How much do you have set aside for kids' college?

[jw72]

10k The week they were born

When my boys were born I bought each 10K of Exxon for their college fund. That would be for 2 years of community college 2 years of University. I got lucky and sold some Exxon and bought some Google. #1 son is done, UCLA engineer, and #2 is on second year of CC, fund is sitting at 100K. I can help #1 with his masters next year as long as #2 does not look at USC, WOW that school is expensive, 7OK a year. The best tip I got was fund early.

 

[jabbahop]

We had about $160K for each kid when the first got to college - all in 529 accounts. We have three more years for the twins (last of three) and I estimate we will have about $20K extra (assuming market doesn’t crash) when they finish undergrad. All three went to private schools and 2 of the three got decent merit scholarships but didn’t qualify (too many assets) for need based aid.

Anything extra in 529’s will be saved for next gen.

 

[MI-Roger]

I have two kids in high school and have $130k put aside for each one in a 529 account. We are hoping both will be attending UNC Chapel Hill as they have the grades and scores to likely get in (crossing fingers as I type this... DS is applying right now). I feel very fortunate that NC has such a desirable public university option for us.

We are early retired and living off our stock portfolio, and our early looks at FAFSA seem to indicate there’s nothing at all available to us there. So although we have taken a peek at a few private colleges, I really can’t see dropping $275-300k on a bachelor's degree for each kid..... not when we can do Chapel Hill at in state rates.

Our sons both attended private out-of-state top ranked universities for less out of pocket costs than attending the top public in-state schools.

Worth applying to private colleges at least. Don't assume private colleges always cost more.

 

[mrfeh]

Son starts college in a couple weeks at state flagship. Total cost for 4 years will be $90-100K.

He has $80K in his 529, half of which was contributions and half was appreciation.

 

[kcowan]

C$40k per grandchild. The parents and other grandparents can handle the rest. Canadian costs are much lower. This year is a peak payout year with three simultaneous attendees. The other two come much later.

 

[steady saver]

When our first son was born, my dad got us started on a UGMA account which we added to a bit every now and then. When our second son was born, we simply opened a non UGMA fund for him (UGMA made no sense to me) and added to it until they were both doing so poorly that we stopped when they were in late grade school. Instead, we paid off our house and invested the money in other areas and in one 529 fund.

We never had a lot of money in any of these and we essential paid for college as they went. My youngest son just graduated this past May.
Our stipulation was that we would pay the equivalent of a state school, or roughly 30K a year. My oldest son got a fantastic scholarship to a small private university and my younger son got into an excellent Honors program in one of our state universities. Both kids cost us approximately 30K a year. The younger son had initially wanted to go to a different, small private university that had offered him a small scholarship. He didn't seem super motivated to try for other scholarships so we stayed firm with our 30K and he ended up choosing the large state university (he didn't want student loans). As it turns out, the program he was in was a great fit and he did really well at school, studied a year abroad, etc.

I recently discovered we have about 19K left in one of the funds. My older son has a "real" job now (at the one year mark) but is wanting to go to a coding boot camp. We had dinner with him last night and his plan is to work another year and study on his own and then if he still wants to go, he'll quit his job and do the 3-4 month boot camp. While we didn't say anything last night (because we want to see if his motivation continues), we plan to pay for that for him, as well as helping him out with other expenses as he'd move to a different city. This kid is financially savvy. At one year out of working, he already has 45K saved...He had probably half of that saved by the time he finished college.
The younger son is in job search mode. He would be a great candidate for graduate school and we would consider helping to pay for that after he worked a bit and if he was highly motivated. Right now, he's not interested in school. He likely needs a year or two of working abroad teaching or something (not his field) so he can travel. Degree was in International Studies, Czech, and Russian Studies. Anyone know of a perfect job...?

 

[kgtest]

I've saved 5k for 3yr old and 1500 for the 1yr old. We encourage gifts to the 529 over actual things and contribute those gifts plus our own little bit 2x a year. Plan being when daycare costs drop and we have extra $20k windfall, split between the brokerage, the 529 and the increased tax liability of the brokerage contributions and losing the child care credit.

Assuming 7% growth, we would have around 450k for all college costs the day the first 18 yr olds tuition bill comes due.

I will encourage them to try and take some C.C. classes while in H.S. to get a cheaper head start.

Estimates from VG using college estimator with both the C.C. and state school I took classes at shows an estimated cost of $135k to 525k. And a lot will depend on the kids too.

Both my sisters have masters, I don't even have a degree. FWIW I earn more than both and am 4 and 8years younger respectively, so college doesn't equate to high pay. It CAN, but it doesn't always.

 

[tmm99]

I can't give you details (because I don't know) or if it actually works this way, but my co-worker told me he and his wife decided to not put any money in tax-sheltered vehicles like 529's for their children so that their kids can get financial aid.

 

[dadu007]

We banked about $12k for each of our two boys in 529 accounts; when I realized there were no deductions on taxes, I stopped. Just emptied our older son's account as he is heading off next week for his freshman year; His funds will ALMOST cover the first semester for his state university tuition/room/board (he has a very small scholarship).

 

[Luvdogs]

We bought prepaid college for our kids when they were very young-cost about $5000-$6000 each. This did not cover fees which I figured well how much can fees go up? This is in-state universities.


They kept increasing the fees. But both kids got Bright Futures (for good grades, there are a couple different tiers) in addition to that.
Kids were in college during the recession and the state cut back the amount that Bright Futures paid. They have since increased it again.


So between Bright Futures and prepaid, we got back maybe $1000 per year (because the fees went up and the cut in Bright Futures). If that had not happened we would have gotten more.

We cash flowed their dorm/meal plan (required for the first year) and apartments. Apartments were around $800/month each and we had three years of overlap for both kids with that.
DS received a full merit scholarship for his masters plus worked for his prof in his field (computer engineering) so he had plenty of $.


Funny thing (and surprising)--DD studied abroad one semester, they gave her an additional scholarship, plus her apartment in Germany was only about $200 per month. So it was cheaper there than here. She used her scholarship $ to travel to different countries almost every weekend.

So to answer your question, we really didn't save for college-the kids were told "from day one" we will pay for instate tuition--or for a top tier (Stanford, MIT, etc) --anything else is on their dime.


They listened to us-whew! No student loans!

 

[PatrickA5]

Used 529's for each of our 3 kids. Last one is now a Junior and we have around $100K left in his 529, so we'll probably end up with some money left over. He might get a Master's so that would take care of it. Since we've had his money in the "guaranteed" fund, his account didn't make a lot of money in the first place and any taxes/penalties withdrawing the money for non-school expenses would be negligible.

Also, remember not all expenses are 529 eligible (transportation, etc) and you'll want to pay $4K of tuition/fees/books from outside funds each year in order to get the $2,500 AOP credit (if qualified). Between the 3 kids, I let Uncle Sam pay for $30K of college through the AOP. State tax deductions for the 529 probably saved another $15K in state taxes. Tax free earnings (both Fed & State) saved even more money. Gotta take what I can get!

 

[imoldernu]

My college now provides an estimator for future 4 year costs. Fortunately, when I went to school there from 1954 to 1958, the cost was somewhat less, $700/yr., an amount my folks couldn't afford. The school had a large endowment, even then, and now it measures in the Billions, enabling substantial subsidies. I suppose my athletic ability helped, but except for one semester, when I lost a part of the scholarship, because of a C+... the rest of the my college years left me without debt upon graduation.

Was an all male school then, with 700 students... Today CoEd, with 1800 students. Still small... and rated #1 in Liberal Arts Schools by Niche, and #3 by USNews.

So how much a four year education is expected to cost in the future?

My thought? "Gulp!"

 

[kgtest]

We banked about $12k for each of our two boys in 529 accounts; when I realized there were no deductions on taxes, I stopped. Just emptied our older son's account as he is heading off next week for his freshman year; His funds will ALMOST cover the first semester for his state university tuition/room/board (he has a very small scholarship).

in my state we get a tax deduction for 529 plans. And a grandparent or parent could simply transfer the plan to the child, or grandchild without disrupting financial aid (depending on the form filed for the aid).

I will not advocate it is the best way to save for kids college, the worst way etc... its one way.

I need to read up on this, as its now pertinent with kids likely attending college.

From what I read, a combination of financial aid, 529, other cash and investments along with the dreaded "student loan" are the typical path to financing college.

I honestly feel like this is similar to daycare. Some folks manage to avoid ever paying anything for daycare costs, while the majority end up with some sort of a bill. Seems like the same for college.

And if you want to be a Dr or Lawyer...plan on getting student loans with the idea of leveraging your future, and bust your butt to make it happen. That's what my FIL did.

Retired millionaire who had to borrow money from his girlfriend (now wife) to clear the last med school bill. He later bought her the dream kitchen she always wanted to repay the debt.

 

[MI-Roger]

Full Ride Scholarships still exist, even for Grad School.

 

[jw72]

Full Ride Scholarships still exist, even for Grad School.

HA, good luck on that. 99% had a income qualifier that disqualified savers. If you have a good job and planned with savings forget it.

A quick google search for Scholarships:
Financial need is also considered.
Applicants must show financial need.
minimum 3.0 GPA; demonstrate financial need;

 

[sengsational]

I can't give you details (because I don't know) or if it actually works this way, but my co-worker told me he and his wife decided to not put any money in tax-sheltered vehicles like 529's for their children so that their kids can get financial aid.

529's are held in the parents name, so no different in the financial aid formulas than any other parental asset when it comes to financial aid.

 

[NW-Bound]

Full Ride Scholarships still exist, even for Grad School.

HA, good luck on that. 99% had a income qualifier that disqualified savers. If you have a good job and planned with savings forget it.

A quick google search for Scholarships:
Financial need is also considered.
Applicants must show financial need.
minimum 3.0 GPA; demonstrate financial need;

One of my nephews got a full-ride scholarship. It was some years ago.

One of my nieces got a scholarship which paid for tuition. My brother had to pay for room and board.

Another niece (by another brother) applied for a full-ride scholarship by a private prestigious endowment fund. Despite being valedictorian at her school, she did not get it due to fierce competition (it took two rounds of interview). So, she had to settle for a tuition-only scholarship, which of course was not bad.

Neither considered financial needs.

 

[kgtest]

I wonder how those poor kids whose folks were millionaire's thanks to their all cash business feel when their financial aid comes in.

At work everyone is encouraged to apply for financial and student aid through our various outlets available to the employees. And as I look out in the parking lot I see about 150 to 200 $30,000 cars parked out there.

Those in need is so so subjective IMHO.


My approach will be to study the matter fiercely as the kids get older. I am really hesitant to stop saving in that 529...but I almost never opened one with the train of thought "Oh my kids won't qualify in the eyes of those defining the need."

I think that was the wrong way to approach the problem personally so I opened the 529.

 

[MI-Roger]

HA, good luck on that. 99% had a income qualifier that disqualified savers. If you have a good job and planned with savings forget it.

A quick google search for Scholarships:
Financial need is also considered.
Applicants must show financial need.
minimum 3.0 GPA; demonstrate financial need;

Trust me. lf the school wants the student bad enough, they fully open the bag of gold. Student and Parental financial means are tossed to the wind.

 

[imoldernu]

A bit of a ramble...

Son and daughter in law retired early at age 59, despite having three children (sic) now aged 23, 21 and 19, all in college at the same time. While both Son and DIL were lawyers, there was no way that they could have afforded to pay for those educations. Despite good pensions, and a safe retirement, all three of the "children" have had, at the least, full tuition scholarships. Oldest is in third year of medical school (MD) at Pitt. Middle daughter just graduated U of Fl, Tampa Magna C_m Laude, and has a further scholarship to a med school this coming year. Youngest is in third year of Univ of Miami, 100% All expenses Stamps Scholarship.

Home - Stamps Family Charitable Foundation

This not only offers room, board tuition and books, but also a new computer, and $12,000 to further expand his horizons by going to a foreign country, which he did this past summer going to Chile, to intern with doctors there.
The Stamps scholarship may also extend throughout graduate school.

Kids are all very smart, and have applied themselves throughout from H.S. on.
But...it doesn't stop there. It was and is a major project for DIL, who has spent more time than we can imagine, in researching availability. Like finding a way through the forest. Youngest was accepted at Stanford, Harvard, Yale and Brown, but with partial scholarships because of parent's income. The Stamp scholarship meant the University of Miami Coral Gables... not the first choice, but many, many tens of thousands dollars difference, and it looks like Harvard may be available as a 'paid' continuation. The scholarships fit the person... leadership and contribution to society in the future.

Long hours of research, multi visits to schools, and digging for those little known possibilities.
For those who are in the middle of this, right now or in the future... suggest spending some time in Niche for starters.

https://www.niche.com/

Be prepared to spend some time, as the website is vast. Also can be used to find the right place to live.

 

[daylatedollarshort]

We have always been good savers in general but saved nothing in particular for college. We had most of our assets in FAFSA exempt asset classes so in the years we managed our income to under the state grant limit our kids went to community college and public 4 years tuition free. Between the grants, tax credits, paid internships, tutor jobs and community college credits college has not been a huge expense for us.

 

[jw72]

Trust me. lf the school wants the student bad enough, they fully open the bag of gold. Student and Parental financial means are tossed to the wind.

Agreed, that is the 1%,

 

[imoldernu]

A bit of a ramble...

Son and daughter in law retired early at age 59, despite having three children (sic) now aged 23, 21 and 19, all in college at the same time. While both Son and DIL were lawyers, there was no way that they could have afforded to pay for those educations. Despite good pensions, and a safe retirement, all three of the "children" have had, at the least, full tuition scholarships. Oldest is in third year of medical school (MD.) Middle daughter just graduated U of Fl Magna C_m Laude, and has a further scholarship to a med school this coming year. Youngest is in third year of U of Miami, 100% All expenses Stamp Scholarship.

Home - Stamps Family Charitable Foundation

This not only offers room, board tuition and books, but also a new computer, and $12,000 to further expand his horizons by going to a foreign country, which he did this past summer going to Chile, to intern with doctors there.
The Stamps scholarship may also extend throughout graduate school.

Kids are all very smart, and have applied themselves throughout from H.S. on.
But...it doesn't stop there. It was and is a major project for DIL, who has spent more time than we can imagine, in researching availability. Like finding a way through the forest. Youngest was accepted at Stanford, Harvard, Yale and Brown, but with partial scholarships because of parent's income. The Stamp scholarship meant the University of Miami... not the first choice, but many, many tens of thousands dollars difference, and it looks like Harvard may be available as a continuation. The scholarship fits the person... leadership and contribution to society in the future.

Long hours of research, multi visits to schools, and digging for those little known possibilities.

For those who are in the middle of this, right now or in the future... suggest spending some time in Niche.

https://www.niche.com/

Be prepared to spend some time, as the website is vast.
Also... good place to search for a place to live.

 

[sengsational]

At ages 3 and 7, I dropped $100K in 529 accounts.
At ages 9/10 and 13/14, I dropped in another $40K.

The account got $124K in growth, so I had $264K to spend.

Spent $120K for Duke and $59K for Chapel Hill. Those totals are less than the sticker price because of need-based grants and scholarships. So after paying for two degrees, I was left with $85K.

But because of the grants and scholarships, I could pull a limited amount from the 529s penalty-free. So rather than all $85K, the 529 balance is at $50K. On the negative side, that money is "stuck". On the positive side, that money is targeted for the next generation

 

[USGrant1962]

I over-contributed and in the end will have maybe $50K stuck between DS1 and DS2. Now, it is not really a big problem because it is only 10% penalty on the growth, but still not optimal.

I should have stopped contributing around where OP is right now.