What percentage of people pay cash for college?

[mamamary]

DS graduated debt free and DD has some debt. If my dd lived at home while her college was strictly online (3 semesters I believe) she probably would have just about no debt.

 

[CaptainAmerica]

I just read 42 percent of undergraduate students at public four-year universities graduate without any debt I remember going to the meeting before graduation (mid 90's) where they told us we'd have to pay up. I remember thinking there are not too many people in this auditorium. I'm sure 25 years later things have changed and that auditorium would be much more crowded, as the price of tuition has increased by quite a bit.

I was surprised that as high as 42% of college students pay cash, as they go.

This is a misreading of the data.

The 42% includes: 1) people who pay cash, 2) people who don't pay at all because of their family's financial situation (i.e. poor kids), and 3) people who don't pay at all because of merit-based scholarships.

 

[kdonnel]

We opened 529 plans for each kid when they were born and contributed $100 a month for the first 15 or so years and then upped it to $150 a month until the final semester was paid. Now all $300 goes to my son's 529 since he is in his first year and I just paid what should be my daughters final semester bill.

They both went to in state schools and qualified for the Zell Miller HOPE Scholarship (Georgia lottery funded program) that pays 100% of tuition.

Despite not having to pay tuition, the money in the 529 plans was not enough to pay fees and living expenses for 4 years.

What the 529s did though was make it easy enough to cover the giant freshman year payments where $7000 was due all at once each semester to cover fees, dorm and dining plan.

Once they were out in apartments in subsequent years the dorm fee was then a monthly lease payment and easier to fit into the budget while reserving the 529 to pay the bill due each semester. The kids were luckily timed where I only had an overlap of both in college for one year. Next year my daughter is on her own to pay rent and what I was paying for her rent will go towards paying my sons.

In Georgia, if your child qualifies for the HOPE scholarship and is willing or able to live at home and commute, college costs about $1500 a semester in fees and books. It can be very affordable.

 

[Sinder]

This is a misreading of the data.

The 42% includes: 1) people who pay cash, 2) people who don't pay at all because of their family's financial situation (i.e. poor kids), and 3) people who don't pay at all because of merit-based scholarships.

Whatever the reasons that is still quite a large portion of students not going into debt. That’s a good thing.

 

[lovesmurfs]

We're cashflowing private college for our DD. We do have a post-911 GI bill for 36 months (pays 60%), but she's taking 5 years. I'll be really glad to stop paying her tuition. The two semesters so far that we paid full price was tough. We're really hoping she'll graduate debt-free, but we'll see. Just wanting her to graduate.

 

[BrianL]

I paid for every semester with a check...20 years ago! The amount that my school has gone up by in the interim is staggering and I don't know how most would be able to do what I did. I worked three jobs at some points too, so it wasn't all that easy then.

 

[SandyinMonterey]

All of ours were years ago, but myself, DH, DS and DD were all paid by graduation. No debt for any.
DIL had a debt upon graduating from law school. It took quite a few years for them to get that one paid off

One of my best friends nephews wife told her she has $200,000 worth of student loans from law school.

 

[Snowysmom]

My older DS graduated from undergrad with zero debt. We paid for his college, he paid for his books and other misc expenses. Younger DS graduated with a bit of debt. He went to a private school, got some good scholarships, and we paid the same as what the state university would have cost. He paid off his debt within 5 years.

 

[GreatLakes]

I did when I was an undergrad and for my MBA.

For undergrad I paid as I went and graduated with some modest savings left over. I worked 48 hours a week and took 12-18 credit hours to get it done but I was young and had more energy. My family couldn't help me with tuition so the only money I had in advance was my own savings.

MBA was part of my compensation package with work so all I had to pay for that was books and fees but I own them back a part of my tuition if I don't remain with the company for 18 months after the last class.

 

[DLgal]

We saved over $30,000 in each of our 5 kids 529’s, a drop in the bucket. Our flagship is over $120,000 with housing for 4 years. Room and board alone is $15,000 a year in this state. The only in state program is free CC for the top 15%. My kids who go OOS have even higher bills, even though they got top scholarships. Dd20 starts her 3 year doctorate program in May, I think it’s $130,000 after her $42,000 scholarship. Fortunately it’s in Boston so housing should be cheap. My oldest will have paid off $90,000 in 5 years by the end of 2023, her brother 2025.

Well, when our kids were born, our goal was to save enough to get them through 4 years of a state school with no loans. We were going to pay for their housing costs. If they had wanted to attend a "flagship", six figure school, it would be their responsibility to figure out the remaining funding. We are both products of the University of California system which is among the highest rated public institutions in the country, so we figured they would do just fine for themselves with an education from one of those.

Unfortunately, life doesn't always go as you planned.

 

[DisneyHardin]

I went to college from 1996-2000 and my sister went from 2002-2006. We both came out without any debt, but that is mostly because we got scholarships. I went to at state school on a full tuition scholarship. My mom paid my room and board (I believe it was about $400/month). My sister was much smarter than me and she got a full tuition scholarship to a fancy private university and she had additional smaller, private scholarships that paid for most of her room and board.

 

[barkley]

between scholarships, financial aid and work study my oldest could have graduated debt free if she had opted to live at home (20 minutes from the college) but she decided year 2 she wanted to move out. she ended up on a tight budget but still graduated 24K in debt. a good number of her friends who attended public universities have student debt that is more related to their housing/living expenses at that time vs. their tuition and other expenses (a number had parents or financial aid programs that paid attendance but not living expenses).

We also have an optional Pre-paid tuition plan where you purchase tuition or tuition + housing up front, so when the kid actually goes to college most of the costs are already covered

on boy-we had a bunch of ticked off parents here back about 10 years ago when our state went through a massive 'we must cut the cost of college' effort. the state made the publicly funded colleges cut their budgets to the bare bones and decrease tuition such that anyone who had bought into our state's pre-paid tuition plan for i want to say about 10 or 12 years prior to the tuition cut actually ended up on the losing end financially. people were complaining that they had paid more per unit than the new going rate and should be refunded but the state pointed out that in the fine print of the program's plan it specifically said that in the highly unlikely case of tuition costing less-no refunds. people were so ticked off. i kind of wonder what will happen with these plans if the current talks of rehauling the cost of college is initiated.

 

[GAN]

Wait, you made a 34k return on your investment? Is my math right? You put in $100 x 12 = $1200 per year x 17 years = $20,400. Now it's at 55k. That's a return of $34,600. That's remarkable.

As they say... It's time IN the market, not TIMING the market

 

[needvaca]

College is so ridiculously expensive now that it makes me angry. Since it is basically a prerequisite to any white collar jobs, I think corporations (FAANG, Forutne 500, etc.) should be paying for it all for their future employees to go- it's basically their training program for their jobs. just like all the other 1st work countries do.

But since FAFSA has brainwashed/forced parents that they should pay $30,000-$70,000 per year per kid (Expected Family contribution on FAFSA), we started saving a decade ago for our kids in 529s. Unfortunately, our state flagship is hard to get into and our other state public colleges are crap, so I don't know how it will work out for my kids.

 

[JimMIA]

on boy-we had a bunch of ticked off parents here back about 10 years ago when our state went through a massive 'we must cut the cost of college' effort. the state made the publicly funded colleges cut their budgets to the bare bones and decrease tuition such that anyone who had bought into our state's pre-paid tuition plan for i want to say about 10 or 12 years prior to the tuition cut actually ended up on the losing end financially. people were complaining that they had paid more per unit than the new going rate and should be refunded but the state pointed out that in the fine print of the program's plan it specifically said that in the highly unlikely case of tuition costing less-no refunds. people were so ticked off. i kind of wonder what will happen with these plans if the current talks of rehauling the cost of college is initiated.

Florida's Prepaid Tuition did not involve any budget cuts for colleges, but it did affect them because tuition increases have always had to be approved by the legislature. They responded by raising fees, but the legislature finally got tired of that and capped the fees they can charge to Prepaid. They have continued to raise fees, but Florida Prepaid families are exempted from those fees.

That made the system more honest, and returned the university system to their requirement of justifying tuition increases to the legislature. The legislature still can, and has, allowed tuition increases.

We have Florida Prepaid for DD (got it for all my kids and grandkids), so we now pay those fees in the middle -- the ones created before the cap was instituted. So for example, this semester DD is taking 17 hours, actual tuition is about $2000, and fees are $1700. Prepaid pays the tuition, we pay a little less than $1000 of the fees (those instituted prior to the cap), and UCF eats $700 in fees because we have Florida Prepaid.

On the refund question, Florida's prepaid tuition program offers two options if a family chooses not to use the plan for state universities. They will pay Florida in-state tuition to any out-of-state school the kid attends (so the same as they would pay in-state) or they will fully refund what the parents paid into Florida Prepaid.

 

[Mango7100]

For my undergrad (96-99) I went to a state school and the entire thing (tuition, room and board, books, etc) was covered by scholarships. I actually had more scholarship money than what was needed so the university cut me a check of about $500 every semester that I used for just random living expenses. My doctorate (99-03) I paid in cash which made it tight living for me and sole-earner DH but it was definitely manageable. My last year of my doctorate program was a tuition of 12k which is obviously not really applicable anymore Given how much college has gone up. Used my college savings (my parents had done a regular investment account with index funds since I don’t think they even had 529s or such back then), and I used that to help with the down payment on our first house when I graduated and had signed a contract for a job.

However, the average debt for my profession now is well over 200k at graduation.. I know some colleagues that have 300-400 k debt if they went to a private college for undergraduate.

 

[White Cat]

We just paid for them as they went along and they all went away to university. One went to law school. We paid 2/3rds of the law school. They have the rest on a loan that is getting paid off.
Could never understand from reading on the dis how one can have a child, then 18 years later wonder how to pay for university.

 

[JimMIA]

College is so ridiculously expensive now that it makes me angry. Since it is basically a prerequisite to any white collar jobs, I think corporations (FAANG, Forutne 500, etc.) should be paying for it all for their future employees to go- it's basically their training program for their jobs. just like all the other 1st work countries do.

Some companies do. For example, here in Miami Baptist Health will refund fully for employees who stay employed by Baptist for 10 years. I don't know the details -- vesting, when refunds start, etc -- but they'll refund the whole thing.

 

[JimMIA]

Could never understand ... how one can have a child, then 18 years later wonder how to pay for university.

Yeah, that's a real smh. But I know LOTS of those folks!

 

[barkley]

College is so ridiculously expensive now that it makes me angry. Since it is basically a prerequisite to any white collar jobs, I think corporations (FAANG, Forutne 500, etc.) should be paying for it all for their future employees to go- it's basically their training program for their jobs. just like all the other 1st work countries do.

there has been talk of creating a program wherein just as companies can get a tax advantage for 401k matching their employee's contributions the same could be afforded for matching a percentage of their employee's repayments on student loans . i think this would be spectacular for so many who can't even begin to think about saving for retirement and are losing out on those matching monies. my kid's employer does a small amount of matching tuition reimbursement but many of the employees enter with existing degrees and would be much better served with the identical amount contributed towards their student loan debt.