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Thoughts on parent's role in funding college
Posted on 9/6/12 at 2:37 pm
Posted on 9/6/12 at 2:37 pm
What's your feelings on paying for your kids' college? I have two little ones, ages 10 and 7, and we have some saved for each but we are no where near on track to be able to pay for four years at the going rate let alone what it will be in 7 and 10 years.
My parents didn't put a dime towards college. Scholarships, work study, and grants (yep, poor folks back in the day)for undergrad and then loans for graduate school. Guess that has given me a different perspective on what is the parent's role in funding college. Could stop most investing and paying down the home and student loans and have enough for both? Yea, probably could, but is this the right thing to do?
Love to do whatever I can, but what's the smartest thing from an overall financial plan for your family? Where does this rank on the priority list?
My parents didn't put a dime towards college. Scholarships, work study, and grants (yep, poor folks back in the day)for undergrad and then loans for graduate school. Guess that has given me a different perspective on what is the parent's role in funding college. Could stop most investing and paying down the home and student loans and have enough for both? Yea, probably could, but is this the right thing to do?
Love to do whatever I can, but what's the smartest thing from an overall financial plan for your family? Where does this rank on the priority list?
20
Posted on 9/6/12 at 2:46 pm to CAT
My view on this is that it is a gift that parents give IF they can afford it. It is by no means a requirement.
What type of school are you planning on them going to? I wouldn't put yours and your wifes investing on hold for college funds. The time factor would be brutal as far as you being able to retire. Anyway you could downsize to add more room to pay for college?
And if you can't foot the whole bill for college but can contribute some, there's nothing wrong with that.
Also, I think the college cost bubble could burst before yours are ready to start college.
What type of school are you planning on them going to? I wouldn't put yours and your wifes investing on hold for college funds. The time factor would be brutal as far as you being able to retire. Anyway you could downsize to add more room to pay for college?
And if you can't foot the whole bill for college but can contribute some, there's nothing wrong with that.
Also, I think the college cost bubble could burst before yours are ready to start college.
Posted on 9/6/12 at 2:59 pm to CAT
My neighbor is a pretty reputable financial advisor and he recommends not funding your child's college unless you can do it with cash (no loans) and consider the monies used as disposable income.
He argues that many retirement age seniors are unable to enjoy their retirement because they killed their nest egg paying for their childs education. He says student loans are relatively inexpensive plus tax deductible and that your child is probably somewhat more likely to take college seriously knowing that they are paying for it themselves.
As it works out, I had to pay my own way through and can say he's right about taking it more seriously when you are paying the bill yourself.
He argues that many retirement age seniors are unable to enjoy their retirement because they killed their nest egg paying for their childs education. He says student loans are relatively inexpensive plus tax deductible and that your child is probably somewhat more likely to take college seriously knowing that they are paying for it themselves.
As it works out, I had to pay my own way through and can say he's right about taking it more seriously when you are paying the bill yourself.
Posted on 9/6/12 at 3:02 pm to LSU0358
We started saving as soon as our son was born. I want to pay what I can for him to go without accumulating debt while in school. I doubt it will be enough for a full ride though, thats where he has to do his part in grades / scholarships and good decisions.
Posted on 9/6/12 at 3:11 pm to wiltznucs
(no message)
This post was edited on 11/29/12 at 3:35 pm
Posted on 9/6/12 at 3:26 pm to wiltznucs
quote:I wouldn't say they are inexpensive. I believe they are 6% for undergrad and 6.8% fixed for grad school. And only the interest paid is deductible (and only if you make less than around 75k)
He says student loans are relatively inexpensive plus tax deductible
Posted on 9/6/12 at 3:52 pm to wiltznucs
quote:
My neighbor is a pretty reputable financial advisor and he recommends not funding your child's college unless you can do it with cash (no loans) and consider the monies used as disposable income.
Have been told this as well and good to hear it again.
Posted on 9/6/12 at 4:18 pm to CAT
Fund you're retirement first. Not trolling or anything but you have no idea if your kids will even want to go the college route. My parent's helped me with mine and working part time can make up the difference.
Posted on 9/6/12 at 4:35 pm to LSU0358
quote:
Also, I think the college cost bubble could burst before yours are ready to start college.
I'm interested in hearing more of your thoughts on this. Do you think that college costs will increase to the point that a great percentage of students won't attend, thus lowering the cost for those who do? Will the laws of supply and demand enter into the equation?
Posted on 9/6/12 at 5:25 pm to KG6
quote:
expensive private school
I personally think one of the myths out there is that the more prestigious the university your child goes to, the more successful they will be. I think you have to look at the return on investment. I'm not spending 100k+ in tuition for my child to get a liberal arts degree. That's just me, though.
Posted on 9/6/12 at 5:40 pm to CAT
Fund it if you can without hurting your retirement. It is a lot easier for a 18 year old to get a loan for school than a 70 year old who it's working for retirement money.
Now, as far as what do I plan to do, i am going to do everything I can to fund my kids school completely.
Now, as far as what do I plan to do, i am going to do everything I can to fund my kids school completely.
Posted on 9/6/12 at 5:47 pm to CAT
My kids can go to school through a combination of scholarships, student loans, and money from jobs they work at the time. When they finish a degree, I will reimburse up to a certain total amount depending on their GPA.
The idea is that they will need to make their own assessment of the cost-benefit anaylsis for that school and degree program. I want to help them get a good start in life without them feeling entitled to the help without the performance.
When I went through school, scholarships and summer jobs covered all tuition and living expenses (four years living on campus). My parents were gracious enough to save a certain amount of money for college that they were going to give me either way. Depsite opportunities at more prestigious schools, the cost-benefit analysis just didn't make sense for me. Things worked out just fine.
The idea is that they will need to make their own assessment of the cost-benefit anaylsis for that school and degree program. I want to help them get a good start in life without them feeling entitled to the help without the performance.
When I went through school, scholarships and summer jobs covered all tuition and living expenses (four years living on campus). My parents were gracious enough to save a certain amount of money for college that they were going to give me either way. Depsite opportunities at more prestigious schools, the cost-benefit analysis just didn't make sense for me. Things worked out just fine.
Posted on 9/6/12 at 6:01 pm to CAT
We save and are preparing to pay for undergrad with stipulations. Grades and possibly even major will determine the amount of support they receive. They will be told in high school that we have a fund avialable but they will be encouraged and rewarded for scholarships. I was lucky to have parents pay my tuition but it's all relative. Tuition was 1200 a semester and during my 3-5 years I needed a job to supplement my monthly gift.
Posted on 9/6/12 at 7:51 pm to CAT
I'm saving with the intention to fully fund college, it will probably be cheaper than private high school 
Posted on 9/6/12 at 8:27 pm to CAT
Why wouldn't I provide my kids with an education? I don't have anything more valuable than my family...do you?
Posted on 9/6/12 at 9:02 pm to OTIS2
quote:
Why wouldn't I provide my kids with an education? I don't have anything more valuable than my family...do you?
That's one way some look at it. I don't disagree but wanted some perspective since I didn't get any help and all is well. As some have said, do you risk paying down debt and fully funding retirement to pay for something that may or may not equate to a successful livelihood.
We have Accts for our kids but when I do the math we are not going to be able to pay for all of college for both children without completely changing our retirement funding and paying down mortgage etc.
As this thread has demonstrated there are different thoughts on the matter.
Posted on 9/7/12 at 7:39 am to CoolHand
quote:
I think you have to look at the return on investment
This. There is no way I would encourage or help my child spend 100K+ to get a degree that will only net him a $30k salary.
My parents helped pay for my school and between them, scholarships and a part time job, I graduated without any debt. A big part of that was choosing a local school to keep my cost of living and tuition costs down.
Posted on 9/7/12 at 7:53 am to CAT
My dad had a college fund for me. He was straight with all the kids and told us "no scholarship, no car." He came out ahead, as all of us got scholarships, and we all got used cars after HS graduation. He covered living expenses while in college as well.
I'm going to try to save the funds for 4 years of in-state tuition and living expenses for my kids. If they want to go to a private school/out of state, they'll have to get a scholarship.
I'm going to try to save the funds for 4 years of in-state tuition and living expenses for my kids. If they want to go to a private school/out of state, they'll have to get a scholarship.
Posted on 9/7/12 at 8:33 am to Chris4x4gill2
(no message)
This post was edited on 11/29/12 at 3:35 pm
Posted on 9/7/12 at 9:27 am to KG6
quote:
But, if my kid was lucky enough to be accepted to say MIT, I want to be able to pay for that. I don't want them to have to settle because of money.
This is my way of thinking, I don't want my kids to be limited financially when it comes to education. I have a target of 250k per child for college and am saving accordingly even though they are 3 years and 5 months. If they decide to go to a local school I'll buy a boat.
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