How much do you save for your kids' college?

[1Jackpot]

We have $100,000 per child (we have 4) saved in an account for them. Our oldest is only 10, but it feels great that, if they choose, they won't have any financial worries on how to pay for college.

I think it's great to see so many parents saving for their childrens' educations!

 

[JBurke]

We have $100,000 per child (we have 4) saved in an account for them. Our oldest is only 10, but it feels great that, if they choose, they won't have any financial worries on how to pay for college.

I think it's great to see so many parents saving for their childrens' educations!

I dont think this very do-able for most people.
Your kids are very lucky.

 

[disykat]

.

So we put away about $575/month and that STILL won't be enough. I don't know what my friends who have not saved for college are going to do

Oh, I know exactly what they'll do. They'll be in total shock when they get their FAFSA ExpectedFamilyContribution, trying to figure out how they're expected to come up with so much money.

Although I'm one who didn't start saving from birth, but rather in changes in cash flow as they got older, I'm still continually amazed by how many people totally stick their heads in the sand about this.

 

[tajz90]

Oh, I know exactly what they'll do. They'll be in total shock when they get their FAFSA ExpectedFamilyContribution, trying to figure out how they're expected to come up with so much money.

Although I'm one who didn't start saving from birth, but rather in changes in cash flow as they got older, I'm still continually amazed by how many people totally stick their heads in the sand about this.

Yet, if they don't have a lot saved and they have some bills, fafsa will help them get more financial aid. I almost wish we didn't save.

 

[disykat]

Yet, if they don't have a lot saved and they have some bills, fafsa will help them get more financial aid. I almost wish we didn't save.

FAFSA doesn't look at your bills. It does, however, look at your savings. Realistically, if you are middle income, based on income alone you're going to be expected to pay so it's best to be ready to do so!

Private schools often use a different calculator that does look at mortgage etc.

Unless you are low income and qualify for a pell grant or are going to a private institution with grants of it's own, financial aid packages are mostly loans. Merit aid is getting harder to get at many schools.

 

[Pigeon]

We're committed to paying for 4 years of a state school. If we have it all saved by then, terrific. With every calculator I've looked at, we aren't going to be penalized by saving as any financial aid would most likely be in the form of loans, not grants.

We add to 529s from every paycheck. We also have some in an additional account. I sure wish our state had a prepaid tuition option, but we have nothing like that.

If there are loans involved, we'll pay them. We are funding our retirement adequately.

I don't want my kids to have to work much during college. I want them to concentration on their educations. A few hours a week and summer jobs are enough. And as for not valuing education if the child doesn't pay for it him/herself, what nonsense. Both dh and my parents paid for our bachelor's degrees and hands down, it was the best gift they could have given us.

 

[lurkernj]

We have been saving since first DS started kindergarten. Started with $100/month and worked our way up to $900/month these past 2 years. He's going to be a senior this year and we still only have $70,000 total saved. We will be done with our mortgage during his 2nd semester, so we will have that to put towards tuition.

He's a pretty smart kid, but there's always someone smarter, so while we are hoping for some scholarship money, I know we can't count on it. I think we're in "decent" shape with him, but we also have a second DS who is three years behind him, so that will be another challenge that we'll deal with when we get there. I will take loans out to give second DS fair opportunities if needed (I won't say equal opportunity, as he is a slacker and doesn't work nearly as hard as DS1).

 

[tajz90]

FAFSA doesn't look at your bills. It does, however, look at your savings. Realistically, if you are middle income, based on income alone you're going to be expected to pay so it's best to be ready to do so!

Private schools often use a different calculator that does look at mortgage etc.

Unless you are low income and qualify for a pell grant or are going to a private institution with grants of it's own, financial aid packages are mostly loans. Merit aid is getting harder to get at many schools.

You're correct. Filled it out twice only to get kicked in the hind end because we did the right thing in our life. I keep forgetting!

 

[FINFAN]

We lost 1/3 of the value of both our kids college funds in '08. They are back to previous levels without additional contributions. They were in 9th and 6th grade when this happened. DD just graduated and with her ACT score received tuition paid scholarship and a few other small amounts so all have to pay is residence, dining plan and books. Probably use any of her leftover funds for son who doesn't work on his studies quite as much.

So best laid plans don't always work out like you think. We had their funds well on the way when '08 hit and instead of gaining almost 20% per year like we had been experiencing . . . we were digging ourselves back up just to get back to where we were and some treading water along the way with the balances in the accounts.

I could have written this, except our DD STARTED in '08...we had no time to recoup what we lost, basically 3 semesters worth and travel expenses ( she attended 4 states away-and before I get flamed no in-state school offered a 4 year degree in her major) We had to use what was set for DS toward DD , and he starts this fall. DD now has student debt, and DS is starting at CC (unsure of his major so good plan) to keep costs down....but it really stings to have sacraficed and saved over the years, to have it all go poof and then be in an even tighter financial situation since time is no longer on your side. Add taking care physically and financially~ 3 aging /ill parents, recession, 20 year old home that needs care...trying to do anything for your own retirement... For those that have it taken care of, well done, we tried our best to do the same, but real life intervened. Luckily we only have 2 kids!

 

[scottmel]

I hope someone reads this that can truely offer advice. I have one DD13 and I am guessing I have saved maybe 100K> However per the advice of my dad and college admissions - it is best to look broke when applying for aid. I have since started liquidating her college fundn to pay her 12k tuition a year at a private school. So by the time she finishes highschool, her "college" fund will be empty except her Roth Fund.

Now we don't have a morgage anymore and everything is tied into retirement. Now when she starts college I can back off the retirement savings and pay for her college. She goes to an excellent prep school and we are hoping for a few scholarships....

 

[crisi]

I hope someone reads this that can truely offer advice. I have one DD13 and I am guessing I have saved maybe 100K> However per the advice of my dad and college admissions - it is best to look broke when applying for aid. I have since started liquidating her college fundn to pay her 12k tuition a year at a private school. So by the time she finishes highschool, her "college" fund will be empty except her Roth Fund.

Now we don't have a morgage anymore and everything is tied into retirement. Now when she starts college I can back off the retirement savings and pay for her college. She goes to an excellent prep school and we are hoping for a few scholarships....

I hope that works for you. The Faisa is primarily driven from income....as was said above, if you have a middle class income, plan on getting aid only in the form of loans.

A girlfriends daughter is heading off this year. Family income of less than $60k. She got a grant package from the school, but the family contribution is still 25k per year of school (private college). With a middle class income and no savings, it will all be loans.

 

[Skatermom23]

I hope someone reads this that can truely offer advice. I have one DD13 and I am guessing I have saved maybe 100K> However per the advice of my dad and college admissions - it is best to look broke when applying for aid. I have since started liquidating her college fundn to pay her 12k tuition a year at a private school. So by the time she finishes highschool, her "college" fund will be empty except her Roth Fund.

Now we don't have a morgage anymore and everything is tied into retirement. Now when she starts college I can back off the retirement savings and pay for her college. She goes to an excellent prep school and we are hoping for a few scholarships....

This probably isn't the road I would suggest because what happens if something happens down the road and you can't fund your DD's education from current income? Besides your financial status has nothing to do with Merit scholarships and it sounds like your current income will prevent you from qualifying for need based scholarships. I would run a FAFSA estimate and see what it tells you. You may be spending the money now for nothing as your current income alone will give you a substantial EFC.

 

[tajz90]

Fafsa also takes into the amount saved. If your child has savings in their name, they are expected to pay more. I forget the amounts.

 

[barbliny]

I hope someone reads this that can truely offer advice. I have one DD13 and I am guessing I have saved maybe 100K> However per the advice of my dad and college admissions - it is best to look broke when applying for aid. I have since started liquidating her college fundn to pay her 12k tuition a year at a private school. So by the time she finishes highschool, her "college" fund will be empty except her Roth Fund.

This advice is unfortunately doled out way too often.

The general (and very general) way FAFSA looks at assets/income -- income is the most important component -- they will take a HUGE chunk of it (about 25% - 30%, there is a portion that is protected based on the number in the family, but this is generally what I have found in the past 2 yrs of FAFSA we have filled out for our family of 4) and allot that to what they expect you can pay for the year. They will take about 6% of the parent's savings - there is a holdback number based on the age of the parents. They will not look at parent's retirement savings. Money in a 529 is considered a parent's asset - so they still only take 6% of that into consideration (I know it sounds ridiculous and is counter-intuitive). Income and assets of the student - they take about 30% of that.

They also 'put back' into your income any untaxed 401k contributions - they feel that you should be using that money for tuition instead.

Now, if you're applying to a private school that uses PROFILE or their own financial aid form - they may or may not take more of your hard assets and expect you to tap into equity.

So, in really simple math, and really approximating as an example
$100k income, $10,000k in savings, $100k in 529 - EFC will be about $36,600
$100k income, 0 in savings - EFC will be about $30,000
$30k income, $200k savings, $200k 529 - EFC will be about $34,000

Of course, these are just suggested numbers as to what you can pay - if you go to a 'does not meet need' school, these numbers mean nothing and the person in the 3rd example will be very happy they saved all of that money.

This is something that I learned after being shocked by my EFC number sending my daughter - I wish someone had it explained it to me better to me back then.

I suggest that everyone look at the collegeconfidential boards - there is a lot of valuable information there. You will see a lot of complaining on the financial aid boards around January.

 

[tiggspring]

The less money you have the more financial aid you will get. We saved and feel totally screwed! Our son was accepted into a private college. He earned several scholarships, but even after that, the bill was going to be close to 100,000. A friends child had the same thing happen. She told me to wait for the finaid package and everything would be fine. Well, because we saved and did the right thing, he didn't receive any financial help. So save, but be prepared. Btw, we saved $150 a pay day from birth.

Yes this is a problem for those of us in the middle save too much and you lose everything We told DD to take money she earns and buy really reliable car first. That will help her earn money to survive. Then save for college as student savings is really a hit to financial aid. We have very little saved as mental health doesnt really pay enough to live on even wiht a MSW. My DH is just now finishing his phd so he can go from a adjunt Professor to a full time proff. That will give our kids free tuition and Dh the ability to work as long as he can think and speak. We doubt he will ever really be able to retire but the kids will go to school

 

[DawnM]

Do you only have one child? I think that makes a difference too.

Biggest take away from this thread seems to be that the amount you need to save depends on how you view college. Some want their kids to be able to go to the best fit University regardless of cost, others only want to pay for public, some want their kids to live at home, and still others want them to do 2 years at a CC first.

I'll agree that there are many ways to make college happen and some are less expensive than others but they're all expensive and there are no guarantees of financial aid.

We want DD16 to be able to go to the best fit University regardless of cost. I'm glad to see that others plan to cashflow as much of the cost as possible. One of the benefits of being debt free is a higher disposable income. We plan to use it for college for 4 years. Savings will be used above that. The private she loves gives generous merit aid. If she gets in there and qualifies, then the cost will be comparable to her top public choice where she's very unlikely to receive any aid.

 

[Pigeon]

I hope someone reads this that can truely offer advice. I have one DD13 and I am guessing I have saved maybe 100K> However per the advice of my dad and college admissions - it is best to look broke when applying for aid. I have since started liquidating her college fundn to pay her 12k tuition a year at a private school. So by the time she finishes highschool, her "college" fund will be empty except her Roth Fund.

Now we don't have a morgage anymore and everything is tied into retirement. Now when she starts college I can back off the retirement savings and pay for her college. She goes to an excellent prep school and we are hoping for a few scholarships....

I think you should talk to those same folks in college admissions about what form of aid you are likely to get. Liquidating $100K worth of savings to get a big chunk of aid in the form of loans doesn't seem like a wise move to me.

 

[imsayin]

We have $100,000 per child (we have 4) saved in an account for them. Our oldest is only 10, but it feels great that, if they choose, they won't have any financial worries on how to pay for college.

I think it's great to see so many parents saving for their childrens' educations!

Hopefully the $100,000 isn't your final number, and you're still saving. DD is off to college this year. A private university currently costs $40-$55,000/year. Our best state university is $28,000/year.

 

[sk!mom]

Do you only have one child? I think that makes a difference too.[/QUOTE

Good point. We have two...11 years apart. DD16 is the youngest and her brother chose the local University and lived at home so he didn't spend much college money. No doubt if they were closer in age or we had several, we would have different plans.

I wonder how others feel about the relationship between college choice and field of study. DD16 wants to study something that isn't offered everywhere. We want her to go to a well respected college for her chosen major. Those two factors increase the potential cost. If she were interested in nursing or teaching, I would steer her to the local University as those programs are well respected here and there would be little benefit to spending $20,000- $40,000 for a degree elsewhere in those fields.

If she wanted to study something that wasn't very marketable, I would also try to steer her to a less expensive option.

If she was undecided on a major, I would steer her to the more affordable options until she made a choice.

 

[DawnM]

I completely agree.

It will depend on what our children choose to go into. For my field of study, I could have gone to the (then) $3,000 per year tuition school and the $5,000 grad school. I did not need the expensive private college I attended.

Dh's line of work was more specialized and it did matter.

For many, many jobs out there, it really doesn't matter where you went to undergrad but certainly not all. So far my boys haven't expressed interest in anything that would need a school name attached to it, but we will see as the time gets closer.

Dawn

Do you only have one child? I think that makes a difference too.[/QUOTE

Good point. We have two...11 years apart. DD16 is the youngest and her brother chose the local University and lived at home so he didn't spend much college money. No doubt if they were closer in age or we had several, we would have different plans.

I wonder how others feel about the relationship between college choice and field of study. DD16 wants to study something that isn't offered everywhere. We want her to go to a well respected college for her chosen major. Those two factors increase the potential cost. If she were interested in nursing or teaching, I would steer her to the local University as those programs are well respected here and there would be little benefit to spending $20,000- $40,000 for a degree elsewhere in those fields.

If she wanted to study something that wasn't very marketable, I would also try to steer her to a less expensive option.

If she was undecided on a major, I would steer her to the more affordable options until she made a choice.