Out of pocket college costs?

[Spanky]

Well, they can afford to be choosy, for sure. The year I graduated from high school, they only accepted something like 12% of their applicants. Most of those applicants are, of course, highly qualified folks, so it really doesn't make sense to offer merit scholarships -- they're uniformly talented folks.

2Cor521

More power to them. Harvard's acceptance is similar -- 10%, but the cost of attending is vary attractive. Cost is zero if income is less than $60K/year or 10% of yearly household income for those who make more.

 

[beldar3]

My elder son graduated from UT Austin last year. Total cost including tuition, off-campus apartment rent, food allowance, fraternity dues: $86,472.

Son #2 graduates from Northwestern University this spring. Total cost including tuition, rent, food allowance, travel home 2x a year to Austin, plus one yearly visit to Evanston for his mother and me: $168,972

 

[playaman]

My daughter graduated summa cum laude from a public university in Tennessee last spring. She had a full scholarship (tuition and books), so the cost to me was less than $10k per year for housing, food, car, etc. I got off lucky. Now she's been accepted to several law schools with tuition alone ranging from $13k to $40k per year (plus everything else). I think she's going to attend one of the pricier ones with a partial scholarship beginning this fall. Even so, I believe I have a duty to help within reason. She's earned it. My folks helped me through undergrad school (but not grad or law), and I agree with earlier posters who believe there is an obligation to help with one's own kids if possible.

 

[RetireeRobert]

........whether you think private education is worth it or not would be good........

Private not worth the double or triple or more cost of public universities in "most" cases.

For "most" kids and "most" degrees, it is the mere fact of a college degree that is the important thing. Where they got it is of minor or no importance. Oh yes, there is always the student who wants to be hired by the big name law firm or the hoity-toity PR firm or Wall Street house, and they may be able to parlay the expensive Harvard or Yale degree straight to a six-figure starting salary at the rare employer who demands the prestige-name colleges on the degrees.

But for "most" people in the real everyday world and "most" starting jobs, you may as well save your tuition money. Advise your students to work their b*tts off once they get their jobs, learn their employer's business inside-out, and they will rise to the top like cream as sure as the sun rises in the East. They will soon demonstrate to themselves the "name" of the college on their degree meant nothing compared to their own personal drive and hustle.

 

[SteveR]

The deal I made with both kids was I would pay a portion of your college (tuition, fees, and books and a portion of their living expenses) BUT they had to have a part time job to contribute to their education and car expenses.

My youngest is almost done. I have averaged $15,000/year for him. He works two jobs part time and fills in the rest. He has a roomate who helps share expenses. He is an "in state" student so his tuition is not so bad.

The four grandkids each have a 529 set up by me. We make sure the kids know what is in there so their parents are a bit more motivated to contribute than blow their tax refunds; but we are not holding our breath. The kids will have a small education nest egg from us but they will also have to find other funding. We contribute $2000/child/year.

 

[Tandemlovers]

Our daughter attends the University of Iowa as an out of state student. She qualified for an academic scholarship of approximately 3k per year, adjusted for inflation. Tuition has run us approximately 23k per year so far (she will complete her sophomore year in May). The 23k includes room, board and books.
Fortunately, she is a serious, no frills student, studying computer science, having very little time for the party scene. She works full time during Xmas breaks and summer. Last year she earned a whopping 6K for her efforts ($9/hour). All of it goes to help pay for her tuition and fund her Roth IRA.
Next fall, we'll be adding daughter number two, who will attend an in-state university (Wisconsin) at a cost of approximately 18k per year.
By 2010, we'll be adding final daughter #3 to the mix. Hopefully #1 will have graduated and will be on her way to independence.

 

[Spanky]

For "most" kids and "most" degrees, it is the mere fact of a college degree that is the important thing. Where they got it is of minor or no importance.

Agreed. Over the years, my observations have been that colleagues with engineering degrees from prestigious universities (e.g., Standford, MIT) have NOT been able to command a higher salary or advance any quicker than those with degrees from lesser-known or unknown engineering institutions (e.g., South Dakota State U). However, this is not true for MBA graduates. Those from top 10 business schools tend to command a much higher starting salary and advance quickly into higher management.

 

[Art G]

So, would those of you say that class ranking is more important than the actual university?
I would think certain degrees might generate more interest from recruiters, or if you know where you'd like to work, attending a potential employers alma mater can't hurt. But the only real advantages I can see from prestigious universities is the contacts you make with other successful people. That and if you graduated from Harvard, I would think if nothing else, it would get you in the door for an interview with most companies.

 

[RunningBum]

Agreed. Over the years, my observations have been that colleagues with engineering degrees from prestigious universities (e.g., Standford, MIT) have NOT been able to command a higher salary or advance any quicker than those with degrees from lesser-known or unknown engineering institutions (e.g., South Dakota State U). However, this is not true for MBA graduates. Those from top 10 business schools tend to command a much higher starting salary and advance quickly into higher management.

I don't completely agree with that. My company will only do college hires from a very few select colleges, Stanford being one of them. After that, it does not matter. In my group, we've hired a couple guys without college degrees (but great work experience, and they were among the best hires I was involved with), and others like me from places like U of Nebraska.

25 years ago I found that my degree from U of N didn't open as many doors as I'd have liked. Where I did get hired, I'm pretty sure I had the same salary as other new college hires, and it wasn't a hindrance in any other way. But I didn't get into the company I really wanted to, at the time.

 

[SecondCor521]

Thanks to all who have replied so far.

If I can put on my "whiney hat" for a minute, I guess I'd like to end up in a situation where I have neither undersaved nor oversaved. I don't expect to have saved exactly the right amount or within $100, but it'd be nice to be within $10K or so. Unfortunately, the dispersion on costs is simply too wide for my desire to be reality -- between various college sticker prices, scholarships, loans, grants, aid, travel, tax benefits, extras, inflation, investment returns, student work study, their mother's contributions (ha!), pocket money, pizza, and beer, it seems like the cost can easily vary between $5K and $50K a year.

To meander on my own thread a bit...

The additional complication in my own case is that if I use the $12K per year figure that I currently do, my projected FIRE date is about 9 years away, which would be when my oldest would be about done with college and my second would be about to start, and my third probably wouldn't know where she wants to go yet (she'd be a sophomore or junior by then, I guess).

I'd want to be equal/fair to the three of them, so it doesn't seem fair to say to the eldest that he can go wherever he wants and then put the youngest on a budget (because I'd be retired on a fixed income by then).

To put some perspective on that coin, the difference between, say, an average public university (@$10K/yr) and an average to good private university (@$25k/yr) is about equal to 1.5 years of living expenses for me. 3 kids x 4 years each x 1.5 = 18 years of living expenses. So in effect that money could go to either private schools for them or nearly 2 decades of my expenses. I'm not making any decisions or value judgments, just saying it's a big impact.

My parents are also well off and old, so there's some likelihood of an inheritance. It could also vary between $0 and...well, a lot. And I know the first thing they would want that money to go towards would be extending the deal they gave me (go anywhere you can get into, we'll pay the bills) to my kids. Even if I didn't see eye-to-eye with them on their perspective that the best colleges are worth the price, I'd have a hard time not honoring their wishes since it was them who earned the money.

Too many variables. I guess I'll just take it as it comes and know that if I make good decisions that my kids will probably be able to get a very good college education.

2Cor521

 

[Art G]

2cor...have you approached your parents about funding their own 529 for your kids? If they are worth "a lot" it might be a good way to pass on assets to their grandkids. Worst case scenario that I can see is tax deferred growth if they had to take it back.

 

[Art G]

My elder son graduated from UT Austin last year. Total cost including tuition, off-campus apartment rent, food allowance, fraternity dues: $86,472.

Son #2 graduates from Northwestern University this spring. Total cost including tuition, rent, food allowance, travel home 2x a year to Austin, plus one yearly visit to Evanston for his mother and me: $168,972

beldar and sam, just curious as to your dealings with U.T.? Of all the schools my daughter applied to, no one treated us with less interest than U.T. did. They never offered a penny, and in fact, the only info we received from them was regarding housing and how we had to procure it before the deadline. We received the letter in the mail the day before the deadline!!
From everyone I've talked to they felt as if U.T. could care less about your student (especially in their freshman year) as they are more of a "publishing university" and students were merely a necessary evil.
Both my kids wanted to go there until we visited. Of course I was thrilled as I've spent my share of time on 6th Street and have to wonder how any of those kids find time to study.
Just wondering if you both were happy with the university?

 

[RunningBum]

beldar and sam, just curious as to your dealings with U.T.? Of all the schools my daughter applied to, no one treated us with less interest than U.T. did. They never offered a penny, and in fact, the only info we received from them was regarding housing and how we had to procure it before the deadline. We received the letter in the mail the day before the deadline!!
From everyone I've talked to they felt as if U.T. could care less about your student (especially in their freshman year) as they are more of a "publishing university" and students were merely a necessary evil.
Both my kids wanted to go there until we visited. Of course I was thrilled as I've spent my share of time on 6th Street and have to wonder how any of those kids find time to study.
Just wondering if you both were happy with the university?

Ditto here. My daughter applied. She got some notice that her app was incomplete. She couldn't log back in. She contacted them, and was given another login or her password reset. That still didn't work. I don't even know where it sits now, but she was pretty frustrated by it.

She has said she doesn't really want to go to school in Texas. Until last year she was top 10% in her class so we told her to pick one as a guarantee, but she just slipped to 10.x% so she didn't make it. She's already got early action (non-binding) acceptance into James Madison so she's got one that she likes for sure, so I'm not pushing her to get the UT app straightened out.

From what I hear and know, once you are in it's a good school and a lot of fun. Austin is a great town in many ways. I certainly appreciate how the co-eds brighten the town lake running trail!

 

[RunningBum]

2cor...have you approached your parents about funding their own 529 for your kids? If they are worth "a lot" it might be a good way to pass on assets to their grandkids. Worst case scenario that I can see is tax deferred growth if they had to take it back.

That's a good suggestion. If your parents want a say, they should be willing to step up directly.

 

[Spanky]

I don't completely agree with that. My company will only do college hires from a very few select colleges, Stanford being one of them. After that, it does not matter. In my group, we've hired a couple guys without college degrees (but great work experience, and they were among the best hires I was involved with), and others like me from places like U of Nebraska.

25 years ago I found that my degree from U of N didn't open as many doors as I'd have liked. Where I did get hired, I'm pretty sure I had the same salary as other new college hires, and it wasn't a hindrance in any other way. But I didn't get into the company I really wanted to, at the time.

Good point - a recent grad from a brand-name school does have a better chance to getting recruited by megacorps.

 

[Sue J]

I found this site helpful for costs - College cost finder - CNNMoney.com

We are paying for our sons' college costs. The older one had a small scholarship and his responsibility was to maintain grades in order to keep the scholarship. We paid for tuition, room and board in the dorm, and books. He paid for any incidental expenses and fun money. He's not a big spender and he never called home for money. He's not a partier so he stayed out of trouble.

The younger son is now a junior in college. He's commuting from home so we pay his tuition, books, money on a food card for eating on campus and transportation costs. He drives my old 1990 Toyota Camry so we pay for maintenance, insurance and gas. He also works and volunteers at a community theater, so he reimburses us for gas not related to college.

Our parents paid for our college (undergrad) and we want to do this for our sons. We don't want them to start out in the world with large student loans and credit card debt.

 

[becca]

We sent our 2 to state schools - paid for tuition, room & board and books, everything else (meaning mostly their beer money) was on their own dime - which they earned at summer jobs. Both graduated with good grades and now have well paying jobs.

 

[becca]

I forgot to mention we did provide a car (used) beginning their 3rd year - we paid for the insurance and maintenance - they paid the gas.

 

[youbet]

The four grandkids each have a 529 set up by me. We make sure the kids know what is in there so their parents are a bit more motivated to contribute than blow their tax refunds; but we are not holding our breath. The kids will have a small education nest egg from us but they will also have to find other funding. We contribute $2000/child/year.

Since you limit your contribution to $2K/yr per grandchild (so do we) why don't you use the more flexible Coverdell ESA instead of a 529b and take advantage of the greater flexibility?

 

[Achiever51]

Good point - a recent grad from a brand-name school does have a better chance to getting recruited by megacorps.

It depends on the MegaCorp. When I worked in HR at my MegaCorp (one of the Big 3 autos), we had a defined set of schools where we actively recruited, mostly within about 1000 miles of the company. Past experience proved that recruiting at some schools (e.g., the Ivy Leagues) didn't pan out as expected -- the few who were willing to relocate for the job generally moved on within a year or two, which was a huge waste of training resources for the company.

One way of helping to identify which companies most actively recruit on a particular campus is to look at the donors to the university. If you see that a company is a major (and consistent) donor to the school -- and particularly if they designate donations for specific projects or programs, there's a pretty good chance that the firm has developed relationships with the school that usually include recruiting, co-op, internships etc. (Not always, but in my 25 years experience, it was a pretty good predictor.)

 

[SecondCor521]

2cor...have you approached your parents about funding their own 529 for your kids? If they are worth "a lot" it might be a good way to pass on assets to their grandkids. Worst case scenario that I can see is tax deferred growth if they had to take it back.

Art G,

No need. They've been contributing to 529's for their grandkids for a number of years. I have two sisters so my parents' annual contribution limit (well, the max our state allows them to deduct annually) gets split 3 ways every year into a 529 for the eldest, with the intent of rolling down leftovers to younger grandkids.

2Cor521

 

[Art G]

Art G,

No need. They've been contributing to 529's for their grandkids for a number of years. I have two sisters so my parents' annual contribution limit (well, the max our state allows them to deduct annually) gets split 3 ways every year into a 529 for the eldest, with the intent of rolling down leftovers to younger grandkids.

2Cor521

Well that's great and I don't mean to tell your parents how much they should give away, but since you mentioned maxing out to your oldest (I assume you mean $24k in '07), why not continue with the next child?
Oooops, on second thought, you can actually carry forward five years for a 529, so they can do around $120k if they wish per child.

 

[ChrisC]

Our parents paid for our college (undergrad) and we want to do this for our sons. We don't want them to start out in the world with large student loans and credit card debt.

I shared the same view. However, we believed that it was our obligation to finance, completely, the reasonable cost of attendance, which didn't necessarily mean the cost of attendance at a highly selective private school. If our children wanted to go to one of these schools, we told them that they would have to pay the difference between the private school and the public school, which meant they would be on the hook for at least $28K per year. We told them bluntly that this would delay our own retirement plans and that they had to share in that burden by either paying us later or taking out loans to finance the difference. It also meant that they had to start thinking about potential career choices, as well.

All of our children obtained acceptances to some of the finest private schools in the nation, but only one really considered going to the extremely high cost private school. Not trying to be judgmental here, but I do think some of the choices to attend some of the elite private schools are occasionally driven by the "car decal" value of having the name of these schools prominently displayed on the parent's car, instead of being driven by the "fit" of the student into the school. Regardless of what school a child attends, I do believe he feels more connected and invested in his education when he has to freight some of the cost of attendance. Though we financed tuition, room and board, books, transportation -- the line was drawn on clothing, entertainment and other personal stuff; our children would have to use their own savings (which meant they would have to do some part-time work at some point in their college career) to cover these expenses.

Some things work for some children; some things don't work for others. I think, as a parent, you need to figure out what best works for your child and you, when it comes to figuring out how to pay for a life-time investment in education.

 

[SecondCor521]

Well that's great and I don't mean to tell your parents how much they should give away, but since you mentioned maxing out to your oldest (I assume you mean $24k in '07), why not continue with the next child?
Oooops, on second thought, you can actually carry forward five years for a 529, so they can do around $120k if they wish per child.

Sorry, I wasn't clear. Our state allows a married couple to deduct up to $8K of 529 contributions per year. So they give ~$8K/3 to each of their three kids' oldest child's 529. It's the state income tax deduction limit they are limiting themselves to, not the annual federal gift tax exclusion amount.

The problem with them giving more is that they might need the money. They're not sure how long they're going to live and whether or not either of them will get an illness requiring a great deal of expense. Their personality is such that they want to be responsible and pay for their own bills without "Indian giving" from their grandkids' 529 funds.

2Cor521

 

[Art G]

OK, I never knew there was a state income tax deduction limit anywhere, I'm in a state without state income tax.
You're very fortunate to have parents willing to help.