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

[ragabnh]

100k, and ended up spending 150k from my own savings for a 4 year out of state engineering degree.

 

[kgtest]

So far I’ve put aside about $65k for three grandkids, starting at $20k/kid when born. Plan to continue to add to their 529 plans.

How does one convince grandpa to do this? My DF is multi-millionaire but "doesn't believe in 529s"


What would you suggest to a stubborn ole man with too much money?

 

[brokrken]

We have one DD, 11 years old, about to start 6th grade. We have about $95k in a 529 and add to it every month. Hope to get to $160k+ by the time she starts. Her $33k per year current tuition eats into the amount we can sock away for future tuition!

 

[Dash man]

How does one convince grandpa to do this? My DF is multi-millionaire but "doesn't believe in 529s"


What would you suggest to a stubborn ole man with too much money?

Convince? Not likely to happen. Either they want to or they don’t. We just set up the 529 plans and told our kids. We are still in control of the money and could pull it out if we wanted to, just having to pay tax and penalty on any earnings.
He may be willing to help with his funds after your kids are grown and ready to go to school. He may want them to have some skin in the game by earning scholarships or working.
He may let you inherit the money, or not, and let you figure how to do it.
We paid for one son for four years, then he was able to have his employer pay the rest. The other son was late to launch and used student loans, which we paid off after he completed his degree. Their grandparents couldn’t help.
My advice is to not pressure him, and be grateful for any gifts he does give. Keep him involved in your kids lives. If he wants to help he will.

 

[RobbieB]

Nothing. But I've been paying anyway -

My step son needed some help and I know my step daughter will too. She was admitted to UCLA school of nursing and does have a 529, but only 30 grand in it, so that ain't gonna make it past year 1.

 

[Cayman]

Curiosity only. Other than Architecture, what degree plans are now five years?

1 extra year due to health.

 

[Helen]

I have two great nieces that I plan to pay for college. I am not funding a 529, I will keep the money in my taxable account. i may open trusts for them and move appreciated stock. They are 8 and 5 so I have time to figure it out.

This is money I inherited from my parents, I know they would be pleased to know their money is going to pay for their grandkids college.

 

[ncbill]

Nothing. But I've been paying anyway -

My step son needed some help and I know my step daughter will too. She was admitted to UCLA school of nursing and does have a 529, but only 30 grand in it, so that ain't gonna make it past year 1.

https://www.chemistry.ucla.edu/sites/default/files/undergraduate/HPSP-2012.pdf

 

[Badger]

No skin in this game any more. But when there was our offer was to pay for our daughters college if she started in the very good CC in town. According to the college website the cost for tuition and books would come to less than $2500 for a 15 credit semester. The first 2 years would then be $10k. The state university across the street would be 2X that or $20k for the next 2 years to get her BS or BA. Subtract any scholarship money and the total cost would be less than $30k or less than $7.5k/yr or less than $625/month. For a lot of people that buy new cars that is a car payment.


Of course that means she wouldn't go to a private school or an out of state school but she would be debt free. Graduate school would be on her nickle but if she did like I did she could qualify for an assistantship or some other financial help that would pay for her tuition.



Cheers!

 

[urn2bfree]

I've got tons of younger cousins and their kids, I think, could be made beneficiary on some part or all of the leftover 529 funds. I thought about approaching the parents and doing a deal where I would pay the U and they would pay me. Sounds illegal though, hehe!



So of the $50k stuck, the original principal, $25k comes out tax and penalty free. If I pulled the rest of it out at 28% marginal tax rate, plus the penalty, I'd only get $15k (rough numbers) for a total of $40k. What if I was paid $45k to pay out $50k. My cousin and I would each save $5k. Of course I'd never do it unless it was 100% legal.

The hitch might be the transfer of money to you - to avoid gift tax on anything over $14,000 a year. If your cousin gave you $14,000 a year for 3.2 years I don't see why the Tax people would or could have a problem. If the cousin and the cousin's spouse each "gift" you the money, you could be repaid twice as fast, as each can "gift" you $14,000 a year.

Also, since this is all based on "gifts," the cousins could stiff you and never repay and you get nothing.

 

[BeachyBound]

Some big big numbers on this thread...wow. Have one kid 5 semesters in at Georgia Tech, and with the GA lottery scholarship and the AOTC I've only been able to pull ~$23,500 out of his 529...I'm expecting to have ~$5-7K left over when he graduates in 8 semesters.

Second kid (starting college this fall) will be a bit more, but nowhere near $100K of 529 draws...

 

[Ally]

I feel like such an outlier. It was over 20 years ago when our kids went to college and we had saved about $20,000 each. They both knew that would cover tuition and books at our local state university. Tuition and books usually ran around 1800 a semester. We gave them the balance of the $2500 each semester for expenses. They mostly lived at home. We told them any scholarships they got, they could use for tuition and keep the money we saved. Our son got about 1/2 his tuition paid by scholarship and our daughter had a full academic scholarship. They both bought used cars with the money we saved. They didn’t have any student loans. Both are very successful and we are very proud of them.

 

[pj.mask]

Some of this is large numbers. Maybe because state income tax? With tuition at state schools around $10k/semester it’s hard to get out less than 20k a year but internships should cover a big chunk of that (if you get a worthwhile degree).

I don’t agree with all the concept of community college. I believe you go to school for more than a degree - you go for growth. While you can stay at home and go to community college (with what I always observed to be awkward/low academic performers when I took a few electives in high school and over summer). Sure you might save 20k (tuition + rent - cc tuition) but is that worth 2 years independent experience at an age of development?

 

[kimcdougc]

Didn't save any money for kids to go to college. DS graduated high school and we told him we would pay for him to go to college. He decided not to go and is currently 37 working a decent job with benefits. He won't ever get rich but is making his own way. DD took a lot of college classes in high school.

In WA state you can get a two year degree while still in high school. The classes count toward HS and college. The district where they go to high school picks up the tuition. DD did one year that way with us only having to pay for books.

She went one semester at college and came back home and we paid as she went. She finished her 4 year degree at 20 and joined the military as an officer at 20. Fast forward she did her 4 years in active duty. Got out (did reserves another 4 years) and used her GI bill to finish her Masters in Business by 26. Fast forward she and her wife are now making over $200,000 per year together and she is being courted by Google to work for them. DD is currently 29.

Funny how the two kids are so different.

 

[jmp470]

this was a heated debate between the wife and I. We have enough for 2 years per kid. They can figure out the difference. As it can go either way with them. They need to have some skin in the game too.

 

[Rdub]

We have ~$178k in my 12yo's 529 and ~$170k in my 9 yo's 529. The plan is to have ~$250 in each acct by the time they start college. If there is leftover, we will designate it for future grandkids.

 

[swabby01]

We ended up having about $120K per child (3 DD) for college by the time they hit (inclusive years 2000 - 2011 for the three) , none in 529's. Everything was in after tax 401K due to my "highly compensated status are my company) and Cal munis earnings. Only took after tax portion as needed and worked out well.

All three ended up getting varied degrees of Academic scholarships which preserved the equivalent of $120K across the three.

Youngest graduated in three years from private university, oldest kept getting increases in the scholarship year over year at private university because they wanted her in their performing arts groups and the middle opted for a state University vs UCLA and/or Stanford (accepted at both ) conditioned on our helping her financially in Law School if she made it (she did at Pepperdine with scholarship - win-win).

Our Strategy: Kids were focused on affordability because my DW and I insisted they take out loans for half the cost. They had skin in the game and it proved out for our situation. Upon graduation of the youngest / last we paid off all school debt they incurred but they didn't know that would happen until all were out.

 

[daylatedollarshort]

I feel like such an outlier. It was over 20 years ago when our kids went to college and we had saved about $20,000 each. They both knew that would cover tuition and books at our local state university. Tuition and books usually ran around 1800 a semester. We gave them the balance of the $2500 each semester for expenses. They mostly lived at home. We told them any scholarships they got, they could use for tuition and keep the money we saved. Our son got about 1/2 his tuition paid by scholarship and our daughter had a full academic scholarship. They both bought used cars with the money we saved. They didn’t have any student loans. Both are very successful and we are very proud of them.

I lived in a blue collar area growing up so I never knew anyone with $200K (even inflation adjusted) set aside for college. Many families lived pay check to pay check and didn't have money set aside if the water heater broke. Even today $200K could buy a couple of decent 3 bedroom 2 bath houses there. One could live in one house rent free, collect rent from the other and make a nice living with a tech school degree or maybe even a fun job like yoga instructor.

 

[morriss003]

I was recently hanging out with some successful, professional friends and was surprised to hear they each have ~$200k/kid saved in 529's for kids who are aged 8 - 13. I have ~$100k saved for each kid in that age range, and figured I'd see how life turns out to determine the rest, assuming more is required. I'm curious how much others on this thread who have youngish kids have put aside specifically for college. (And I have no idea how to create a survey, so if someone else wants to add one that'd be fine.)

The cost to put our two sons through college was $200,000 and the last one graduated in 2007. One went to Indiana University in Bloomington (5 years), and one went to Northern Iowa in Cedar Falls (6 years). Beware: colleges set up things to entice kids to spend at least 5 years in college.

 

[Henman004]

I transferred my Post 9/11 GI Bill to my kids, ages 4 and 2. That will cover 2 years of tuition and room/board for each.

I also curently have about $3600 saved per kid. The money is in UTMA brokerage accounts, and I hope to have a balance around $50K for each, by the time they are college-aged. If they don't end up going to college, or they join the military, then they can keep the money penalty free. It can always be used for an alternative investment in their futures.