Having twins does put a different spin on college financing.
Things to remember…
@thumper1 yes, $5,500 direct loan for each twin freshman year will help and I plan to do as @AroundHere recommended of taking the other yearly direct loans (keeping in mind that I will want to pay these loans back for my kids). As to your question…as of today the cumulative VA 529 value is $62K ($31K for each twin).
Throwing this out there - Virginia participates in an education exchange program sort of like the WUE program in the west. I don’t think many people know about it. It’s called the Southern Regional Educational Board Common Market. “The Southern Regional Education Board Academic Common Market provides tuition discounts for more than 1900 academic programs in Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.”
The programs are offered at in-state tuition rates. Graduate programs are also included for future consideration. The programs are restricted to areas of study that aren’t offered in VA.
Here’s the link for the results when Virginia is entered into the search for programs: http://home.sreb.org/acm/SearchResult.aspx?state=VA
So…let’s say you get to $40,000 for each kid. That’s $10,000 a year.
So for freshman year, you are starting with $15,500 including the Direct Loan and the 529.
If you won’t be contributing to the 529 once they start college…how much would you be able to contribute out of current earnings? For each kiddo.
Why wouldn’t you continue to contribute to the 529 for the tax benefit rather than OOP while they are in school ? I put the allotted amount in each month just like I did before D started college and then pull it out as needed (usually nearly deplete it). I also dont’ understand the summer work thing. I’ve been to FairFax and there are a million places to work. I have friend with kids there that work all summer, sub shops, coffee shops (even better because of the tips) and make $3000 or more. They use public transportation to get to work if Mom and Dad aren’t around. Anyways, $2-3K every summer per student really adds up. Sure, a babysitting gig would pay more if you could get it for 30-40/hours a week but that’s nearly impossible so something steady is more likely to pay more.
Well…yes, you can contribute to the 529 as you have and just pull it out. I think some states have a tax benefit for doing so…but others don’t.
Another thought…are either of these twins willing to get certified as a lifeguard? Around here…there are always jobs…and the pay is good. In addition, where my kids went to college…lifeguard jobs were amongst the highest paying on campus jobs…and they were always looking for folks.
To clarify, I meant pension savings not an income stream from someone who had the good fortune to be able to retire at 50. It was an article about Princeton that was linked somewhere on College Confidential. Sorry for any confusion.
@thumper1 …I hope to continue contributing to the 529 when they start college. Current earnings (assuming no major expenditures)…around $6-8K per year for each kiddo…but with occassional home ownership expenditures, mortgage, car payments/maintenance (for us not the kids!), elderly parents needing care and likelihood of needing to dump close to $6K on single last minute overseas trip (for all 4 of us) for potential funeral…I worry about being able to contribute enough when the time comes. We don’t live extravagant lives by any means but every time we save some money it seems something comes up
If and when the time comes and we need money to pay for their tuition/room/board…I’m leaning towards a cash out refinance or HELOC based on research and the fact that I’m willing to do this.
I know it seems early to think about financing for college - but I like to be prepared and get all the facts/comments/recommendations. We will be tightening the belts so to speak but it’s really hard with family overseas and needing to go every other year (and my husband goes every year since his dad is in a nursing home). Certain expenditures are necessary and others are choices…so finding a balance has been difficult, but I have yet to regret anything…if it means refinancing or HELOC so be it. We’ll cross that bridge when we get to it.
Thanks all!!
Sophomore year is not in any way too early to think about how you’re going to pay for college.
One thing to think about: if you can’t spare money from current income for college, how will you spare money from current income to pay back loans?
On the contributing to the 529 plan during college: please remember to check out the federal tax credits available for educational expenses. To take advantage of them, $4,000 in payments must not come from a tax advantaged plan. In checking, not sure these are available at your income range. But worth investigating - one can do for both students in the same year.
@scoutmom2002 They can get free room if they becomes RAs most places. They need to look into it when they arrive.
Keep your eyes open for local scouting scholarships and possibly even national ones. Every 1k helps.
Ok…so if you plan to continue for EACH kiddo…your actual contribution for college (because you will have more to withdraw…whatever you put in a year…you take out) would be $10,000 from current 529 plus say $6000 additional per year of the new annual contributions from current earnings…plus $5500 Direct Loan. Right? $20,500.
So…which colleges can they get some kind of merit aid at in VA…to cover the balance. I’m betting ODU or CNU or some of the others you named…Radford, for example, could work financially.
Academic Year: 2016-17
Estimated tuition and fees $13,054
Please remember that once they start college, food/grocery/utility bills go down while they stay in school, so these saving will be against the $10,914 room & board charges (mainly the meals).
Since you are in state, the personal expenses, transportation won’t be as high as the $3,544. The personal expenses will likely happen anyway if they stay home and go to community college. And the transportation won’t cost you much if just go to pick them up by driving couple hours from where you live. The $3,544 is about the same amount publish by every university counting students from states and all over the world that require airfare, but it is not really apply to your situation.
I live in the DMV area too, and I know the jobs are plenty these days that many teens both in high schools and colleges are able to find part time jobs in grocery store, Starbucks, restaurants… and staring at $11-13 per hour. I see them posting hiring all the time. This areas really don’t have anything to do teens can’t find summer/part-time jobs due to low-wage immigrant issue as one of your post if they really want to find a job.
@thumper1 UVA does NOT have merit aid. Only one scholarship - Jefferson Scholar - which is run by outside organization and is very very selective. Based on many factors, not just test scores, gpa etc. I don’t know about William and Mary, but UVA is a no go for merit.
Getting accepted to UVA or VA Tech from NOVA is no easy task these days
Right…Jefferson Scholars. But if you don’t get accepted to UVA, you can’t use this award there.
Where did I suggest that these twins apply to UVA. That isn’t a good choice for these kids at all, right now.
Lifeguard jobs in NoVa are in demand. Locally community pools can even be within bicycling and walking distance.
@AroundHere or someone else. Can you expand on this statement:
“If you do not take the freshman loan, you cannot get more as a sophomore. Since you know you will run out of money, take the freshman loan.”
Is a student required to take the direct federal student loan as a Freshman even if they don’t need it to pay for their first year BUT might need/want the direct federal student loan in future years?
@ccsouth I was reacting to OP’s comment in the first post that she has enough in her 529 to pay for freshman year in full, but she would need to get loans later. This can be a bad plan.
The maximum federal direct studen loan amounts are
Freshman 5500
Sophomore 6500
Subsequent years 7500
No one is required to take the federal direct loan as a freshman. But, the maximum loan you can get as as sophomore is 6500. That loan amount does not change if you didn’t borrow in freshman year. Come sophomore year, your freshman eligibility is gone.
If you know, based on your four-year plan for paying for your education, that you will need 25K total in loans, it makes sense to take advantage of the deal that the federal government offers on the federal direct loan. But the rules are written such that you have to take those loans a little bit each year. If you don’t take that 5500 as a freshman, you would have to use loans at worse terms in later years to borrow the total amount you need.