<p>My parents wound up giving something like 10k a year for tuition and covered books. the rest was on me. Student loans and jobs covered the rest including all spending money, insurances, car, phone, food, etc… I picked a relatively cheap school to keep my costs down. I looked st some that were more expensive but didn’t want to take on the debt. My sisters loans for two years totaled mine for four and she commuted from home instead of living on campus like I did.</p>
<p>I have a Co worker who told me his loans are 750 a month. That’s practically a mortgage. </p>
<p>I agree ucb, which is why I brought it up. The OP’s plan seems geared towards kids going away to college and spending 4 years there. With 4 young B students, it seems there’s a good chance that at least one would benefit from time at the cc.</p>
<p>The simplest way to make your children price-sensitive when choosing a college is to let them share some of the savings of doing so, either in the form of lower debt or a cash payment upon graduation. I don’t understand why so many people resist this. If you don’t want your child to be too influenced by cost, give them only a fraction of the savings, say 1/3. Giving them none of the savings encourages them to choose the most expensive school, and many colleges spend the marginal dollar on amenities, not instruction.</p>
<p>^only true if the max amount offered is significant. My “x” probably wouldn’t cover full pay at the in-state flagship. The kid is going to have to shop for scholarships in order to have any options at all.</p>
<p>Thanks everyone for all the great feedback. </p>
<p>I’ll likely incorporate UCB’s recommendation for the potential of > 8 semesters. I had already planned to cover the tuition in that event (on the assumption the child would not have yet taken the required 120-130 credit hours) but I do think your suggestion works well for room / board.</p>
<p>One question. Some of the early posters suggested I wasn’t taking the right approach with respect to the child potentially earning scholarship money. But I’m not sure what your suggested enhancements are.</p>
<p>I’ve been thinking that if TRB exceeds my full ride cap, the student’s scholarship is applied to our shared contribution (either pro rata or to the child’s contribution first). If TRB is less than my cap, the scholarship reduces my outflow. I recognize in that event it may not be much of an incentive to the student, but I don’t see just handing over cash to the student unless perhaps it is post-graduation. The idea of applying the savings to a grad school fund does seem like a good idea.</p>
<p>Welcome your thoughts and thanks again for all the feedback. I feel like, even if our plan is still a ‘draft’, I can have that first conversation with the eldest about planning for college, the need for a summer job and stretching in school to earn a chance at merit money.</p>
<p>Perhaps the following may work, in giving incentive to do well in high school (to get merit scholarships and better chance of admission to generous-financial-aid-grant schools), choose a good value for the money college, and continue to do well in college (do well enough to keep scholarships, avoid needing extra semesters):</p>
<p>Set a baseline limit that you will contribute. For example, you may base it on TRB at the state universities. If the student attends such a school without grants or scholarships, the student is responsible for additional costs through work earnings or Stafford loans.</p>
<p>If the student chooses a lower cost option (including if the net cost is reduced by merit scholarships, but also cheaper schools including starting at community college), lower the student contribution first, as the student has earned it. If the net cost is lower than the baseline limit, then you can just pay that, but reserve the excess for later if an extra semester is needed or the student goes to post-graduate school (or, at your option, contribute it to moving and starting out expenses when the student starts his/her first job after graduation). If any is left over after all education is successfully completed, consider turning over at least a portion to the student (though some may choose to delay turning over large amounts of money until the person is established in a financially sustainable lifestyle without needing the extra money).</p>
<p>If the student chooses a higher cost option, the student’s contribution goes up. You probably want to limit the student’s contribution to Stafford loans plus realistic work earnings (i.e. not much), effectively limiting the maximum net cost. (This may mean that if a student depends on a merit scholarship to attend a more expensive school, but loses it, s/he may have to transfer back to a community college or other lower cost school.)</p>
<p>We made our kids responsible for ten percent of tuition (net of scholarships), room, board, and books. Everything else was their cost. We did not place an upper limit on how much we would pay or on the number of semesters they could be in college because neither of those two things mattered to us. Our decision to have them be responsible for a portion of their college costs was designed for financial education purposes rather than cost savings.</p>
<p>The 10% was enough to make them price sensitive, but not so much money that it would have made any dream school out of reach. Both had worked since the age of 14 and had significant personal savings before going to college because we required 50% of every paycheck to go in the bank. Both also planned to continue to work while in college. We did not expect they would need to take out any loans for their share, regardless of where they went.</p>
<p>In the end, both attended a low cost public, both have/will graduate without any debt, and both have or will graduate in four years (albeit with summer classes). The younger one graduates this spring. Neither student has any regrets with regard to choosing a low cost option for college. We will similarly fund grad school for either, to the extent not employer funded.</p>
<p>We’ve considered scholarships as part of the kids’ “skin” in the game. We will also not give them spending money. We gave them a set figure, dollar amount, that we were willing to contribute to their college education, they had to figure out where the rest of the money was going to come from–scholarships and summer jobs mostly. They had zero issues finding affordable schools that were great fits for them. They are looking at potentially not having to pay out of pocket for anything in college so our contribution to their education will fund study abroad programs, summer travel, spring break maybe, etc. It depends on some competitive scholarships. Our figure is WAY, WAY under $40,000/year :D.</p>
<p>In your situation, I would suggest that you really lowball the number that you will give them. Once you see test scores and GPA’s junior year, you and your spouse can set a more concrete number. Let the kids apply to some financial reaches if they want and if they get accepted and you are happy with how hard they are working to contribute, pay for their schooling above what they are contributing.</p>
<p>Other people we know have the kids take out loans, supplying limited funds while they are in college. Once they finish college and are working, pay off those loans for them, but not telling them that until they have shown they worked hard enough in college and have gotten a job.</p>
<p>There is no right or wrong way but I do agree that the students should pay for as much of their own schooling as they can through jobs and scholarships.</p>
<p>Mingles, like you we consider scholarship money to limit our outflow, and personally I see nothing wrong with that. It is a personal philosophy of reciprocity. I will help the kids get an education. They need to be cognizant of the bottom line and do thier best to save me money. It’s better for them if I’m not so broke at retirement that I have to move into one of their basements. I have also said I can pay up to X, not “I will give you X every year.”</p>
<p>I agree with the posters who said that it may be difficult for some kids to graduate in 4 years. Some schools offer 4 year guarantees with stipulations that you don’t change your major and such but we didn’t go that route. D will easily graduate in 4 years because she came in with about 30 AP credits. S, even though he came in with about the same amount of AP credits will barely squeak by getting done in 4 years since he is double majoring in two difficult majors - computer science and mechanical engineering. He is planning very carefully and took a CLEP chemistry exam over break and should be able to do it. </p>
<p>As far as the $$, We were very clear with our kids in advance how much was available for their schooling. We had been saving for some time in a 529 and shared the balances with the kids and looked at the difference in costs at the different schools they were considering. We told them how much extra they could expect over and above each semester that we would be able to absorb and the rest is on them. DH also sat down with them and an amortization schedule to look at what $50,000 & $100,000 in loans really looks like as far as a monthly payment and as one poster mentioned, it looks like a mortgage.</p>
<p>Both chose schools that would allow them to graduate debt free - where the tuition was within our budget. The money they earn goes towards books and spending money. Both also have already gotten good PAID internships for this summer so should have no trouble with their part next year. I really am not in favor of unpaid internships - i think they take advantage of our kids - unless it is really a super unique opportunity or for a non-profit. There are plenty of things one can do for no pay - working for a company all summer isn’t my idea of a good choice of one.</p>
<p>OP, you are smart to be thinking of this in advance for all your children. We have 7 kids and H and I disagreed about our oldest S’s college choice. H allowed him to turn down NM scholarships and choose a private school with no merit aid. We also allowed our 2nd child to choose the most expensive of her three choices, though she had some merit aid. We made these two pay 10% of their total costs by working high school and summer jobs. We did not keep track of nickles and dimes. S’s school was more expensive, but D spent a semester in Europe, and spent more on "unnecessaries."Our next two sons qualified/will qualify for NM scholarships and we are making them take the $$ because we are older now and need to save more for our own retirement, as well as save for 3 younger kids who, based on their academic performances so far, seem less likely to qualify for large merit scholarships. We promised S’s #2 and #3 if they maintain their scholarships and graduate in 4 years, we will buy them each a car (good used car) for college graduation. (Older sibs got nothing.) We will also remember, in the future and in our wills, who got a lot from us for college and who didn’t. We can’t treat all our kids equally, I recognize that it is “unfair” to our younger kids, but they are not the kind to protest this. The ones that are “forced” to take scholarships are just happy they don’t have loans like so many of their friends. They will all end, I hope, on somewhat equal footing: with a college degree and no debt. That’s the goal, anyway.</p>
<p>I’m really not a fan of parents paying their kids x% of what was save upon graduation (or even throughout college). I’m at school on a full ride (including room and board, I pay for books but I get a semester stipend. Thank you ROTC) and I have not asked my parents to give me anything to compensate. They’ve given me a great childhood, shouldn’t I take into consideration that what they’re not giving to me is either going to my sisters or their retirement. It’s time for me to stop taking and become independent. </p>
<p>Maybe I’m just very fiscally responsible and don’t expect anything from my parents, but I never think a parent owes money to their child. The merit scholarship and graduating without debt should be big enough rewards, many kids aren’t lucky enough to have even that.</p>
<p>Scutrules–our kids won’t get back what “they” saved us in college tuition–they will get the comfort of knowing we won’t be moving into THEIR basement any time soon :D. Like DD has FINALLY figured out, the less college costs us, however, the more freedom she has to travel, etc. in college, which is something she wants to do.</p>
<p>If your kids want graduate school, especially law/medicine/business (which offer almost no need-based nor merit-based aid), they are better off going for merit undergrad, then putting money towards graduate school.</p>
<p>It’s your money, so you don’t have to do that, but be aware that it might be what is best for your kids. You could always restrict post-college funds as exclusively for graduate school (not a car, down payment on a house, etc.).</p>
<p>How much you need to structure the cost sharing with incentives does also depend on how frugal and altruistic the students are. If the students are naturally frugal (looking for the best deal even when spending someone else’s money, and not wasting any opportunities) or altruistic (wanting to avoid spending too much of or wasting your money), then you may not need to put as much in the way of incentives into how you structure the cost sharing.</p>
<p>But the fact that you brought up needing to have “skin in the game” indicates that you do not believe that this is true for at least some of the students, right?</p>
<p>Everyone has their own philosophy regarding higher education. We started saving when the kids were born and have a certain amount in mind to pay. I told my kids that we could pay tuition, room, board, fees + books for instate colleges. Out-of-state or private they would need to earn merit scholarships to bring the cost in the ball park of the instate options. I would pay the extra if the total costs were in the ball park and the out-of-state/private was a better fit.</p>
<p>Anything left over in the 529 accounts or assigned investments will be theirs when they graduate. They can use any extra for their own investments or use it for graduate school if they chose.</p>
<p>So, the first two kids are going in-state but #1 is a bit lazy in appying for merit aid considering that he doesn’t have skin in the game. I made the arrangement even more generous and told them that any merit aid they earn is theirs to keep.</p>
<p>They have to pay for their own entertainment and gas (if they use my car).</p>
<p>Exactly, UCB. There is definitely variability among the four. The eldest is much more tight fisted with his own cash than with ours, and is a bit of a procrastinator. Hence the desire to begin having ‘the talk’ early. I suspect that one will thrive better in a much smaller school than the state flagship which makes merit $ all the more topical.</p>
<p>We told our dgt we would pay for the first 4 years of school. We should have said we would pay for undergrad. Now she is planning on graduating in about 3 1/2 years, taking her grad level courses her senior year and getting her Master’s by the time she is finishing up what should be her senior year in college. She is taking 20 credits per semester and if she can get the right classes at the right time she is on track to graduate at that point. The savings that I have though considered the cost of undergrad and not grad school costs. So we are going to come up short. However, she thinks she may be able to become a TA for the grad school part.</p>
<p>I don’t want to make light of the added cost to you Lambb66, but if ever I find myself paying more than expected for my kids’ education I hope it’s because they have a motor like your child’s. Thanks for the post!</p>