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How much did YOU save/pay for kids college tuition?

1,184 901 January 3, 2020 at 11:30 AM
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So we are trying to gauge what the norm is for parents paying for college. For my experience, my parents only paid about 20% total of college tuition (they didn't have a lot of money)...I worked nearly full time throughout college and paid my student loans for about 8 years before paying them all off. I seem to remember the majority of my college buddies had nearly a full ride from their parents and didn't work. I have seen that it didn't work out too well for many of them since it wasn't their money they were wasting. Many graduated with 2.xx GPA, flunked out of classes, partied too much, sat around being lazy, and didn't learn any work ethic. I graduated with close to $80k in private school loans and a good GPA, but got a great job and paid my loans off in half the timeline.

From my view, it seems to work out better like my case, where the child has to learn to work to support themselves. They also work harder to get good grades because they are paying for the majority of the loans themselves. We have 3 kids and plan to have about $15k saved up for each kid. I know that's only enough for 1-2 years of full in-state public tuition, or maybe a year of private if they choose to go that route. I'm not going to just hand it over to them when college starts (they would probably be stupid and go buy a car or something!). I plan to cover part of the tuition each semester and have them get loans for the remainder. If they are excelling in school, maybe I'll pay a bit more each semester.
And I fully expect them to be working to support their living costs while in college. Full time college is not a full time job; you can easily accomplish both in my experience (and I did Engineering).

What do you all think of this? Are we being too harsh? What did you do (or plan to do) for your kids? The view is skewed here in Utah because there are so many families with huge inheritances from grandparents and they plan to fully cover their kids college and living expenses. I think this is silly and babies them; they don't learn any work ethic and are frivolous with your money. Thoughts? I want to be fair, but firm!

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Really, nobody wants to share their experience/ideas? Or does nobody on SD have kids???
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My oldest is 10; we have 529s for all of them (4 kids), pretty much just put birthday/holiday $$ in there annually (I get a state tax break for 529 contributions). I am still not sold on the benefits of having a war chest saved for college in terms of how it negatively impacts aid and scholarships.

As for me, I am also an engineer, got a good scholarship to my undergrad and came out with about $30k in loans IIRC. I don't know how much my parents paid, frankly, although I do remember feeling pretty guilty about it honestly. I didn't work while at school but did work over the summers which included internships. Then I got another 4 degrees in engineering, which were all free to me, but also delayed repayment (deferment).

I also believe "skin in the game" is essential for motivation and focus (in just about anything anyone does, frankly).
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Thanks for the reply. I made a bad choice to go to one of the top private engineering schools, so that's why I ended up with $80k in loans. It would have been $150k but I had scholarships that covered almost half. In hindsight I would probably advise my kids to NOT go private school as I'm not sure it helped me in landing great jobs compared to public school peeps.

What kind of rates are you getting in return on the 529's? I remember looking at them a couple years ago and the return was less than your average 2% high yield savings. Plus they had so many restrictions and fees if you pulled money out for anything but college tuition. Like if my girl wanted to go to beauty school or something different than proper college I couldn't use the 529 money on them. How much do you plan to have for each kid by the time they graduate high school?
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Quote from jordanz12
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Thanks for the reply. I made a bad choice to go to one of the top private engineering schools, so that's why I ended up with $80k in loans. It would have been $150k but I had scholarships that covered almost half. In hindsight I would probably advise my kids to NOT go private school as I'm not sure it helped me in landing great jobs compared to public school peeps.

What kind of rates are you getting in return on the 529's? I remember looking at them a couple years ago and the return was less than your average 2% high yield savings. Plus they had so many restrictions and fees if you pulled money out for anything but college tuition. Like if my girl wanted to go to beauty school or something different than proper college I couldn't use the 529 money on them. How much do you plan to have for each kid by the time they graduate high school?

I also went to private school - again I don't recall the numbers but I did do a fair amount of scholarships and such, the balance being private and gov't loans. I paid the private loans off ASAP as they were in the 8-10% range, and had maximum deferment limits (I wound up repaying them while still in grad school). I actually rolled the private loans into gov't loans because my wife went back to school at the time!

As for the 529, I started it only because the state offers deposit bonuses sometimes - for both new and existing accounts, then I realized there's a (state) tax benefit, and I figured WTH what's the difference between $$ sitting in a do-nothing custodial savings account vs. a 529 that I can at least get some tax benefit? I don't have a set plan, and I don't put any "family" money into it (e.g. it's not a budget item), just yearly I pare-down the kids' savings accounts. For example between the 4 of them I put about $8k into the various accounts in FY2019. [although that's probably a one-time high anomaly due to an inheritance, I won't be doing that every year and the state tax limit is $10k total, btw]. As for investments, they are just in MM right now, not really invested; according to the website the current MM rate is like 2.25%.
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I have two girls ages 16 &13. I have no money saved up for them. Although I do plan on helping them, they will definitely be paying for more than half. I know two people who had full rides through scholarships and they both blew it their freshman year so I'm hoping that if they have to pay for it then they will put more effort into it. Obviously it's not a guarantee since I also know people who paid their way and still dropped out.

My girls know that they will be paying for college. My 16 year old worked practically full time last summer to save up money. Now that she has a driver's license, she is starting a new job this week.

I am also a firm believer that college is not for everyone and that skilled trades are also a great thing. I went to a two year technical school and it hasn't hindered me at all.
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Quote from jordanz12
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Really, nobody wants to share their experience/ideas? Or does nobody on SD have kids???
I haven't had to pay for it yet but for me the school paid half of tuition with my Mom and I each covering about 25% of the remaining tuition. Room & board was covered by my Mom the 1st 2 years and I did the last 2 years.

I was asked the question once during an interview I had while in college of how I would handle my kids college and back then I said I would cover it all because of all the work I had to do to pay the tuition (it was an expensive private school) but in retrospect I don't think that's a good idea. I worked a crap ton so I wouldn't graduate with a ton of debt and I definitely lost out on the college experience a bit and it took time away from studying.

In retrospect I think it's important for the kid to have their own stake in the game where they see how much it costs so they know it's important and that they don't dick around and get on the 5-6 year plan while still allowing them to enjoy school. I would go to school all day Friday and then go to work around 3 and get off between 10 and 11 and go to the tail end of a party with my friends or something. Do the same on Saturday again after doing homework in the AM and then work Sunday morning 7-3. That was on top of other shifts during the week it's just the weekend days are the money days in the restaurant business so that's when I always worked. That kind of sucked. In the end I graduated debt free which was awesome but I'm sure it would have been a more enjoyable experience and I would have gotten better grades if I didn't work 40+ hrs a week on top of going to school so I think somewhere between, maybe them working 15-20 hrs a week is reasonable, hopefully at a good paying job so they make enough to see the value of their work while not taking too much away from school.
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Thanks for the input everybody. I think I'm on a good tactic to help with covering some of their schooling, but definitely making them work a bit to cover living expenses and some schooling, and get some loans to cover rest. I definitely wouldn't expect them to work fulltime like I had to, but at least part time. Work ethic is a good thing to learn young, instead of partying every other night and wasting their money and efforts.
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Daughter had 4 years of college and 3 of grad school. Wife saved all of her child support $$ and we had about 70K total, we used that and she worked an extra job. For the first 4 years it was probably 125K plus living expenses, with her scholarship $$. Grad school we just paid for and her living expenses another 100K probably total. No student loans just living somewhat frugal for 7 years and some help from grandparents.
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Quote from teenbean
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I am also a firm believer that college is not for everyone and that skilled trades are also a great thing. I went to a two year technical school and it hasn't hindered me at all.

I 100% agree, more today than ever. My daughters are both more than smart enough for anything, but motivation is an issue. Had I just handed college money...they'd be failed out via the party method.

My goal is to get them excited about a career, and at the end hand over a check when they realize the debt they have...but they have a future without my check. My check can be to loans, or a house down payment.
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Quote from teenbean
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I have two girls ages 16 &13. I have no money saved up for them. Although I do plan on helping them, they will definitely be paying for more than half. I know two people who had full rides through scholarships and they both blew it their freshman year so I'm hoping that if they have to pay for it then they will put more effort into it. Obviously it's not a guarantee since I also know people who paid their way and still dropped out.

My girls know that they will be paying for college. My 16 year old worked practically full time last summer to save up money. Now that she has a driver's license, she is starting a new job this week.

I am also a firm believer that college is not for everyone and that skilled trades are also a great thing. I went to a two year technical school and it hasn't hindered me at all.
Quote from uniquename
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I 100% agree, more today than ever. My daughters are both more than smart enough for anything, but motivation is an issue. Had I just handed college money...they'd be failed out via the party method.

My goal is to get them excited about a career, and at the end hand over a check when they realize the debt they have...but they have a future without my check. My check can be to loans, or a house down payment.

I concur; Over in TP there's a long "college" thread where I've stated that the whole "free college" is a bad mistake because it treats it like "grade 13" or basically an extension of HS. At that point one should be making more serious decisions about their path in life, and enabling "life experience" in college is a bad move. College is not for everyone nor should it be. I have several F/F that spent a ton of time and $$ in college only to go into something entirely different afterward where their degree had zero impact; e.g. my BIL spent 7 years in college only to enlist in the AF; my best friend growing up was similar (although only 2years in CC then onto the Marines).

All that said, I just wanted to point out that 529s can also be used for trade school, it doesn't have to be college per se.
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Quote from jordanz12
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Thanks for the input everybody. I think I'm on a good tactic to help with covering some of their schooling, but definitely making them work a bit to cover living expenses and some schooling, and get some loans to cover rest. I definitely wouldn't expect them to work fulltime like I had to, but at least part time. Work ethic is a good thing to learn young, instead of partying every other night and wasting their money and efforts.
You can learn a good work ethic way before college...
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Quote from bonkman
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You can learn a good work ethic way before college...
Yep, very true. We've already got our "slave" children earning their living at home Smilie. Never too early to start!
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I have been contributing 3k/yr to my own 529 account on vanguard shortly after I started working full time. No kids so far but I can always use the fund in the account for myself if I decide to go back to school or gift it to my young relatives later in life. To me 529 is similar to Roth IRA but for education use only.
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Quote from jordanz12
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Yep, very true. We've already got our "slave" children earning their living at home Smilie. Never too early to start!
In that case, you might not feel like you need to hold something over them financial. Self motivation exists. Not saying that your idea is bad, of course. You do what you think is best for your kids.
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