Average college savings for children

[JamesMom]

We have 4 years tuition prepaid for both our boys finishing up 2nd and 4th grades. We started payment plans their first year of life and paid off the contracts with an inheritance 3 years ago. The value of the contracts now is about $40,000 for the oldest (UT Austin) and $36, 000 (UNT) for the younger so about $75,000 which is fair considering we paid $55,000 out of pocket and we still have 8 years to go for the oldest. The texas plan guarantees to pay 124 credit hours at an instate college (provided they are admitted) within 10 years of their high school graduation. If they chose an out of state or private school, the plan will pay the then average in state tuition and the rest is up to the kid. Our house will be paid off in 12 years so we can get loans and pay as we go for dorm and such.
As for the poster who has $320k saved, wow. It would take y-e-a-r-s for us to save up that much even at 100%, lol.

 

[allison443]

My boys are 11 and 13! While i don't have a "college fund" named for them, i do have a couple of mutual funds that my husband and i have been contributing to since we moved into our house. I plan on using that money for their college....We will also have our Mortgage paid off a few months before my older son starts college - so we can use that money each month towards bills as well. I hope to be able to pay 4 years for each at a State school - hoping they get some scholarships......not to sure about Financial Aid - no screaming but what about if we put all our savings under the mattress - maybe easier to get financial aid?

No screaming, but FAFSA is a federal form. You are supposed to report your assets even if they are "under the mattress". I guess you plan to lie on the form and say you have no assets?
That said, the FAFSA in my experience seems to a large extent to be driven by income. If your income is at a certain level your family's estimated contribution will be from 25% to 33% percent of your income (rough approximations). So even if you put your savings under the mattress you will still have to report your income, unless you also lie to the IRS.

 

[aprilgail2]

I put in 50 per week into my daughters college fund and my brother has one for her also (she is an only child, only niece and only grandchild so she has it made!) and he puts in 100 a week right now. She should have enough to get her few a few years depending on the college she picks out. I don't want her to have to take out to many loans since I don't want her starting out her adult life with a bunch of student loans, I don't think that would be fair to her.

 

[etail]

I was able to save 24K while paying for private school K-12 in one of the more expensive towns in the US. I was hoping that he'd go to a state school but instead he developed a unique talent in film composition so the main choices became NYU, USC or UCLA (and we don't live in CA to get in-state tuition). So I can pay one semester and continue to make payments amounting to half the tuition the other years. No real exit plan...

I kinda feel inadequate for not saving more but private school tuition amounted to more than 200K. How many DVC points would that have purchased?

I guess for me the lesson is that you need to save regardless and expect to be flexible whether the kid has a knack for a technical vocation or esoteric art form that requires specific schools or equipment (how much did that violin cost?). Giving our son the opportunity and the skills/tools to succeed are what we "signed up for" when we became parents...

 

[brymolmom]

Usually I feel pretty good reading posts about savings, etc. here on the BUDGET board - as dh and I are in a decent position in terms of retirement, savings, debt, etc.

I believe this is the FIRST time I've read a thread like this and felt so far behind so many of the other posters! And I just told dh that he and I need to be adopted! Many of the posts here where everyone is all set or pretty much set either have kids who got scholarships (no way to predict that right now) or have generous grandparents or other relatives/inheritence opportunities that helped. And I will say I'm jealous! Between dh and my moms - our inheritence will equal about a pack of gum! Now I love them both dearly and will hate to see them pass - but both were widowed moms with young kids...and neither of them has much money and will have nothing when debts are paid. My mom gives my kids a $20 gift on birthdays but she babysits for FREE very frequently so I do get a deal there. So I'm trying to focus on that even though I am jealous in a similar way to when my coworker tells me about her parents bringing her family of 5 to Disney or an Mexico All Inclusive every year and when I ask about the costs - she has no idea.

We did not start out as aggressively as we should have when they were younger - I can admit that now. I will be SURE with any grandkids I have that college accounts are started on their day of birth. We have about $23,000 each saved so far and they are 9 and 11 years old. I have been increasing what we put into the 529's as much as I can each year - for about 10 months that has been $340 per month each child. And I plan to work additional hours starting in September when they're both in Middle School - so will increase it at that time again. But honestly I can't see increasing it past $400 per month each - we also will need a new vehicle next year - so some of my new salary will go toward a car payment.

Luckily - our mortgage will be paid right as the first one goes to college...So that will free up a lot at that time.

Oh and we never intended to pay 100% of college - I think it's good for them to be invested. But I'd be happy if we can pay 75% but looking likely unless they get a bunch of scholarships...it might be 50%.

 

[disykat]

brymolmom, you're way ahead of where we were at that point and we're managing just fine with our boys!

We really didn't start until the boys were in junior high. The biggest thing for us was paying off our mortgage to free up that cash flow. We also did the majority of our saving when I started working more when the boys left grade school.

Sure it's good to have started early, but it's not too late!

 

[mward73]

We're also not the typical college saver. Neither DH or I wanted to live in the other's townhouses so we sold those shortly before we got married and bought a house. The profit from his was enough for the downpayment on the house so we rented mine for a bit then sold it. We put an addition on our house and put $50K aside for DS1's college (we ended up buying some land with my parents so this is now up to about $100K). DS2 came along a couple of years later and I started putting $300/month in stock for each of them. My mom got wind of this and also started putting money in their accounts, as well as opening other stock accounts for them. So, in stock, each kid has about $40K plus the ~$100k in land that we'll sell when the oldest gets to college age. They're only 3 & 6 now, so we've still got plenty of time.

On a side note, we thought about the pre-paid college plans and still toy with that idea, but can't seem to pull the trigger and do it. I'm uncomfortable with how it would work if they got a scholarship or decided not to go to college.

 

[taraaplin]

So I am really behind :/ with three kids at
100 per month each they will not have near enough! Divorce and dead beat dad who hasn't paid child support in a year! My kids only have about 600 each now. I figure we had to start somewhere.

 

[chloelovesdisney]

So I am really behind :/ with three kids at
100 per month each they will not have near enough! Divorce and dead beat dad who hasn't paid child support in a year! My kids only have about 600 each now. I figure we had to start somewhere.

Every dollar helps, just do the best you can. It's better to start late and have a small amount set aide, then to never start and have nothing.

 

[taaren]

On a side note, we thought about the pre-paid college plans and still toy with that idea, but can't seem to pull the trigger and do it. I'm uncomfortable with how it would work if they got a scholarship or decided not to go to college.

I'm going to have to look into these pre-paid plans, but they also make me kind of uncomfortable for the same reasons.

Since I just finished my Master's a year ago and got a job in my field, we're finally in a position to be contributing to more than DS6's 529 plan, to which we've had a modest monthly contribution since he got his social security number. (I paid my way through my Master's with wages, and scholarships, got out of there for under $10K fortunately.) However DH never went to college, may never go ... and honestly with DS6's personality being exactly like DH's I'm not sure college will be the right fit for him or that he'll want to go.

I'd like to be able to cover his tuition + books for a community college, then a state school IF he chooses to go, but that's a big if. I worked through my B.A. and had some scholarships, went to a state school and my family paid tuition and books, and I think it was a good balance to be working part-time (I finished the B.A. in three years maxing out on credits because I wanted to, and it had the added bonus of saving money).

Fortunately DH and I both have pensions and 457 plans, but I'll probably prioritize maxing out the Roths before I go for more college savings.

Its a balancing act, and the answer for every family is different.

 

[sweetdana]

Oh and we never intended to pay 100% of college - I think it's good for them to be invested. But I'd be happy if we can pay 75% but looking likely unless they get a bunch of scholarships...it might be 50%.

THIS.

My DH mom paid for 5 full yrs of school, and he dropped out with no degree.. stupid DH.. He has no concept of money at all. to this day, he only lives on a budget due to me.

I paid for all mine without a penny, and learned a bunch more about money, and life that he. (I feel strongly this is a huge learning lesson about coll)

I intend to pay for the 1/2 the 1st yr, (2 if comm coll), and some minor expenses, and sending them occasional gifts. I would help them some, but would hope they would learn how important budgeting, and how hard things really are. Assuming they graduated, I would give them a very large grad gift and send directly to the student loans for them, probably a yr or so of tuition.

I have funds saved, but nothing really specifically coll. My mortgage will be paid off while she is in middle school. So this is my goal later.

Priorities now are retirement, so they will not need to take care of us. TOTALLY on pace!
Staying away from debt, and saving just to save. ON PACE
Enjoying them while they are young spending extra money enjoying life. VERY much on pace

I will help, but the goals are to pay for about 25% of there coll, unless DH and I financial situations change dramatically. They will be welcome to stay as long as they need, if they want a comm coll, and free room and board for 2 yrs, I would certainly approved. and still prolly end up taking care of the 3rd yr.. making it very economical.

 

[AJ1983]

I am so glad I live in Canada! Reading this thread and hearing about people sending their kids to private elementary/high school and then to university for $20-40k/year sounds so expensive. Where I live, I think there are 2 private elementary/high schools, and my 7 years of university (BA and law school) cost me less then $100,000.

God bless the USA, but I think He favors the pocketbooks of Canadians! I think its amazing that so many of you are willing to help your kids with such a considerable expense, but I see a huge value in having them contribute the bulk, even if it is through student loans. The thought of repaying the debt themselves may deter them from "needing" to attend the pricier school that they may choose to attend on your dime. Also, when I went to university, it was not difficult to tell who was footing the bill themselves! They were the kids you saw studying and attending class. The ones on a free ride from Mom and Dad spent alot of time goofing off in the student centre.

 

[ManyMinnie]

We have no intention of paying 100% of college costs for our children.

DH worked during the summer/breaks and was able to graduate with no student loans.

I wasn't as fortunate and had to take out loans and they were paid off about five years after I graduated.

Our kids can do the same and not rely on money from Mom and Dad.

We're focusing on retirement and paying for DH's Master's Degree.

 

[rainynight]

We have no intention of paying 100% of college costs for our children.

DH worked during the summer/breaks and was able to graduate with no student loans.

I wasn't as fortunate and had to take out loans and they were paid off about five years after I graduated.

Our kids can do the same and not rely on money from Mom and Dad.

We're focusing on retirement and paying for DH's Master's Degree.

Consider yourself lucky! My husband and I are hoping to relocate to Canada one day. The US is just too expensive for working people to live in

 

[MrsPete]

Wow, MrsPete! It's hard to believe that people that brought kids into the world and raised them for 18 years would just toss them out to sink or swim. It hurts my heart thinking about it.

Well, in all honesty, they did plenty of things during my teen years to prepare me for being tossed out (literally) the day after graduation. I didn't live in the lap of luxury one day and on the streets the next day.

My husband can still work up resentment towards his father. His parents were divorced and as soon as they turned eighteen, their father pulled all support. He didn't even help with books. All the while buying sailboats and flying ultra lights.

Well, my parents weren't living so high on the hog as your father-in-law, and I never expected them to say, "Here's a blank check". I knew that was well beyond their means, but if they'd just helped me a little, if I could've even had a little emotional support, it would've meant the world to me. I can also work up resentment, but I (usually) choose not to do so. At this point in my life, I've overcome those difficulties, and I'm doing fine. I can't change the things that happened, but I can change my attitude towards them.

I have chosen, however, to treat my own children very differently. I expect them to give 100% in working towards a college degree -- and my oldest, the only one who's in college thusfar, certainly is doing so -- but I bend over backwards to help her in little ways: A grocery bag of her favorite treats every time she comes home, proofreading her papers, helping her move into her dorm. Yeah, these are extras, perks, not needs, but they're things that remind her she's not "on her own" in the big, cold world at 19; rather, she has parents who are behind her 100% and will always be helpful to her.

no screaming but what about if we put all our savings under the mattress - maybe easier to get financial aid?

Nah, it won't work. You have to report what you earn. If you shove your money under the mattress, the FAFSA people will think you've been spending frivolously and will not reward you with free money. It's a game you cannot win -- unless you are genuinely needy, and then it's still not a good trade-off.

We did not start out as aggressively as we should have when they were younger - I can admit that now. I will be SURE with any grandkids I have that college accounts are started on their day of birth. We have about $23,000 each saved so far and they are 9 and 11 years old.

23K each isn't half bad, and you have years ahead of you still. If you save only a small amount more, you're looking at having roughly 3K per child per semester. It's not a blank check, but it's also not peanuts. In my state, it'd essentially pay tuition and leave you to figure out living expenses. Assuming you're still working and the student is contributing something as well, that's do-able. Remember, too, that you don't have to say, "Choose anything -- anything at al!" We set some limits on what we could pay, and our oldest had no trouble sticking to those limits.

 

[goodeats]

We want our children not to graduate college with hefty student loans. With grandparent's help and modest savings on our part we have a significant amount saved for our 3 and 1 year old (about 30K and 20K respectively) plus many years of saving/growth ahead of us. Still it won't be enough for private ed in 15 years. DH and I both went to respected in-state public universities, so I expect them to do the same. We also expect to cash flow the living expenses portion.

 

[akcire]

I had a full athletic scholarship to a state school that included medical, books, and room and board. My mom sent me $75 a month as fun money. I also worked each summer, and babysat during my college years (technically I was not supposed to work, but one of the families I watched was the AD of the university). Babysitting and various jobs paid for my very modest (read junk) car and car expenses. I had a job waiting when I left university which was good, because my car died on the way home. I lived at home my first year, until I lived with my now husband.

Since my mom spent next to nothing on my college experience she left all the money from my college fund for me to use for graduate school. My grandparents had left me some money too. It is all in that pot of cash.

Husband had a college fund plus modest loans from undergrad, but a big old $120,000 graduate school debt. I worked two jobs (one professional, one store clerk) he worked full time. We lived on nothing. We bought dumpy houses lived in them fixed them up sold for profit, repeat. Every 18 months or so we sold a house in excellent condition to move into another dump. This was when the real estate market was good. This allowed us to pay off all his loans in about 5 years.
When I tell you we had nothing, I mean we could pretty much move in a regular car with the exception of our bed and a dresser I picked out of the trash. It was sort of worse than college. Not long after we paid off his loans we took our first vacation. I am SO happy we choose to do this many of his classmates are still paying back loans more than 10 years later. Other friends shopped and had very nice expensive big houses. We had no time for shopping, except at Home Depot.

We continue to live on less than 1/2 of his income. I am not working to hang out with our daughter. If I don't get pregnant in the next year or two I will get a part time job (for sanity).

My daughter should be set for college and graduate school. My mom recently gave me my college fund for her; my mom is risk adverse and invested in US savings bonds nearly 20 years ago when they were paying 7-8% this money will continue to grow for at least another 10 years until the bonds come due. It should be just under $200,000 at that point. Go Grandma for being cautious. No market corrections in savings bonds.

My husband and I have set up an account for my daughter also. The one thing we did not do is put the money in her name. It is held at a different brokerage firm, but it is in our name. I had a cousin who had a fairly extensive college fund and an unknown drug habit. When she turned 18 she cashed out her college fund for drugs. It didn't kill her but it easily could have. I don't want any large accounts in my daughter's name.

We hope to have a 2nd child. We will have to work hard to match the assets that are earmarked for our daughter.

The house we live in is nice enough, but paid for. We are looking for another house, it will also be modest but in a better elementary district. My daughter will have no idea of our resources until necessary. Not that I want to think we are poor, but I want her to appreciate money/things and the value of work.

 

[imsayin]

We have no intention of paying 100% of college costs for our children.

DH worked during the summer/breaks and was able to graduate with no student loans.

I wasn't as fortunate and had to take out loans and they were paid off about five years after I graduated.

Our kids can do the same and not rely on money from Mom and Dad.

We're focusing on retirement and paying for DH's Master's Degree.

This is not as easy as it once was. Tuition/room/board at one of our state U's runs between $20,000 and $35,000/year. Community college is obviously less.

In terms of getting a summer job to pay for that, it is not likely. First of all, the job market sucks right now. Many teens can't even get hired, and if they do, it is for part time work. Even with a full time job, you're probably looking at $4,000 at most over the summer. That would barely make a dent in college costs, and the numbers above don't include books or spending money.

 

[3boymthr]

On a side note, we thought about the pre-paid college plans and still toy with that idea, but can't seem to pull the trigger and do it. I'm uncomfortable with how it would work if they got a scholarship or decided not to go to college.

Check the plans available to you but the plan my parents bought allows for these situations - the money comes back to the kids at the amount paid in plus interest. You lose the extra paid up value of the tuition but still get your money back.

ETA - they were also told that the people who give the grants (The FAFSA people) are not allowed to take these plans into consideration when deciding how much money they are eligible for in grants and loans. It probably varies by state and plan but this is what they were told.

 

[icemanextreme]

Just put aside what you can. The economy is bad and it is not as easy to put away money, even for college.