Kids college: Let them pay?

[Breedlove]

Maybe I sound bitter , but I hear the next bubble will be the college loan debt now over one trillion dollars . My education was partially paid for by my employer , DW's was paid for by us . Our son's was paid for by us . Now I understand some cannot afford to pay but I talk to kids all the time with 20, 30 thousand dollar debt and they have decided to take a semester off and change their degree . My opinion is you do not get any federal money unless you go to school and get a 3.0 average . Students wait in line to get those high interest credit cards that we the tax payer will end up paying off .
Today education is a racket , everytime I ride the beltway in Houston I see a new pay as you go school .

 

[Rianne]

University of Illinois C-U tuition in 1982 - $1200, books and fees @ $400
I was lucky to live at home, food, laundry, transportation taken care of by parents.
I worked as bartender/waitress, great tips in good restaurant, mostly cash tips. I paid for my tuition and books.

I'll admit I was at a disadvantage because I worked. Less time to study and party.

My first accounting class had 125 students in this huge lecture hall. Profs had to publish so TA's taught the class, graded papers, provided tutoring. Fraternities and sororities are huge at CU U of I. They had the previous years tests. Lots of cheating going on. The grading curve was in the 90's. My accounting grades suffered but other business classes were smaller and I did well so my average was OK.

The competition in large state universities is brutal. If one could afford a smaller, private school I think success is better.

It's hard to work your way through college. Social life is important but when you divide working hours (average 20 hours/week), classes 12-18 hours/semester, social life and of course, studying. No walk in the park.

I cannot imagine students today under pressure to succeed, good grades with the cloud of debt over their heads.

 

[Breedlove]

Many kids that go to college today are not ready and I agree college is more then book learning . But who lets these kids go borrow thousands of dollars end up with 2 semesters and no plan to ever pay back the loan .

 

[Rianne]

Many kids that go to college today are not ready and I agree college is more then book learning . But who lets these kids go borrow thousands of dollars end up with 2 semesters and no plan to ever pay back the loan .

Exactly why finance classes should start in grade school! Professional athletes are taking finance classes so they don't go broke after earning $MM. Kids are brilliant at figuring out phones, computers, social media and so ignorant about money. We don't have kids, but to preach save save save without showing why saving, investing is so important at a young age defeats the purpose. Warren Buffet, at a very young age, figured out compound interest.

 

[Cobra9777]

I worked nearly full-time during college, working 30-35 hours/week at a retaurant, 40-50 hours on breaks and holidays. I lived off campus in crappy little apartments with lots of roommates. But I could get through registration for about $400-500 per semester. My parents helped out here and there when they could, but it was not very much, maybe a total of $1500 over 4 years of undergrad. I had no loans or scholarships and graduated in 4 years. I continued to work through grad school but was married by then and DW helped close all the gaps.

I always thought similar to OP that our two kids would take the same path as me... and that somehow that would be "best" for them, even though we could easily afford it. The reality is the numbers just don't work. Even working full time, they could not do it without taking on significant debt. I don't see how that's "best" for them. They both worked enough to cover their misc spending, and also their bills once they moved off campus. But we paid tuition, fees, R&B, and rent after they moved off campus. They each got a new car upon graduation with a new job. I posted in the other thread that our cost averaged out to be $16K/year per kid... total $128K spread over 7 years. We paid out of regular cashflow.

 

[daylatedollarshort]

In our area the difference in school costs and starting salaries is pretty crazy. Students in the Bay Area can go to community college and then transfer to 4 year schools like U.C. Berkeley or San Jose State while living at home and commuting. Berkeley is actually easier to get into as a transfer student than right out of high school. San Jose State tuition is $7.4K a year, median starting salary for computer engineering majors is $93K. The paid internships in that major are pretty high with lots of networking opportunities in the area and a high placement rate with local companies. Transfer degrees from the CCs guarantee students can graduate in 4 years. The payback is really good.

At the other end are kids with some 6 figure loans for expensive schools in majors with low pay or low employment prospects, adding to the $1.5 trillion student loan crisis.

 

[dadu007]

I have a son who is entering a in-state university as a freshman this year.
Anyone here (assuming you're 50+ years old) who says "I paid my way" and so kids these days should do the same is living in a dream world.
My state University tuition was $275 per semester.
Just got my son's bill: $10,000 and change for this fall semester (Tuition/dorm/unlimited cafeteria meal plan). That's after applying $2300 in scholarship money. We are adamant that neither of our kids get loans; both my wife and I had to dig out from loans for grad school and got a late start financially. Our parents did bupkis.

Son is a CompSci major. Worked his ass off in a very competitive high school to get admitted. He and NONE of his braniac nerd friends had part time jobs in high school. You have no idea of the workload for top students these days; it would make your eyes water. There's no way a kid in AP classes in high school can work part time. If you're in lower level ("normal") classes, it's possible, but not desirable.

He would be at a great disadvantage at University if he had to work part time. He knows the stakes are that high.
We'll pay for undergrad; he has to foot the bill for any grad work. Also hammered home he needs a major that will lead to employment WITH health benefits, since he's a Type 1 diabetic.

 

[WhenIsItTime]

In our area the difference in school costs and starting salaries is pretty crazy. Students in the Bay Area can go to community college and then transfer to 4 year schools like U.C. Berkeley or San Jose State while living at home and commuting. Berkeley is actually easier to get into as a transfer student than right out of high school. San Jose State tuition is $7.4K a year, median starting salary for computer engineering majors is $93K. The paid internships in that major are pretty high with lots of networking opportunities in the area and a high placement rate with local companies. Transfer degrees from the CCs guarantee students can graduate in 4 years. The payback is really good.

At the other end are kids with some 6 figure loans for expensive schools in majors with low pay or low employment prospects, adding to the $1.5 trillion student loan crisis.

You illustrated a concern I have perfectly. I am too much a finance person to ignore that when I support my kids schooling!

 

[WhenIsItTime]

I have a son who is entering a in-state university as a freshman this year.
Anyone here (assuming you're 50+ years old) who says "I paid my way" and so kids these days should do the same is living in a dream world.
My state University tuition was $275 per semester.
Just got my son's bill: $10,000 and change for this fall semester (Tuition/dorm/unlimited cafeteria meal plan). That's after applying $2300 in scholarship money. We are adamant that neither of our kids get loans; both my wife and I had to dig out from loans for grad school and got a late start financially. Our parents did bupkis.

Son is a CompSci major. Worked his ass off in a very competitive high school to get admitted. He and NONE of his braniac nerd friends had part time jobs in high school. You have no idea of the workload for top students these days; it would make your eyes water. There's no way a kid in AP classes in high school can work part time. If you're in lower level ("normal") classes, it's possible, but not desirable.

He would be at a great disadvantage at University if he had to work part time. He knows the stakes are that high.
We'll pay for undergrad; he has to foot the bill for any grad work. Also hammered home he needs a major that will lead to employment WITH health benefits, since he's a Type 1 diabetic.

It's a serious question: If he can't work part time, is he studying outside class 40 hours a week? That is how much I worked, but it also meant I did less than 10 hours of studying a week and my GPA reflected that!

 

[WhenIsItTime]

Maybe I sound bitter , but I hear the next bubble will be the college loan debt now over one trillion dollars . My education was partially paid for by my employer , DW's was paid for by us . Our son's was paid for by us . Now I understand some cannot afford to pay but I talk to kids all the time with 20, 30 thousand dollar debt and they have decided to take a semester off and change their degree . My opinion is you do not get any federal money unless you go to school and get a 3.0 average . Students wait in line to get those high interest credit cards that we the tax payer will end up paying off .
Today education is a racket , everytime I ride the beltway in Houston I see a new pay as you go school .

I believe like anything a lot of this is mis-managed by the system and students. Loan access partially allows schools to increase rates ever year.

That is why I am trying to figure out how to give my kids skin in the game. Only spend on school what you think has a good return. Don't flip flop curriculum's. Can you take in high school where rates are cheaper? Can you go to JC? For post-graduate, get a good employer to pay. Use opportunity to transition to adult decisions.

 

[WhenIsItTime]

I worked nearly full-time during college, working 30-35 hours/week at a retaurant, 40-50 hours on breaks and holidays. I lived off campus in crappy little apartments with lots of roommates. But I could get through registration for about $400-500 per semester. My parents helped out here and there when they could, but it was not very much, maybe a total of $1500 over 4 years of undergrad. I had no loans or scholarships and graduated in 4 years. I continued to work through grad school but was married by then and DW helped close all the gaps.

I always thought similar to OP that our two kids would take the same path as me... and that somehow that would be "best" for them, even though we could easily afford it. The reality is the numbers just don't work. Even working full time, they could not do it without taking on significant debt. I don't see how that's "best" for them. They both worked enough to cover their misc spending, and also their bills once they moved off campus. But we paid tuition, fees, R&B, and rent after they moved off campus. They each got a new car upon graduation with a new job. I posted in the other thread that our cost averaged out to be $16K/year per kid... total $128K spread over 7 years. We paid out of regular cashflow.

Wow - first paragraph sounded pretty familiar. As I read the second one, I needed to go refill my drink! Not that I don't agree (i will ignore new car detail). Just going through some denial/acceptance!

 

[Texas Proud]

I have a son who is entering a in-state university as a freshman this year.
Anyone here (assuming you're 50+ years old) who says "I paid my way" and so kids these days should do the same is living in a dream world.
My state University tuition was $275 per semester.
Just got my son's bill: $10,000 and change for this fall semester (Tuition/dorm/unlimited cafeteria meal plan). That's after applying $2300 in scholarship money. We are adamant that neither of our kids get loans; both my wife and I had to dig out from loans for grad school and got a late start financially. Our parents did bupkis.

Son is a CompSci major. Worked his ass off in a very competitive high school to get admitted. He and NONE of his braniac nerd friends had part time jobs in high school. You have no idea of the workload for top students these days; it would make your eyes water. There's no way a kid in AP classes in high school can work part time. If you're in lower level ("normal") classes, it's possible, but not desirable.

He would be at a great disadvantage at University if he had to work part time. He knows the stakes are that high.
We'll pay for undergrad; he has to foot the bill for any grad work. Also hammered home he needs a major that will lead to employment WITH health benefits, since he's a Type 1 diabetic.

I will disagree with you.. sure, AP classes are harder, but they can do that and work... my son was working at a tutor his last year of HS and graduated 13th in her class of over 1,000 kids...


I do agree with the cost difference... but how much did it cost you for dorm/meals/books etc? Just comparing tuition to the whole amount is apples and oranges..

 

[Winemaker]

I have a son who is entering a in-state university as a freshman this year.
Anyone here (assuming you're 50+ years old) who says "I paid my way" and so kids these days should do the same is living in a dream world.
My state University tuition was $275 per semester.
Just got my son's bill: $10,000 and change for this fall semester (Tuition/dorm/unlimited cafeteria meal plan). That's after applying $2300 in scholarship money. We are adamant that neither of our kids get loans; both my wife and I had to dig out from loans for grad school and got a late start financially. Our parents did bupkis.

Son is a CompSci major. Worked his ass off in a very competitive high school to get admitted. He and NONE of his braniac nerd friends had part time jobs in high school. You have no idea of the workload for top students these days; it would make your eyes water. There's no way a kid in AP classes in high school can work part time. If you're in lower level ("normal") classes, it's possible, but not desirable.

He would be at a great disadvantage at University if he had to work part time. He knows the stakes are that high.
We'll pay for undergrad; he has to foot the bill for any grad work. Also hammered home he needs a major that will lead to employment WITH health benefits, since he's a Type 1 diabetic.

I also disagree. My post, #64, describes my 2 kids efforts. $20,000/year tuition, worked in high school, took AP classes, worked in college. Son was in top 1% of high school class, and was an athlete as well. Daughter was in top 10%, but she wouldn't compete anybody for anything.

They caught a lot of ribbing for working from their classmates, but my kids were laughing when they didn't have $80-100,000 in loans at graduation.

 

[thepalmersinking]

College isn’t what it was when we graduated. Higher education is now a business. If you can afford it, pay at least for a state college. In NC, I pay $21k per year all-in. I do not want my kids starting their life out in debt. I have people in their mid-thirties working for me and they still owe. It is interesting to hear them benefits of not investing more in their 401(k)’s because of the debt. It’s sad

 

[dadu007]

I also disagree. My post, #64, describes my 2 kids efforts. $20,000/year tuition, worked in high school, took AP classes, worked in college. Son was in top 1% of high school class, and was an athlete as well. Daughter was in top 10%, but she wouldn't compete anybody for anything.

They caught a lot of ribbing for working from their classmates, but my kids were laughing when they didn't have $80-100,000 in loans at graduation.

I looked at your post #64. Your daughter graduated in 2007?!

This is the tell. That was a lifetime ago. Not the same game at all anymore, my friend. AP courses back then do not hold a candle to AP courses now. (i.e. Calculus, Physics, Chemistry). It would make your head explode. Also, my son's high school has 3000+ students and is ranked as one of top public high schools in the country. Kids with foreign-born parents set the academic pace in our school district. Competitive as all get out.

 

[LARS]

If you have children, and your financial situation allows (which is a whole different discussion), and your children are serious about getting an education than my own personal view is that it is an absolute obligation of a parent to pay for college.

We could debate just undergraduate vs. graduate or state vs. private, but some basic level of educational support is fundamental.

 

[mpeirce]

I come from a long line of college graduates, so I was raised with the expectation of (a) going and (b) paying for the kids to go. So I never really considered not paying for the kids' educations.

And I have to say, never filling out FAFSA was one of life's little luxuries.

 

[ocean view]

We put money in a 529 as soon as DS was born for the same reasons that we saved early and earnestly for our retirement—because we didn’t know what the future would hold.

Like all other new parents, we didn’t know what tuition would be 18 years later. We didn’t know if our son would be a high or low achiever in school. We didn’t know if he would even want to go to college (it’s not for everyone). But we knew that if we waited to start saving until those things were known it would be too late.

So now that the time is nearly here (HS senior this year), I’m glad we saved early and happy that we can support him in his higher education. It wasn’t a hardship for us to put the money away and it didn’t delay or sidetrack our ER plans. It was our insurance policy for providing the best future for our child.

btw, my parents saved paid for my college education. When I graduated after 5(!) years they had $10k left over that they gave to me. And what did I do with this money? I opened an account at ML and invested for my retirement...

 

[big-papa]

Out of 11 siblings, I was the only one to complete a degree. My parents couldn't afford it, so between grants, scholarships, summer jobs, and loans I did it. Now, for my daughter who is a senior in high school, we bought a 5 year contract through the Texas Tomorrow Fund when she was 1 year old. If she goes to school in TX, then tuition and fees are taken care of - just room/board/books out of pocket. Her grandparents left a small 529 for her. More importantly, her grandfather left half of the estate to her which will be put in a trust with funds available to her when she turns 21. Would have preferred that it was when she turned 18, but nobody was on speaking terms at the time of his death and not sure of the rules in the state he was living in anyway. Our plan is for us to be reimbursed for some of the out-of-pocket fees from her trust once she's 21, but currently the estate isn't settled and we don't have a good feel at all of the value to be put in the trust.

 

[Texas Proud]

Out of 11 siblings, I was the only one to complete a degree. My parents couldn't afford it, so between grants, scholarships, summer jobs, and loans I did it. Now, for my daughter who is a senior in high school, we bought a 5 year contract through the Texas Tomorrow Fund when she was 1 year old. If she goes to school in TX, then tuition and fees are taken care of - just room/board/books out of pocket. Her grandparents left a small 529 for her. More importantly, her grandfather left half of the estate to her which will be put in a trust with funds available to her when she turns 21. Would have preferred that it was when she turned 18, but nobody was on speaking terms at the time of his death and not sure of the rules in the state he was living in anyway. Our plan is for us to be reimbursed for some of the out-of-pocket fees from her trust once she's 21, but currently the estate isn't settled and we don't have a good feel at all of the value to be put in the trust.

According to my sister you made out like a bandit on that fund if it is the one she was in... it was closed many years ago to new people...

 

[Winemaker]

I looked at your post #64. Your daughter graduated in 2007?!

This is the tell. That was a lifetime ago. Not the same game at all anymore, my friend. AP courses back then do not hold a candle to AP courses now. (i.e. Calculus, Physics, Chemistry). It would make your head explode. Also, my son's high school has 3000+ students and is ranked as one of top public high schools in the country. Kids with foreign-born parents set the academic pace in our school district. Competitive as all get out.

I still disagree. My wife, BIL, are retired teachers, sister and daughter are active teachers. AP classes are AP classes, you take the test at the end of the year and if you get the qualifying grade you can claim college credit. My niece is taking them now. It will depend on the school your kids attend whether those classes get them college credits. Washington and Jefferson, and CMU did not accept those credits for my kids. Nothing was lost, their QPA was higher as a result, and they didn't read from papyrus scrolls or stone tablets. They still paid for half of their tuition, through scholarships, grants from professional societies, and tips/wages from their jobs.

Motivation for US students or foreign students is the same, if you don't succeed academically, you are doomed to a low paying job, unless they enter a trade. Your kids are 7 years out; motivate them now to get some skin in the game. It's the same as it was in the '70s when DW and I, my DB and DSs, worked while in college. And it was the same as lifetime ago, 11 years ago, for my kids.

 

[big-papa]

According to my sister you made out like a bandit on that fund if it is the one she was in... it was closed many years ago to new people...

Yep, that's right. We got in on the original plan before it was replaced! Lucky timing on our part! I have a friend who purchased one for each of his four kids. Was really a great deal!

 

[Amethyst]

I agree. Maybe not "no way," but you almost have to be Superkid with Superparent(s) to make it all work.

And one does want one's child to have some kind of social life in high school, since that's a time of great learning about social behavior, dating, etc.

High school scholars can work in summers, though, even if it's just a small job, or even working around the house. That's also part of learning about life.

I
There's no way a kid in AP classes in high school can work part time. If you're in lower level ("normal") classes, it's possible, but not desirable.

.

 

[king smoothie]

This is going to be a book, because I still struggle with this, with only the 2 out of the 5 in college so far. We committed to paying about $12000 a year for college. They were supposed to come up with the rest. The first did pretty good at first, but we learned that whenever he takes a full course load he his grades will range from A to F- no logical reason from what I can tell. When he goes part time, one or two classes he usually gets an A or B. When he goes part time he works 2 or 3 jobs. When he goes full time no job or one job. So he recently started his 5th year and will have to add on a summer and maybe a fall semester. We did end up paying more than we committed to the first couple of years and still provide an occasional cash infusion but mostly he pays his own way now because we won't pay tuition now. He just took out his first student loan last year - two semesters. Not taking one this semester, although only 2 classes.
The second I gave until the end of the first year to get a job. He did, right at the end of course, at McDonald's and lasted 4 weeks there. But he did get straight A's. But since he didn't apply for any scholarships he used up all his savings and used student loans as well to cover his share. I feel a bit guilty that I am enabling them to get into debt, and maybe should have insisted they stay for community college the first two years if they didn't have the funds. For that reason, perhaps we should have had a no scholarship, then community college rule. We are paying the interest on his unsubsidized student loans now, so it doesn't build up the cost more.
The high school senior found a university in Utah, SUU, that has a matrix system for a scholarship that includes SAT/ACT and GPA. She just took the SAT again, but with her previous score she qualifies (and automatically receives it) for a scholarship that will leave $3000 a semester to be paid, plus room and board which is relatively cheap there. If she increases her SAT by 20 points from this go round, all tuition will be covered by the scholarship. Which means her college costs could be well below what we said we would pay. This is her default university- she is already accepted. I encourage her to apply for more, but she seems hesitant.
I guess my summary is that we found it difficult to stick to our limit, I think that paying part of it is a harder line to hold than paying none of it. Technically we could stop or significantly reduce our retirement investing -not really impacting when we decide to retire due to pensions - and pay for all their college (4 year degrees), but I am still of the skin in the game mindset. I do feel like we failed at some point, because it seems that each child finds a low cost college that will work (with or without loans for them) and then they don't apply for scholarships or apply for other colleges to see if they can get any good offers. Maybe by the 5th one we will actually have a system that works well.

 

[gayl]

So far it's $6700 for my last one (GS that I raised is now a senior). GS is looking at grad school and that's on him. I helped him figure out the scholarship route. Still waiting on final year's to post .... hoping for next week

DD paid her own way & no debt. DS went thru on the visa plan, graduated with 16k in cc debt, came home for 6 months to pay it off.