Parents, how do you pay for college ?

Then you find less costly colleges that you can pay for.

And you have $200,000 in a 529 for your one kid? That’s $50,000 a year right there. Your kid can borrow in his name about $5500. So now you have $55,500 covered…Per year. There are tons.l.tons of colleges where that will pay the full price.

With $300,000 in income, are you saying you can’t pay $20,000 a year for your kid to attend college? Because that $20,000 added to the 529, and Direct Loan would give your kid $75,000 a year to pay for college.

And if you continue to save…the amount would be more towards college costs.

?‍♀️ I just don’t understand why you think you can’t afford college.

@BunnyWu

Post 77…

distraction Should be distribution!

There are tons…tons of colleges that could be fully funded with $200,000 of 529 money. Tons.

What many parents are eyeing are the most selective schools, the top schools on the UNWR ratings. The schools that are now having costs looming around the $80k mark and even crossing it.

That means even 50k a year saved is going to mean a lot more. It means digging into current income AND loans, perhaps for both student and parent. Loans are not a bad thing if you can reasonably repay them.

Take out the loans and start repaying them immediately out of current income. That’s what we did. Yes, it was no pleasure paying all 4 years worth of loans for 10 years, but it was done in 13-14 years.

When you don’t save enough, when you want to live at a certain standard, you borrow. It stretches each year’s expenses over 10.

There’s nothing an expensive private school offers that’s not already offered at a state university. He’s not missing anything. Just go with what you can afford and make sure you set realistic expectations now.

Aspirations and planning. Much of the calculus of costs depends on what kind of college the kids aspire to attend and what academic and other achievements they have earned prior to college. Our goal as parents was simple: make it possible for the kids to attend the best colleges they might qualify for; help the kids to discover those colleges and prepare for the application process. We followed the child-raising advice of my spouse’s grandmother: “Just bring them up alive.” Take care of their health.

We did not spend money on private schools prior to college. We stayed in our starter house. We owned one car at a time (I could walk to work) and did not go for luxury models. We socked away savings for college (while I also automatically built up my 403b for retirement). We lived in university towns where the public schools were excellent. The kids attended “special” programs during a couple of summers (art school summer institute, debate camp). We took advantage of inexpensive summer vacations at our parents’ locations on the west and east coasts. We were lucky that my parents contributed what turned out to be about 1/4 - 1/3 of the cost of the private colleges the kids ultimately chose to attend. (My parents did the same for all of their 12 grandchildren, not just our kids. All on a very good aeronautical engineer’s good salary.)

In sum, we didn’t have to be rich for the kids to have great educational opportunities. We did have to be lucky with job security and good health. And we “chose our parents” well. But we also began to plan on college when the kids were infants and we committed early to saving money. All college options were thus available when the kids composed their applications (a half-dozen applications by each kid).

One of my long time friends is a State U grad, product of public education all the way as is her DH. Both have done well and were staunch believers in that system.

And then they had kids. The first one sailed through it all like a charm and validated every bit of their theory. The second one, well, a big state flagship, and the big directional schools were clearly not good fits for him. A small LAC with a D3 football program , his passion , was clearly the way to go. I agree— I see the same right now in my cousin’s son. Different circumstances but I think the chances of his succeeding would be 3 fold, more to go to a small residential college —bad home environment.

Their third child was born with a number of issues that involved a series of critical surgeries over the years. Private school made a huge difference as he had severe cranio-facial corrections and he was quite behind academically. The public school labeled him as intellectually disabled and placed him into special education that was totally inadequate. The right school, even though expensive made a world of difference.

Those turn of events along with a number of others made things quite difficult in paying college costs. Had they made private college, their main focus, they could have funded it. They did not and so paying for it hurt. They did not qualify for any financial aid. They didn’t get any merit money either.

We’ve always lived below our income with the longterm expectation that we’d have a bunch of kids and educate them as well as possible. That meant saving hard early for a larger down payment on the house, staying in cars longer to pay cash for home improvements, paying for Catholic education because it was valued, saving what we could as we went along and doing without a lot of stuff at all points in time.

One of the biggest things that helped was punching that education hole into the budget as early as possible to get used to living without the money. When my kids rolled into college the first $15k was the same tuition we’d paid last year, so we were only looking for the step from there to $EFC - numbers varied with the number of kids in school. For people in public schools just chop out a painful amount of money, decide that can’t go to retirement or other spending and then either save it or retire debt in preparation for the days of tuition costs. Pay off the car, the second mortgage, the credit cards, anything at all that you owe on: every dollar you’re spending on some other non-mortgage debt won’t help your EFC and won’t be available to pay tuition.

Last point: “early retirement” is not a thing until college is factored in. You wouldn’t complain about your mortgage being too high to retire, you’d just work longer until you could afford it. As more info becomes available you adjust the cost of retiring and keep going. Sorry about your COL, but to live as you do you’re going to need a lot more money to live that way after quitting. No sympathy from the rest of the world on that point regardless of your specific income.

I saved aggressively in our state’s 529 plan since it became available around the turn of the century. Even back in 2000 there were projections that the cost of college was going to increase at twice the rate of inflation (5-6% per year).

[quote="StPaulDad;c-22391799. …paying for Catholic education because it was valued, saving what we could as we went along and doing without a lot of stuff at all points in time.

One of the biggest things that helped was punching that education hole into the budget as early as possible to get used to living without the money. When my kids rolled into college the first $15k was the same tuition we’d paid last year, so we were only looking for the step from there to $EFC - numbers varied with the number of kids in school. . …
[/quote]

It isn’t supposed to work this way, but it often does: paying for private school gets you used to paying that amount for college. We had a constant stream of private school payments for decades not even counting college.

We knew many families with the similar financials that theoretically could have saved what they were NOT paying in private school tuition but they often did not.

It shows that budget and standard of living is something you can set yourself into.

Because we already had our paychecks pretty much garnished for private schools and a hefty mortgage payment, we didn’t have extra money. No vacation fund Vacations were catch as catch can. No spending sprees. No cable, old box TVs , black garbage bags of hand me down clothes everyone gave me because I was that old woman in the shoe. Someone would be able to fit those clothes

Food bill, utilities bills low, low low. One car. Kids worked doing errands in neighborhood and had own spending money. So we did watch our money in everyday spending- because we didn’t have much left with our two big luxury items, house and private school

We had a new house, makingbit more of a luxury but it meant few repair issues. We maintained it ourselves mostly. Kids did the lawn and sorts pitched in the cleaning. Got some help when the grandmas moved in. . Had a bit of housekeeping when I was working my little business fulltime too

But, for us, that move to college for some of the kids freed up some money as their private school was so expensive.

I’m parting myself out…putting organs up for sale on Craigslist…

With $300k income and $200k in 529, you should be able to figure out how to pay $70K plus a year for college. You’ve got $50k/year in the 529 which leaves $20k/year for you to shell out. Unless you are paying off some major debt or paying for full time care for an elderly relative, this doesn’t seem unreasonable.

^$1500-2000/month out of income doesn’t seem that much when the monthly income is so high. And lots of people with high incomes spend a chunk of that just on vacations, cars, and all sorts of discretionary choices.

Unfortunately this is just not reality. Can you be successful going to a state college, absolutely, but to imply that the state college experience is the same as a top rated private university is just false. Your statement is an easy way to dismiss and rationalize not having the means to pay for said private institution but reality tells another story.

Just as one small example. D20’s close friend is a freshman at UC Berkeley (6,000 undergrads). It take her 30 minutes to get to class from her dorm, and the other dorms are spread out throughout the entire campus and surrounding areas.

Contrast that with Duke’s freshman class (1,700) are all housed in the self-contained east campus, with a mix of residence halls and “house-style” dormitories… The east campus includes the marketplace dining hall, it’s own library, and auditorium. Some faculty even live in the residence halls with the students. The east campus is a short 5 minute bus ride to the main west campus. All students are highly encouraged to live on campus all 4 years.

Lastly, 70% of the Duke classes have fewer than 19 students and the student to faculty ratio is 8:1.

UC Berkeley, only 50% of the classes have less that 20 students and student to faculty ratio is 20:1.

My last anecdote, our tour guide told us she wanted to fulfill a foreign language requirement by taking Persian. Only 3 students were enrolled in the class but she was still able to take the class and had basically one-on-one learning with a professor. Do you think this could ever happen for a freshman at a large state university?

The bottom line is that while both are fantastic universities; a completely different freshman experience. It just is, to suggest otherwise is just flat out wrong.

Agreeing with the PPs who pointed out that 200k in a 529 plus 20-25k annually out of a high current income can pay for any college in the US for one child. I haven’t read through the thread, but I’m not seeing any problem. This is a fantastic position to be in.

@socaldad2002

If one can afford the expensive private elite school…then fine. But you know…there are a gazillion college students who are quite successful, and graduate with fine degrees and great jobs…who don’t attend top 20 schools…and especially if they are unaffordable.

I don’t understand why these expensive colleges are not affordable for this family…I just don’t.

To OP question:

You have 4 years before college and 4 of college and you’ve already saved $100k, right?

Set aside $25k a year now for 4 years, and pay $25k per year while he is in the expensive private college. That’s $200k which together with the $100k in savings, should cover it.

You’re fortunate to have this option. No need to chase merit, though if you and he prefer that in 4 years that’s also an option.

I wish the “how do I pay for college” posts in the FA forum from poor kids, kids with divorced but uncooperative parents, internationals who need full rides, etc were as easy to solve.

@OHMomof2

This poster wrote this…

He has $200,000 saved for college…not $100,000.

And the student is in middle school giving this family that has a $300,000 income about 5 more years to save for college.

This seems doable to me. Save even $20,000 more for each of five years, and you have $300,000 total on college savings PLUS the family can contribute what they have been putting in the 529 annually towards college costs.

They can also look for colleges that cost $50,000 a year…or less. They do exist!

@thumper1 - whoops missed that! Even easier.

Is there anything more to add to this?

@cptofthehouse Our second is in trade school now, so we got a college “raise” as well.