Saving/investing for college

[DaddyO]

We've done a tiny bit of this. And, the GPs are too. But, riddle me this?

How many of you paid/worked for your own advanced education? How many had the folks foot the bill? How seriously did you apply yourself?

See, my folks sprang for my undergrad studies and most of my living expenses (granted, I took a part time job so I could keep myself "in the manner to which I'd become accustomed"). And, I although I got decent grades and a degree, I look back on most of it as a 5 year orgy of gratuitous self indulgence. Would I have taken it more seriously and got more out of it if I had to pay some/all of it? Would I have even gone if that was the deal? Did this financial "sheltering" discourage me from knuckling down and figuring out what the hell I wanted to do with my life?"

I ask these questions not to judge or blame my parents. I'm just concerned about how to address these issues w/ my own kids. My wife went to a super spendy private high school and college on the parents dime. She feels it was really important and wants to be able to support our kids if they want the same. So, we're trying to figure this thing out now while they're young so we can be united on this issue when it really matters.

[Weston]

Our priority will be our retirement... We'll set up some college stuff for them, but not a lot for the very reasons you mentioned.

[SGTDad]

I'm kind of two minds about it. My wife got a full-ride ROTC scholarship - her parents didn't have any money. My Dad paid for my school, plus some living expenses, but, as I said in another post, I didn't have the maturity or self-discipline to succeed in college the first time. So I quit school, joined the Navy and finished my degree on my own. I don't know how things might have been different if I had to pay my own way.

Some of my college friends had some interesting hybrid solutions. One of my (few) college girlfriends paid half of everything while her parents paid the other half. The parents of one of my roommates bought some stock when he was a baby and he also was required to put a portion of his allowance and income from teenage jobs into his college account. Then he had to manage that money during his college years to make sure he didn't run out.

We have education IRA's set up for each of our kids. One of the reason we went with IRA's is because it can be used for any education. Since we're a military family and we move a lot, there will probably be times where we'll have to live somewhere with bad or dangerous schools. We can use the IRA money for a private school if we need to.

I think we will probably chip in for part of the cost, but we'll also require our kids to save from any jobs/paid chores, etc.

[Indy]

My parents parents had saved up for my brother and my college education, but they'd only pay if we made the grades. My first couple of years of college were part time at a community college, but I was doing that because my parents told me that was what I had to do. I wound up skipping most of my classes and just showing up when I had to. I did OK until I hit a couple of really dry courses that I couldn't stand. I didn't make the grades, and the agreement was that my parents would only pay the bills if the grades were good. I was put on a reimbursement program through them.

A few years later I got a job with Xerox and they offered tuition reimbursement. It was a good deal, they paid 100%, and I think they paid for books as well. By then, I wanted to work towards a college degree and signed up for classes at a local Catholic college. In that situation, I did well as the class sizes were much smaller and I couldn't skip out without being missed.

A couple years later, Xerox announced a pilot program that amounted to an accelerated bachelor's degree through RIT. I took the test and was among the top 25 candidates, so I got in. I realized that trying for two degrees and working full time wasn't practical, so I stopped working toward the other degree.

Again, everything was paid for and it was distance learning. I did well, maintaining a 4.0 GPA. Corporate cutbacks killed the program two courses away from getting our degrees. I tried to finish the program on my own, but was told it was actually a master's program and I'd need to get a bachelor's before finishing taking the remaining two courses.

Xerox changed their reimbursement policy so that they'd only reimburse 60-80% depending on your grade. They also wanted a 4 year commitment after the degree was obtained. If the degree wasn't completed, or you quit before fulfilling your commitment, you had to pay everything back. That seemed too much like indentured servitude to me, so I shelved the idea of getting a degree.

I'm kind of toying with getting a degree, but I don't know if it's a wise decision considering I plan to continue working on my own. I might look into colleges that offer life credits or accelerated programs. I'm tired of taking all those fluff course that just boost the colleges' bottom lines.

[CTdadof3]

Gramps set up the 529's when each child was born, and we try to send something each month ($25 is the min allowed). It's not likely we will be able to save enough to fully fund a 4 year college education (for 3 kids), so there will plenty for the kids to contribute.

From my experience, mom and dad picked up most of the tab. I worked summers and breaks, and that covered book money and living expenses. So I was paying in. But it still took me 2 years to understand what I was at college for and to take advantage of all that was available.

I like SGTDad's reference to having the kids pay into their college funds early on from allowances and teenage jobs. I think it gets them to buy in to the process earlier and can also offer early lessons on saving and investing.

[SGTDad]

I like SGTDad's reference to having the kids pay into their college funds early on from allowances and teenage jobs. I think it gets them to buy in to the process earlier and can also offer early lessons on saving and investing.

Yeah, part of that comes from my personal experience of getting no real financial/money training from my parents. I was the typical kid that only knew what money was, so i wrote checks and got into a lot of credit card debt. So I intend to make sure my kids understand financial responsibility.

[DaddyO]

[quote=CTdadof3]
So I intend to make sure my kids understand financial responsibility.

That's a huge part of this for me.

[Don-Dad]

WE set up 529's in hopes that we might be able to have alot of the college bill paid. Remember, by the time our kids go to college, it's gonna cost probably 2 or 3 times what it cost today. And I doubt the wages they will make will allow them to get out of college debt in just 10 years like most traditonal college loans. Just think of having to pay $500 a month in student loans 6 months out of college.

I'm just now getting ready to pay off my graduate degree, $267 a month is bad enough.

I was lucky that we were poor and all my undergrad years were paid for by Pell and Tap grants. I was no model student but I made it in 4.5 years with a whopping 2.76 gpa (I did get a 3.81 in my grad days :P )

[Don-Dad]

And a tax write off on your state tax return :wink:

[sao95]

we have a bank account that we regularly put money in, we have been looking into a 529 but aren't sure which state to go with :???: My wife's was paid for through her associates and a little after, I was on my own, which was a reason why I joined the military, for the g.i.bill, it unfortunately didn't pay for everything and I have quite a bit in student loans. My grades were good, then they dropped and I dropped, (actually it might have been vice versa) I was working full time and taking a full load, I missed alot of classes not because I was partying, but because I was tired, the profs didn't let it go and they failed me in many classes even though I had the grades, but because I missed to many classes, that irritated me and I said screw it. When I went back my grades were up again and they stayed that way...

[Cubfan]

This is a great website for 529 info. It lets you compare state by state, and also make comparisons if you want to invest in other state's plans. FYI - I live in Illinois and participate in Iowa's plan. I did this mainly because Vanguard manages Iowa's plan, and I'm comfortable with Vanguard. And, Iowa has one of the lowest cost plans. Yes I know I forfeit some state tax breaks with Illini, but I also get other perks from Vanguard for having so much $ with them.

http://www.savingforcollege.com/compare_529_plans/

[Will'sdad]

Thanks for the link!

[Bollux]

parents paid for my edumacation =p Serious slacker... many of mornings it was:

"Hmm french class or belgian waffle..... mmmm waffle!" lol Hated the school aspect as alot of the teachers in the music department along with the students had a holier then thou attitude that drove me nuts. I was dubbed the Phantom of the Music Department cause i couldn't stand being around the pompus arrogance. In the end i stuck to it and graduated. not like the degree meant much.

[SGTDad]

Some banks and bigger financial institutions have 529 programs that work in any state. If you're worried about sticking to a specific state, check those out.

Also, take a look at education IRA's. They are a great deal as well.

[Jackson's Dad]

How many of you paid/worked for your own advanced education?

I pretty much paid my way. My parents contributed, but it was probably only 10-15% of the bill. I paid the rest through summer jobs, school jobs, grants and tons of loans. But they didn't do it to "teach me a lesson" -- they did it because we didn't have a lot of money. (I was the 3rd kid in college in 4 years). That's how I grew up, so I always knew that working my way through school was how it was going to happen.

The summer job sucked - not because I had to work, but because it meant I missed some great summer internships. I always had to pick the paying job over the unpaid internship.

Job during school was fine. There was a movement while I was at school, where a bunch of other work-study kids wanted the system to change. They said it was unfair that we had to work, taking time away from studying, while others didn't have to. I argued that fair or not, it was always how I expected to get through school -- paying my own way. That was the deal I made with the school. Besides, one of the jobs I landed was designing signs and fliers, which directly let to my career as a graphic designer.

Don't know what we'll do for Jackson yet. We'll probably pay for more of it than my parents did, but will definitely make him sit down and work the numbers with us -- no carefree clueless ride. We'll definitely expect that he works for his money, and so on.

[sao95]

Some banks and bigger financial institutions have 529 programs that work in any state. If you're worried about sticking to a specific state, check those out.



I didn't know that, good info, thanks :)

[LooneyToonDad]

I had heard something about 529's reducing financial aid possibilities, so I did a quick search, and while most seem to say it does affect it, I found this line from FinAid website (finaid.org, found the link also through my local community college website):

A section 529 college savings plan owned by a parent has minimal impact on financial aid, and one owned by a grandparent has no impact on financial aid.

I haven't even started thinking about his college $$ yet, but I guess it's never too early. I think I want to go finish mine before he starts though.

[Math Daddy]

I paid for my undergrad with lots of loans. Same thing with grad school. Since I went to a private college, tuition was something like 16k a year. The last two years, I was a Resident Advisor in the freshman dorm...which knocked the total down to 8K (room and board were covered for R.A.'s). All in all, I'm looking at somewhere around 70K in loans I have to pay back...which means I'll be paying until I die. That's the problem with teaching. Maybe I'll get a doctorate in Educational Leadership and become a principal. While teachers are getting paid around 36K a year in my county (that's after about 10 years of teaching), principals are getting close to 90K. I have an urge to vomit now.

I was a motivated student, but not too psycho (like my wife, who managed a 3.999 GPA in undergrad. Two B's, in singing classes, that she took for the hell of it. She's still pissed). I ended up with a 3.11 GPA, and that's without actually trying or studying. I studied for my major classes, but that's it. Got a 3.75 in grad work. Much more motivated then.

[Becca's Dad]

Would I have taken it more seriously and got more out of it if I had to pay some/all of it?

My father works for a college so my tuiton was covered as long as I passed, I dropped one course too late, he made me pay for it. He was right, it made me value it more...

On the other hand I'm putting money away simply because I saw too many friends that couldn't get any finacial aid because their parents made too much money. And with the cost of college rising every year my daughter will probably have to work whether I save or not.

[pwrandall]

Regardless of how an education gets paid for I think it need to be a priority for parents to instill the expectation of a college degree into their children. It is simply a fact that people with degrees earn more over their lifetimes, and those with advanced degrees do even better. Financial responsibility is a separate topic IMHO.

That being said, I recieved my B.S. on the grandma scholarship program but also worked a couple of part-time jobs during my 5 years of undergrad work. Having my basic needs and college tuition covered meant I could focus on what college is really about -- social skills, networking, deadlines, maturation and development of the self as an individual, drinking, drinking, drinking and then I met my wife.

Having a good experience as an undergrad led me to later earn a Master's degree (easier by the way); however, I'll be the loans for that degree off until my daughter is in college. (Boy, do I need to go back to work.)

My wife, on the other hand, worked three jobs and had several loans and other than meeting me hated her college experience and is not motivated to pursue higher degrees. I believe this is my point. Get it paid for no matter what so that it is a good experience that encourages further growth.

Sorry about the rambling.

[silviomossa]

On the other hand I'm putting money away simply because I saw too many friends that couldn't get any finacial aid because their parents made too much money. And with the cost of college rising every year my daughter will probably have to work whether I save or not.

That's my thinking. Tuition has been raised about 10% every year this decade at our local state colleges. My brother (works as a U fund raiser) said that states used to contribute about 80% of the operational costs of universities. Now, it's about 35%. If it stick it all to my kids, I'm guessing that they'll be six figures in debt in undergrad alone once their time comes, so I'd like to help out if possible.

As for myself, grandparents trust fund paid for the tuition, my jobs paid for my living expenses. I didn't "value" it as much I should've, perhaps, at the time, but oh well -- the reasons for that were several. Regardless, I turned out okay. No regrets.

[Jackson's Dad]

On the other hand I'm putting money away simply because I saw too many friends that couldn't get any finacial aid because their parents made too much money. And with the cost of college rising every year my daughter will probably have to work whether I save or not.

So true. We were lucky in that my father was starting his own business, and we had very little money. He said that our going to college was one of the reasons he decided to start his business then, rather than do the safe thing and wait till we were out of school.

[Joey G]

Dad contributed to college, I worked part-time and summers, and I had loans. I had about $18K in loans when I got out of school in 1992, though I was lucky in that the college of journalism at my school had a 1% loan program and some of the owed money was through that. It seemed daunting after I graduated, but it was a little depressing when I finally paid them all off (meaning I'd been out of college 10 years) :shock:

Looking back, that $18K was nothing, my alma mater's tuition is so much now that given my dad's contribution and the amount of work I could handle, I'd be borrowing $18K a year. And though I don't regret my college choice or my 2.6 GPA, as a journalism major at a supposedly good J-school, I learned more about the newspaper business working for the college paper and, especially, in three months as a clerk at a big-city paper than I did in four years of journalism classes and sometimes wonder if it was worth it.

My wife had to leave school a year early after her dad got laid off and her family was in financial trouble -- they basically could no longer pay for her school and she moved back home to help bring in some money. She almost never made it back (thankfully she did, I joke she was on the 13-year plan :) We have a 529 for the first son and will be setting one up for the newborn soon. Though I'm sure there will be loans and part-time jobs involved when they get to school, we want to contribute as much as we can so they can can worry just about college.

JG