How did you pay (or how are you paying) for college for children?

[LeavingOhio]

First off, let me say that I'm not looking for ways to pay for college for my children...knowing where they are gradewise and scorewise and what our income is and what schools we're targeting for my oldest (who is a junior in HS now; and younger is in same boat academically), I have a good sense of what we will need to pay at various schools (and in our case, the better schools actually will cost much less than mediocre schools unless we go for full-ride academic scholarships at those mediocre schools...MOST top schools don't give merit scholarships...only need-based aid).

I'm more curious to see what all of you did. I often hear that people are afraid of the $45,000 tuition cost, and really from what I see, MOST people don't end up paying anywhere near that once financial aid and other scholarships are applied, and the ones who do pay that usually can easily afford to do so.

Then, of course, there are plenty of schools with a cheaper price tag, Community College is still an option for many as is working and attending part time.

So, what did you do?

 

[robnplunder]

With my income level, my kid didn't qualify for any financial aids and I've got no tax breaks. So, it was cash payment for everything. Luckily, my kid settled on a public university and graduated in 4 years. It cost me $25k per year. It wasn't bad (relatively speaking) since I paid $30k per year for his private high school education.

 

[H2ODude]

Paid their living expenses with cash; both had academic scholarships.

 

[Mulligan]

My daughter went to juco first 2 years and my ex and I are paying for one year each for about 20k a piece. If school is so great that she decides it is going to take a 5 the year, well that one is on her as she has been forewarned.
The good old days of the early 80s are long gone..... I borrowed money for student loans first 3 years of college and immediately deposited them into CDs drawing 12-16%. The accumulated interest from the loans alone completely paid for my 4th year.

 

[34rlsa]

We were very fortunate... my wife and I put 3 kids through college. But we had a resource not available to families unless you live in Alaska... the Alaska Permanent Dividend Fund. Over the past 30 years the dividend has averaged about $1000/year.

Here's how we managed to get them through under grad school with no loans.

1. We were able to afford saving each of our kids annual dividend in separate accounts for them since they were about 7 or 8 years old.

2. Whenever they received a gift of cash we required they deposit 50% of it in their individual accounts.

3. When they were old enough to work and earn money... whatever money they decided to save and deposit into their account we would match 100%.

They all graduated college in 2006 (triplets) with no debt.

 

[jon-nyc]

My son is 4 and has a fully funded 529. By fully funded I mean it should be enough to pay 4+ years of a tier one private university. It helps that every dollar I put in back in 2009 is worth over two dollars today.

 

[38Chevy454]

The way I did my college: J-O-B scholarship, aka working while going to school. 25 hours/week in school, 40+/hours/week during summer and winter breaks. I received only small help from my parents, mostly on my car insurance which was on their policy. No student loans and graduated with almost no debts, just a little credit card that I let run up at the end before graduation, since I had a job lined up.

Go to public state schools, way lower tuition/registration fees. Location of the school makes a big difference in living costs, something to consider. If your kid can live at home that saves even more, although they may want to get out of the house!

I think it is great to save and provide for your kids college, if you can. But IMHO there is also too much of entitlement mentality in many kids that parents have to pay. Working to help the expenses is something any college kid can do, except maybe on an athletic scholarship, but that effectively is a replacement for work and provides tuition and other benefits.

I actually asked a question on 529 or other accounts about 1 week ago. It had some good discussion on this subject as I am going to open college savings accounts to help out my niece and nephew.

 

[BrianB]

Our DD is now a college junior, and here is what we've learned:
1. With just one child & two-earner income about $80k we are out of the running for most need-based financial aid. "Scholarships" are hard to find, time consuming to apply for, and very competitive - especially for non-athletes with good grades but not valedictorian.
2. DD first selected a private arts college at $45k / year. When we discovered that a student CANNOT get a loan without a parent co-signing we nixed that idea. We're now only a year or two from ER and don't want that hanging over our heads for the next decade! Plus, student loans start accruing interest IMMEDIATELY, at a rate of 6% or more, and can never be forgiven in a bankruptcy.
3. After some deep discussions (DD, DW and I) we agreed on an in-state public university, about $15k total per year.
4. Realizing that she couldn't do anything without us paying or cosigning we agreed to pay tuition ($8k / year) and rent on a shared student apt ($4k / year). She has a part time job to pay for books, food and miscellaneous.
5. At first she was not very enthusiastic about the school, but now that she has student friends up to their ears in debt she has realized how many opportunities she will have by graduating debt free!
6. We've been VERY clear that after 4 years the money stops flowing. She knows that she needs to get all her courses complete on-time, and any thoughts of grad school are further off in the future when she is fully self-supporting.
Bottom line: We will have paid about $50k college cost when she graduates. While this may have delayed our ER plans, the reality is that the bills come in over time. We've generally been able to scrounge up the money without raiding savings or investment accounts. My strategy has been "OK, semester one paid for...OK semester 2 paid for..." and here we are with only two $4k tuition payments & sixteen $260 monthly rent payments left! DW and I are proud we've been able to do this, and we shudder when we think about the many kids who will enter the working world with six-figure debt that will follow them for decades.
Good luck to you!

 

[pb4uski]

DD went to college during some of my high income years so we paid for her colege costs from cash flow. We had some taxable savings notionally targeted to her education, but never needed to use it and it is now part of our ER money.

She went to a private school but received about $5k a year in scholarships (effectively a tuition discount the school made to entice her to attend there vs other places). Another school closer to home actually offered her a bigger scholarship but she didn;t want to go there.

DS hasn't moved on college yet, but part of our taxable account is earmarked for his college.

 

[W2R]

The way I did my college: J-O-B scholarship, aka working while going to school. 25 hours/week in school, 40+/hours/week during summer and winter breaks. I received only small help from my parents, mostly on my car insurance which was on their policy. No student loans and graduated with almost no debts, just a little credit card that I let run up at the end before graduation, since I had a job lined up.

Go to public state schools, way lower tuition/registration fees. Location of the school makes a big difference in living costs, something to consider. If your kid can live at home that saves even more, although they may want to get out of the house!

I think it is great to save and provide for your kids college, if you can. But IMHO there is also too much of entitlement mentality in many kids that parents have to pay.

+1000 This was more or less the approach we used for our daughter (public/state schools, working part time, we paid tuition, fees, books, and about half her living expenses). This was all we could afford but it worked out well for her; straight A's, loved her job, and learned about working for a living while in college.

 

[Newventurer]

My daughter ended up joining the Army and not going to college, yet anyway.

My son got a full tuition and partial housing allowance scholarship.

I dodged the bullet, twice...thus ER.

 

[Calgary_Girl]

We live in Canada so tuition up here is quite a bit more affordable vs. the U.S.

Our girls are only 7 and 4 but you can't start planning soon enough so the month after they were born we opened up an RESP (Registered Education Savings Plan) for each of them and are contributing enough to get the 20% government match. We currently have $44K saved in total and, considering that the average tuition at the University of Calgary is $5K/year, I think they should be okay.

It must be an American right of passage for students to live on campus (or at least that's what DH says) because I didn't have any local friends who lived on campus if they went to the U of C. Everyone lived at home with mom and pop and graduated debt free. This is what I expect my girls to do as well unless they absolutely insist on going to an out of province school in which case they can pay for the difference!

 

[Brdofpray]

DS and DD daughter both chose state schools. Both had academic, and athletic scholarships (not a full ride but it really helped.). We were able to handle the cost with basic monthly cash flow. Actually we put the expense on our Visa. The resulting points allowed us to fly to the swimming national championships each year. Both went on to post graduate work. DS into dentistry, DD into nursing. We figured we got them this far, they were on their own for further education.

 

[karluk]

I expect a total of $25,000 invested in U.S. savings bonds in December, 1991 and January, 1992 to pay for essentially 100% of the college expenses of my two children. I made those large purchases back then not because I was looking ahead to future college expenses, but because at the time savings bonds paid a guaranteed 6% interest and there were reports in the news that the guaranteed rate was about to be reduced, as indeed happened in February, 1992.

Flash forward to December, 2003, when my savings bonds started reaching their initial maturity, and the guaranteed interest rate was reduced from 6% to a still competitive 4%. I was looking into alternative investments and discovered that contributions to 529 plans were one of the approved educational uses that qualfied savings bonds for tax free redemptions. Since then I have been redeeming enough savings bonds every year to fund two 529 plans up to the amount that qualifies for a state income tax deduction. I redeemed the last bond in July, 2013.

DD is currently finishing up her junior year. I expect her 529 money will be exhausted sometime late this year. She says she will need 4 1/2 years to graduate, so I need to come up with the money to fund two additional semesters.

Fortunately the money in DS's 529 has done much better. It was invested in an S&P500 index fund until late last year, when I moved it to a total bond fund. It turns out I can switch beneficiaries on the 529 money, so the excess in DS's account should easily cover the extra two semesters for DD as well as four full years for DS, who will be starting college in the fall.

All this has been achieved at a negative income tax rate - no federal taxes due and 11 years of state tax credits.

It does help that both children are attending state universities. That keeps the costs much lower. But those savings bonds were the key. They probably aren't the best investment I've ever made, but they're certainly in the top five.

 

[Moemg]

My Son went to MIT with some grants & scholarships . The rest we covered by working extra & savings. My daughter went to U of Mass.She also got grants & scholarships and we covered the rest. They both knew that Mom was only good for four non party or low party years after that it was on their dime .My daughter got her masters at BU . She was working there at the time so it was at a very low cost . She paid but I did make a contribution when she graduated .

 

[RetireAge50]

Daughter about to complete first 2 years at community college and will transfer to a private college. Son will begin his first year this fall at the same private college.

We have about $25,000 saved in 2 ESA accounts. The rest we are paying as we go from income.

 

[Sue J]

Our older son went to a state school 2002-2006. He lived in the dorm and had a meal plan and total cost was about $13,000 the first year and $14,000, $15,000 and $16,000 the next 3 years, so about $58,000 for the 4 years.

He had a scholarship of $2,000/yr based on high ACT scores. DHs father had made a trust for all the grand kids and our sons were the first to use it. It provided about $5,000/yr for 4 years. Because we had another son entering college while the first one was still attending, we went ahead with Stafford loans for the first son (no interest while in school) and we cash flowed the rest.

$20k - grandkids trust
$ 8k - ACT based scholarship
$17k - Stafford loans
$13k - Cash flowed

The Stafford loans were always our debt and we paid them off very quickly.

The other son went to a local state college 2005-2009. He lived at home and commuted. We provided a car and covered all transportation costs, insurance, books, meals at school, etc.

His tuition was $9000 - $10,000 a year for 4 years. His 1st semester was at another state college and his costs were higher for that and we did one small student loan, paid off soon after graduation.

$20k - grandkids trust
$ 1k - Stafford loan
$17k - Cash flowed
Unknown amount for transportation and other expenses

 

[woodguy00]

No scholarships or ability to qualify for financial aid here. Son is a junior at state U. First two years at community college living at home.

Our deal with the kids is that we will pay up to max in-state tuition and fees. They could live at home if they liked. If they went away to school, then they paid for room and board from loans and summer jobs, If they wanted private college, they would have to pay the difference. It works for us and our kids. The;ve got skin in the game.

 

[panacea]

By the time our 2 children go to college, we should have enough saved for at least $20,000 per year for four years for each. That would pay for any state school, including room and board, books, fees, etc. If they land at a more a expensive private school, the difference will be made up with work, loans, and hopefully merit scholarships.

 

[imoldernu]

My college current 2014 tuition and fees... for comparison, and angst.

Fortunately a huge alumni fund and scholarships for qualified students.

 

[Tree-dweller]

DW and I paid for daughter and son to go to attend college of their choice. Three year diff in age, so only one overlap year, TG. Not scary huge tuition, big enough, but we wanted our kids to graduate debt-free. DD (the oldest) did go to an obscenely expensive school her first year, but she hated it and xferred to another school that threw money at her. I will share one experience: that expensive school she attended freshman year she applied to "early decision", essentially saying to the school "I really really really want to go here!" Well, she was accepted and granted a big fat 0 dollars in aid. Did the early decision application have an impact on the lack of financial aid offers? I suspect so, but I'll never be sure.

 

[photoguy]

We live in Canada so tuition up here is quite a bit more affordable vs. the U.S.

the average tuition at the University of Calgary is $5K/year, I think they should be okay.

Wow $5k/year seems really low. I checked my alma mater (university of waterloo) and tuition is 7k a term (so 14k per year). I think this is about the same as a UC school tuition.

 

[Louis2]

My two daughters received academic "scholarships" at a private college that brought the costs down to about $25k per year total (tuition, room, board, books.)

We started early with savings bonds then 529 and Coverdell. Wasn't enough to cover but definitely helped.

Both worked part time jobs to cover "other expenses" like entertainment, eating out, drinking, weekend trips, gas money, etc.

In short, we were blessed, they were lucky, we paid.

 

[scrinch]

We paid cash for:

DD1- $14k/yr public university w/token scholarship
DD2- $32k/yr public university w/token scholarship
DS- $52k/yr private university minus 20k/yr merit scholarship

This is money we had saved over the years and set aside for this purpose. Each of the DDs worked about 10 hrs/wk for spending money during the last 2-3 years of college. DS is in his freshman year and will be expected to get a PT job later also.

 

[shortstop14]

Early 2000s timeframe. We provided our daughter with $10,000 per year as long as she was enrolled full-time. It was her choice as to where she went and how she applied the money. She had options to attend state schools or some expensive private schools, and had some partial scholarship offers both academic and athletic.

She chose to go to a state school in Washington, so the $10,000 covered tuition, room and board (eventually apartment rental rather than dorm room.) She also waited tables for spending money. Got her bachelors degree with no student loan debt.

Since her high school graduation coincided with paying off our mortgage, the cash simply came from earnings rather than the investments we'd set aside for college.

She did eventually chose an expensive prestige school for graduate school, so she accumulated some student loan debt for that year. Not a bad decision on her part, as that school got her set up for what has turned into a lucrative career. We also contributed $10,000 for that year.

She had a pretty good idea of my opinions on debt, and seemed to make pretty sound decisions. Still, ten years later that one year of debt has dwindled but is still in her life.