Kids college: Let them pay?

[brett]

We were/are fortunate to have the financial resources to ensure that both children did not have to graduate with any debt and that financial resources do[/did not limit their desire for post secondary or graduate programs.

We are huge believers in education. Not only because of the career paths but also because of quality of life. University changed how I saw the world and taught us to be critical thinkers. As did extensive travel. We feel that we have an obligation to our children to support them through their education programs. This is tempered by reason and by decent grades. We are willing to pay for performance.

 

[USGrant1962]

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.

OK, I just looked up CMU and W&J. Tuition, room, board, and fees are approximately $72K and $60K per year, respectively. If a kid can pay that, why go to college?

 

[Winemaker]

OK, I just looked up CMU and W&J. Tuition, room, board, and fees are approximately $72K and $60K per year, respectively. If a kid can pay that, why go to college?

There was no room and board, although my cars were involved. Tuiton was about $20,000 each, 1999-2007, and they had to come up with ~$10,000. It wasn't $60-70,000.

And IIRC, it was requirement for all students at W&J to have some sort of "job", whether at a business or at the school; at the library, taking prospective students around campus, working in cafeteria, etc.

 

[Housewife]

I went to a private school in the mid 90’s. My parents could not afford much, and I went through my college years mostly on financial aid. For the rest, I opted to work 30-40 hours a week (and more in the summers) rather than taking loans, because I was too scared to carry a large debt load right after college. I refused to slack off on coursework. So instead, my social life in college was non existent.

I worked hard and stayed frugal, partly because I wanted to be in a position to pay for both my kids’ education. In state for sure. If they are capable of getting into one of those top tier out of state schools or private universities (eg. UCB, Yale, Williams), I am also willing to step up. However, I do expect my kids to work 10 hrs or so a week during the school year, and I expect them to work summer jobs to either contribute directly, or do unpaid internships/research work to “earn” my contribution to their college expense. There is a balance. I hate to see them going through college with nothing but $ in mind and neglecting social life/networking with peers. I also do not want to see them freeriding on mom and dad’s dime without any skin in the game. I have seen so many kids who go to very expensive schools, picking the easiest majors, having lots of fun for four years, with absolutely no regards for what they plan to do with their majors or how they plan to support themselves after college. I am not willing to fund this.

 

[daylatedollarshort]

Our kids and friends are starting to graduate and get jobs now and the biggest factor in successful careers tends to be choice of majors. Except for one group of kids who had a band, actually became rock stars and get to tour the world, but I think they beat the odds.

 

[Mulligan]

Comparing what "we" did with today's college costs is not reasonable. College costs have increased much faster than inflation for 30 years. Here's one example: https://www.zerohedge.com/news/2016-08-18/simple-chart-illustrates-absurdity-college-inflation

This has been driven by both rent seeking (government making piles of cash available through loans, scholarships and grants, so education institutions grab it with gusto) and the explosion of administrators at colleges (again, mostly to satisfy and comply with government regulations).

I certainly agree the relative costs are not the same. In early 80s my dad paid first 2 years, and I paid last 2. However I took max student loans out for first 3 years during college and put each years loan amount into 12%-16% CDs. Therefore the interest alone paid for my 4th year for free. I also worked 20-30 hours PT at a union grocery store, so I didnt struggle with any debt, and still found I had plenty of time to study, party, and successfully chase the co-eds.

 

[googily]

With no kids of our own, DH and I started 529s for all five nieces and nephews. Two of them come from families without great expectations for education, so they will both likely go to smaller state schools, but three others are in HCOL areas and would probably be expected to go to the best school they could get into. The 529s will probably end up being about $7k per kid. I'm enough of a HCOL resident to think that will only be a drop in the bucket, but I guess maybe for the ones going to smaller state schools, it will be a decent chunk.

Maybe this means at least one of them will take care of old Aunt Googily some day.

 

[Cayman]

Student loans sometimes get a bad rap. They can be a good way to pay for college when there aren't better options. I was grateful to graduate with a marketable degree and student loans (totaling around $40k in today's dollars). Without the student loans I probably would not have finished my degree and consider the interest on the loans to be $ well spent.


According to LendEDU, the average borrower from the Class of 2017 graduated with $28,288 in student loan debt. Considering that many college grads spend that much or more on the first car they buy after graduation, it sounds very reasonable. DD will not have any college loans, but if I couldn't contribute as much as I do to her education I'd have no qualms with her carrying $30k in education debt.

 

[benchwarmer]

My Uncle Sam paid for my schooling.
I made an offer to my kids, I would pay for their collage if they finished in 4 years,50% if they finished in 5 years and 0 if it took longer. One of them finished collage but after 7 years, took a break after 2 years and then finished.

 

[Montecfo]

I paid all of my personal college costs. Worked multiple summer jobs and waited tables during school.

DS went initially to his dream school which was out of state and expensive for that reason. He struggled that first semester and it ended up being a costly experiment. So he came home and rehabilitated himself at JUCO to earn his way back to "away college". That did go well. He paid for everything.

Then he went to a well regarded in-state school. We paid except for his spending money. He did well and graduated with a technology degree.

I think it helps for kids to have skin in the game.

 

[always_learning]

We also felt it would be helpful for our kids to have some skin in the game, whether it was through working and saving over the summers or scholarships.

Around here, summer jobs for teens are sparse as adults work them year-round. None of their friends could find summer jobs, either.

Both kids worked hard on their academics and won scholarships, so their 'skin' was to keep their scholarships and we would keep paying the rest. It worked out well. Both graduated debt free and our cost was 'minimal'.

Something I've seen here, and in other places, is that the kids go to the best school they could get into. Why is that? Our kids both went to a state school (but not in our state) and got wonderful jobs upon graduating (different areas of study). Both were offered the standard rate in jobs that offer the same salary to all new hires. It's a step system, so there is no negotiating. From there, both will continue in steps while promotions are awarded according to performance. School choice has nothing to do with it. Their workmates range from state school grads to 'name brand' schools. Unless one has a full ride at a name brand school, why go there? I'm not being snarky, I'm genuinely curious.

Also, something I haven't seen mentioned here, or on any of the parenting boards I frequent (except for one dedicated to education), is the CLEP exam. One of our kids received 18 credit hours for the exams taken. One simply self studies and takes a multiple choice test. It's a pass/fail exam, and you know right away if you passed. About $120 is the cost of each exam. The kicker is to make sure the chosen university accepts CLEP scores. Interestingly, our state schools didn't (neither do most private schools), but the chosen out-of-state school did.

Regarding 'in-state' schools, don't be afraid to look outside of your state. Many state schools offer better deals to out-of-state students than their own residents. Our state is like that. Both kids went to school OOS because it made financial sense. Big name companies recruit at both schools, so it made perfect sense (and cents ).


Editing to add:
For those with kids in college now, it may not be too late to take some CLEP exams. Most of them are for things like History and foreign language (i.e. the first year or so of university gen ed), but if they haven't taken those classes yet, they can take a CLEP exam and simply have the credit transferred in (if the school accepts it--- check this first) and be done with it.

 

[mpeirce]

Their workmates range from state school grads to 'name brand' schools. Unless one has a full ride at a name brand school, why go there? I'm not being snarky, I'm genuinely curious.

I think generally the thinking is that going to a "name brand college" gives a person a leg up on someone who went to a state school.

In my case I went to a "name brand tech school" (well know in the the tech world, but not an Ivy, say, that is a household name). The education I got was top notch and just as important was the network of people I got to know there.

While my life would have been fine if I had gone to another college, I know I got a couple of jobs because of the network of people I knew from school. My life would have turned out very differently - quite possibly well, but I'm very happy with the way things turned out for me.

Just my experience.

 

[Amethyst]

Well, some people think working for jobs that have steps (e.g. Government) is a step down. They may think you will never have a nice house, or be able to send your kids to college, or travel, let alone FIRE.

I saw some college snobbery at my Agency. The tech people were very big on who had gone to Purdue (to the point that some people started spitefully spelling it like the chicken company). One of the senior managers never let anybody forget he was a Harvard man. He was also a [redacted] but hey, he was a Harvard [redacted]. So it was OK.

Despite being a National Merit finalist, I didn't get any scholarships and was in danger of not going to college, since it was not a goal for daughters in my family. Fortunately, my Dad found out he could get a stipend from SS for "full-time student living at home," and spent some of it to send me to a local community college, which I loved (started at age 16 - it was like a high-school do-over, only better) and then a very little-known upper-two-years university. It was no-frills, and I lived at home, which let me focus on the two things I cared about most: Getting A's, and going out with boys. My high GPA, plus high scores on some aptitude tests, led to my career.

I worked summers and semester breaks to pay for books, supplies, clothes, and little stuff teenage girls want. Also my first pair of contact lenses - I still remember what that cost, $300 in the late 70's was a lot of $$.

W

Our kids both went to a state school (but not in our state) and got wonderful jobs upon graduating (different areas of study). Both were offered the standard rate in jobs that offer the same salary to all new hires. It's a step system, so there is no negotiating. From there, both will continue in steps while promotions are awarded according to performance. School choice has nothing to do with it. Their workmates range from state school grads to 'name brand' schools. Unless one has a full ride at a name brand school, why go there? I'm not being snarky, I'm genuinely curious.

.

 

[6miths]

Despite being a National Merit finalist, I didn't get any scholarships and was in danger of not going to college, since it was not a goal for daughters in my family. Fortunately, my Dad found out he could get a stipend from SS for "full-time student living at home," and spent some of it to send me to a local community college, which I loved (started at age 16 - it was like a high-school do-over, only better) and then a very little-known upper-two-years university. It was no-frills, and I lived at home, which let me focus on the two things I cared about most: Getting A's, and going out with boys. My high GPA, plus high scores on some aptitude tests, led to my career.

I worked summers and semester breaks to pay for books, supplies, clothes, and little stuff teenage girls want. Also my first pair of contact lenses - I still remember what that cost, $300 in the late 70's was a lot of $$.

How times change. Kudos!

 

[daylatedollarshort]

Something I've seen here, and in other places, is that the kids go to the best school they could get into. Why is that? Our kids both went to a state school (but not in our state) and got wonderful jobs upon graduating (different areas of study). Both were offered the standard rate in jobs that offer the same salary to all new hires. It's a step system, so there is no negotiating. From there, both will continue in steps while promotions are awarded according to performance. School choice has nothing to do with it. Their workmates range from state school grads to 'name brand' schools. Unless one has a full ride at a name brand school, why go there? I'm not being snarky, I'm genuinely curious.

I assume it depends on the career field. It is probably not easy to get to the Supreme Court with a University of Phoenix degree. But for jobs in Silicon Valley, it is actually one of the top 25 schools for working there. There are some very expensive schools on 25 schools list, but also some real bargains, too. Many of the big tech companies in the Bay Area like Apple and Google no longer even require a degree.

 

[pb4uski]

Late to the thread. My parents paid for my tuition, room and board... DW's parents contributed what they could but it was not much... she graduated with student loan debt equal to a year or two if tuition, room & board.

We decided that we would fund 4 years anywhere they wanted to go. DD went to a good college... they offered her a scholarship (discount) of 20-25% a year... we paid those costs from cash flow.

DS has so far decided not to go but we have funds earmarked and I continually tell him that there is funding if he decides to go. My dilemma is if he decides not to go as seems likely, do I somehow use these funds for his benefit or do they revert to the familial pot that he and DD will inherit once we are gone. Still mulling over that question.

 

[NW-Bound]

If the parents have enough money to think of the possibility of leaving some money to their children, why not spend some of that on college if the kids want to go?

I did not want to spoil my children, so gave them used cars and paid for their tuition. They get room and board free at home. I purposely bought my home within a few miles of the local state university with that in mind, before they were born.

They worked part-time jobs to get money to spend, and to buy books and supplies. My son was sufficiently frugal that he saved up enough money, and did not work the last 2 years of school.

They both got employed after graduation, and their employers paid for their graduate studies. They are fairly established now, and are doing well.

When I went to school, the tuition was low, and I was able to pay for it with my part-time work. My parents had fallen into hard times, and other than giving me room and board, could not offer any help. In fact I contributed to household expenses to help them out.

My children had it a lot easier than I did, but there was no reason to make them suffer like I did. My parents would do the same thing I did, if they had money.

 

[Osprey]

.
Something I've seen here, and in other places, is that the kids go to the best school they could get into. Why is that? Our kids both went to a state school (but not in our state) and got wonderful jobs upon graduating (different areas of study). Both were offered the standard rate in jobs that offer the same salary to all new hires. It's a step system, so there is no negotiating. From there, both will continue in steps while promotions are awarded according to performance. School choice has nothing to do with it. Their workmates range from state school grads to 'name brand' schools. Unless one has a full ride at a name brand school, why go there? I'm not being snarky, I'm genuinely curious.

My son graduated this past winter with a mechanical engineering degree from a top tier school and got a job with a company that would not have considered him If he had gone to our flagship state u instead. He is paid more than the average starting salary for new grads in the area and the work is more interesting than jobs his high school classmates are starting with. Not sure what the overall career impact will be as he is only starting out but we are thrilled that he is so excited and happy at this stage.

 

[sengsational]

I think generally the thinking is that going to a "name brand college" gives a person a leg up on someone who went to a state school.

There was some research done on this which indicated (and this might not be 100% accurate, but it's what I recall) that if you were lower on the socio-economic ladder, then going to a name brand school increased your lifetime earnings substantially. The authors theorized this was because if you're on the lower end, and you go to a state school, your network will include more people like yourself, but if you go to a hoyty-toyty school, then you're kind of forced up the social pecking order. In other words, your network is generally more well to do, and so that boosts lifetime earnings.

 

[youbet]

My son graduated this past winter with a mechanical engineering degree from a top tier school and got a job with a company that would not have considered him If he had gone to our flagship state u instead. He is paid more than the average starting salary for new grads in the area and the work is more interesting than jobs his high school classmates are starting with. Not sure what the overall career impact will be as he is only starting out but we are thrilled that he is so excited and happy at this stage.

Does this "superiority of private schools" theory still apply if the state school is also "top tier?" For example, Purdue is ranked in the top ten (when I last looked a few years ago) in mech eng nationally. Would that hold up? Or is it still the kiss of death to have gone to school with the mere mortal plebeians at a public university?

 

[youbet]

I only scanned some of the pages of this thread, so please excuse me if I missed it, but I note little mention of co-op programs. When I was managing engineers at MegaCorp (back in the day!), I had great luck with kids who were full co-op participants (NOT just summer interns). And I understand the pay can be very good too since by their 2nd or 3rd working semester, they're doing junior engineer work on the job instead of waiting tables or mowing lawns.

 

[MichaelB]

For finding a job and getting ahead, I think for the vast majority of students graduating from college, skill set is more important than which college. This is probably the biggest change compared with previous generations. Students without specialized or high demand skills are at a significant disadvantage in the job market.

For this reason, I also think many parents and students do not choose well and also spend too much on college.

 

[Amethyst]

Could not agree more. It's perfectly possible to instill a sense of responsibility, without a hair shirt to go with it.

My children had it a lot easier than I did, but there was no reason to make them suffer like I did.

 

[sengsational]

For finding a job and getting ahead, I think for the vast majority of students graduating from college, skill set is more important than which college. This is probably the biggest change compared with previous generations. Students without specialized or high demand skills are at a significant disadvantage in the job market.

For this reason, I also think many parents and students do not choose well and also spend too much on college.

I agree with that, and the lifetime earning statistics that I saw bear that out; once you get out in the earning world, it matters a whole lot less where you went to school as opposed to what you've done lately (like having been promoted and/or having had a successive string of jobs that had ever increasing levels of responsibility).

 

[FlaGator]

Originally Posted by MichaelB
For finding a job and getting ahead, I think for the vast majority of students graduating from college, skill set is more important than which college. This is probably the biggest change compared with previous generations. Students without specialized or high demand skills are at a significant disadvantage in the job market.

For this reason, I also think many parents and students do not choose well and also spend too much on college.

I agree with that, and the lifetime earning statistics that I saw bear that out; once you get out in the earning world, it matters a whole lot less where you went to school as opposed to what you've done lately (like having been promoted and/or having had a successive string of jobs that had ever increasing levels of responsibility).

I agree wholeheartedly.

In addition, with the exception of specialized fields (i.e., engineering, law, medicine) I believe the specific degree awarded matters less over time. In my case, I worked in my degree field for only 3.5 years before switching to something completely unrelated, and changed careers twice after that (in tangentially related fields) before finding my professional sweet spot in my late 30's.

I may be an exception, but it's one of the reasons I don't get worked up about what my HS senior intends to study as long as she can support her self initially and get the undergrad degree from a low cost state school. And I'm happy to pay for that.