Funding college for kids... ouch!

[FinanceDude]

Couple thoughts

- My youngest is doing 2 yrs at local community college. This allows a time to work on studies without all the distractions; It is somewhat cheaper than 4yr college for tuition and they can live at home for 2yrs saving on the room and board (although mine eats so dang much).
- There are jobs they can get where they learn on the job. Although I would say the degree may not payoff like you would want from investment angle it CAN open options not available without one. So there are payoffs that don't hit the bottom line. Also can introduce them to fields they may not consider otherwise.
- Finally, there are options to help pay the costs, such as military service and others that can either provide $$ help or can provide experience that can be used for college credits. I was given about 40 credits when my service experience was evaluated. My son has been working and schooling, and his employer paid for most of first 2yrs before they had to close the shop. My employer also provides tuition assistance as do many.

Just my thoughts...

+1 Also, at least in our state, it becomes much easier to get into the big state schools if you have a year at an extension school. For instance, UW-Madison is insanely hard to get into. However, if you go to a UW- extension school, and have get a B average, it's almost a shoo-in.......

 

[lrak]

College tuition inflation is typically 7-8%. In other words tuition doubles every ten years. If you have a child when you are 30, his college degree is going to cost about eight times what yours cost.

Grants are getting harder to come by every year.

Salaries aren't increasing by 7-8% a year in most jobs.

I don't think ANY 529 plans are returning 7-8% a year.

Those of you talking about paying your own tuition in the 70s/80s experienced very different college costs than are likely to exist 15 years from now.

 

[ronocnikral]

I am entirely grateful and always feel indebted (and b/c they are nice parents and raised me) to my parents their support to put me through college. Even when my father lost his job after my first semester, he still encouraged me to stay and finish out school, claiming he would find way. I felt I was entirely capable of making $30k or so a year, so I thought I should help at home and transfer back to a state school where my parents lived and eventually finish out college. While I had to take out some loans, I was encouraged to remain where I was.

Since I have been very fortunate in my career (still under 30 and not able to contribute to a Roth IRA b/c of income) and b/c of what my parents did for me, I feel it is a responsibility to help our child (and hopefully more to come) through college. DW and I have discussed what this will look like, but it still looks like an ameoba. We contribute to UT's 529 plan so far for the max income deduction (~$3500/yr) and we will see where that gets us, deciding then what we will do for DD. I personally think supplying 4 years in state tuition is plenty, and helping out with bills here and there. We have also discussed having DD pay for the first semester and somehow reimbursing her if her grades (and I plan to somewhat guide her choice of major) are statisfactory. Nothing wrong with her putting some skin in the game....

We shall see how things unfold, but for right now, saving some money for college at least puts us in a position to decide to help.

 

[FUEGO]

We are dumping the max into 529's to take advantage of a state tax deduction. That is $5k a year (total for our family) and will probably fully fund in state tuition for 3 kids given historical investment returns and higher education cost growth rates (7-8% for each).

We have a couple great in state schools and if tuition itself is covered, we or the kids can probably swing room and board, books, incidentals, etc. Where we live is only 5 miles or so from a great state U, so living at home for the kids is an option if money is really tight. There are summers and breaks where the kids can get jobs and there is time during high school to work if they want money. And in my experience, I received a bunch of money from academic merit scholarships that more than paid for my undergrad tuition. All in all, I don't think we will have a hard time paying for college. But I don't expect to fund 100% of all costs. I hope to at least have enough for the 4 years of in state tuition and fees for each kid though. If they have skin in the game, they should be more focused on getting something out of college.

My parents were prepared to pay for mine, even though I didn't need much help after the first semester (and in hindsight I had plenty of money to cover the first semester).

Will saving money to pay for their tuition delay our FIRE? Sure. By six months or so given our current net worth accumulation rate. Pretty minor sacrifice to get all 3 of them launched with sufficient velocity to make it into orbit.

 

[Nords]

College tuition inflation is typically 7-8%. In other words tuition doubles every ten years.
Grants are getting harder to come by every year.
Salaries aren't increasing by 7-8% a year in most jobs.
I don't think ANY 529 plans are returning 7-8% a year.
Those of you talking about paying your own tuition in the 70s/80s experienced very different college costs than are likely to exist 15 years from now.

You mention inflation of 7-8%, and then you list three more reasons that it can't continue to be 7-8%.

I think college is getting to be like a car dealership: there's list price, and then there's what you actually pay.

 

[arky]

I think giving a child a free ride to college is like everything else in life.
If you get something for free, you won't appreciate it as much.

 

[Aiming_4_55]

I think giving a child a free ride to college is like everything else in life.
If you get something for free, you won't appreciate it as much.

Nothing personal, I don't totally agree with this. I've received a few things in life for "free" but I still know the value of them and try/want to pay it forward one day.

I agree some don't appreciate things regardless of being given or working/paying for it.

 

[eridanus]

I think giving a child a free ride to college is like everything else in life.
If you get something for free, you won't appreciate it as much.

College was "free" for me and, damn, I can still taste the freedom. It was a great [-]5[/-] [-]6[/-] 7 years. *


*Grad school was paid for with a research grant and lab work.

 

[jerome len]

I want the best for my kids and my youngest is bright and capable of getting his PHD. So, I have 7 to 9 years of private education and I'll spend a bunch putting him through school. I don't have to sacrifice my retirement so I'm happy to do it. On the other hand, one of my older kids wanted a VERY expensive wedding and I said no. I gave the couple my wedding allowance, told them they could elope and keep the cash or go into debt if they spend over my contribution. They were upset for a short time, went into debt and that's life. I guess everybody has their sense of values but I do value education, not just for a job but for personal growth, networking for the future and becoming a well rounded person. I'm lucky......I don't have a college degree but I've been successful financially and my most important goal is taking care of my family, without spoiling them or making life so easy they become lazy. Maybe I'd feel differently if paying for their education represented a true financial sacrifice of lifestyle or postponing retirement.

 

[sheehs1]

We put three thru college. No student debt. No regrets so far. I suppose it was because that is what our parents did for us. That said, they all worked either during the summers or all year round on week-ends and took every scholarship available to them, academic and otherwise. We didn't have to delay retirement plans because of it as their college tuition was a factor in saving and planning from early ages.

 

[Bestwifeever]

I think giving a child a free ride to college is like everything else in life.
If you get something for free, you won't appreciate it as much.

How do you know this? I don't see it.

 

[Mulligan]

I think I appreciated my college more by having to pay half of it. But that is just me, and looking back, my father sacrificed way more than I knew at the time to do even that. I was also able to pay one of my two years by acquiring student loans and putting them in 12%-14% CDs. My daughter cant do that! She will get out debt free as she will stay home for 2 years and we will pay her two years at state u. I believe she appreciates it, because she is starting to work a PT job in her first year of JuCo. She is hoarding every penny for future out of college costs. That makes me feel better about her money management abilities because Lord knows her career choice isnt going to make her rich.

 

[Aiming_4_55]

I did not read the whole thread, but what I did read nobody posted about this...

To the OP... you have mixed things on your decision... you state that it will cost $200K in the future, but then compare it to a $40K or $50K job which is todays dollars... apples and oranges...

As someone did mention, what is the income if they do not... heck, it might be a LOT... I have a neice whos husband works in the oil field and is making about $150K per year... with NO college education... and he is in his early 30s...

Or, it could be $20K to $30K per year... who knows for sure...

Agreed Texas Proud - I am mixing apples and oranges comparing projected college cost with today's salaries, however I don't hear much about 7%+ pay raises from within my circle of friends these days or within the last 4 years that stayed in the same job. However my neighbor received a 10% pay cut in his university engineering job recently with a warning that pink slips may fly in May.

If those oil field jobs are still available in 15+ years it will be considered as part of the mix of options. =)

I do agree ... who really knows how things will be 5, 10, 15 years from now.