Have questions re: college tuition/loans for DD

[golfgal]

Well, this is terrible to think about and I hope to God it doesn't come to pass, but it IS their account so if God forbid something happens to them before we use the 529, it would be part of their estate.

Not necessarily. It isn't an asset in the way a 401K plan would be. There is a person listed as the beneficiary of the account (the grandchild, for example) and the account is for that child but the grandparents are the owners of the account. If the grandparents die before the account is used up, the money sits there for the child under some kind of trustee unless there are contingent owners. Grandma and Grandpa should list contingent owners if they haven't already so the ownership then passes to someone else (the parents of the child or some other adult) when they die if the account hasn't been used up yet. It is a simple piece of paper that takes care of this.

 

[golfgal]

Tell me about it! My kids are 1 1/2 and 6 years old. According to one of those online college savings calculators, I need to put away about $1000 each month to pay for their tuition when their time comes. A 4 year state school - out of state, because I want them to have options outside of NJ - would total 250k each for 4 years including room and board. Yikes! That is at an estimated 8% yearly return. There goes our vacations! I guess I'll have to live vicariously through you guys by reading trip reports!

That is assuming you have to pay 100% of your child's education expenses. Honestly, the best way to save for your child's college it to make sure they do well in school-the scholarships will follow. Also, for a lot of people by the time their child starts college, the amount they have to pay isn't horrible. We will probably end up having to pay between $500-1000/month for DS17 when he starts college next year. That is manageable considering we spend probably $500/month on him for food, auto insurance, school expenses now anyway. Since he will be away at college he won't have to be rated on our car and his food is rolled into the college costs. When he was a year old, $500-1000/month seemed impossible.

 

[palmtreegirl]

I don't expect anyone else to pay for my children to go to college or even loan me the money to do so. My kids will go our local community college and then transfer over to state school because that's what we can afford.

 

[golfgal]

I don't expect anyone else to pay for my children to go to college or even loan me the money to do so. My kids will go our local community collage and then transfer over to state school because that's what we can afford.

So you won't apply for scholarships or any aid? That is just silly, sorry. Why shortchange your kids? What if they were offered free rides somewhere, would you turn that down?

 

[Snowysmom]

The FAFSA is an annual event at my house. I get to fill out 2. The good news in the EFC goes down with 2 in school The bad news is, I have 2 kids in school! LOL!
My older DS went to UMass Amherst. He had scholarships and we were able to pay for the rest of his education. He was top in his major and is now in his third year at a top 50 medical school. You can go to a state school and succeed quite well. My younger DS did not want to go to UMass. He picked a private college knowing that we would contribute up to the cost of UMass. Luckily he got a good 4 year scholarship from the college, we pay some, and he has taken out some loans. He does working co-ops every other semester to gain work experience in his field and earn some money for school. Because of this he will be able to get a higher paying job in his field at graduation.and that will help pay off his loans. He also worked a part time paying internship when he was in classes to earn some money. It did not affect his grades. I went from a part time job to a full time job so we could also help out older DS a bit. As parents, we do what we can and sometimes the kids have to take out some loans. You just want to be sure that it is within reason for the field they are going into. Best of luck to all who are heading off to college and their parents.

 

[golfgal]

The FAFSA is an annual event at my house. I get to fill out 2. The good news in the EFC goes down with 2 in school The bad news is, I have 2 kids in school! LOL!
My older DS went to UMass Amherst. He had scholarships and we were able to pay for the rest of his education. He was top in his major and is now in his third year at a top 50 medical school. You can go to a state school and succeed quite well. My younger DS did not want to go to UMass. He picked a private college knowing that we would contribute up to the cost of UMass. Luckily he got a good 4 year scholarship from the college, we pay some, and he has taken out some loans. He does working co-ops every other semester to gain work experience in his field and earn some money for school. Because of this he will be able to get a higher paying job in his field at graduation.and that will help pay off his loans. He also worked a part time paying internship when he was in classes to earn some money. It did not affect his grades. I went from a part time job to a full time job so we could also help out older DS a bit. As parents, we do what we can and sometimes the kids have to take out some loans. You just want to be sure that it is within reason for the field they are going into. Best of luck to all who are heading off to college and their parents.

This is the part that parents seem to forget (and students). For someone graduating medical school with $200,000 in student loans SOUNDS bad but since they are going to start out making a salary of that or MORE, paying those off isn't that big of a deal. Now, if you came out of college with $200,000 in loans and got a teaching degree and were going to make $30,000--not a smart move. If a student comes out of college with loans at or below what their starting salary will be, that is reasonable.

 

[chisnpeke]

There is no way someone making $40,000/year would not qualify for some aid, unless they only went to a community college. If a student is going to a state school costing $15,000/year, for example and a family makes $40,000, they would most likely get most, if not all, of their college paid for--unless they have a lot of money in LIQUID savings--not retirement funds. With those numbers, a family would only have about $15,000 of after tax money to live off if they paid 100% of their kids' college. It just doesn't add up.

I only know her father's income. She had a stepmother who I'm (just guessing) made at least $30,000 a year. I'm only going off of what she told me, so it could have been an exaggeration.

She has a baby and is not married to the father, she is only 20 so if she wanted to get aid she has to get married to the father of her baby or she is still considered a dependent of her father even though he gives no financial support to her.

 

[golfgal]

I only know her father's income. She had a stepmother who I'm (just guessing) made at least $30,000 a year. I'm only going off of what she told me, so it could have been an exaggeration.

She has a baby and is not married to the father, she is only 20 so if she wanted to get aid she has to get married to the father of her baby or she is still considered a dependent of her father even though he gives no financial support to her.

Does she live with her father? There are questions on the FAFSA (it was so much easier when they called it the FFA, anyway) that ask if the student has dependents, etc. If she is not living with her father, she wouldn't have to claim his income. If she is living with both her father and her step-mother she would have to include both of their incomes. Also, where is she going to school? If she is going to a community college that only costs $4000/year, she isn't going to get any aid. If she is going to a private college costing $40,000/year, she should be getting a free ride.

 

[palmtreegirl]

So you won't apply for scholarships or any aid? That is just silly, sorry. Why shortchange your kids? What if they were offered free rides somewhere, would you turn that down?

Our children will be spending their first 2 years of school at our local community college, I don't believe they'll be "short changed" at all. Of course we'd accept any kind of scholarship they were offered but we don't feel their entitled to anything.

 

[golfgal]

Our children will be spending their first 2 years of school at our local community college, I don't believe they'll be "short changed" at all. Of course we'd accept any kind of scholarship they were offered but we don't feel their entitled to anything.

If they get a full ride scholarship to a 4 year college they won't be able to redeem that if they spend the first 2 years at a community college. Sorry, I just think your reasoning is short sighted and is limiting your kids potential.

 

[hentob]

I don't expect anyone else to pay for my children to go to college or even loan me the money to do so. My kids will go our local community college and then transfer over to state school because that's what we can afford.

Simple as that.

You are teaching your children how to survive in the real world

 

[hentob]

If they get a full ride scholarship to a 4 year college they won't be able to redeem that if they spend the first 2 years at a community college. Sorry, I just think your reasoning is short sighted and is limiting your kids potential.

If they get a full ride scholarship, that would be cheaper than paying for community college.


Then plans change.


I am sure palmtreegirl is smart enough to know that she should send her children to the 4 year school IF they get a full ride

Why are you saying she is limiting her children?

 

[palmtreegirl]

If they get a full ride scholarship, that would be cheaper than paying for community college.


Then plans change.


I am sure palmtreegirl is smart enough to know that she should send her children to the 4 year school IF they get a full ride

Why are you saying she is limiting her children?

Exactly.

 

[lil mermaid]

I totally agree!
OP- did you not know that every year for the past 18 years that your child was one year closer to college? Instead of taking so many vacations you could have invested at least part of that money in your childs future. If you can afford that many vacations you can certainly not expect government handouts for your childs education? You could have gotten a 529 as soon as your child was born and invested part of that vaction money. Sorry but just can't feel sorry for someone that vacations over and over for the past 18 years and doesn't think about their childs future.

I agree. Every month since our children were born we have put away money for their education. We are very fortunate that their grandfather contributes $100 per month for each of them also. I doubt that we will have their college educations 100% funded by the time they are ready for college, but we expect that any shortfalls will have to be made up by us and not the government.

Still, if I were the OP, I'd be much more concerned about the fact that they have no retirement savings than the college issue.

 

[hentob]

Still, if I were the OP, I'd be much more concerned about the fact that they have no retirement savings than the college issue.

Suze Orman would agree

 

[golfgal]

If they get a full ride scholarship, that would be cheaper than paying for community college.


Then plans change.


I am sure palmtreegirl is smart enough to know that she should send her children to the 4 year school IF they get a full ride

Why are you saying she is limiting her children?

Because, first, people wrongly assume that anything done in a community college automatically transfers to a 4 year school and often going this route costs MORE then just going directly to a 4 year school. Second, there is a lot more to learn in college then what you get in class and by sending kids to a community college vs away for school deprives them of learning those lessons-mainly deprives them of growing up sooner rather then later. Third, the quality of classes at community colleges just doesn't compare to those at most 4 year colleges and that alone is worth not going that route. Having your children grow up with their only choice is to go to a community college for 2 years and then on to a 4 year school puts them in that mind frame. Why make this choice before the time comes? Present it as a POSSIBILITY as well as other options but not THE ONLY option as she is stating.

Suze Orman is a dork, BTW--sure fire way NOT to ever retire-but I agree that funding a retirement plan is much more important then funding college.

 

[okeydokey]

OK this is way more than needed.By the way WE have a great amount of money in the bank for savings and some IRAS that have tanked like the rest of the country.My DD on the other hand does have some.We have a financial planner and are on top of all that.My question was about college- basically how do people do it?

Again the ones that get screwed are the people like us who have contributed to society year after year after year to get screwed over and over again- the white, middle class American family continues to pay through their noses.I work with an anesthesiologist from another country who told me that the rich people in his country come here and their kids go to school for nothing!!!!! WTH!!!!!!!!

By the way my DD had scholarship offers from 4 schools that is why I was asking the question.She had to sign her National Letter of Intent today and wanted to make sure going this route was the best since the money was the best but not her first school choice.

She wants to be a chiropractor so going to any old school was not an option but thanks for the info about the state schools- we did go with the cheaper option, again not her first choice.

Thanks to all who gave valuable information.

Linda

How do people do it? By saving for college from the time the kids are little instead of taking expensive vacations every year and by choosing state schools that don't cost $150,000 to go to. At least that's how my family did it.

 

[golfgal]

How do people do it? By saving for college from the time the kids are little instead of taking expensive vacations every year and by choosing state schools that don't cost $150,000 to go to. At least that's how my family did it.

I hate it when I see this thrown out there, state schools are NOT always less expensive. In my case a state school would have cost me 5 times more then what I paid at the private college I attended. Many of our friends' kids are finding the same thing. It isn't a state school vs private school or even a $15K year vs $40k/year argument, it is about applying to a wide range of schools and picking the one that works the best for you.

 

[mefordis]

I agree. I started out at a community college and I missed out on the freshman year at the dorm. I wouldn't want my girls to miss out on that. By the time I went to the 4 year school after a couple of years at community college I felt like I was too old to be in a dorm. At that age everyone is moving out into apartments. If I had planned better I would have been able to go straight to the 4 year school right out of high school.

Because, first, people wrongly assume that anything done in a community college automatically transfers to a 4 year school and often going this route costs MORE then just going directly to a 4 year school. Second, there is a lot more to learn in college then what you get in class and by sending kids to a community college vs away for school deprives them of learning those lessons-mainly deprives them of growing up sooner rather then later. Third, the quality of classes at community colleges just doesn't compare to those at most 4 year colleges and that alone is worth not going that route. Having your children grow up with their only choice is to go to a community college for 2 years and then on to a 4 year school puts them in that mind frame. Why make this choice before the time comes? Present it as a POSSIBILITY as well as other options but not THE ONLY option as she is stating.

Suze Orman is a dork, BTW--sure fire way NOT to ever retire-but I agree that funding a retirement plan is much more important then funding college.

 

[mefordis]

I get the idea that private schools tend to work more with the student to make it more affordable than state schools.

As a side note, you guys in MN are lucky you get reciprocity with U-W, too. My alma mater! That just opens up more choices for you. Here in NJ it's slim pickings for good schools. I'm counting on our girls having to go out of state. Maybe U-Michigan - my home state! U-W is great but it is too far away! I'd miss them!!

I hate it when I see this thrown out there, state schools are NOT always less expensive. In my case a state school would have cost me 5 times more then what I paid at the private college I attended. Many of our friends' kids are finding the same thing. It isn't a state school vs private school or even a $15K year vs $40k/year argument, it is about applying to a wide range of schools and picking the one that works the best for you.