We have 7 children ages 1 to 16, spaced about 2-3 years apart. Once our 2nd child heads to college, we’ll have 2 in college until our youngest is the only one left. My husband will be 60 when our youngest graduates high school, so pretty close to retirement age.
I’ve run the NPC with all our info - even with 2 kids in college at the same time, our EFC is $40,000 per year per kid.
I’ve been trying to come up with a plan that balances the needs of helping our oldest kids fund college while also planning a bit better for the younger ones. We currently put $50 per month in each kids’ 529 from birth. This gives each of the kids about $20,000 at age 18. Enough to do something for our older ones, but by the time our little ones are big, it will be a drop in the bucket.
We don’t want to spend too much on oldest and short change the younger ones or short change the oldest ones to save more for the younger ones.
Our oldest is 11th grade. We have a few things we’re cleaning up financially, but by the time he graduates, we should be able to pull about 5 to 10K a year from current earnings to apply to college.
Our plan is to give him 3 options that amount to around $40,000:
Earn a tuition scholarship, and we pay room and board.
Live at home and commute to one of the four 4 yr schools near us. We pay tuition.
Community college for 2 yrs (we can cash flow it) plus 2 years away that he helps fund with savings.
We would also offer that to the next child in line. After that, things get tricky because prices might be a lot higher and it seems like it would be unfair to limit the next kids to $40,000.
(Accidentally hit post, so continuing in next post.)
Around the time child 3 graduates high school (8 yrs), we should have our house paid off. Also, dh is still climbing the ladder so his salary should be quite a bit higher. We should have quite a bit more money to work with.
So a few questions:
How do you keep things fair for the kids over time while accounting for increase in the cost of college?
Would it make sense to spend more money on the oldest 2, assuming we will have more money to work when the youngest 5 are college?
Should we focus on finding ways to significantly increase the amounts we’re adding to the youngest children’s college funds and invest it more aggressively, hoping for more growth? (This is what dh thinks, but to me it seems unfair to the older kids.)
Just wanted to run it by some who have btdt to get another perspective. Would love to hear your thoughts.
The 529s for the younger kids will be much larger because they will have had more years to grow. You also may be able to double the monthly amounts as the older kids drop off the monthly plan. It will be impossible for everything to be the same for the current 17 year old as the current 5 year old. All you can do is your best.
Can you even pay room and board should your oldest get a full tuition scholarship OOS? Check it out because some school’s R&B are near 15K/yr, throw in 2 return flights a year (min) and you could be looking at much more than 40K over 4 yrs. Assume potential loss of scholarship, because that is real. Factor that in to a plan. 40K sounds doable in my state for commuters who start on a good scholarship. You can only do what you can do. IMO you have no choice but to get to college as cheaply as possible for each kid that is college material. They won’t all be 4 yr uni kids.
Is your savings and 401K (for you both plan solid)? Put on your own oxygen first, then attend to the kids. Is your income from both parents working?
All of your 529 money is going to be counted as a parent asset in the financial aid formulas, even the money where a different child is the beneficiary. You can put all your money in a few accounts and just change the account beneficiaries as kids graduate.
I would work on sending your kids to college for cheap. This means the highest grades and test scores possible to get scholarships, and shopping for colleges with price tags in mind. Just because some NPC calculator said you can pay 40,000 per kid doesn’t mean that is a wise thing for your family to do. (BTW: each college has its own formula, you get different prices at each school.)
Your in state public university system is a good place to start looking. There are some schools known for low price tags for out of state students as well. It depends on what the child’s grades and test scores look like and what they want to study.
@Mom2aphysicsgeek has a large family as well, maybe she’ll chime in with her strategies.
Are you having trouble finding colleges that are acceptable in the $40k range?
We are at the same efc, 2 kids, about $40k each, so we don’t qualify for any financial aid beyond merit. We have found that most schools, ranked in the USNWR #50 - #150 range, come in between $35k - $45k per year. Our kids are B - B+ average with mid 20s ACT scores and even they have received merit awards from most private schools between $15k -$20k per year. In state flagships are coming in at $30k-ish; OOS flagships at $42k-ish. So, in reality, we have had no real issue staying in the $40k per kid/per year cap.
I am sorry to say that you are in the boat with the majority of upper income families, you are expected to pay out of pocket for a college education. The question is how much are you willing to sacrifice your current lifestyle to fund your kids’ education? I am a firm believer that: 1) You do not want to rack up loans to pay for schooling; 2) Most kids should live on campus. There are lots of good options out there for quality of education, they might not come with a flashy name brand, but there are plenty of options. Hopefully one or two of your kids will be academic powerhouses and earn some outstanding scholarships, there is also the military as a career avenue, and maybe you will have a sports prodigy! Good luck and kudos to you for looking ahead!
You may want to double think about paying the house off and consider the equity for a 2nd mortgage, as interest rates are so low and mortgage interest is still deductible, at the moment. It may be the cheapest way to borrow money if it comes to that.
Edit: We are in Texas too, really, really really pay attention to that top 10% (6%) rule and try to nail it, there are some good options in state but admittedly they are limited.
Wow! Congratulations and condolences! (I have seen the word “congrolences” used in similar cases).
“We’re in Texas.”
I agree with @Sybylla, you have really good in-state public options. Assuming that your kids are academically qualified to go in-state, given your financial situation I wouldn’t consider anything that would be more expensive.
It sounds to me that you have in-state options close enough to commute from home, and have already proposed this as your option #2. This seems very reasonable to me. Your option #3 basically seems to say “same price, slightly different split” which also seems reasonable to me. Your option #1 seems unlikely to be possible for a kid to pull off, but if it comes out to the same price then this also seems reasonable. Perhaps this is a slow way to say: You seem to be headed in the right direction.
I don’t think that I would use the $40,000 number. I think that I would use the “cost of local in-state school commuting from home” as the number. This number will likely change (upward) over the many years that you will be supporting your students.
One thing to think about: What happens if a child gets a merit scholarship to a further away or private school, but then loses the scholarship? In the cases that I have heard of merit scholarships require that the student maintain a minimum GPA in university. I think that I would propose “they have to transfer to a nearby public university and commute from home”. Another issue: What happens if a child doesn’t graduate in 4 years? Frankly 7 Bachelor’s degrees in 28 years seems like it is almost too much to hope for. In this case you probably need to be able to pay, but I wonder whether there should be an expectation that the child eventually pays you back for the extra year.
Given your situation, I would be cautious regarding spending, and definitely don’t go beyond the cost of an in-state public university for any of your children.
“How do you keep things fair for the kids over time while accounting for increase in the cost of college”
As you have probably noticed well before now you pretty much need the wisdom of Solomon to pull this off. I would use “cost of in-state public university” as my measure, probably limiting this to one that is within commuting distance. If you expect to afford this for 7 children (28 years!) then that is what I would limit every child to. If you can’t afford this much then you might need something closer to “Community college for two years and in-state for the rest”.
@Sybylla We’re not looking OOS at all except for Oklahoma because it’s closer to us than some of our in state colleges. We’re only looking within driving distance. (There’s a chance we might relocate, but if so, we’d look in state wherever we go.)
The housing/meal plans I’ve seen on college websites run about $10-11K so we could swing that if he got tuition covered. He works, and we’d expect him to cover books/extras from savings and a small part time job.
Our 401K/savings is solid. For some reason we thought our college plans were sufficient, but we should have planned better, which is why I’m trying to reevaluate everything.
Dh is the only one working. I’m a homeschooling the kids, and taking care of the little ones. I’m open to getting a PT job when all of the little ones are older.
Dh mentioned moving all of the younger kids’ 529 money to the oldest 2 since we still have time to plan for them and might have more wiggle room, but I’m not sure that’s a good idea since the future can be so uncertain.
“Dh mentioned moving all of the younger kids’ 529 money to the oldest 2”
The investment strategy that the fund manager uses is different based on when the child will be going to university. Thus for example the recent run-up in the stock market helped the 529 for my youngest more than it helped the 529 for my oldest. Presumably this was because the 529 for the youngest was slightly more aggressively invested.
With some long-range planning, & depending on their majors, at least some of your kids should be able to graduate in 3 years instead of 4. This would involve taking a lot of AP courses in high school and some classes at a local community college while in high school.
If they are all going to the same college, perhaps u could buy a condo or small house near the campus. Your kids could live there & u could rent out rooms to other students when there is a vacancy.
I would just choose option #2 or #3 and not worry. Your kids should start earning and saving money each summer for their education. And they should either take AP classes to earn college credit or do a running start (community college courses) while at high school if that is offered to get ahead. They might save a semester or a year of schooling.
For a limited budget, you go where the money is. Don’t stick within driving distance of home. For example, kids with high stats and low budgets often head to Alabama https://scholarships.ua.edu/types/out-of-state.php
There are other places as well, it depends on what your child’s test scores are.
Homeschooling mom of 6 here with 3 in college (and one not yet in K5);
We currently have 2 kids doing option 1 and 1 doing option 3. CC kid had the option to live at home and commute (option 2), but she wanted to save money to live either in an apartment or on campus when she finishes her Associates and transfers to a 4 year.
My advice is to chase merit. Do whatever it takes to build up standardized test scores and keep those grades high. That’s the best way to reduce costs for multiple kids in college at the same time.
Kid 1 got a full tuition scholarship plus national merit money. Kid 3 got a full tuition scholarship plus a small local scholarship that covers fees and about a semester of books. Kid 2 didn’t have the test scores to earn merit money, but is a straight A student at CC and was awarded a scholarship by the school that is equal to half tuition.
Start prepping those younger kids for PSAT/ACT/SAT. It will pay off down the line.
I didn’t think much about the fairness aspect of things, tbh, as each kid has different tastes and desires. Kid 1 is at an OOS private, kid 2 lives at home and goes to CC, and kid 3 lives on campus at a local 4 year state school. We don’t pay the same for each of them, but they are each where they chose to be given our financial parameters. It may simply be too early for you to know what each of your kids will want out of a college experience, so try not to stress about being completely fair.
@DadTwoGirls Thinking of it as the “cost of local in-state school commuting from home” is extremely helpful. It’s what we’ll likely be able to afford for each of them, and it will give us a way to set a fair a dollar amount for each of them when the time comes. If a couple of them end up wanting to do something different, and they can bring the cost down to that level with merit money or whatever, then they’ll have that option. And yes, if they lose the scholarship, they can come home and do the local option.
I need to see what Dh thinks about the number of years to fund. I know some degree programs take around 5 years now, and there can also be some bumps along the road.
@ucbalumnus Yes, that’s correct and probably better phrasing. We can afford $10,000-15,000 per kid. EFC is $40,000.
We can probably double that amount once our mortgage is paid off, which should happen right after our 3rd child graduates high school, but it might work out to providing the same level of help as we did for our older ones as costs will likely be significantly higher by then.