<p>I'm now jumping in full-force to the saving-for-college planning for my 9th grader (we've been saving all along, but not nearly enough). I'm just wondering, if anyone would mind sharing, what the ball-park figures were for what they'd saved by the time their kids were HS seniors?</p>
<p>I'm recently reviewed our 529 plan (organized by investment firm) and had a serious shock at how little we've accumlated... (barely $10k)! eek. I'm starting to work part time; the plan is probably for me to work in a more full-time capacity by the time son is a junior and senior (and hopefully bank most of my salary for college---I have a 3 year old at home, so can't do the full-time just yet..)</p>
<p>We're in the $100k plus per year salary bracket, so not counting on much re: need aid...</p>
<p>Thanks very much for any information on this sensitive, but important, subject!</p>
<p>I can't tell you how much others have saved -- but if I had a 9th grader, I'd act on the assumption that 4 years of undergraduate education will run to $200,000 -- however you want to pay for it. You don't need to have it all in savings, since you can pay some of the costs out of current income. For example, if you have been paying $15,000 a year for private school and/or other activities for your son - that means you probably can spare $15K each year for college - so savings and/or loans would only have to cover the balance.</p>
<p>well we had a lot saved but a few years of underemployment and big medical bills took care of that :(</p>
<p>I would think that $200,000 is probably conservative- right now a year inc room and board at my D school is about $46,000- it goes up pretty fast.</p>
<p>We've been in the same boat as EK and are just now getting back on track. Our (original) plan was to have our (EFC + $5K) x 2 saved by the end of her senior year with the rest coming out of current income. Now we're just hoping to have our EFC + $5K and will bite the bullet for the remaining years. Our combined AGI is less than $75K, and we've told our daughter that we will guarantee her $20K per year. We may be able to come up with more, but we want her to have an idea of where things stand as she begins her applications.</p>
<p>We saved enough for each child to go to state school & dorm for 4 years by buying state zero coupon bonds for both of them when they were infants/toddlers. Since they probably won't go to state school, but we will no longer have to pay for their private school when they're in college, we told them we can pay about $20,000+ each for them for 4 years & figure out how to pay the rest as we go along. We likely won't get any/much need aid either, so we're hoping son (& maybe daughter) can get some good merit aid offers. Have no idea, but GC at school thinks son has good shot at merit aid with 2230 SAT; we'll see.
We have found a few schools that we could afford that are OOS, but son will need to explore their honors programs.</p>
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I can't tell you how much others have saved -- but if I had a 9th grader, I'd act on the assumption that 4 years of undergraduate education will run to $200,000
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<p>Wow! You people wre either rich OR nuts! (or rich AND nuts)</p>
<p>A few questions (I'm sort of new to the nuts and bolts of this financial stuff...belatedly)! Mezzomom, what's EFC + 5k x 2 if you don't mind? I guess EFC is "estimated family contribution" but not sure of the other figures?</p>
<p>HI mom, what are zero coupon state bonds, and how will this help you if kids don't go to state school? (figuring it's some kind of benefit for your child attending a state college...perhaps that's not correct...) Thanks!</p>
<p>Appreciate the estimate, calmom, and good luck emerald kitty with your plans! I'm hoping to have more saved for my younger daughter, but w/my 9th grader, there were years of parent grad school/no income factored in there...</p>
<p>Zero coupon bonds were being sold when my kids were very young. They were being offered by our state at a discounted price & as buyer we chose the maturity date with a guaranteed 9% compounded interest rate. For example, you would pay $1250 for a bond that would be worth say $5000 in 15 years, with the interest calculated into the eventual maturity value. We timed their maturity dates to co-incide with when they will be freshmen in college. The bonds are tax-free at our state level, as long as we use them for college+ anywhere (not limited to HI).</p>
<p>It is both a blessing & curse to have saved money toward our kids education, since it will be counted against us & them in calculating expected family contribution. Nonetheless, it's good to feel we have some options & that we saved what we could & can guarantee that we can at least send them to our state U+ without any assistance.</p>
<p>529s are another vehicle for college savings, as are Coverdell or education IRAs. We started one for each of our kids at the earliest opportunity & have always contributed the max, but unfortunately it has NOT grown much :( Our kids are now a rising senior & rising sophomore, so we don't have much more time for saving & hubby longs to retire once our younger child has finished 4 years of college (about 7 years from now). We'll have to see how things evolve & hope for merit aid.</p>
<p>5K I would assume is $5000 (probably for unexpected expenses). x 2 probably means multiply by two because probably there are two children involved. I'm sure the poster will correct any misinformation I'm sharing.</p>
<p>I am in Texas and from a very analytical person he says that a state school (his son attends Tx Tech) costs about (including a fair amount of incidentals) $15,000/year.</p>
<p>i know you see the $200,000 and I dont doubt it for the top tier eastern schools, but I would just suggest youo can get a good to great education at much lower costs.... One example --again from Texas-- if you receive a ceertain level of financial aid --scholarships etc ---you get instate tuition at costs noted above... BTW I suspect UT-Austin, might be a little more (say $3k to $5k) more per year --most in cost of living..... BTW (again) I know some people who targeted saving $80,000 and supplemented from yearly earnings</p>
<p>As to zero coupon bonds, for states that had or have them (like Illinois), they are really a lot like any other savings or municipal bonds. You usually don't have to use them for the state college, or college at all. However, there are usually some incentives to use the funds to send the student to a state college like some small additional bonus payments on top of the bond's face value if you do.</p>
<p>As to saving, if you currently have only $10,000, the real question you will have to answer is how much can you save in the next 4 years. It is probably true that a number of your major private universities will have tabs close to $50,000 a year to cover everything when your son starts college. It is also probable that you will not be able to qualify for much need-based aid if making over $100K a year. But absent a windfall of money from somewhere, it is highly unlikely you can possibly save enough to cover those expensive private universities (and despite the overwhelming mantra you might see on this site, there are a huge number of us who believe those colleges really aren't worth the price tag and state schools are pretty damn good). A more realistic goal is saving enough to cover the cost of one your state's public colleges -- the tab for everything at one of those is likely be only in the $20,000 range per year 4 years from now -- lower in a number of states, higher in others. If you could save $10,000 a year (on a monthly contribution basis) in a good mutual fund for the next 4 years, it is possible you could end up having enough for a state college particularly if you also consider that some of the costs are going to be covered by some of your regular income that you will make during those college years. $10,000 is a lot but one way to view it is treat it like you just bought an additional new car and you have to make monthly payments on it plus insurance and gas -- for a car that can easily exceed $10,000 a year (that is actually how we rationalized it when we started saving for our daughter after she was born and she is now a college student and we actually ended up accumulating far more than what was needed)</p>
<p>A problem you face in saving is that you also have a 3 year old and you should start immediately saving for college for that one in a 529 plan although you can start with whatever you can ($1,500 a year? $3,000? just get it going now so you are making regular contributions and you can raise the sum later)</p>
<p>Like many other parents, we didn't start really thinking about saving for college until the kids got to high school. We assumed that the kids might go to private college and also go out of state, and so we were thinking we'd need about $120K per kid. Now that was an underestimate, even for the time (they graduated HS in 1996 and 1999). We didn't know what to expect from financial aid because of our incomes, though we hoped for merit-based scholarships.</p>
<p>What we managed to do was to save about 1 year's worth of the private college costs of each kid by the time they entered college. Then there was the magic of the grandparents contributing bonds to each kid (would have been better if in our names) that covered another 1.5-2 years. And the rest? It came from annual earnings during the 7 years the kids were in college. That is, we didn't have to have all the money on hand the day they started college; we did have to have it ready to spend by the time they finished! So that gave us more time in reality.</p>
<p>Our backup plan was to use home equity to cover any shortfall but we didn't have to do that. So now that the kids are both out of college and one of them at least is totally self supporting (the other gets a monthly subsidy for a while but has a real job), both they and we are debt free. But part of the story is that we also deferred a lot of maintenance on the house and have had one car the past 9 years, and we'll have to make that up.</p>
<p>We prepaid the tuition for Maryland state schools, which was around 15K when they were in 6th grade. This worked out well for my son. My daugher probably won't attend a state school since they really don't have any strong graphic design or new media programs here in any Maryland state school. Thus, I am stuck with sending her to a private school. UGH</p>
<p>The cost for room, board, books, travel, should be at least $140,000 for 4 years and could go as high as $200,000 for a private school such as CMU. Don't forget to take college inflation cost into account.</p>
<p>Taxguy is in a better position to advise you on the tax implications of various savings strategies, but I would strongly suggest not only saving for the 9th grader, but also for the 3-year old. You could use the tax-free $10k per year per donor as a guide, at least for the older child. Also, since you will need the money for the older child's tuition fairly soon, you probably should be somewhat conservative in your investment strategy. </p>
<p>If I remember from previous posts, your 9th grader is very bright. He could conceivably qualify for merit money at a number of colleges. Check out the threads by Evil Robot, who got into Yale EA but went to Vanderbilt because of financial issues. ER updated CC and reported he was very happy at Vandy.</p>
<p>We also prepaid the state tuition in SC for both kids which cost approx $15K each and is today worth about 32K each. Doesn't cover R&B, books, fees, etc, but will help. Also have a small amount in 529s for each. Even with that, we still have a gap to pay which we plan to pay out of pocket as they go. The state schools with their lottery sponsored discounts are hard to beat financially.</p>
<p>Yes, state school prepaid tuition is hard to beat, and all proceeds used for tuition is tax free. Yippie!</p>
<p>Alernatives for private schools would be your section 529 plans that allow a lot of money to be contributed. Although none of the contribution would be tax deductible, if the proceeds are used for tuition, they are tax free. I also think that any contributions are above and beyond the normal yearly gift tax exclusions of $22,000 per year. Thus, I don't think that you need to file a gift tax return.</p>
<p>Close to zero. We don't make much to begin with, and most of what we had we spent on the kids' education before college, on the assumption that if they became interesting, exciting people to be around, the college thing would take care of itself. It has thus far.</p>
<p>Started saving and investing when the oldest was 5 years old. Had about 2 years of private college tuition (4 years of public school tuition) saved (or had cashed in investments) by the time she ended her senior year. I know that some people think it is crazy to save for college since it negatively affects financial aid. But it was a load off for us to know that we had the money to send her to our local state univ at the very least. Figured to make up the rest in school loans and home equity loans if she decided to go down the private college route.</p>
<p>Well, she chose the private college route and is starting her second year. Things have happened (money from estate of grandparent, selling investments that had increased a lot) so that the rest of college for her is banked.</p>
<p>Have started saving for kid #2 who is starting high school this month. We plan on having to save less for her since the house will be paid off by the time she starts college and I can go to work at least part-time to pay more tuition out of cash flow. Plus, we will have the equity in the home and school loans we can tap, since we didn't have to for Kid #1. </p>
<p>Like Mackinaw, we have deferred house maintenance and haven't remodeled like most of the neighbors, we drive old cars, we don't have those toys that others have (boats, jet skis, etc.), we don't go on extravagant family vacations, we live in a middle class neighborhood and attend public schools, we ourselves graduated from college without much in the way of student debt, and we have been in relatively good health. Life has been good.</p>
<p>Bottom line: you don't have to have all 4 years of college saved ahead of time; more is better, but at least 1 year (preferably two) is better than nothing. Not having all of the money saved CAN (but not necessarily must) constrict choice in college. Kids can work during the school year and during the summer, the family can make lifestyle changes, both kids and parents can borrow, and choosing the right college that is both a financial and educational fit can make up the difference.</p>
<p>Oh, the other thing that has saved us is that we only have two kids. If we had to educate 4 or more kids. . .</p>
<p>We've planned all along to pay 100% of state school which is about $15k/year. Once the 529 runs out we'll just fund the rest with other stocks.</p>
<p>We just don't get why someone would pay $200k for an education when $60k will get you a really good education too. You'd have a hard time convincing me that you'll make up that $100k+ in extra pay. Add to that - every study ever done says expensive schools don't lead to happier people. Guess I don't get the whole "prestige" thing.</p>
<p>For some students there is a significant difference between attending an instate university and attending a small LAC.
Our state has some decent large universities but my daughter felt that she needed a much smaller school to get the most benefit out of her 4 years, we agreed.
Some states have a poor state university system, not every place is California, other states have budget problems where enrollment is going up but resources aren't there to match it-we are fortunate to have a great number of schools in this country to choose from.
Some students however are even choosing to attend great schools in Canada, where they might not qualify for need based aid, but what the school offers is more than comparable to a local school.</p>
<p>i think it also depends on what type of school you're looking to go to.. if your kid wants to go to a school that costs 12k a year instead of 46k a year, you don't need to save up 200k. </p>
<p>my school tuition was about 8-9k a year, plus room and board (4k?).. and i owe roughly 20k in loans. my parents paid for about half, and the rest i had grants/scholarships to cover.</p>