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My financial advisor has recommended depositing ~$10,000/year into our son’s 529 account so that we can afford predicted sticker prices at a private university once he graduates from high school. Since there’s no way we’ll be eligible for need-based aid (which is not a complaint, just an objective statement), we’ll probably try steering him to one of the flagship-level in-state public universities. The conversation would be more nuanced if he can get merit aid at a higher tier private school or he’s accepted into a top-top university that’s so prestigious, it’s worth considering biting the bullet and forking over the cash (although I still think that for most people in most circumstances, the ultimate outcome will be the same, and being able to minimize or eliminate graduate/professional school debt outweighs a shinier brand name UG degree).
I think we can keep up this level of savings with one child, no problem. Two will be more difficult, and will up the pressure, but I’m hopeful that as my wife and I progress in our careers, we’ll be able to cover the spread. Three kids or more? I shudder even thinking about it. Assuming we stay in our current school district (which isn’t phenomenally-reputed but is plenty good, and even has some advantages over the more prestigious and often much larger nearby districts) we plan on doing public education at least through eighth grade. If it ain’t broke, we won’t necessarily pull the kids out for the fancy-schmancy prep school down the road for high school (not because the local high school is bad but because said prep school is so good).
What about everyone else?
Saving money for college, that's hilarious. I'd say that amount is a minimum and I'm not sure how old he is but people are graduating from state universities with $100k in debt because it is that expensive. Lots more than just tuition.
Saving money for college, that's hilarious. I'd say that amount is a minimum and I'm not sure how old he is but people are graduating from state universities with $100k in debt because it is that expensive. Lots more than just tuition.
He’s not even two, so we have loads of time. And if projections change, we’ll increase contributions accordingly.
Saving money for college, that's hilarious. I'd say that amount is a minimum and I'm not sure how old he is but people are graduating from state universities with $100k in debt because it is that expensive. Lots more than just tuition.
No, it isn't that expensive. Room and board at a New York State University is $25,000 per year. Debt anywhere near $100,000 means a person didn't have any parental contributions or scholarship or took more than four years to graduate.
If someone has no money - not a single cent - for college, then they should start at a community college. Two years at a community college while living at home is $9,500 ($2,375 per semester).
A friend's son was not focused. He took three years to get this stuff together and to graduate from his community college His parents paid for his community college which was $15,000 (for three years total) and loaned him a car. Afterwards, he attended a NY State University for two years while living at home. He paid for the last two years at public university - about another $15,000. His four year degree cost a total of $30,000.
College is the first big purchase for kids. Parents need to help them navigate the process within their means. Often parents push kids into students loan for an expensive private college just to have the "right" bumper sticker on their car. It becomes more about the parent than the child.
If I had to chose between more children or worrying about college tuition, I would chose more kiddo's. College will get sorted out.
$10k per year in a 529?! THats like $300k by the time they are 18 after taxes.
Holy crap. I saved a few thousand bucks and my parents helped. Granted my tuition was under 15k per year.
$10k per year in a 529?! THats like $300k by the time they are 18 after taxes.
Holy crap. I saved a few thousand bucks and my parents helped. Granted my tuition was under 15k per year.
I could be mis-quoting my financial advisor, but I believe the goal is $400k based on conservative projected investment returns. 529s require post-tax dollars going in, but investment gains are tax-free, like a Roth IRA, as long as you use the money for approved educational expenses.
I went to a flagship-level state university for undergrad, and even though it was one of the most expensive public universities in the country, between in-state tuition and a small merit scholarship, my tuition also never exceeded $15k a year. But throw in room and board and the other bells and whistles, and I believe the whole kit and caboodle exceeded $100k. And that was 10-15 years ago.
In theory this could be a moot point because one of my child’s grandparents has promised to pay for all higher education costs, but this person is also notorious for using their money to try to bully people into kowtowing to their capricious whims, so my wife and I have agreed to save for college as if we won’t be getting a dime from outside sources.
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Quote:
Originally Posted by ElijahAstin
I could be mis-quoting my financial advisor, ...., as long as you use the money for approved educational expenses.
.... I believe the whole kit and caboodle exceeded $100k. And that was 10-15 years ago.
..
because one of my child’s grandparents has promised to pay for all higher education costs,...
... so my wife and I have agreed to save for college as if we won’t be getting a dime from outside sources.
Ah, this explains a lot....
How long have you been listening to this financial advisor? Is this advisor taking a cut from college savings?
Bogleheads.org is free. Compare their results with the proven long-term net of your advisor. It's worth a look.
$100k all in 10 yrs ago?
No ramen or shared rooms!
Not getting a dime in financial aid? That's normal, unless you solicit private U packages, often cheaper, all in.
Financially bullied by parents? (Your kid's grandparents). That's not required above age 18. )16 in some states.
Last edited by StealthRabbit; 03-23-2021 at 09:00 PM..
How long have you been listening to this financial advisor?
Six years, and he’s does a fantastic job.
Quote:
Originally Posted by StealthRabbit
Bogleheads heads is free. Compare their results with the proven long-term net of your advisor. It's worth a look.
Thanks, but no thanks.
Quote:
Originally Posted by StealthRabbit
$100k all in 10 yrs ago?
No ramen or shared rooms!
I’m sorry, what?
Quote:
Originally Posted by StealthRabbit
Financially bullied by parents? (Your kid's grandparents). That's not required above age 18. )16 in some states.
No ****, grandparents aren’t required to contribute to their grandchildren’s education. Parents are also allowed to leave their kids high and dry, as we’ve established.
I sense that English isn’t your first language, so this might be a reading comprehension issue on your part. That is not intended as a snipe, by the way.
But since you seem to take perverse pleasure out of this notion, let me set the record straight. The issue, dear lagamorph, is that said grandparent will make big promises about covering expenses and then threaten to yank it away as a power play. Here’s a hyperbolic, but simple, illustrative example that you should be able to understand:
Day 1:
Grandparent Moneybags—I’ll pay for every dollar of my grandson’s education, and that’s a promise.
Us—That’s so generous! Thank you so much.
Day 2:
Grandparent Moneybags—I want you to meet me for lunch in the City today so I can see my grandson.
Us—Sorry, we’re busy this afternoon, but we’d love to get together some other time.
Grandparent—Meet me in the City for lunch now, or you can kiss that college money goodbye.
See what I’m getting at? Rather than get caught in this trap and be dangled like puppets on a string (or worse, yet, try to make my son jump through ridiculous hoops) so Grandparent Moneybags can throw their weight around, we’re pretending Grandparent Moneybags’ fickle dollars don’t exist until the cash is in hand.
In response to your edit: I was just talking about contributions from Grandparent Moneybags (again, reading comprehension). Barring a stark reduction in earning power, we’re not getting a drop of financial aid from any university.
I could be mis-quoting my financial advisor, but I believe the goal is $400k based on conservative projected investment returns. 529s require post-tax dollars going in, but investment gains are tax-free, like a Roth IRA, as long as you use the money for approved educational expenses.
I went to a flagship-level state university for undergrad, and even though it was one of the most expensive public universities in the country, between in-state tuition and a small merit scholarship, my tuition also never exceeded $15k a year. But throw in room and board and the other bells and whistles, and I believe the whole kit and caboodle exceeded $100k. And that was 10-15 years ago.
In theory this could be a moot point because one of my child’s grandparents has promised to pay for all higher education costs, but this person is also notorious for using their money to try to bully people into kowtowing to their capricious whims, so my wife and I have agreed to save for college as if we won’t be getting a dime from outside sources.
You're making a smart choice to consider the possibility of more expensive colleges. It's not always the best choice to pick the lowest price in state college, depending on what your child may want to study when the time comes. Our oldest went out of state and the cost come to around $200K in 2019 dollars, which included some help from us, work/study, summer jobs, scholarships and about $60K debt. On the plus side, picking the right college led to a good job that is also funding grad school. Youngest also went out of state, but joined the Army to pay for it.
No ****, grandparents aren’t required to contribute to their grandchildren’s education. Parents are also allowed to leave their kids high and dry, as we’ve established.
I sense that English isn’t your first language, so this might be a reading comprehension issue on your part. That is not intended as a snipe, by the way.
But since you seem to take perverse pleasure out of this notion, let me set the record straight. The issue, dear lagamorph, is that said grandparent will make big promises about covering expenses and then threaten to yank it away as a power play. Here’s a hyperbolic, but simple, illustrative example that you should be able to understand:
Day 1:
Grandparent Moneybags—I’ll pay for every dollar of my grandson’s education, and that’s a promise.
Us—That’s so generous! Thank you so much.
Day 2:
Grandparent Moneybags—I want you to meet me for lunch in the City today so I can see my grandson.
Us—Sorry, we’re busy this afternoon, but we’d love to get together some other time.
Grandparent—Meet me in the City for lunch now, or you can kiss that college money goodbye.
See what I’m getting at? Rather than get caught in this trap and be dangled like puppets on a string (or worse, yet, try to make my son jump through ridiculous hoops) so Grandparent Moneybags can throw their weight around, we’re pretending Grandparent Moneybags’ fickle dollars don’t exist until the cash is in hand.
In response to your edit: I was just talking about contributions from Grandparent Moneybags (again, reading comprehension). Barring a stark reduction in earning power, we’re not getting a drop of financial aid from any university.
IMO you are handling this perverse dynamic with the kooky-grandparent well. It's easy to say on the internet with incomplete information but I'd have a talk with said GP and lay down some rules. You cannot allow your kiddo to decipher the GP's actions over time with the risk your kid will emulate this bad behavior later.
IMO you are handling this perverse dynamic with the kooky-grandparent well. It's easy to say on the internet with incomplete information but I'd have a talk with said GP and lay down some rules. You cannot allow your kiddo to decipher the GP's actions over time with the risk your kid will emulate this bad behavior later.
Thank you. There have been no threats of yanking college money yet, but based on past interactions we know it’s only a matter of time. We shall see.
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