Can we talk college savings?

[Just Kate]

Sadly, my family hasn't done any college savings for my kids. They are 10 and 6, and I would really like to begin doing something. I am a Dave Ramsey follower and I know he recommends ESA (Educational Savings Account). I am also somewhat familiar with 529 Plans. What have you used for college savings? If you use a 529 Plan, how did you choose which one to go with? Do you have a savings goal? Any tips or suggestions?

[MIch elle]

We did not save "for college."  We paid off our mortgage and all debt in preparation for college bills.

[NorthwestMom]

We have about a year's worth of tuition for all 3 kids in separate 529 plans for each of them. We used our state plan. I wish we could have done more. We are also Dave Ramsey followers. No goal because there's just no way to adequately fund college for 3 kids these days. I will probably go back to work in a year or two, so we may be able to cash-flow college to some extent.

[Pink Elephant]

Sadly, my family hasn't done any college savings for my kids.

 

We are in the same boat as you. I honestly don't comprehend how any family can save for a child's education nowadays with the cost of living being so high and everything so expensive.

[Jenrae]

We didn't save and now it is too late to catch up. Best advise I can give is start NOW.

 

Somehow we get busy in life and often don't have the extra funds to save, but if you view it as a gift to your children it will be more of a motivational factor. Just start saving in whichever of the plans will give you the most *flexibility* when it is needed for their education.

 

If you can put all the funds in one savings that could be used for either of your children it would be great, as you never know if they will both choose to go to college. Also, use whichever fund allows the funds to be used at ANY school you choose, not just an in state school.

 

Just do it! Sure wish we had.

[Erica in OR]

We mostly follow Dave Ramsey too. We started out with ESA's, but switched over to our state plan 529. We put in what we can, but are focused more on paying our mortgage off early. We see what we can put toward it out of the budget in balance with our other goals (mortgage, sinking funds, etc.). We also match our kids' contributions up to a certain amount to encourage them to save too.

 

Erica in OR

[maize]

I have a state plan in my oldest child's name, but not much in there. I'm hoping to save more, but realistically with as many kids as we have college is going to have to mean affordable school + scholarships.

 

I tell my kids already they need to work hard at their studies to be competitive for scholarship $'s.

 

We do plan to live in a paid-off house by the time the kids are headed to college, so current housing funds will be available to cash flow. The only way we could put more money away for college right now would be to cut down on retirement savings or cut out money for extracurriculars; I don't think either would be wise. Extracurriculars allow my kids to grow and develop and lead a full life now, and retirement saving is critical to ensure a decent life for dh and I in the future and to prevent unnecessary burdens on our children.

[hjffkj]

We aren't planning on putting anything away for their college. Our first priority is getting the mortgage paid off so when college comes we will have more money after bills are paid. We will be encouraging our children to start saving for their future at young ages so they understand that while we are here for support and help it is their responsibility. We'll contribute what we deem fair and doable when the time comes. We also may choose the route my parents took. They both worked at local colleges that offered free tuition as a benefit. I would be more than willing to work in a job specifically to get free tuition for myself, my husband and my children.

[Miss Peregrine]

We didn't save as we don't believe it us our responsibility to pay for our kids' college.

[umsami]

Our state has a prepaid college plan... you can choose 4 years university, 4 years community college, or a 2 year community college + 2 year university plan.   Your monthly amount depends on how old your kids are when they enroll.

 

They also offer 529 plans.

 

If I were you, I would simply start doing something.  Putting away even $50/month will help.  Do it regularly.  Don't overthink it, but rather start saving now.

[bibiche]

...We also may choose the route my parents took. They both worked at local colleges that offered free tuition as a benefit. I would be more than willing to work in a job specifically to get free tuition for myself, my husband and my children.

 

Unfortunately, colleges that offer this benefit are few and far between these days even for faculty, let alone staff.

[MomtoCandJ]

Fairytale, can you please tell me more about your Michigan plans? We live in MI also and plan to start accounts for the girls in the next few years.

[hjffkj]

Unfortunately, colleges that offer this benefit are few and far between these days even for faculty, let alone staff.

 

 

Oh I know.  We are in a location where the local University is very generous with their tuition remission so faculty and staff both get it.  Even part time employees get partial tuition remission.  Of course this could change at any time, hence the not banking on it as the only option.  But if it is a viable option when my children are nearing college years I will gladly take the job to help make their college years easier.  

[Sherry in OH]

We use our state’s 529 plan.  Ohio offers a small credit on state taxes as an incentive for education savings. 

[Tsuga]

I saved a bit on a Coverdell so it could be used for study abroad as well. It is normally used by really posh people who want to get more tax breaks on private school. The thing is, if you spend it on study abroad, or PSAT or SAT prep before college, then it's not there when they look at your expected family contribution.

 

"We also may choose the route my parents took. They both worked at local colleges that offered free tuition as a benefit."

 

That is not an option here, but it used to be. Make sure that is still a viable option! Where are you located? We might move there.

 

 

[FaithManor]

Unfortunately, colleges that offer this benefit are few and far between these days even for faculty, let alone staff.

 

My alma mater does not give a discount. As a result, very few of the children of the faculty and staff attend the institution. As a matter of fact, they do nothing for alumna either, and their rate of second generation attendees is abysmally poor. Doesn't seem to bother the powers that be very much.

[FaithManor]

Our 529 plan tanked the year that the housing market crashed. DD was entering school at the time, so there wasn't much left for the boys and not much time to save. When I say that it crashed, I mean that it was actually worth less than the principal amount invested. Sigh....

 

So, since then, we've paid ourselves out of debt completely and will make payments to ds's account up to a certain amount each year. He knows how much he can count on, and needs to keep in mind how much scholarship money he needs to earn though we are not opposed at all to $5000.00 a year in federal student loans because the interest rate is so very low. He will get more financial aid the second year when his next youngest brother enters school, and his senior year another bump when the littlest brother is a college freshman. Middle boy will benefit the most in that regard because he will have a sibling in college all four years which increases the amount of need based aid offered from the state. Youngest will have the least benefit because his junior year, he will have no sibling in school.

 

All of them will be eligible for the same amount of money from us. Currently, in order that it may earn a little bit of interest, it's being socked away in dh's 401K since his employer allows "loans" against the balance which we will pay back to ourselves through payroll deduction, essentially paying ourselves interest...not as much as what it would be if we left it in the account to grow, but not a total loss either. At this point, it is the best plan we have as we are very unhappy with our financial advisor/investment counselor - who turned out to be, shall we say, less than top shelf - and are shopping for someone new.

[Mrs Mungo]

Sadly, my family hasn't done any college savings for my kids. They are 10 and 6, and I would really like to begin doing something. I am a Dave Ramsey follower and I know he recommends ESA (Educational Savings Account). I am also somewhat familiar with 529 Plans. What have you used for college savings? If you use a 529 Plan, how did you choose which one to go with? Do you have a savings goal? Any tips or suggestions?

We have 529 plans. We picked plans with the company that our IRAs are with because they were simple to set up.

 

I worked my way through college, often holding two jobs over 20 years ago. It was *extremely* difficult even back then. I believe that it would pretty much be impossible to do on minimum wage jobs even now. I worked my butt off, driving my health into the ground, I was constantly sick and at one point started having panic attacks from the exhaustion. But at certain points I could not manage to do everything (like find time to spend 15 hours/week in the language lab for my senior level foreign language class). I vowed that I would help my kids with college. I discussed it with my now-dh before we got married. I would never have even considered marrying someone who wasn't willing to help our kids with college, I placed that high of a priority on it.

 

Now, does that mean we are sending our kids off to a 4 year college with room and board? No, it doesn't. My eldest is doing her first year in community college. We paid for it out of her 529, but at a fraction of the cost for the 4 year school of her choice. It gave her a chance to figure out school, since she has always been homeschooled. She currently has a 4.0 GPA which (combined with test scores, if she continues that on through her next semester, etc) will allow her to transfer to her four year school of choice with a partial scholarship, and we will help with the rest.

 

There are a lot of options out there to consider.

[Sdel]

We started a 529 when dd was born.  Because she was an extreme premie she was eligible for a one time SSI disability check, so we took it and used it to start her fund and added in a significant Christmas check from one of her great-grandmothers.  We consider it to be all her money, we haven't contributed to it at all.

 

Stefanie

[bettyandbob]

Not open to everyone, but my bil worked as an RN for a hospital associated with a private university. One of the benefits was full tuition for his dc to go anywhere. One of my nieces went to Northwestern and the other U Md. Nice benefit. I don't know how long you have to be an employee to vest in that benefit he was a career switcher and didn't start that job until his kids were older.

 

We started with our state college savings plan. It covers tuition for any state institution. I have 4 years at a university in my oldest child's name and am paying off 2 years in the second childs name. These accounts can easily be transferred within the family and are good for up to 10 years (so child does not need to start college right after high school). The state also started a 529 program a few years ago---after we started in the savings plan. Some people have both -- one to cover tuition and one to cover room and board.

 

My oldest resents that he's limited to go to school in state. He has a problem with entitlement. He's also been stumbling a bit on growing up (his problems have been on other threads). Long story short my second child may use oldest child's plan. She may use her plan too if she needs an extra year. It is also my understanding some of the prepaid tuition can be used toward grad programs. Or older ds may get his act together and use the dd's plan towards the end of the term it needs to be used. Anyway, I'm sure the 6 years of prepaid tuition will get used no problem.

 

My neighbor's dc had grandparents who fully funded  4 years of prepaid tuition for each child and funded 529 accounts. Their younger son is attending college and doing well. Their older dd had to drop out of college during her first semester and is working through issues related to major depression.

 

So, while prepaid tuition is a very good deal, especially in my state with the choices of universities, you do not know what can happed and it can be a gamble guaranteeing your dc will use it. So, a 529 may be a better instrument.

 

I agree with the earlier poster. If you are doing nothing, start something now. Even it's small. Start.

 

 

[Jane in NC]

If you qualify for a Roth IRA, you might consider using it for college savings.  You can withdraw your contributions to the account without penalty. 

 

My son qualified for generous merit aid.  We used savings (his and ours) to pay the difference without having to tap into the Roth.  Now we'll add those dollars to our retirement savings.  But extra dollars were there in case we needed them.

 

In general I think that Roths are a great savings tool.

[Laura Corin]

We put a lump sum into a Fidelity 529 for each boy about ten years when times were good. Calvin is using that to top up his zero interest government loans.

[foxbridgeacademy]

We don't have the money to save at the moment but I do hope to have a years worth saved before DS starts full time.  I will be going back to work full time to fund our children's college plus what ever they can save during summers and P-T jobs.  They will continue to live at home or they will have to figure out how to pay for residence. In extreme need I will take out loans to pay for tuition because for me a college education is a necessity.

 

 If DH or I had actually finished college (we quit due to finances, because no one helped us) we wouldn't be in the financial difficulties we are in now.  He would make twice as much as an engineer with the same amount of experience as he does as a maintenance tech(he's finally a supervisor so maybe not quite twice as much).  I would likely have spent time teaching and would have likely gotten my masters and would now be teaching part time at the local CC.  We would much more secure. There would be no question of how we were going to pay for our children's college. 

 

ETA: another option is that DH's company has an opening in Poland in a couple years (plans to build have just been approved) and he could have the job if he wants it when the time comes.... Education is free in some of those European countries even for foreigners and I would love to live in Europe (I'd go tomorrow if I could).  Dh is also on board if the money is right (I'd be willing to eat Ramen noodles). 

[DawnM]

We just have a general savings account.  I also plan to go back to work by the time my middle son starts college.

 

But for now we are working on paying off more mortgage.

[Shellydon]

Our state has a prepaid college plan... you can choose 4 years university, 4 years community college, or a 2 year community college + 2 year university plan.   Your monthly amount depends on how old your kids are when they enroll.

 

 

 

We did this. We have 8 years paid for.  This will allow for 2 years per kid, or more if someone opts not to do college.  They will be expected to pay a chunk by working.

[JumpyTheFrog]

We have 529 plans for each kid. We saved all the Christmas and birthday money they were given and put it in there. Although it never seemed like Tigger got that much cash for gifts, over the course of 6-7 years he had recieved about $3000. I don't know how, but I guess $50 here and there adds up.

 

We have contributions to the 529 plan on autodraft and are using the age based option so the plans automatically become more financially conservative as they get older.

 

If you are interested, google "Monte Carlo College Simulator." If I remember correctly, I used the one at T Rowe Price to figure out how much to invest each month to ensure they each have enough for in-state tuition, books, and fees. Even waiting a couple years can greatly increase the amount needed monthly to meet the same goal. So whoever on the forum said to start saving as each child is born has it right. Even if it's only $20 per month each, open a 529 account and put it on autodraft.

 

Tell your kids that half of all the money they receive for gifts will go in it. We don't gove allowances but when they do extra chores for money, half their earnings get added to the account. I remember my mom starting to tell me that I needed to save for college when I was about five and over the years, it made an impression.

[Chris in VA]

We have several savings plans for dd. We are hopeful she'll get some aid, also. We can take out a home equity line of credit for less-than-student-loan interest, which is what we did for our eldest. Our agreement with him was that he'd be responsible for 1/4 of his college expenses. That held up for a couple of years, but he ended up going an extra semester, and was not working enough to pay the whole 1/4. He lives at home now and we charge rent, which pays some of his college expenses (he's out--I mean he is helping to pay back the line of credit loan thru paying us rent).

 

I plan on working more during dd's college years. We will only pay for an in-state college; if she goes private or out-of-state, it's on her to come up with the difference. She will be taking AP courses her last 2 years of high school, which will equal almost a whole year of college, and we know of one 1K scholarship that is hers for the asking. She will work, too, at least 2 summers in high school as well as at least a day a week (babysitting, most likely, but she currently works as the weekend sexton for our church--that, however, is phone-money!), which will net approx 8-10K.

 

Cobbled together!

[Susan in TN]

My oldest, now a freshman in college, is the only one with any real savings - in an UTMA. We essentially added to the account with the lowest amount allowed for automatic bank draft on a quarterly basis, starting when he was about 6yo. With ds's current scholarships, the savings should cover his state university costs for 4 years.

 

Dd16 has about 1/3 of ds's fund in an ESA. We no longer contribute to the fund.

 

Dd12 has about 1/3 of dd16's fund, which may buy her a textbook by the time she gets to college.

 

Thats it for our kids. Our budget is so tight these past few years, the thought of having to squeeze out more for college for the younger ones makes me want to cry. 6 kids is a whole lotta college money that we will not have. They are pretty smart, though, and not afraid to work.

[KungFuPanda]

Dd has her eye on a private college in state. We've checked to see which courses will transfer into her degree program from our local community college. It's almost two years' worth of classes, so we're going to save by keeping her home her Freshman year. No sense in paying top dollar for identical credits.

 

We had three layers of back-up plans that all tanked. Investments flopped, DH couldn't take the pay cut to return to academia, and I couldn't return to work full time because DS was diagnosed with muscular dystrophy 7 years ago and is in serious decline now. Dd is a senior in high school right now. The savings wouldn't get her through a year of private college :-/

[Scarlett]

No savings here and I am not going to beat myself up about it. It isn't as if I have been living the high life and ignoring the future.... I have been busy raising my ds and surviving all that life has dealt.

 

Our house is free and clear and we will help where we can. Xh is very likely to help Also.

[Kerileanne99]

Oh I know. We are in a location where the local University is very generous with their tuition remission so faculty and staff both get it. Even part time employees get partial tuition remission. Of course this could change at any time, hence the not banking on it as the only option. But if it is a viable option when my children are nearing college years I will gladly take the job to help make their college years easier.

One of the bigger reasons we are still at the university where dh teaches is their very generous 100% tuition remission policy for family members after a few years of employment. In addition, they have a reciprocal agreement with other universities within the same state.

 

 

And still, that is our backup plan because I have no idea if dd will even be interested in the universities here:)

We started a small savings account for her when she was born, and worked up to contributing several hundred per month. We paid off the mortgage, so we really should do something about a savings plan that will actually earn a bit of interest without penalties if she doesn't end up needing the money for school.

And of course, soon we will have to worry about a second fund for new baby. Ugh.

[Sdel]

We started education IRA's for each of our six kids at birth. We max them out each year. If I'm not mistaken, the maximum allowable contribution is $2000/year.

 

The accounts were doing fairly well gaining interest until the economic crash in 2008. Since then, they have made little money beyond what we contribute.

 

Our eldest (twins) are now in their freshman year in college. We've maxed out the savings each year since they were born, but our education IRA's are enough to cover ONE year of the private colleges they are at.

 

It's disgusting. I honestly don't know what else we could have done.

 

If you are in TX, do you qualify for Hazlewood Act?

 

Stefanie

[Melissa in Australia]

We didn't save as we don't believe it us our responsibility to pay for our kids' college.

 

:iagree:

 

 

Also I live in a country that views educating it's citizens as a good idea, so students can get a Federal Government loan that is almost interest free. They will pay it back through their wages after earning a certain amount of $$

[Pippen]

We aren't planning on putting anything away for their college. Our first priority is getting the mortgage paid off so when college comes we will have more money after bills are paid. We will be encouraging our children to start saving for their future at young ages so they understand that while we are here for support and help it is their responsibility. We'll contribute what we deem fair and doable when the time comes. We also may choose the route my parents took. They both worked at local colleges that offered free tuition as a benefit. I would be more than willing to work in a job specifically to get free tuition for myself, my husband and my children.

 

FYI, in our state one must be an employee of a state university for 7 years in order for their children to qualify for tuition reduction.

[leeannpal]

We did not save "for college."  We paid off our mortgage and all debt in preparation for college bills.

 

This is what we are doing. We sold our house and are now renting and really have no other debt. Of course, we are going to encourage her to try for scholarships too. Most likely, she will start at a local community college and transfer later.

[Hikin' Mama]

We didn't save any money specifically for college. We do, however, have savings, investments, and retirement accounts. We are self-employed and if we don't plan for our future, no one will. :) So we, or rather I, as I am the designated chief financial officer for our family's finances, thought it more prudent to save for our old age than for college. However, we have a good CC here from which our kids could have transferred to a state school to complete their bachelors' degrees. The oldest went to the CC for two years, got married, had a baby, and joined the military. He may go back to college at some point using his GI benefits, but is pretty happy where he is at the moment.

 

Middle son got scholarships and attends an out-of-state public institution. We are able to help with the expenses (like room and board) that scholarships don't cover, so he is able to go there. If we weren't able to help, he would have had to stay in state. He will also be doing two 6-month engineering internships (already interviewed and accepted for those) that will be full time and WELL compensated. He will put all money he earns toward school and pay his own living expenses during that time. He works in the summer to pay for books and other expenses.

 

My daughter, well, I don't know what she's going to do. She is dyslexic, and in spite of all the remediation we've done, school is still very hard for her. I don't know if college is in the cards for her. She wants to be a flight attendant, which requires only a high school diploma or a GED. However, from what I've read, those jobs are very competitive and she will need either college or job experience to help her stick out amongst the other applicants. I think she would be fabulous, as she is great with people (in spite of being an unsocialized homeschooler--ha ha!) and she is a very hard worker and she loves to fly and travel. She is delightful and bright. I want to go back to school when I am done homeschooling, and she is thinking of starting at the CC with just sign language. I'm trying to encourage her to do a math class too. She is pretty good with math.

 

Well, I kind of got off track, but like Mrs. Mungo said, there are many options. Too many people I know think their kids must go to college away from home, and a prestigious college at that. Middle son got accepted to a private engineering and tech school across the country, but even with the nice merit aid they offered, we would have had to go into lots of debt to cover 4 years. Plus the travel expenses would have been much greater. We weren't willing to do it. We told him he could borrow the money, but I highly advised against it. I really think his situation now is best suited for him. Plus he got the opportunity to row for a Division 1 school, which is pretty awesome!

 

Best wishes!

[hjffkj]

FYI, in our state one must be an employee of a state university for 7 years in order for their children to qualify for tuition reduction.

At the university I'm speaking of this is not the case at the moment, or course that could change. You do need to be employed for 2 years if you want to try to win the tuition exchange lottery the offer with other out of state universities. But for their normal tuition remission it goes into effect when your other benefits go into effect.

[hjffkj]

Apparently the courts don't agree with you: https://www.yahoo.com/parenting/21-year-old-sues-parents-for-college-tuition-and-104767331362.html

The article implied that in this case it was because when the parents divorced the divorce decree likely mentioned both parent's obligations for future educational expenses. If the parents legally agreed to pay for her education together the court is within their right to force them to uphold that part of the divorce decree.

[Miss Peregrine]

The article implied that in this case it was because when the parents divorced the divorce decree likely mentioned both parent's obligations for future educational expenses. If the parents legally agreed to pay for her education together the court is within their right to force them to uphold that part of the divorce decree.

Yeah, no such agreement in place so she would be on her own.

[Lori D.]

We started education IRA's for each of our six kids at birth… but our education IRA's are enough to cover ONE year of the private colleges they are at… I honestly don't know what else we could have done.

 

Same here. Due to the huge escalation in college costs in the past 8 years, what we were able to save for each of our two DSs since before they were born, thinking it would be enough for a 4-year degree somewhere, is now enough -- barely -- for 3 semesters at the local state university while living at home. We were saving all we could, living modestly, avoiding debt, etc. and that was all we could do.  :(

 

A moderate college will run you $10-$15/year in tuition; if the student can't live at home, plan on another $10K/year for room & board, books, and other expenses. That's going to run about $80-$100K for a 4-year degree -- assuming college costs don't continue to rise by several hundred dollars a year, as they have been doing :( -- AND, assuming the student can finish in 8 semesters (4 years), as more and more frequently students are neediing more like 9-12 semesters to finish that 4-year degree.

 

Not at all trying to say you shouldn't start saving; but it's good to be realistic about how much you can set aside regularly, and how much will that really help in the long run. If you can put away $5K/year per student, great! But if you're only able to manage $100/month per student right now, it might be better in the long run to use that to pay down the mortgage and be out from under it entirely by the time your students are ready for college, as previous posters suggested, and be able to have that $1000/month mortgage money to use for college.

 

I'd recommend speaking with a financial advisor, esp. one who specializes in financial aid and college savings, and get some ideas about how to maximize what you have now for your future needs. Since you will have a shorter period of time to earn interest before using funds for college, a high-yield mutual fund might earn you more in the long run, even paying taxes on the interest, than an educational savings account, for example.

 

In addition, this might be a good time to start looking into alternative possibilities. This past thread has some creative ideas for college funding: "s/o of Cautionary Tale/High College Costs -- a brainstorm ideas thread!". Lots of interesting suggestions, such as:

 

- earn a lower-cost on-line degree through College Plus (or DIY)

- knock out 2-4 semesters of gen. ed. credits at a local lower cost community college and/or through CLEP testing and then transfer for the last 2 years of the degree program

- military service and then use the GI bill

- tuition-reimbursement programs -- military or business pays some of your tuition, and in exchange you work for them for several years upon college graduation (ex: SMART scholarships, some hospitals or big companies such as Bank of America, Citigroup, UPS, FedEx, IBM, Best Buy, Circuit City…)

- college tuition exchange programs -- pay for in-state tuition and attend out of state at participating school (ISEP, NSE, MHEC, WUE and WICHE)

- Ameri-Corps (a domestic version of Peace Corps -- volunteer in US for 12 months service and receive $5700 towards college tuition -- can do this as a deferment for a gap year, so still be accepted, PLUS look super for scholarships due to the year of volunteering, PLUS the money from Ameri-Corps)

 

 

Also, check into alternatives to going straight to a 4-year university after high school:

 

- apprenticeships (earn a paycheck while learning a skilled trade)

- AAS degree (2 years of direct-to-work education at a lower-cost community college or vocational school -- e.g.: dental hygienist, diagnostic medical sonographer, respitory therapist, MRI tech, CAD or electronic drafting)

- hire on with a good company straight out of high school and work your way up (e.g.: Geico, Costco, Home Depot, Chipotle)

 

 

BEST of luck as you begin to plan for the future! Warmest regards, Lori D.

[J-rap]

We didn't have any savings either.  We were too busy paying off our own college loans, and then paying off our home and cars.  However, the timing was just right, because we finished paying for all of that around the time our first was entering college.  Last semester we had 4 in college, but were debt-free. 

 

Part of that is because generally our kids did college differently than most.  We only paid for one year of our son's college.  He got a full-time job after that but was laid off when the economy went sour, and our state compensated by paying for a year of college for him.  Then he got married and now he qualifies for some great financial aid!  His tuition for the whole year was $2,000.

 

Our daughter decided to attend university in Costa Rica.  She already spoke Spanish fluently so was able to pass into their degree program and get an educational visa.  She attends an excellent, private university there and it costs just $4,000/year.

 

Another daughter got a good president's scholarship (that paid half of her tuition) and found out that when she did semesters abroad in French-speaking countries, she received a special scholarship her university had for French language programs at partner universities.  Because the French program was small at her university and she spoke French fluently by the time she began college, she was a shoe-in for the scholarship.  This covered the remainder of her scholarship for a year.

 

For her three years on the U.S. campus, it still covered some beyond the president's scholarship.  To save money, she lived at an aunt and uncle's home instead of in the dorms.  That actually saved her a LOT of money!

 

#4 child has chosen to not go the college-route, but is learning through experience.

 

#5 child has a pretty good scholarship but we'll have to find some creative ways to pay for her tuition in the remaining three years.

 

The most surprising thing is how much speaking a second language fluently has helped.

[mamakelly]

If you live in California and make a low-moderate income, and your kids have the minimum required GPA, your student can qualify for a CAL Grant. A Cal-Grant pays for all instate tuition for California schools. They've raised the income limits and middle income families usually qualify. It's been a huge blessing to us, our 18 year old's school is totally paid for.

[TranquilMind]

Sadly, my family hasn't done any college savings for my kids. They are 10 and 6, and I would really like to begin doing something. I am a Dave Ramsey follower and I know he recommends ESA (Educational Savings Account). I am also somewhat familiar with 529 Plans. What have you used for college savings? If you use a 529 Plan, how did you choose which one to go with? Do you have a savings goal? Any tips or suggestions?

I used rental properties.  Be a landlord for 10, 20, 30 years, the longer the better, as the house may be paid off.  Then sell a house when someone needs to go to college. 

 

It won't cover everything but it sure was better than saving bit by bit, I think. 

[TranquilMind]

We didn't have any savings either.  We were too busy paying off our own college loans, and then paying off our home and cars.  However, the timing was just right, because we finished paying for all of that around the time our first was entering college.  Last semester we had 4 in college, but were debt-free. 

 

Part of that is because generally our kids did college differently than most.  We only paid for one year of our son's college.  He got a full-time job after that but was laid off when the economy went sour, and our state compensated by paying for a year of college for him.  Then he got married and now he qualifies for some great financial aid!  His tuition for the whole year was $2,000.

 

Our daughter decided to attend university in Costa Rica.  She already spoke Spanish fluently so was able to pass into their degree program and get an educational visa.  She attends an excellent, private university there and it costs just $4,000/year.

 

Another daughter got a good president's scholarship (that paid half of her tuition) and found out that when she did semesters abroad in French-speaking countries, she received a special scholarship her university had for French language programs at partner universities.  Because the French program was small at her university and she spoke French fluently by the time she began college, she was a shoe-in for the scholarship.  This covered the remainder of her scholarship for a year.

 

For her three years on the U.S. campus, it still covered some beyond the president's scholarship.  To save money, she lived at an aunt and uncle's home instead of in the dorms.  That actually saved her a LOT of money!

 

#4 child has chosen to not go the college-route, but is learning through experience.

 

#5 child has a pretty good scholarship but we'll have to find some creative ways to pay for her tuition in the remaining three years.

 

The most surprising thing is how much speaking a second language fluently has helped.

That's really awesome that your daughter went to Costa Rica!    You have done these things wisely.  I hope we manage to pull it all off as well. 

[TravelingChris]

We have done it so far with a combination of scholarships, a few small loans, and paying the rest.    We never ended up paying more than about 12,000 a year and some of that was directly a switch for some of the taxes we paid so no extra. Currently, one dd is using two semesters of the GI bill and we will pay for the tuition portion of the rest of her schooling (she already did some as a scholarship student and now she is an online student and will be till she finishes ((health reasons)) ).   Our last child will be using the remaining three years of GI bill plus any scholarships she gets and earnings she earns. When dh and I were discussing whether to let her older sister have a year of the GI bill, he thought that was a very good idea since in four years, we expect to be in a much better financial situation than we are now and should be able to self pay the youngest's last year minus whatever scholarships she has and whatever earnings she has saved. She is our only kid with a very practical degree and she is very interested in co-ops or internships for part of her education.  We already know that she can get good paying summer jobs here once she starts college if not somewhere else. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[wapiti]

I would play around with lots of price calculators and so forth for different types of colleges, to get as realistic a picture as possible, as specific family finances mean so much with regard to college cost.  This is definitely an area in which knowledge is power even though things will undoubtedly change by the time your kids get there.  A good idea of what to expect will go a long way.  Then start the conversation with your student early in high school.

 

(E.g., in our particular case, if our family finances remain the same, no financial aid will be available for my kids - we anticipate paying sticker price.  We also know that, realistically, our children could not pay for college themselves unless they are awarded a very generous merit-only scholarship, something that is in short supply the more selective the school.  Even our state school is 30k including room and board, not something they can cough up by themselves, though I'm not aware of what the merit-only scholarship situation might be there.  They will have to contribute, but having done that myself, I know such contributions are likely to amount to a drop in the bucket.  We have 529 plans for each of our six kids.)

[lllll]

..

[justasque]

We didn't save as we don't believe it us our responsibility to pay for our kids' college.

 

Whose responsibility is it?  

 

In most cases, there are four potential sources of funding, generally tapped in the following order - 

--The student, through savings, work during school and on breaks, internships/co-ops, and student loans to be paid off later.

--The parents, through savings, cash flow during the school years, and loans to be paid off later.

--The school, generally through merit aid, usually used to entice top students to attend the school.

--The neighbors (aka taxpayers) through federal student aid, subsidization of loans, and subsidization of work-study wages. 

 

It is the rare kid who can work their way through at today's prices without relying on help from the other sources.  

Schools assume that parents will contribute a certain amount based on their financial situation.  

Students who do not get this contribution from their parents do not get their financial aid package adjusted to take that into account, meaning that at best they will have to take out loans to cover it.

This is because the system is set up with the assumption that parents should contribute what they can before asking the neighbors to do so.

Merit aid can be substantial, but rarely covers so much that the parents aren't expected to contribute at all.  

 

Not contributing what you can to your kids' higher education puts your kid in the hole before they even start.  It makes it much, much harder for them to get a college degree.

Why would you do that?  

 

(I am not talking here about parents who are finacially unable to help, or about kids who have shown themselves to be an iffy investment due to behavoir or academic issues, or who want to major in underwater basketweaving or some other iffy career that is a lousy return on investment, or about kids who for one reason or another are better off on another path than college.  And obviously the financial aid system is not perfect and doesn't always take into account special cases.)

[AHASRADA]

We have never been in a position to save for college. We made a conscious choice to relocate to an area with extremely affordable higher education well in advance of our children's college years. It also happens to be a homeschool-unfriendly area, there has been a lot of hoop-jumping and other logistics that have made life more challenging than if we had stayed home. But, in-state state school tuition back home is $16k per year. In our current province, it's $1500. No comparison.

[Dory]

We haven't done any savings for college so far. We have worked to pay off all debts and have several investments. We are hoping the investments are going to help with college and the kids will be required to have part time jobs and help pay for things.