If you saved $1000/month for a kid for 18 years, you wouldn’t have enough for most private colleges, and just enough for in-state tuition in my state with some money to help with grad school. Lord help you if you have two or more.
If you saved $1000/mo x 12 mo x 18, you’d have $216,000 (plus another $1000 x 12 x 4 years of college if you keep contributing). I know it’s insane to think anyone with a 1 month old is going to have $1000/mo to put into college savings, but if you can and do, and you can’t find a school to send your child to for $216k, you need to look a little harder. Or move to S Dakota.
Yes, you can find a school, but the most privates are now in the $70,000/year range and our in-state flagship is $30,000/year. Not affording a top school does not mean you haven’t been saving.
@juststaycool “If you saved $1000/month for a kid for 18 years, you wouldn’t have enough for most private colleges, and just enough for in-state tuition in my state with some money to help with grad school. Lord help you if you have two or more.”
Wrong. If you invested in a college savings plan (not just saved) the 1K a month over the years at reasonable 5.5% return, you would have approximately 270K in only 15 years and 350K over 18 years. Even if you contributed a more reasonable amount each month, say $500, you would have almost 180K in 18 years.
The bottom line is if you start contributing to your kids college (i.e. when they are born) the more money you have when they are ready for college and takes the sting out of the high cost of tuition.
“The bottom line is if you start contributing to your kids college (i.e. when they are born) the more money you have when they are ready for college and takes the sting out of the high cost of tuition.”
When the kids were in daycare, there was no money left over to put aside for college. The only way we could have done that is if we stopped funding retirement completely, as it was, we could only afford to each put the minimum. We have been paying daycare since 2001 - this is the last year that we will have those expenses. You don’t even get a decent tax break for it - only the first $5K is tax free. It cost $65K for each kid for daycare up through age 5 - so that was $195K that wasn’t available for college savings - and that was only through kindergarten. We paid for after school care for each one for 6 years after that, and then full time care during the summers until they turned 13. It’s an enormous amount of money that we couldn’t save over the years. You think you will get ahead, but the costs of daycare seem to be on the same trajectory as college tuition. Somehow, the rate never changes from the infant rate and you don’t EVER pay less. Daycare is ridiculously expensive in some parts of the country, and it was extremely hard to find when my kids were little - long waitlists, etc. We had to live on an extremely tight budget for at least a decade!
As each kid got older, we increased our 401K savings until we each maxed out our contributions. We need to do that in order to be able to retire someday. We have money now that we can give the kids for college, but we have a strict budget that we need the kids to stick to.
Be grateful that you had enough left over to save big money for your kids to go to private schools, you are truly blessed to be able to do that.
$1,000/month for 18 years at 7% annual interest rate (compounded monthly) results in a balance of $433,233. Yes, I realize that an investment that returns an average of 7% annually may be too aggressive for some people, especially as the child gets closer to college age. I’m simply pointing out how the savings can grow. Not accounting for investment growth, even if it’s just interest from a savings account or CD, is silly.
Some people still put it under the mattress, I suppose. In any event, I think the recommended formula is 1/3 out of savings, 1/3 out of current income, and 1/3 out of future income (loans). If you can save half the tuition by contributing $200-$300/month per child, you can soften the impact on current income (during college) and loans.
Some of us still sadly DO pay full sticker price, so be aware that it can sting A LOT. Even if one child in the family gets SOME merit aid, there is no guarantee that any other child in the family will similarly get merit aid and full sticker price may be much more than one has budgeted for. It can be tough to let kid #1 go to elite school with good merit but refuse to let kid #2 who gets in with no merit attend. Yes, some families say, sorry not, but others have more difficulty.
I think that while the premise is true that the average family will likely not be paying the sticker price that doesn’t mean college will be easily affordable for many of those average families. The uncertainty of the cost contributes to feelings of unease about the affordability of college. Enough people with HS age children have kind of a Scarlet O’Hara attitude towards college and pledge to think about that tomorrow. When tomorrow is finally now you do get scared. The number of posters both students and parents wanting to know about “full ride” scholarships tells me that they aren’t prepared and often have expectations about both schools and costs they will not be able to meet.
I encourage pragmatism at the earliest possible moment. Those parents who begin to save for college when their child is born, kudos to you, you may still need help but you are far more prepared than most. It will be easiest for you to determine what you will contribute because you’ve been thinking about it for a long time. Those who haven’t been preparing need to work on the expectations of their children. It does little good to have NYU dreams on a Community College budget. That doesn’t mean they can’t apply, it just means, that can’t expect to attend unless things go very right. Just don’t say to your child or your self “we’ll figure it out”. You figure it out before the applications go out.
I thankfully will soon be done with this adventure. We’ve been smart in someways thanks to CC, fortunate in others thanks to smart kids making good decisions and having reasonable expectations and down right lucky in other situations. My mantra has become know what you will contribute. It’s up to you how you finance it but don’t leave it open ended. That leads to disappointment or financial disaster.
Articles like this bother me, because they just give parents the idea that funding college for their students will be easy.
I can’t tell you how many parents talk about looking for “free rides” when they have no clue that those are only reserved for a very few tippy top students.
The truth is, apart from the students you see on CC, the vast majority of students in the US are average. They might have a 3.5 GPA and maybe 27 ACT if they are lucky, stats which will earn them no merit aid unless they are a recruited athlete. Then, unless their parents are low-income,they will still be expected to pay a high amount in tuition. The public universities near me are $26k a year including room and board and there is no way to make that cheaper since rents around those colleges are high. A student can take only $5500 a year in loans which means parents have to make up the difference. How many parents can sign for $20k a year (especially if they have other children)? Until a parent reaches this journey with their own child, it’s easy to live in the past and not understand how much college costs have skyrocketed.
@hopedaisy wrote:
I can’t argue with that, but, what’s equally true is that CC has a rather skewed idea of what constitutes “middle-class”. Last I looked, the median income for a family of four in the United States was ~$76,000. Yes, I agree that they would have to meet some rather high academic benchmarks in order to gain admission to any of these T50 colleges and universities - https://studentloanhero.com/featured/us-colleges-generous-financial-aid-packages/ - but, it seems to me that we have only begun to scratch the surface in terms of reaching a meaningful number of these families.
Many of those average students of 3.5/27 get merit aid at average schools. If the student wants to go to a reach school, there isn’t going to be as much merit aid (may be need based aid).
Only on CC do we try to bring the discussion back down to the ‘average’ student and end up with a student who scores in the 87th percentile on the ACT.
The 51st percentile composite score for the ACT is actually a 20. While it’s true many kids take the SAT or ACT multiple times to get a better score there are plenty of good, hard working B students who will never score higher than a 21 or 22 (63%).
Then again, this article isn’t about funding for the average student. It’s about encouraging kids who qualify for academically elite schools not to be scared away by the sticker price, the point being that often these schools are more affordable than people expect and can in some cases be cheaper than a state school for a middle class family.
Average schools have sticker prices too.
The title of the thread is about looking for more information before dismissing a school just because of price, or at least that’s how I took it. My daughter went to a high sticker price but non-elite college after we looked for ways of getting money to make the school affordable.
My older child had a 2.99 gpa and a 28 ACT. The college he chose was private and it, along with 3-4 more private LACs he was accepted to, were all significantly cheaper than our state schools which had little merit and awful need-based aid.
My younger child had a 3.9 gpa and 35 ACT and again, the state schools came in with the highest prices of the group, except for one OOS where she was offered full tuition+.
So, absolutely it’s been our experience not to “be scared off by the sticker price”.