A beautiful gift from my parents today

[Tiny Kingdom]

That is a awesome gift and so much more thoughtful than yet another plastic toy for the landfill!

Now to be Debbie Downer...My state stopped accepting new enrollees into their pre-paid tuition program in 2008 when it essentially bankrupted. It wasn't backed by the state or collateralized in any way. When the market tanked, it tanked. Turned out they didn't actually guarantee anything.

Still, very generous of your parents and if your state is providing a true guarantee backed by the state, pretty sweet deal!

 

[FIREchief]

+1

Although I agree it's a wonderful gesture, I think unrestricted gifts are much better.

+2. What if the child decides that learning a skilled trade is a better fit for them than a traditional college degree? There are many paths to "success." Things change.

 

[Aerides]

Gift horse, etc.

 

[SecondCor521]

On another note, I would encourage the OP to sit down with his kids and make sure they understand and appreciate the grandparents' gifts. Having college paid for is great, having kids who turn into decent humans is also a good goal. It's easy to lose appreciation or forget to express gratitude when others help us out.

(Not saying the OP hasn't or wouldn't, I just didn't see the idea mentioned in this thread yet.)

 

[Beer-man]

+2. What if the child decides that learning a skilled trade is a better fit for them than a traditional college degree? There are many paths to "success." Things change.

Well fortunately skilled trades is what both my parents specialized in, what I do, and what the family business is. If any of the kids go that route they will get plenty of in house training

 

[Beer-man]

On another note, I would encourage the OP to sit down with his kids and make sure they understand and appreciate the grandparents' gifts. Having college paid for is great, having kids who turn into decent humans is also a good goal. It's easy to lose appreciation or forget to express gratitude when others help us out.

(Not saying the OP hasn't or wouldn't, I just didn't see the idea mentioned in this thread yet.)

Agree, they are not at the age yet where they will understand but I hope to have that talk with them one day.

 

[Franklin]

+1. It sounds like a wonderful gift.

anytime u can do this it is great +1

 

[FlaGator]

It is a beautiful gift!

That they did it for your kids is a sign they want different opportunities for them, and have confidence you will help the kids pursue them

To all the "whatabout" posters, lighten up. It's a gift, and it's not a tie with logos of your favorite NFL team. They have provided a useful floor upon which to build the GKs future. For a 5 year old, the lump sum cost is ~$8,600.

Florida (apparent home of beer-man) has a viable and flexible prepaid plan. If the kids do not attend college, the original amount will be refunded. Would nice if there was some inflation or upward return adjustment, but that's the downside of locking in unpredictable college costs.

 

[FIREchief]

It is a beautiful gift!

That they did it for your kids is a sign they want different opportunities for them, and have confidence you will help the kids pursue them

Please tell me about these "different" opportunities. OP indicated that family was successful in skilled trades, and that children were already well positioned for help in that area. Do Grandparents consider this inferior to a college education, and wish to steer things towards such different opportunities? This doesn't necessarily smell as good as some may be perceiving.

(disclaimer: I leveraged a college STEM degree to establish a career and FIRE, it's simply NOT the only path...)

 

[FIREchief]

Well fortunately skilled trades is what both my parents specialized in, what I do, and what the family business is. If any of the kids go that route they will get plenty of in house training

Beer-man: I have some unique perspectives here. I have adult children who have taken both paths. In my professional career, I managed both engineers and skilled tradespersons. For some reason, skilled tradespersons sometimes feel that they are not the "equals" (whatever the heck that means) of those with college degrees. In today's world, that is likely increasingly far from the truth (and likely getting farther every day). I'm not sure if the Grandparents are sending a signal here or not. Are they using their wallets to suggest to the grandchildren that they need to somehow "rise above" the lowly life of a skilled tradesperson? That's a really scary thought. Hopefully this is in no way part of what is going on. I FIREd from a STEM degree, but I would have likely been a happier person for decades working as a skilled tradesman.

 

[target2019]

Perhaps they are daughters. Perhaps GF is looking ahead and realizes his business will need a CEO and CFO. Perhaps a 2-year college degree is the equivalent of yesteryear high school degree. Perhaps the GF is just a nice old guy with best intentions.

 

[RetMD21]

Well fortunately skilled trades is what both my parents specialized in, what I do, and what the family business is. If any of the kids go that route they will get plenty of in house training

If applicable, there are some well regarded programs at community colleges for skilled trade certification (at least in my area). This is a wonderful gift.

 

[Beer-man]

Perhaps they are daughters. Perhaps GF is looking ahead and realizes his business will need a CEO and CFO. Perhaps a 2-year college degree is the equivalent of yesteryear high school degree. Perhaps the GF is just a nice old guy with best intentions.

All of the above is true, great insight.

 

[FIREchief]

Perhaps they are daughters.

That is why I used the term "tradesperson" other than when referring to myself. OP indicated mother was a skilled tradesperson. Maybe gender made a difference (to somebody) 50 years ago. I think we're past that now.

The point I and at least one other poster were trying to make was that it might be an even better gift if it were the same monetary value but not tied to a single post-high school path.

 

[Calico]

My parents told us today that they will be purchasing a 2yr prepaid college plan for each of our 3 kids. They are still sub 10yrs old but it was such exciting news. We haven’t had any windfalls and some setbacks along our FI journey in the past few years so this is such a surprise and blessing.
We do have 529’s but they are minimally funded and we really had no formal plan for how to fund college.

This is a very generous gift and indeed a blessing as you say. How wonderful that the grandparents have the ability and desire to do this!

 

[brett]

duplicate.

 

[brett]

The plan that we have for our grandchildren is not tied to a specific institution or indeed to any post secondary. The monies will revert back to us in whole or in part if not used. It is a family fund that can be accessed by any number of grandchildren in the same family.

The will provisions are different. Set amount. If not used for past secondary then the money reverts to each grandchild at age 28. They are a long, long way off from that.

 

[target2019]

All of the above is true, great insight.

Thank you. I'm retiring from this thread with perfect batting average.
[emoji106]

 

[yclipse]

What happens if the child's best choice is out of state? Of if the child choses not to attend college? Or joins the military?

Under Michigan's plan, the owner can get a calculated cash refund if the funds are not used for attending a college in Michigan - standard 529 terms.

 

[Pellice]

And the gift does not only benefit the grandchildren! I can sense some of the stress over this future goal slipping from your shoulders as well! You and your children still have to set aside money, but in a more easily achievable way - and that has to feel good!

 

[Beer-man]

And the gift does not only benefit the grandchildren! I can sense some of the stress over this future goal slipping from your shoulders as well! You and your children still have to set aside money, but in a more easily achievable way - and that has to feel good!

Yes you nailed it! Honestly I felt both a burden to prepare for that time financially but also provide for them now emotionally and being around to help them develop and being a good dad. Those priorities were competing for my time, now I can enjoy the now time with them and not stress about work/saving as much