

[EastWest Gal]

My parents invested in college funds for my sister and I then decided not to let us have them when we went to college. They had a lot of problems spending anything while we were growing up. But we lived at home and they paid for both of us-two year’s community college (no tuition or fees)., then 2 years at UC Berkeley ($750/yr plus books and transportation by BART) We both moved out our senior year together for a free room situation close to school and away from their alcohol fueled fights.

Medical school-I took a loan from a family member who was really supportive of my ambition. A much better deal than what banks offered in 1980.

My dad realized his mistake when not offering the funds he set aside for our college education. With encouragement from his lawyer, he decided to pay for his 3 grandkid’s college educations by starting 529s. I started out professional life with $40K debt; my son graduated debt free and now has $25K in the bank and a ROTH IRA at age 26.

My sister and I eventually cashed out the stock funds when given access as adults. It would have paid almost half of my medical school debt...thanks, dad...

Yes, I paid for college. My son is working and paying for grad school. He hates the expense. But he can afford it.

We paid for undergrad, he pays for grad school, and we help him still as is convenient. He is fun, helpful, and good company. I keep having to push him to find his financial calling. He works part time six days a week, and I am pushing to help him build a studio of private music students. A bit more lucrative than what he does now.

Of course he could do what his dad did-marry a doctor, raise the kid, and pursue his own talents. We went into the relationship with eyes wide open knowing that I would be the breadwinner and the world would be a better place with his volunteer and underpaid talent as a creative force locally.

The return for us is personal joy. I know in the future we will need his care and help. With each day we keep the connections. The love is there. Not much else matters. It fits my life view. Work to live, not live to work. Money is a hugely important tool. But it is only that-a versatile tool.

 

[candrew]

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?

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.

On the flip side, many parents are unable to pony up ~25K/year to fund their kids' educations. Every parent has to answer for themselves whether or not they can afford to take on this responsibility. Parents who do so with a hope that their kids will in return fund their retirements and/or otherwise provide for their support may find themselves in dire straits later in life when they are no longer able to work.

And as for those kids, like ours, who were not ready for college coming out of high-school; our sons didn't get it together until their mid to late 20's. IMO, parental willingness to pay for their kids' education also has a shelf life.

 

[6miths]

Comparing what "we" did with today's college costs is not reasonable. College costs have increased much faster than inflation for 30 years. Here's one example: https://www.zerohedge.com/news/2016-08-18/simple-chart-illustrates-absurdity-college-inflation

This has been driven by both rent seeking (government making piles of cash available through loans, scholarships and grants, so education institutions grab it with gusto) and the explosion of administrators at colleges (again, mostly to satisfy and comply with government regulations).

Completely agree. DW and I had no financial help from parents for undergrad and grad degrees and accumulated little debt but the cost of the degrees was very low compared to today. As well, Both DW and I were able to work in a factories in the summers and at Christmas break in jobs that paid more 40 years ago than most jobs that are currently available to kids today (and I am not talking inflation adjusted).

Burdening the young with big debts coming out of college greatly limits their options in life.

We are supporting our kids through college on tuition and accommodation. Their work income is going to savings and non-food living expenses.

 

[jollystomper]

DW parents and my parents, all minority immigrants, saw a college education as THE great equalizer in U.S. society, and sacrificed to pay whatever they good to get us and our siblings through college. We were VERY grateful for this. One of the big joys of my life was making enough in a summer internship before my senior year to tell my parents don't worry, I've got my senior year costs covered, use the money for my younger siblings when they reached college aid. It was one of the few times in my life I saw my Dad cry with joy.

So our cultural attitude was, if we can afford it, we will pay for it. We told them this was our big gift to them to get them started with an independent life. But, we did put some rules around this - mainly, the timeframe over which we would be willing to pay.

In the long run our kids appreciated our paying, but it did take some years for them to realize the benefit. Our youngest decided to take a year off to work, but he said he wanted to pay for his last year of college. He decided to change his major which will take my more than a year to complete, but has gone back this fall and came up with his funds, grants and loans he needed to do this.

The lessons we learned were:
- It depends on the child. Some will be grateful for you doing this and will make all efforts to take advantage of this. Some will take it for granted and with those it is better for them to invest some of their own "skin" in the game for motivation.
- We would have put more influence of which college they went to. Like our parents we were willing to pay for the "best" college the child got into and wanted to go to, but we did not question enough the reasons for going. Some of our kids would have been better off going to a different school (which we personally felt was fine but the kid did not have it as a preference).

All in all though, What we spent has been worth it. But that is just our situation, from our background and culture, and may not apply to others, or is even automatically recommended for others to follow.

 

[1242Vintage]

We have three kids and the first two had a small financial stake in funding their higher education. Our goal was to get them out with $10k or less of student loan debt so that they aren’t starting out with big loan payments.

We funded almost everything, but the older two kids lived modestly and worked part-time during school to defray costs. They did their part. There were also small scholarships along the way that helped. Both are now graduated and financially independent young professionals.

Our youngest, who just started her senior year at university, is on a full ride scholarship at a private university across the country. It’s not an academic or athletic scholarship ... she has a permanent disability and her university includes services that supports students with her type of disability. We would never have been able to afford this school on our own and is the reason why we were able to retire early. We are very grateful for this scholarship.

 

[Aerides]

On the flip side, many parents are unable to pony up ~25K/year to fund their kids' educations. Every parent has to answer for themselves whether or not they can afford to take on this responsibility. Parents who do so with a hope that their kids will in return fund their retirements and/or otherwise provide for their support may find themselves in dire straits later in life when they are no longer able to work.

I fully appreciate that many in this country cannot even begin to afford to fund college, but the question posed here - to this forum - is arguable to a group that can. If one is on their way to funding "typical" ER (not included extra-frugal MMM type ER), then the population here generally has a luxury of choice. And my "so how will your kid pay for it?" question is with this crowd in mind.

 

[Bimmerbill]

DD is 6 years out and I don't have any money saved. I've started brainwashing DD to go to community college the first couple of years and then transfer to the state university. Both are about 30 minutes from home so tentative plan is for her to live at home and commute. She will work and I'll end up contributing some I am sure. I'm kind of cash poor and investment/pension rich, so I may end up helping pay off her loans.

 

[RenoJay]

I started the other thread the OP references. OP has a great point. I think working through college can build great life skills for kids who can handle it. Some kids need hours and hours of study time and others can multi task and still do well in school. I think it depends on the kid.

 

[pacergal]

We told both our kids that we would pay for first two years in full at local CC, then help (50/50) payback their loans for the last two years after graduation. Anything beyond that was on their own. DS lived at home and went to local state college for BS.
We had the ability to pay off DS BS and MA degree after we retired, he had been paying them down prior. DD has had her school paid for by work, so far, similar to Assoc degree. Not sure she plans to go further, but will help if needed as we did her brother.

 

[ncbill]

Whatever you decide you owe it to your kids to let them know well in advance.

Fall semester of their senior year of high school is too late.

We were clear several years in advance what we could do (and the limits) for them.

If you won't (or can't) provide any help IMHO their best bet to "pay it on their own" is some form of military service:

Active for GI Bill benefits (IIRC, the Army still offers 2-year enlistments with 80% benefit)

or National Guard, in a state where being in the Guard pays for 100% tuition/fees at in-state schools.

or a military academy, assuming they're exceptional enough to earn an appointment there.

Because, frankly, it's not very likely your kid will be able to save for college from the wages of any job they can get with only a high school diploma.

 

[kgtest]

I paid my own way through college. I expected my kids to do the same.

My wife had everything paid for. She expected to pay everything for her kids.

I will say that I don't think my parents did the right thing because they actively avoided giving me any help when they could have easily afforded a token amount of help.

I don't think you will really know what you will do until the time comes.

Same with me. DW had all expenses and even her apartment paid for. She did hold a few part time jobs during that time.


Meanwhile my dad SAID he would pay me back for my tuition bills (not books or housing) IF I got Cs or better. Well the first semester I got one C (in math) so he didn't pay me back for any of it. I dropped out and moved back in with him because I couldn't afford my lifestyle...I actually went without eating at least one day most weeks simply because I had no dough.


I hold some resentment, but not a lot. I earn more than he ever did, and both my sisters (who have masters) ever did. From all my peers I talk to they say I am lucky to not be burdened with debt. I always thought I was at a disadvantage for not getting my degree, but alas.



Student debt and interest can be a real set back as I've seen from my peers, but some just chose to party instead of pay bills so it depends.


I managed to take a few more college classes later on in life (after I joined the Airforce) and then once I got out...but I had credits with so many different schools it never transferred and added up.


I have 529s for the 2 kids now, but I reluctantly put money in it each time, thinking to myself...should I be putting this in a taxable brokerage instead?


College does not teach ambition and drive. Or if it does, some people spent a lot of money for nothing. It does not guarentee success (although many studies say those with degrees earn more) I am the exception to that rule. I earn more than MOST of the kids I graduated school from (or those that are willing to discuss income with me).


Sure there are some Dr's and Lawyers that will eventually earn more than me..but I will be retired and at that point won't care.


My dad had a funny way of motivating me with a lot of negative attention. "You will never make it" "You won't last a day" "You'll be collecting garbage"


Honestly, proving him wrong was more motivating than any other thing in my life. I am still on a tear to surpass him in invested assets, I will never pass him up in net worth but I surpassed him in income earnings the last year he was working (and I am 30yrs younger). I think that sort of opened his eyes a bit. Now he listens to me for investing advice, simply because he knows I know more than he.


But when I ask about his grandkids and helping for college, the answer is still no. He could be trying to motivate me but he knows how motivated I am lol.


He grew up with great depression era parents who were dirt dirt poor, so did mom. Neither of them have degrees, but despite that they are multi-millionaires themselves.



I don't know why else someone would earn a degree if not to guarantee some sort of career. If there wasn't the allure of a successful career, only the smarty pants would attend.



Just my .02c

 

[Cayman]

We cover most expenses at a v. good state school. DD interns in the summer and works during semesters, too. She pays $5k/yr toward her BS in a marketable field. For grad school, we'll help less.

If you have the dough and you withhold it to help them, how will that play out? Will their education and job prospects suffer or benefit as a result of your "help"? (Will they delay or forego higher ed as a result of your "help"? Will they be forced to choose poor schools or less desirable majors because they lack the funds?....)

 

[kgtest]

Whatever you decide you owe it to your kids to let them know well in advance.

Fall semester of their senior year of high school is too late.

If you won't (or can't) provide any help IMHO their best bet to "pay it on their own" is some form of military service:

Active for GI Bill benefits (IIRC, the Army still offers 2-year enlistments with 80% benefit)

or National Guard, preferably in a state where being in the Guard pays for 100% tuition/fees at in-state schools

or a military academy, assuming they're exceptional enough to earn an appointment there.

Because, frankly, it's not very likely your kid will be able to save for college from the wages of any job they can get with only a high school diploma.

I am the exception. I check the *some college box, but not the 2 year or 4 year box. I think having some college and some military experience on my resume certainly was needed to earn mid sixes like I do.


I would at least encourage them to try it even if there is absolutely no way they would afford four years.


I say this because my current employer offered to pay for me to 'finish up' the degree...14 years after my last college class. I declined but it was a nice gesture.

 

[tulak]

The best gift we can give our kids is an education. I’m more than happy to pay for a full ride at an in-state university.

Regarding if they value it, DS is in his second year, is in a very marketable major and has excellent grades. He has grand plans, which is great for his age.

DD has one more before heading to university and also leaning towards a competitive major.

As a parent, I have no problems helping them out to get a better start in life.

 

[Yachi]

I'm FI mid-forties. Wife and I paid our own way through college. I believe that really got us saving/earning early in life and a key to our success. Realize paying your own way through college is harder now than 20 years ago. However, even though we can pay for kids college not sure that is best for them.

I was surprised by the other "how much do you have set aside for kids' college" thread by how many folks are planning to pay 100%.

Our kids are 7 years from college. Would love to hear from folks dealing with this now, approach and rationale.

My thoughts (My wife and I both graduated college around 7 years ago, it was expensive then):

Other countries have cheaper (free even) higher education paid for by higher taxes. We have lower taxes instead that have benefited us early-retirement savers. It seems fair to use the taxes-saved portion to help our kids in college.
I graduated with lower debt because my parents made little money (FAFSA aid).
My wife graduated with high debt because her parents made more money (even though she got a very good scholarship).
My sister-in-law graduated with super high debt because she didn't get the good scholarship.
I don't want my high income to negatively affect my children, so I plan paying enough that they end up with reasonably-low debt.

 

[brett]

I paid my way through university thanks to a very will paying summer job on the railway. But tuition has skyrocketed since the early/mid seventies and well paying summer union jobs with scads of overtime are much more scarce.

We were happy to pay for both our children's post secondary education. Our aim was to have them graduate with zero debt.

Son is returning to graduate school next month. He has been working for a few years and has savings. We have told him that we are more than happy to assist him financially. Why not? He simply has to ask.

 

[Rianne]

We do not have children. This link is for anyone who has college aged kids. The asset part is troubling. Do 401K's count as assets?



https://wgntv.com/2018/08/27/univer...s-free-tuition-for-income-qualified-students/

 

[daylatedollarshort]

Our kids had most of their tuition covered by grants, worked for spending money and we picked up the rest of the cost and provided money for cars.

 

[MI-Roger]

We do not have children. This link is for anyone who has college aged kids. The asset part is troubling. Do 401K's count as assets?



https://wgntv.com/2018/08/27/univer...s-free-tuition-for-income-qualified-students/

It depends........

As far as I know, current FAFSA guidelines require retirement & 401(k) assets to be included on the FAFSA form and are included in the Expected Family Contribution calculations. Back in 1999 and 2000, when our sons graduated High School, these assets were not specifically mentioned to be included.

The advice we received at the time was to "Include everything that is asked for. Omit anything that is not specifically requested."

Maddening to me was that in 2014, when our 32 year old son was applying to Medical School, my financial assets were required on his FAFSA application! He had been out of college for 10 years by that time, had been employed for 8 of those years (only unemployed for the 2 year duration of his Pre-Med studies), and his investment portfolio value astounded me.

 

[sengsational]

It depends........

As far as I know, current FAFSA guidelines require retirement assets to be included on the FAFSA form and are included in the Expected Family Contribution calculations. Back in 1999 and 2000, when our sons graduated High School, these assets were not specifically mentioned to be included.

I don't think the bolded part is true, or at least wasn't when I went through it in 2010-2017. Anything considered a "retirement asset" did not affect the calculations directly. There's the "Federal Methodology" and the other one, which asked about retirement assets, but those did not affect the EFC.

Maddening to me was that in 2014, when our 32 year old son was applying to Medical School, my financial assets were required on his FAFSA application! He had been out of college for 10 years by that time, had been employed for 8 of those years (only unemployed for the 2 year duration of his Pre-Med studies), and his investment portfolio value astounded me.

You have more experience than I in this regard, but my understanding that once your kid was independent, your finances were NOT required on the FAFSA. No way I'd sign a FAFSA for a 32 year old.

 

[njhowie]

DD is 6 years out and I don't have any money saved. I've started brainwashing DD to go to community college the first couple of years and then transfer to the state university. Both are about 30 minutes from home so tentative plan is for her to live at home and commute. She will work and I'll end up contributing some I am sure. I'm kind of cash poor and investment/pension rich, so I may end up helping pay off her loans.

I'm all for brainwashing the kids - it works. The sooner you start, the easier it is as it just becomes a given and it's no big deal in their mind. You explain everything to them, show them "their plan", they begin to own it, and they get excited about it. As our daughter was approaching "the date", when she spoke with professionals in her field during group discussions, they were all floored that she had a plan, understood the benefits of what she was doing, why she was doing it, and how she was doing it, and they let her know that she was taking an approach better than most others in the field.

For your child - take her on field trips to the community college and state university every now and then. Go on the campus tour. Go to some sports events or music concerts at the state university. For both schools, go to the information sessions that the admissions office does a couple times a year. Before you know it, your daughter will be telling everyone how it's her own plan/idea.