Saving for College?
 

What are you guys doing? I'm gonna get screwed because I don't believe in debt, no morgage... What should I do about it? PA TAP, Roth IRA, nothing is safe from legislative monkey wrenching. Not save at all? Lots of folks save and lie...

Our plan is all our kids will work their way through college, and get scholarships and use the occasional student loans, just like the two of us did. There's absolutely no reason to pay $30,000 a year at some private school, there are tons of really good state schools out there. We're not saving anything for college.

On the other hand, when the first one turns 18, we'll suddenly have an extra $3,120 each year, and when the second one turns 18, we'll be saving a total of $11,520 a year. The cessation of child support can be their college fund.

Good question.

I'm putting most of my savings into my own (to share with my wife) retirement plan. I figure the best thing we can do for our kids is not be a burden on them when we're older. Plus, last time I looked, a parent's 401K holdings were not counted against you when you are applying for lots of various types of financial aid for college.

We also had a fair amount of money in our short term savings. We dumped a bunch of it into 529 plans for each of our kids. 10K for each kid. I don't make enough now to be saving anything for the kids' college, but hopefully that 10K will grow enough to cover the cost of textbooks when they finally get to school. I don't remember the details on the 529 plans, but they had some pretty significant tax savings. You can doublecheck the accuracy of my memory, but I think you get to deduct the money you put in to them from your income (like a 401K) and then they also grow tax free.

See this link for example, for more information.

Mostly, I'm just hoping my kids are smart enough to get scholarships.

i met a guy who knows a guy who once read about financial planning. :worried:

he suggests:

priority #1 always always always has to be your own retirement first. no exceptions. if you aren't fully funding your own retirement plans (401K, IRA, etc.) you shouldn't be thinking about college plans yet. Why, you ask? many students can get grants, scholarships, and loans. to date, there are no retirement scholarships.

priority #2 everything else. if college savings for your kids is something that you want to do, 529 plans are a great way to go. if you invest in the one sponsored by your home state, they are often tax deductible. but it is important to remember that not all 529 plan money managers are top notch, so it is sometimes prudent to forego the tax deduction in favor of another state's 529 plan that will give you more consistant returns. things like risk tolerance and time horizon are important questions to consider. or so i've been told. by a guy.

if you want specific info, i recommend that you inquire with a guy who knows a guy who knew a guy who met a guy who read a book. or someone similar.

I'm a big advocate for attending the first 2 years at a community college... it's inexpensive and there are a lot of really good ones (probably bad ones too, but that's another point). Once they have finished their first two years and required core classes at an affordable price, they can transfer to anywhere they want, as long as they pay for it themselves. You take care of the first two years - then cut the cord and have them assume some major responsibility and take care of the rest. I know a lot of people who went this route and it seems to work out. If the kids wanted to go somewhere expensive, the kids had to pay for it. If they do well at their community college, there is also a world of scholarships available to them too.

i, of course, went into the military to pay for it. in some states (like illinois) if you are a resident for 6 months before you enlist and return within 6 months after your enlistment you can go to any state school tuition free for the rest of your life.

that is one sweet deal!

Yes, but you have to be careful with the military option. My husband thought he'd go through college on an ROTC scholarship... and then his first kid unexpectedly came along. They were cool about it, just nicely let him out of his contract so he could put off school to go get a job to support her--but he had to pay them back all the money they had "invested" in him so far, somewhere around $6,000.

Didn't have to go so nicely, though--another friend of his tried to drop out of the program (so he could drop out of college), and they chose instead to invoke their right to enlist him as a private immediately.

In Texas, if you're in the top 10% of your class, you're guaranteed admission to any state university, and if you're a National Merit scholar, you pay no tuition at any state school.

you are talking about ROTC though - that is where the gumint gives you money to pay for college before you've done a damn thing. you just promise to be an officer for X number of years after college. if you walk after collecting benefits there will obviously be consequences.

GI Bill and the like is for people who already served and have earned their benefits.

That's great. I like that alot.

My freshman year of high school, I was in the top 10% of my class. Unfortunately, I fell down into the lower part of the top 20% by the time I graduated, because all the bottom students at my high school dropped out to work in mills. I actually increased my rank, but it didn't matter because the class size shrank so much. My position relative to the rest of the class was sinking lower as we lost all those on the bottom rungs.

you know - i like that reasoning. maybe that explains how I was in honors classes all the way through high school and still only made it into the top 1%

of the bottom 50% of my class.
of course, the fact that i didn't do 1 single homework assignment in 4 years may have something to do with it. take your pick.

It was a program enacted by Bush when he was governor, to replace affirmative action. If you went to a poor or otherwise crappy school, you'd be given a fair shot at a college education--regardless of your race.

damn stupid racist only out for the rich guy republican bast...

However, it sucks ass if you're a successful kid in a school full over bright overachievers ...

There was a story on this on 60 Minutes. Made me think of Bakke v. Regents, actually.

The Hispanic girl from an inner city school whose GPA never broke 3.2 got to go to the good college and was struggling to stay in, while the white girl with the 3.9 didn't get in to the school that her father, grandfather, and two brothers had attended.

man bites dog...

next!

The fact that 60 Minutes was promoting the white kid's plight is what got me ... hell, it was 60 Minutes. You know, Let's Watch Dan Rather Give Castro a Blow Job and after the Commercial Break Ed Bradley Will Set Fire to a Republican Senator 60 Minutes.

That 60 Minutes.

[gentle self-depricating]Or were you just not able to get past the idea that my TV might have channels other than FoxNews and The History Channel? [/sarcasm]

Yeah, but in that case you almost certainly have other options. The white girl with the 3.9 wasn't cursed to community college, unless she was stupid enough to only apply to one place. I didn't get into my top college choice either, boo hoo hoo...

We had plenty of bright overachievers "playing the system," though. I knew of several kids who transferred to bad schools their senior year so they'd have a better chance of being valedictorian, and jumping through a million hoops to get out of gym classes because those by definition couldn't be "honors" courses and would bring down their GPA.

With the latest Supreme Court decision, you should get a mortgage. You only own the place at the sufference of the local politicos anyway, might as well let the bank get screwed when they take it from you.

That probably wouldn't work, as the bank would still insist he pay it off ... if a drug dealer has his hoopdie confiscated by the man with 58 payments owing on it, the dealer still owes the 58 payments ... not that he would have paid it off to begin with, but he still owes on the lien despite the government having taken and even resold the property.

I would hope (but not necessarily expect) that what the government considered "fair compensation" would at the very least pay off any outstanding mortgage...

I paid into an inexpensive scheme in Canada,not sure if in US, whereby a small amount is contributed very month, if you start early when the kids are young.
You pay for the first year of university and if the grades are OK subsequent years of tuiution etc. but not living expenses are paid by the scheme.
Of course I went overseas and the plan lapsed but in theory it was good.

Had I kept it up my son would benefit now because his is going to do a masters in London and will probably go the PhD route.

Crap, I guess I should have bought intothis place while I was in Arenal.

Go for it. I will clean your Griftropical resort's bungalows.

Yes it is right but sorry to say that you do not have other choice.

What?

Clarify your remark please.

You know, saving for college is such a bummer. man. But what are you going to do?

There are plenty of alternative paths but that's for the kid to choose. You could try for girls, a subliminal recording that says, "elope", and for boys maybe a military theme.
But you're still stuck with that nagging guilt trip of not being prepared to support all of their possible paths. :Flush:

I see college grads with as much as 200k in student loan debt, making 45k salary. They have the same shitty jobs everyone else has. I don't get it.

Colleges are businesses run by MBAs selling the illusion that their product is required for survival and success in life. If the product doesn't work as advertised it is your fault and you either need to apply more of the product or you lack the proper faith.

What do you want to be when you grow up?
If the answer is... 'I don't know, I'll figure it out when I get to college', alarm bells should be going off.
College debt can be a case of buyer's remorse having a huge impact on your quality of life for a very long time.

For a long time now, most parents have had the goal of the kid going to college, assuming with a degree the kid would at least be able to get job good enough to maintain a middle class lifestyle. Or, "I was they first in my family/clan/village/coven, to go to college and as god is my witness my kids will too."
That attitude has fed the price increase of the parchment, and the whole student loan/financing shark business, for those that can't quite grab the golden ring without help.

College loans have suffered the same fate as the rest of the credit market, and some people have fallen for it.
Easy credit, you said It!
Hurry hurry, hurry, step right up, today only... no money down, no payments for 3 months, low monthly payments.
Whatcha need Bubba, 10, 20, 30 years... sign here... blood thumbprint there.

Others tried to game the system and got trapped when the law was changed so they couldn't bail out with bankruptcy.

It's time for parents to step up and educate their kids about the alternate vocations, opportunities and career paths, where college wouldn't be the appropriate choice. If they choose to pursue something needing a degree, no problem, less chance its being wasted.
Let your kids know enough about the employment world to make an educated guess... but wait, what do you know about various vocations and how a kid would get there? Do you live in a white collar world where you haven't got a clue who makes the world around you work every day and how? Do you live in a blue collar world where everything is controlled by some faceless suit? No wonder the kid can't figure it out till they get to college.

The Catch22 here, is there will be a surplus of underemployed graduates for some time, and employers that will require a degree to even apply for that janitor, local truck driver, assistant helper, job.

My parents told me this, and I believe it to be true: if you are going into any serious academic field that really requires a degree, you will probably be getting a Master's. And if you are getting a Master's, the only school anyone will care about is that graduate level work--it doesn't matter where your undergraduate work was done, as long as it was a place any normal person would consider a real college and not some online shill. And, when you are getting your Master's, your parents' income is no longer considered, and there are a lot more programs to offset the cost like being a Teaching Assistant to undergrads, etc.

State school, all the way.