How much to set aside for kids college

I think I'm not going to do the 529 and save the money elsewhere, because those little bastards better get a scholarship. And if they get one, then the restrictions on that 529 money are going to suck.

I figure its a weird balancing act because you don't want to oversave and have to pay the penalties due to not using on college expenses. I'm 20 years from this issue so someone else may have a better comment on it.

ETA: Can't you use the money for Room and Board? I'd save up that amount for sure.

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yes. any college related expenses

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I'd do that then. Screw tuition. Rather put the money somewhere else and if I have too much, don't get penalized for it.

I'm not sure if I should keep saving in a 529 or maybe start something else. I figure I've got 5 years till my oldest will be starting college. I currently have $35k saved up in each of their 529 accts. just wondering if I should keep funding 529, or maybe start something else.

You can also use the funds to pay for things like study abroad or summer travel/study. Lots of wonderful programs out there, great for kids to get international experience.

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Thats high..

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The actual number is $8,700

LINK

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If they are good students that's enough by far IMO.

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Unless they're really good students and want something better than a State School education.

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Unless they're really good students and want something better than a State School education.

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Exactly, it will be there if they need it

Here is a side topic I've always wondered about regarding in-state vs out of state:

Lets say I live in Texas and want to send my kid to LSU. Below is the tuition difference from college data:

In-state: $8,750
Out-of-state: $26,467

So a difference of 18k per year or 72k over 4 years.

What if I bought a 250k rental property in Baton Rouge (using only 20% down) a couple years in advance of child attending LSU. Rent it out over the years prior to kid attending school. This would give a couple years to legitimize residency though property tax, vote in the state, etc. Then let the kids live in the house during school with friends helping pay the note.

What legal grounds would stop me from applying for in state tuition?

I am sure the recoup of equity through sale, rent collection, difference in tuition rates etc would greatly cover the headache, cost of greatest insurance plan to cover liabilities from college kids etc.

ETA: Just googled this scenario and it seems there are very strict rules: It's for residents who have an established domicile, not just owning real estate. Probably wont fly.

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ETA: Just googled this scenario and it seems there are very strict rules: It's for residents who have an established domicile, not just owning real estate. Probably wont fly.

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Ya they're all over it.

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Lets say I live in Texas and want to send my kid to LSU

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If he's paying full rate to go to LSU, then he isn't going to LSU. Sorry future kid.

Withdrawals from the 529 cannot exceed the calculated Qualified Higher Educational Expenses for the student's institution. IOW, you can take out exactly what the school bills you for tuition and room & board or you're hit with a penalty. If the student isn't living on campus, the institution can provide you with an estimated cost of attendance for off-campus living, or for residing with parents. But any amount exceeding those estimates is taxed at 10%.

So you can use 529 money to pay rent, but it must be in line with the official estimated costs of attendance. You can't simply charge your kid an inflated rent as a way of "keeping" the 529 funds yourself.

You also can't double-dip....if you're paying educational expenses out of 529 money, you can't claim the opportunity tax credit or the lifetime learning credit.