<p>We are thinking about having our daughter take some financial ownership of her upcoming college experience by having her contribute a (very small) amount to its cost.</p>
<p>Ideas being thought about include having her work a few hours a week to pay for incidentals, maybe off-campus food, going to movies, etc. Or, possibly, we agree to pay for all direct colleges costs (tuition, room and board, fees, etc.) but that she pays for the books.</p>
<p>Another idea is that she would take out a very small loan each year as her contribution.</p>
<p>Anyone with experience on these methods? Other ideas? Opinions? Thanks.</p>
<p>I’d pick something she needs to be responsible for (books, spending money, transportation, sorority dues) and then let her decide. I do not recommend loans as there would be 4 years of interest built up on the loan before she’d even make a payment.</p>
<p>I have two starting in fall 2014. One is going to a (relatively) low tuition school, with minimal financial aid, so I’ll pay tuition and R&B, and she will pay everything else. She’s working now and has saved $1500, so by September should have a nice balance. She hopes to be an RA in the second year to pay R&B.</p>
<p>The second is going to a much more expensive school, but has athletic and merit scholarships. I will give her much more help in the disposable spending account as she has a lot of skin in the game keeping her scholarships, and because I’m not paying as much OOP as with her sister in the ‘cheaper’ school. She really has no time to work (there are only 8 weeks from high school graduation to the first day of college) and we have to move and go to a wedding in the middle of that. She’s also agreed to live in the cheaper dorm!</p>
<p>We were told to have your child “have some skin in the game.”</p>
<p>We had our DD take out the $5500 loan that one can do, but told her if she keeps up her GPA we will pay it for her.</p>
<p>Also, we don’t give her spending money: we pay room/board/tuition/books/travel home. She is responsible for having a summer job to have spending money. For freshman year she got control of her savings accounts ($$from baptisms/confirmation/etc.) and after that is was up to her. This gave her incentive to get a summer job.</p>
<p>People have different philosophies on this issue. I don’t subscribe to “skin in the game” because I feel it is my responsibility to pay for my kid’s college to the best of my ability; in my thinking, a college education is not a privilege my child has to earn, but a gift we are giving her as it was given to us. So we pay for tuition, room, board, books and necessities. However, we don’t pay for beer money, gas money, weekends in Boston, etc. She has to provide her own spending money or she doesn’t go out/buy stuff. We do expect her to work in the summers, but she gets to keep her own money as discretionary income to use or save as she sees fit. </p>
<p>I don’t think it’s a good idea to make college kids take out loans if they are not necessary to pay the bills; it’s manipulative and unfair because most kids don’t understand the long-term implications of debt with compound interest. We did take out a small Stafford in D’s name in order to help her establish a credit rating, but we make the payments.</p>
<p>I do not have GPA expectations beyond what the college considers the minimum acceptable level for progress-toward-degree and graduation. Getting a high GPA at a decent school or in a rigorous program is hard. Many high school superstars are humbled freshman year. It’s stressful enough without the added financial pressure. We do, however, have a four-year limit (barring unexpected illness, etc.).</p>
<p>I didn’t have either of our kids take out any loans for college. We paid their tuition, room & board, as well as any books that they request help purchasing. We also buy plane tickets home and have paid for a car to be shipped to each of them SR year. S paid all other costs related to the used car we sent (he had a PT job on campus in his field). D didn’t have a job and we were concerned about her health, so we paid all costs relating to her used car. They never asked for spending money, taking it out of their savings and earnings.</p>
<p>S had a substantial merit award and his ‘skin in the game,’ was keeping it and getting high enough grades to be competitive for internships and later jobs. He did very well at keeping up his end of the deal.</p>
<p>D did well to get admitted as a transfer into the U and also get into the school that she wanted within it. She worked very hard without having any cash that she was paying toward her education. She felt very fortunate by the opportunities she had.</p>
<p>We weren’t worried about D’s work ethic, so ‘skin in the game’ wasn’t our issue. However, we had reached a point where there were a great many choices to be made (enrichment opportunities, grants she could apply for, special programs, study abroad options, work opportunities, to co-term or not to co-term - all of which have financial consequences). We soon realized that we didn’t necessarily have the best information and if we paid for everything automatically, she would have no incentive to do the research and make the hard trade-offs. Instead, we turned the decision-making on finances over to her. We told her that we had x amount of money available for her remaining years of education. When that is gone, she will need to apply for loans. She can forestall that day by working, applying for grants and scholarships, and through other money-stretching techniques. We are always ready to discuss the options, but ultimately, she is the one with the incentive to stretch her budget and make the trade-offs.</p>
<p>Example of how this applies: She is currently overseas where she identified her own study abroad program because going with her university would have been twice as expensive and didn’t precisely fit her objectives. She is also looking for housing when she returns - one option is very expensive and very convenient, the other is cheap and inconvenient. We have talked about the pros and cons, but she will have to figure it out. (Answer - neither, she’s still looking and may end up on a friend’s floor for a week or so if absolutely nothing comes up. Her choice.)</p>
<p>So far, so good. She has become very savvy at identifying grants, flexible jobs, and opportunities to stretch her resources further - far better than either of her parents could have done. She values being treated like an adult and we value not having to second guess her. Were she less mature, we might not be comfortable with this, but you know your daughter best and whether she’d make good choices if she were to have the final say over her educational resources.</p>
<p>We chose to have our D pay for everything non school related. </p>
<p>We cover tuition, books, R&B, etc. She covers entertainment, trips with friends, off campus activities, and the like. She keeps up her grades to maintain her academic scholarship which we also feel gives her incentive to do well. (Although it is in her nature to do well anyhow). This has been a great plan for us as she works very hard during the summer to earn spending money. She has loved her jobs and it has led to her unveiling what she wants in the future. The pay off has been very rewarding.</p>
<p>Whatever works for your family is the best way to go.</p>
<p>Ours pay their summer earnings expectation to the school directly. They have enough for books out of their summer earnings too. Campus job covers their spending needs which is a great way to teach budgeting and saving.</p>
<p>Love this thread. My DD will need skin in the game as I can only afford ‘some’. Her skin in the game is to graduate over 3.0 (she’s struggled some in class) and find scholarships and apply for them (essays, poetry, etc. whatever…). She has a car already. If she performs well freshman year she can take the car. She’s looking for a job now (she’s a HS junior) but can’t find one so now her ‘job’ is to do well in school and study for the ACT and SAT. I don’t like the idea of a college telling me that my kid needs to have some skin in the game, let me decide that. She’s agreed to go to any college we can afford and has some favorites. We’re hoping for a teeny bit of a golf scholarship but not sure that will happen. I’ve already let her know what I can pay so if we can get it cheap or free I’m all in. I’ll likely pay for any study abroad programs as well.</p>
<p>You could give her a budget of [tuition + fees + books + room + board - expected financial aid grants] of a college that you realistically expect her to be able to be admitted to and find suitable (note personal and misc expenses not included so she would have to earn that).</p>
<p>She can choose that school and work for the remaining expenses.</p>
<p>She can choose a cheaper school or earn scholarships so that your budget will cover the personal and misc expenses as well, possibly with some left over for post-graduate professional school or other educational opportunities (e.g. study abroad if it costs more, or extra semesters which are a realistic possibility if she is not a top-end student).</p>
<p>She can choose a more expensive school and work more and/or borrow (within reason) to pay for it.</p>
<p>Wow! There are a lot of wonderful ideas and of course there is going to be differences of opinion. And I’m glad everyone has kept it civil. Money can often be a touchy subject and I apologize for that sort of in advance. ;)</p>
<p>I appreciate all the posts.</p>
<p>I’m sorry, I should have stated before that we already know where my daughter will be attending college. And, with our savings, 529 accounts and income, we can probably meet all of the regular costs. (There will be no need-based or merit aid.)</p>
<p>As far as …</p>
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<p>That gift was not given to all of us. As I’ve posted before, my parents contributed zero (I mean zero) to my college or to my graduate education. I worked full time while in school, paid for it all myself and also took out tons of money in loans … all paid back.</p>
<p>We had our DD2 take out loans the first two years. We paid the loan interest while she was in school so that it didn’t accumulate. She found grants to make up that amount her last two years. She also worked in the math lab tutoring for her walking around $ and books.</p>
<p>My parents paid for all of my college costs (books, room & board, tuition, clothing, dorm supplies) and I paid for entertainment and a January study-abroad opportunity. This was something I also wanted to do for my D, so I told her all along that getting into a college was her job and my job was to pay for it. She did not have a car for her first year, but she has one now. Initially, I paid for gas, insurance and maintenance. She now pays for gas. </p>
<p>She wanted to live off campus for her 3rd year, so we worked out the finances as follows. I was willing to pay for the most expensive room and meal plan on campus, so that was her budget. The money that she saves by opting for a less expensive apartment and by cooking for herself, we split 50/50 at the end of the year. If her studies extend beyond 4 years, she’s responsible for the entire 5th year. She currently works a part-time job during the school year and summers.</p>
<p>She works hard, earns good grades, and I actually worry that she doesn’t do enough on the entertainment front. If she were a different kind of kid, I might have made some different choices – easy for me to do since she’s my only kid, and I don’t have to consider fairness issues amongst siblings.</p>
<p>My son is on a full tuition scholarship so we are splitting his R&B three ways among him, his dad, and me. (His part is in loans, which means he will graduate with a manageable amount of debt–and it’s possible we may pay that off for him afterwards, depending.) He doesn’t have a car on campus (much to his dismay) so it is hard to find jobs during the school year. So he saves up as much as he can working during the summer and winter break (he has a great warehouse job that pays well and gives him long shifts) and tries to live on that for his “fourth meals,” books, and entertainment/small trips. We pay his airfare back and forth. It is working fairly well so far but he does spend a ton on food, and two trips this fall–for fall break and to a conference–put him over for the semester. Fortunately he has a five-week winter break so he should be able to replenish his funds fairly well before he goes back.</p>
<p>Our kids are responsible for books and personal expenses (food beyond the dining hall/set allowance once in apt, entertainment). They knew this very early on, so planned that they would need money before school if they wanted the luxury of not working during school. One son had a great FT internship for two summers before school. It was a great experience and he saved most of the money. The second cut his ECs from two academic teams to only one his Sr yr and got a PT job. Although busy (what Sr isn’t) he’s really enjoyed the job and doesn’t regret his decision to arrange his schedule to work. It’s a great co that he can come back to on breaks as long as he wants to. </p>
<p>For our family, it makes sense that they help out when Mom & Dad (and everyone at home) are cutting back. Happy to do it, but money’s not limitless. No one is complaining about the arrangement. Our kids are quite happy for loan-free educations.</p>
<p>We pay room, board, tuition and books. Everything else is on the kids. We don’t have a strategy for it, we just tell them they will need to save summer earnings for anything else - walking around money, lost key charges, college t-shirts, etc.</p>
<p>I think the best thing is to make it clear to kids that they will be providing their own spending money. Preferably by junior year of HS, so that they can look for a job that summer.</p>
<p>I would just do a job to be honest. A loan is kind of a weird way to put skin in the game in my opinion – it’s not BAD but it doesn’t really teach responsibility since it’s basically just a signature on a form until four years later when they start paying for it off. I know when I was starting college way back when people were just THRUSTING forms at me and I didn’t learn nearly as much from that experience than I did from the actual responsibilities of working and being a student and things that I did (rather than things that were done TO me).</p>
<ol>
<li>Get merit</li>
<li>Study well, so you don’t need to hire tutors or take additional classes</li>
<li>Tutor, if she has time. $20/hour - minimum that she would get with tutoring. Better than any babysitting.</li>
</ol>
<p>"my parents contributed zero " - same for me. Tuition was waived. I stayed in my parents apartment, they provided food, clothing, extra money. All together - I think less than $3,000 for all 5 years.</p>
<p>However, my children won’t have a luxury of waived tuition. As long as I am capable, I’ll pay for them.</p>