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Message
Funding college for kids without using a 529 fund
Posted on 3/22/19 at 6:56 pm
Posted on 3/22/19 at 6:56 pm
Current situation, I did not save for my kids college in a 529 fund thinking that I would just help them pay as they went as well as that they would receive TOPs. TOPS is still around an my kids two of them 15 and 11 if they choose to go to college will attend state university’s and live at home (BR area) .
I currently have about 60k invested in two mutual funds (vimax- midcap index fund) and (vtsax- total stock market index fund).
Plans are to have the kids apply for student loans to offset any expenses that are not covered by tops or scholarships, and slide them cash for basics that they need but can not afford to pay with the jobs that I except them to have while attending school.
I would then let them be responsible for the student loans but pay them off taking earnings from the funds on good years to pay them down for them.
Am I missing anything here with this as a plan? I realize I could have had the tax benefit of a 529 fund.
I currently have about 60k invested in two mutual funds (vimax- midcap index fund) and (vtsax- total stock market index fund).
Plans are to have the kids apply for student loans to offset any expenses that are not covered by tops or scholarships, and slide them cash for basics that they need but can not afford to pay with the jobs that I except them to have while attending school.
I would then let them be responsible for the student loans but pay them off taking earnings from the funds on good years to pay them down for them.
Am I missing anything here with this as a plan? I realize I could have had the tax benefit of a 529 fund.
2
Posted on 3/22/19 at 7:27 pm to Ol boy
I think your plan is one that sounds good in your head rather than one you put down on paper planning out.
The biggest thing they probably will struggle to pay for is rent, which can easily be 10k a year in college towns. Even if they complete in 4 years, that’s still 80k minimum.
Your account is at 60k, and you expect to begin drawing down in the next 3 years.
Then help them out by drawing down earnings.
And pray there isn’t a recession right in the middle of their college education.
There is also the value of the big life lesson of owed money.
If I am wrong in my guess and you sat down, researched, and assessed cost of living as being primarily manageable with <$12/hr part time job with depletion’s from your accounts as being able to make the difference with room to spare, go for it.
If not....you might want to consider reserving your loan support to helping them help themselves and just pay the interest to keep the debt from becoming suffocating.
The biggest thing they probably will struggle to pay for is rent, which can easily be 10k a year in college towns. Even if they complete in 4 years, that’s still 80k minimum.
Your account is at 60k, and you expect to begin drawing down in the next 3 years.
Then help them out by drawing down earnings.
And pray there isn’t a recession right in the middle of their college education.
There is also the value of the big life lesson of owed money.
If I am wrong in my guess and you sat down, researched, and assessed cost of living as being primarily manageable with <$12/hr part time job with depletion’s from your accounts as being able to make the difference with room to spare, go for it.
If not....you might want to consider reserving your loan support to helping them help themselves and just pay the interest to keep the debt from becoming suffocating.
Posted on 3/22/19 at 7:31 pm to Volvagia
quote:
he biggest thing they probably will struggle to pay for is rent, which can easily be 10k a year in college towns
Plans are for them to attend LSU and commute while living at home. If they want to do something different then they will have to decide how to fund it.
Google says LSU tution is 4K per semester so say 10k a year. If I fund the books and small cost such as fees out of pocket roughly 80k total for two kids.
For drawing down I would not begin drawing down or paying unless market was up, and let those loans which are fairly low interest sit until market upswing. Should I maybe look at mixing in a high divended yield fund to the mix??
This post was edited on 3/22/19 at 7:50 pm
Posted on 3/22/19 at 7:32 pm to Volvagia
quote:
will attend state university’s and live at home
Rent shouldn't be a problem
Posted on 3/22/19 at 10:05 pm to TorchtheFlyingTiger
Yeah, missed that part 
d
dPosted on 3/22/19 at 10:53 pm to Ol boy
I like the idea of students having some skin in the game. I knew too many friends that squandered their college opportunities because it was all given to them. On the other hand, I knew if I failed I'd have a hole to dig myself out of without the advantage of a degree. Your plan allows them to earn their way then you can help after the fact.
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