Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Personal Finance
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 08-13-2010, 01:31 PM
 
1 posts, read 2,239 times
Reputation: 10

Advertisements

Hi. Does anyone here have experience with a prepaid tuition plan? I'm looking at the prepaid option versus a regular 529, which seems to offer mediocre mutual funds as investment choices.

If you've used a prepaid tuition plan, how has it worked for you and your child? Would you recommend it? Do you wish you had done something else?

Thank you.
Reply With Quote Quick reply to this message

 
Old 08-13-2010, 06:32 PM
 
20,793 posts, read 61,081,847 times
Reputation: 10691
Can you even get a prepaid plan any more? Shop around for 529 plans. There are some very good plans out there with some respectable companies like American Funds. Every state has their own fund and some are better than others. Also, check to see if your state offers any benefits for the 529, our's does but they are not very good. Some states match up to $6000 in contributions so it is worth looking into.
Reply With Quote Quick reply to this message
 
Old 08-13-2010, 10:23 PM
 
Location: Maryland's 6th District.
8,358 posts, read 25,152,847 times
Reputation: 6540
I think that only 19 or 20 states have the pre-paid tuition plan. Basically, they are only good for state or public universities in the particular state and what you do is you invest X amount of dollars based on semester increments. You can pre-pay from one to eight semesters. When you buy into this plan, you are locked into the current tuition rate. So, even if your child goes to college 18 years from now, whatever you paid at the time of purchase will increase at the same rate that tuition is increasing, so in essence, you will pay 'today's' rate for tomorrow's tuition.
Reply With Quote Quick reply to this message
 
Old 08-13-2010, 11:04 PM
 
Location: Las Flores, Orange County, CA
26,338 posts, read 93,435,175 times
Reputation: 17827
I do the Education Savings Accounts (Coverdell, Education IRAs) at $2000/year per kid X four kids. In addition I save in growth mutual funds. When college time comes around the kids will have the ESA money and if they need more I can gift the necessary mutual funds to them so they can cash them in their (lower) tax bracket.

Since I have four girls, I just tell them to keep in good shape and marry rich guys: "You can marry more in 20 minutes than you can earn yourself in a lifetime."
Reply With Quote Quick reply to this message
 
Old 08-14-2010, 12:42 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,569 posts, read 57,505,129 times
Reputation: 45952
My theory is (was) that the kids have access to far cheaper money than parents, and there are advantages to having kids pay for their own college. (may take school more serious, less apt to change majors, will finish faster, will find a job faster, will grow up faster, will learn to deal with sleazy loan joints). Worked for mine, they consolidated their $14k - $16k total debt @ 2.7% for 20 yrs). They also went to college FOR FREE instead of High School for grades 11 & 12 (most states offer this option), thus 2 less yrs of college for them to pay for.

That said, savings programs vary by state. Here is ours (WA) GET | Guaranteed Education Tuition | Washington's 529 Prepaid College Tuition Savings Plan
Does your state's prepaid tuition plan make sense?

At this stage of the game I think the USA EDU system is not competitive with worldwide EDU. (Just finished a master's program in private USA University). In 15 yrs US EDU will be worse, or dissolved. I would plan for my kids to attend ALL edu in a foriegn country.
Reply With Quote Quick reply to this message
 
Old 08-14-2010, 08:42 AM
 
Location: Las Flores, Orange County, CA
26,338 posts, read 93,435,175 times
Reputation: 17827
Quote:
Originally Posted by StealthRabbit View Post
In 15 yrs US EDU will be worse, or dissolved. I would plan for my kids to attend ALL edu in a foriegn country.
Sounds like over reaction and paranoia. Also sounds like the most expensive way to get an education, though there will be many benefits living in a foreign country.

Quote:
Originally Posted by StealthRabbit View Post
At this stage of the game I think the USA EDU system is not competitive with worldwide EDU. (Just finished a master's program in private USA University)
That's interesting considering the amount of foreign students in US grad schools. When I was in grad school at UC Santa Barbara (computer engineering), there were maybe 15 or 20 students in each class and it was about like this: 4 or 5 from China/Taiwan, 4 or 5 from India or Pakistan, 3 or 4 from Europe, and 4 or 5 Americans.

Here's a photo I took of my class in 1996 at UCSB. Look at the students. See what I'm writing about? The white guy with the long hair on the far left was from Germany. The other white guy in the back tipping his cap was from new york. The two other white guys in the front, Mike and Kip, were from California. Pretty much the rest were from east of the Mediterranean.

Reply With Quote Quick reply to this message
 
Old 08-15-2010, 08:29 AM
 
Location: Victoria TX
42,618 posts, read 86,592,874 times
Reputation: 36637
Whenever somebody comes to me offering a plan (a non-negotiable plan whose terms are all written by them), the first question I ask myself is this:

Is this plan stacked in MY favor, or THEIRS?

Under what circumstances can I be the loser, and what is the probability of that happening?

Specifically to this particular case, what happens to your money if your kids don't go to college?
Reply With Quote Quick reply to this message
 
Old 08-15-2010, 08:57 AM
 
20,793 posts, read 61,081,847 times
Reputation: 10691
Quote:
Originally Posted by jtur88 View Post
Whenever somebody comes to me offering a plan (a non-negotiable plan whose terms are all written by them), the first question I ask myself is this:

Is this plan stacked in MY favor, or THEIRS?

Under what circumstances can I be the loser, and what is the probability of that happening?

Specifically to this particular case, what happens to your money if your kids don't go to college?
With a 529 plan you can change the beneficiary of the funds to any close relative (grandchild) or yourself, you can withdraw the money at retirement and pay tax on the gains just like you would an IRA. If your child gets scholarships for school you can withdraw funds from a 529 equal to that amount in that school year without penalty or tax. There are a lot of options if your child doesn't need the money for one reason or another.
Reply With Quote Quick reply to this message
 
Old 08-19-2010, 08:52 AM
 
Location: Vermont
5,439 posts, read 16,803,729 times
Reputation: 2651
this is tough. College Calculator suggests $600 a month to save for a newborn to go to private college full time in 18 years , 100% paid for. that is for one child and that is only with a 6% increase per year in college tuition.
Reply With Quote Quick reply to this message
 
Old 08-21-2010, 02:51 PM
 
Location: SoCal desert
8,091 posts, read 15,363,648 times
Reputation: 15035
Quote:
Originally Posted by joe moving View Post
this is tough. College Calculator suggests $600 a month to save for a newborn to go to private college full time in 18 years , 100% paid for. that is for one child and that is only with a 6% increase per year in college tuition.

So have the child attend a community college for the first 2 years and transfer for the last 2 years.

Parents are not legally liable to pay for their child's further education unless they want to.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Personal Finance
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top