<p>Hi,
This is my first kids going to college. So i'm navigating new waters.
He got into an Ivy. Dream school. Essentially 64K / Y COA.
While I committed to carry the burden, I expect him to have a "skin in the game".
That "skin in the game" means contributing to COA from his earning during the school year + summer jobs.
What is a reasonable school year earnings ? That really does not impact academic results ?
Thanks in advance.</p>
<p>Kids on work study are generally expected to earn $2,000 to $3,000/year. I’d add in the same amount again for summer earnings. Keep in mind that at least part of this money would go towards books & personal expenses . . . so if he doesn’t work, he doesn’t get to go out for pizza.</p>
<p>My kids earned about $80 a week after taxes as freshmen…more as they moved up through the years and learned how to balance work and school, found better jobs or were promoted or worked some more hours. My second worked a job that paid $13 an hour junior and senior year and actually managed to save quite a bit and bought a car in addition. All three of mine were able to save around $2500 in the summer after their “expenses.” We have never given the kids an allowance or walking around money ever so i can’t tell you how much they spend on gas and entertainment and sundries as it’s theirs and we don’t ask. </p>
<p>I guess it comes down to how you want him to reimburse. For us it was easier to just say we’d pay for tuition, books and living (dorm for freshman year apartment share the other three years) and everything else was up to them. They appreciated not having to deal with the bursar’s office so it worked for us. Some people have their kids take out the federal direct loans and pay those back. It just depends on the dynamics. </p>
<p>Are you full pay? Then he may not be eligible for work study and he may have to find an off campus job during the school year. Ten or so hours a week should not affect his academics. I think $5 to $6K total summer plus school year is accurate.</p>
<p>We had our kids pay spending money, books, and if they took a summer internship where they couldn’t live at home they had to cover that expense. And I wouldn’t pay for any J-term or summer abroad sort of programs. Or spring break trips (I did pay airfare for them to visit grandparents instead of coming home at spring break, though). I also insisted that they work the summer after senior year of high school to get some cash in the bank for starting out at college (double benefit, the kid who night stocked at Walmart was REALLY ready to go to college in the fall).</p>
<p>Some parents ask their kid who picks the pricier school to take out some federal loans as part of “skin in the game”. If you could get along without it, you could consider having him just take out the subsidized loans if he is eligible (essentially no interest payments accruing and no payments due until after he graduates).</p>
<p>One of my kids worked on campus (writing center job, did not need to be work study) and one is finding her college too academically stressful to work. But the second one got herself a paid internship on campus for the upcoming summer after freshman year, and lives pretty frugally, so she is well on track to cover her “skin in the game” without working during the school year.</p>
<p>Some parents give their kids “skin in the game” by saying that “we will pay up to $X of the net price; anything above that you have to find from work and/or loans up to federal direct loans”.</p>
<p>“Meet full need” schools typically expect a student contribution of $4,000 to $5,000 without loans or $7,000 to $10,000 with federal direct loans (up to $5,500 the first year).</p>
<p>My kids paid for their “discretionary” expenses. We paid for tution,fees, room, board–the direct billed things up to the limit we said we would–their savings and summer money were sources for anything over that, and we drove the kid to school, spent some money on him which we haven’t counted towards our contribution, and gave him some cash before we left. Freshman year, i believe we bought books, and thereafter it was on them. We paid for them to come home at Thanksgiving and Christmas, and spring break, and home at the end of the year. We’ve also tried to visit at least once, sometimes twice a year. So having kids in college has been very expensive for us. We have not given any of them an allowance. They live off of what’s left from summer/savings, though they’ve all gotten jobs for a few hours a week to avoid dipping into that. </p>
<p>My one college kid borrowed one term when had to quit that job, wanted to go on a trip with a friend that was a great opportunity at low cost since that family was subsidizing a lot of the costs, got hit with some unexpected expenses and then realized that the trip was pricier than it seemed since he would lose summer work hours and pay doing it. So he took out a $3500 loan which allowed him to breathe easier that summer and also to give him a nice nest egg to start out the school year–turned out he didn’t need all of it. But when he budgeted to pay it back, found that it was not easy to do so and still leave a margin he wanted in his account Took him a year and half rather than a year and gave him a taste of how difficult it is to pay back loans. </p>
<p>Mine were pretty good in college about spending. Sadly some of them, had issues when they got out in terms of budgeting. That they did not have school loans has been a major relief as they would certainly be in trouble with them if they had. </p>
<p>Those are net or gross wages? I don’t even know how much kids can earn before they have to start paying taxes (and at what percentage). Anyone know? </p>
<p>You actually have to report and pay taxes on anything you earn, from dime one. However, there is a $6100 standard deduction if you file a 1040 EZ or 1040A, and a $3900 personal exemption, but a student’s parent might claim that, so it is unlikely anyone would pay on income below $6100. Other things can be included in income, including scholarships and interest, so you might not get to earn $6100 before you have to pay. The lowest bracket is at 10%.</p>
<p>I thought there was some form a kid could fill out to alert the IRS that they did not expect to earn more than X, an amount that is below the income tax threshold. </p>
<p>Also, the college expecting student earnings of about $6000/year is gross earnings, correct?</p>
<p>Good to note that wages are added to any scholarships and interest. Will keep that in mind. </p>
<p>I think most kids can work 10 hours a week without affecting academics. I don’t think you can expect them to earn more than $10 an hour and they may well earn minimum wage. My younger son earned $10 an hour last summer and had one meal and housing paid for a campus job. He had the same job with less responsibility the year before and had to pay a small stipend for the housing and earned less per hour. My older son, a computer science major, earned much, much more summers, and didn’t work during the school year.</p>
<p>That reminds me: Some interesting student jobs that I’ve heard about so far (decent pay, flexible, etc.)…</p>
<p>female student: weekend EMT
male student: community support staff for Autistic young-adult male clients
highly paid independent math tutor
dance major…well, “dancing” (yikes!)
highly paid computer consultant
boat captain
UPS labor (tuition benefit)
cell phone sales
barkeep-ess at the remote refreshments shack on a golf course (tips galore)
caddy</p>
<p>Others? </p>
<p>I employ undergraduate tutors at 8.50/hr, and they line up for the job, taking specific required courses. I agree that 10 hours/week is not a threat to academics, but it cuts out opportunities. If you can afford it, might you require a specific GPA as a kind of skin in the game?</p>
<p>I worked as a nursing assistant (nights) and as a dog groomer during college. I missed out on a lot of EC which may have helped my intellectual and social development.</p>
<p>My D works 15-20 hours a week as a waitress at a pizza place. She is a junior and found this job right as her freshman year was starting. They give her summers off and hire her back each fall. Last year she made over $9000 just with this job and the claimed tips. That does not count summer work or the tips she didn’t claim on taxes. She has fairly high GPA, but not 4.0, so working that much may have affected her GPA some, though not enough to really worry about. We are low income and she needs the money if she is to graduate.</p>
<p>Scholarship money is not taxable if it is used for tuition and associated fees. It is taxable if it is used for room and board or books.</p>
<p>Our kids pay their own books and personal expenses/transportation costs. Costs will vary. Oldest is a nursing major, so books are very expensive, can contain substantial updates with each new edition (new drugs & procedures all the time), and need to be saved for board review. Used is rarely an option. She works a lot, but it is a function of who she is. Some kids can handle it. Some kids can thrive on it. Some kids can’t handle much more than the 10 hours a week expected of a typical work study job.</p>
<p>Oldest kid always had at least 2 jobs, one at a dance studio teaching tumbling (they let her take free fitness class in addition to paying her), the other at a hospital affiliated program. You know, so she can get a job when she graduates. She’s worked summers at the pool since high school, working her way up form guard/WSI to manager. This summer she has a paid externship. She probably works 15-20 hours a week during the school year and 40+ in the summer. She earned 12K last year. The externship pays better than the pool, so I’d imagine she’ll earn more in 2014.</p>
<p>Youngest kid has work study in her aid package right now, but got a large local scholarship, so I think she’ll lose it. We’re not letting her take a car and her college is in a small town near a city. I don’t know how much opportunity there is for off campus work within walking distance. She’ll have to budget her summer money pretty carefully. </p>
<p>All in all, I think somewhere between 4-6k is a reasonable expectation for student earnings. I do believe it’s better if the student has actual expenses to pay so they can see where their money goes. </p>
<p>We attended a Financial Aid talk at my D’s high school earlier this year. The presenter recommended that if kids are awarded work-study as part of their FA package, it should go towards books, personal expenses, and travel. Since the amount of w/s she has ($2100/yr) is roughly equivalent to the college’s estimates for books, personal, travel, that’s what we’re planning to do. (The challenge, of course, is whether she can budget the funds correctly!) </p>
<p>I’m also a little worried about 10 hrs/wk of work cutting into her ability to make the most of all the resources -academic and social- her school offers. Hopefully she’ll figure that out.</p>
<p>Also, she’s expected to contribute $2,500/year from summer employment. That’s more than I’d initially predicted based on the fact that she pays for her own gas and cell phone plan… she’s going to need to work a lot of hours to do that. BUT the college’s FA package specifically divides the EFC into student and parent contributions, and they expect $2,500 from the student. So she’s going to have to make that happen.</p>
<p>In addition, she’s taking out the max in subsidized Stafford and Perkins loans. So she DEFINITELY has “skin in the game”. I’m really sorry she’ll graduate with debt, but on the other hand, knowing that she’s paying a lot for her education will hopefully be impetus to really make the most of it. When I went to college, I didn’t realize my parents had taken out student loans in my name. I didn’t really have any skin in the game. I may be wrong, but I feel like I might have tried harder, made use of the resources available to me more, if I’d known. I do feel like I somewhat squandered my college education now! (An wasn’t I surprised when I graduated and my parents said, “OK, here’s the note for the $12,000 loan you owe!”)</p>
<p>The problem with workstudy being designated for books is that for freshmen, it 's going to be at very least 2 weeks, and as much as a month before finding the job, working the job, getting on to the system and working through a paycheck cycle. You want your kids to have their books that first quarter when class starts to get that running start. Actually, I 'm not keen on kids working at all first term at school. Let them get their feet wet, open their ears and eyes, get the lay of the land before committing to 10 hours or so a week on a job. </p>
<p>I wouldn’t be so strict and stick to the way the breakdown is made between parent and student. Schools do it differently, and it’s often an arbitrary thing. Your kids’s contribution amount could be entirely different at a different school. Adjust to what is best for your student and family. </p>
<p>I gave as much as I could the first term but expected my kids to step up and glean some things from the resources thereafter. Some did, some didn’t. They made mistakes. </p>
<p>The problem these days if parents take out Direct loans in the kids’ names is that: 1) It’s fraud. Federal fraud to boot. 2) the amounts can be well in excess of $50K and be unpayable by many students when they first get out of school.</p>
<p>There is a form students can fill out for summer/part time work that exempts them from WITHHOLDINGS of any taxes from their paychecks if they do not expect to earn over the taxable income threshholds, but that does not exempt them from owing taxes if they should go over that amount. My kids do not withhold taxes for summer work, and some have had to come up with taxes owed when they went over those IRS threshholds, and had to file. Not a whole lot, but some. </p>
<p>When it comes to full scholarships or generous amounts that pay more than tuition, fees and books, the excess is unearned income and if that is over a certain amount, or over in combination with earned income, yes, taxes need to be paid on the excess amount. It can become a complex issue as to how to best file to get the exemptions, the AO credit, and one has to try it different ways to get the best mix. THrow in a 529 plan, and there is no clear formula on how to best do this. You have to run the scenarios and pick the best one. </p>
<p>I was concerned about making books part of my D’s contribution, as I didn’t want frugality to prevent her from buying something she truly needed, or for her to think she could somehow share a particular book with another student and then have access issues.</p>
<p>She chose an expensive, out of state school. She had less expensive options, but I agreed this school was the best fit for her. Her expected contribution to the direct bill is $1,000 per semester. In this, her freshman year, we agreed it was best for her to contribute $2,000 to the Fall semester, and nothing to Spring, in part so that the cash wouldn’t be in her account at FAFSA time, and in part so that she wouldn’t be tempted to spend beyond her means in the Fall. </p>
<p>Any personal expenses other than the initial stock-up at move-in time are her responsibility. She has a full meal plan, so she hasn’t needed anything essential other than something like a bottle of shampoo here and there. The one essential she does have to plan for is cab rides to and from the airport when she travels, but she easily found someone to split a cab with almost every time she needed one. </p>
<p>She did engage in a little retail therapy her first semester, but it’s her money and she saw the error of her ways. She goes out less second semester (or, allows a date to treat her!) and is planning on having two jobs over the summer to replenish her fun money. She did not work during school this year (which I am happy about) and really got off on the right foot academically. Now that she has her arms around her school and her time, she does plan to work during school next year. I have requested that she not put in more than 10-12 hours a week, which should not be a problem for her. She worked a lot more than that her senior year of high school. I was one of those kids who worked more than 40 hours a week during college to pay my own room/board/books/personal expenses, and I do not wish that on my D.</p>
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<p>Academic jobs like tutoring, reading minor homework papers, lab assistant, etc. may actually be beneficial academically, in reinforcing what the student had previously learned (and some of them give the student practice communicating knowledge to others).</p>
<p>@staceyneil —Those 10 hours/week of WS can be employed strategically. The student can try, as much as possible, to research the WS jobs on campus before the start of school and to search for ones that align somehow with her interests (library to learn more about its resources, the career center, the TRIO program, a lab, alumni house, the department of her major, etc.). Those relationships and insights she’d gain in a strategically chosen WS job can be very beneficial. I do note that freshmen might be left with the pick of the “least desirable” WS jobs, but that’s in the eye of the beholder. Even the on-campus job search process can help her build connections. </p>