<p>Wondering how much skin your kid has in the game when it comes to financing their education? We purchased pre-paid tuition contracts in our state and that turned out to be a wonderful investment. We have tuition and required fees covered for 4 years at any of our state's 4 year universities. He's been admitted to one of our flagships and is awaiting the other. </p>
<p>He has some college funds in a savings account he will own next month, upon turning 18. That could fund another $3k or so a year.</p>
<p>We are also willing to provide him around $300/month allowance. </p>
<p>The rest is his to finance through jobs or scholarships. The rest could be from $3,000 to how ever much he thinks he needs to spend and which of the 2 flagships he winds up at - one has about $3000 lower living costs than the other. </p>
<p>I think he's got it made. Wondered what other folks are doing?</p>
<p>Personally, I think what matters is the demonstrated work ethic of your kid, as opposed to having a financial stake. You have to work out what will be most effective for motivating your own kid.</p>
<p>Tuition should be covered by remission (attends school at my employer) or, hopefully, exchange (accepted for tuition exchange at a sister instituion). Room/board/fees in this part of the world (think rural) are pretty reasonable and can be covered by the money in the 529s. We’ll have her buy her own books and provide her own spending money. </p>
<p>Right now, she’s interested in a 2+2 program, two years at an LAC and then 2 years in clinical rotations. Remission/exchange won’t be extended for clinicals and those prices are all over the place, depending if the clinic a certificate or a degree program (doesn’t matter as the LAC issues a bachelor’s when all is done). At that point, there may be loans in her name as well. </p>
<p>A have two sets of friends who insisted on the $5500 in loans in the student’s name from year one on to ensure their sons had their own “skin in the game”.</p>
<p>D1 has generous finaid award, which includes approx. $4.5K/yr in subsidized loans (in D’s name) and $1.8K/yr in work-study. DH and I pay all educat expenses (minus the finaid), including books, lab fees, studio fees and copy fees; we also pay for all medical (including birth control) and all travel home. We do not provide an allowance; instead D (who prefers not to work during the school year and who has never earned more than half her w/s award), uses her summer earnings of approx. $4K as her school-year living/recreation expenses, including her cell phone’s data plan (we pay for phone service and unlimited texts). </p>
<p>An obvious benefit of this arrangement is that since D is using her summer earnings, she can spend the money however she likes (she attends college in a town with great restaurants and spends a lot of money eating out - - which I would not want to subsidize, having already paid for meals which are required for students living on campus). When D graduaes, she will have $18K of debt. And why not - - she’s receiving the education and she is attending the college of her choice (top LAC)?</p>
<p>You better believe it.
We borrowed massively in the PLUS program and we funded son’s UTMA which far exceeded his Stafford Loans. Told DS at graduation that I had withdrawn several thousands to reimburse us for transportation costs, and that he would be assuming the PLUS balance. Afterall, the UTMA was to fund his education. </p>
<p>If the balances were to be net out at time of his graduation (2006), the balances would be netted to $0. Today, he has fully funded Roth IRA, and making other investments. As for the loans, they are fixed for another 20 years, but at 2% APR. We took advantage of the credit bubble.</p>
<p>My sons have no skin in the game other than covering his non-academic expenses. (We cover room, board, and books.) </p>
<p>Younger son turned down a half tuition offer at a lower ranked university. As far as I can tell he’s living up to his end of the bargain and working very hard, and excelling in the course that sold him on this particular college. This was not necessarily a foregone conclusion as he did not exert himself particularly in high school.</p>
<p>My older son also did very well, though that was less of a surprise since he’s majoring in a subject that’s been his passion since he was seven years old. (Computer programming.)</p>
<p>Completely agree. My kids’ skin-in-the-game is the hard work and effort they have demonstrated in their studies. If finances were such that they needed to pay for x% of their education, then so be it, but since they aren’t, I don’t see a need to arbitrarily require them to pay 5% or 10% or whatever.</p>
<p>Depends a lot of family circumstances. H & I were fortunate to have our families fund our college education (tho H worked part-time to help pay for his schooling, as did I). We plan to allow our kiddos to graduate debt-free, so while we set up a Coverdell account, we won’t tap it untli hopefully it has a chance to recover this fall (D’s senior year). Our kids’ “skin in the game” was for S, getting significant merit aid to help defray tuition. For D, she got a part-time job her 2nd day on campus & used it to help with her expenses, including food. We provided lodging & funds equal to the lowest priced meal plan, plus occasional cash gifts. </p>
<p>Our kids will likely be responsible for funding any post-grad studies (or hopefully get employers to help). At this point, still working on the last 3 semesters of expenses.</p>
<p>D1’s situation is that she received and accepted a great merit aid offer: full tuition, room, stipend and computer. We cover books & board. She has money saved from her summer job/birthday checks etc. and she uses that for her spending. Surprisingly to us, she spent less than $150 her first semester. So my attitude is that her “skin in the game” is the scholarship and we’ll fund pretty much everything else.</p>
<p>What we did tell her is that we feel she has an obligation to the Honors College to be involved & an advocate for them since she is benefiting from their scholarship fund (and yes, I realize that the school “bought” her to some extent with the scholarship since she was a NMF.) She’s gotten involved with them in some leadership positions and I’d rather have her do that than take a p/t job on campus right now.</p>
<p>When D2 rolls around it might be a different story based on where she goes, how much it costs & if she gets significant merit aid.</p>
<p>Here it’s always been-- we’re a family, we all do whatever we can for each other. We’ve put aside money for D’s college and she knows that if she can stretch it with merit aid etc., that will help her with grad school or to get a start after college. But honestly, she’s our daughter, we’re so proud of her and would do anything to help her on her path. And she’s the same-- got a summer job at 14 and has refused any spending money from us since.</p>
<p>My children will have reasonable loan amounts (under 20K) when they graduate and if their job expectations work out they should have no trouble paying.</p>
<p>My oldest has a classmate attending a top 20 school (50K+ per year) which the parents are paying for but only with the understanding that the kid will reimburse them for 50%. The parents are well off, so at a need only school that could be a considerable sum, perhaps as much as 100K or more. They told me they set this rule because their parents made them pay for half - given that these parents did everything in their power to convince the kid to go to the expensive school as opposed to the state U where he had almost a full ride, I think their terms are unreasonable. If they need to say that “Johnny goes to XYZ” I think they should pay for it or let Johnny do what he was originally inclined to do - stay debt free.</p>
<p>Here is what we are trying to do, but we are just 1 semester in, so can’t really say it worked. We have put money aside in a 529 and other UTMA accounts. Last spring, when he picked his college (state flagship), we realized there was enough in that account for 4 years, so we then started putting all saving in our D’13 account, not knowing what her costs will be.</p>
<p>We taught him how to deduct money from the account to pay for housing and tuition/fees. I would like for him to be done with undergrad before that money runs out. He knows he will need to work at some point during this time if he wants to fund study abroad or masters. All investments are very SAFE, but let’s hope there is not another downturn.</p>
<p>Covering the whole nut, but only for 4 years. Grad school is on their own. They know that their college GPA could either help or hinder their grad school options. That’s up to them.</p>
<p>I think it depends on family circumstances. Our D has Stafford loans and a work/study job, as well as summer employment. Plus she has to keep her grades up to keep her merit aid. But, I have to say that I am totally against funding her entertainment costs - eating out, going to plays, concerts, spring break trips, etc. I pay for her education, not her entertainment. Also, she knows that she has to pay for all additional expenses to do study abroad during her junior year. BUT, every family has their own circumstances and expectations.</p>
<p>It also depends on where the school is located. Not a ton of stuff to do off campus in Tuscaloosa. If you’re in NYC or L.A. that’s a whole other story…</p>
<p>We stick to the financial aid package. My daughter pays her summer and campus job earning expectations directly to the school. Spending money is on her as well. We pay the parental contribution, travel back and forth, supplies, and modest other expenses. She’s fortunate to have no-loan financial aid so she should be free and clear at graduation. I’m not really fond of the phrase “skin in the game”. My daughter works hard to earn the money she makes and frankly it’s a big chunk of her costs. Skin in the game sounds trivial, like it’s about making a point more than being able to go at all.</p>
<p>It’s so individual.
Our son graduated with bachelor’s with $18,000ish staffords in his name. We could have paid full cost. Instead, he earned a tuition scholarship for masters and we agreed to pay for his apt out of state so he could accept the offer. He works two part time jobs for his food, books, gas for car, etc.<br>
We couldn’t see ahead when he was 18 that he would have an opportunity for grad school…but we are happy that we were able to help without straining our family finances more than planned.<br>
He will have relatively modest debt with two degrees in hand. We have no plans to pay his staffords and he knows that.</p>
<p>Thanks everyone for the feedback. I know my grades in college were better because I paid my way 100% than they would have been if my parents had paid 100% for it. Might have been less stressful had they been able to contribute more. </p>
<p>Husband and I were both 1st generation college graduates. We went to the local community college and then branch of a university and lived at home with parents and worked. [My equivalent of walking to school in the snow uphill both ways … ]</p>
This way of thinking aggravates me to no end. Schools now cost 9-10 times what it cost the parents. I made enough in a summer job to pay most of my tuition. I don’t think there are too many summer jobs paying the $40K/year my alma mater now charges. Times have changed, you can’t apply what worked 30 years ago.</p>
<p>I was always glad I didn’t have to work a job during the school year. I made enough during the summers that, with my parents’ contribution, I only had to borrow small amounts my last two years. My total loan amount was about 20% of my first year’s pay.</p>
<p>We are in the fortunate position where my S will not have to borrow any money. He got some modest merit (about 10% of the total cost) and goes to our in-state flagship, which is not crazy-expensive. He does pay for his own expenses, and volunteered to pay for his books. He is getting excellent grades, so I don’t see a need for more ‘skin’.</p>
<p>Besides, if ‘skin in the game’ means loans, I think that is somewhat pointless. Very few if any teens have any conception of what it means to have a loan or repay one. It’s just magic right now, you sign your name and money appears. Having loans didn’t make me work any harder or take things more seriously.</p>
<p>My kids had “skin in the game”. They had to maintain sufficient GPAs to keep their merit aid. They had to graduate in four years (or they had to pay for any additional time) and they had to earn all discretionary spending money including books. We asked them to each take the Stafford loan simply because it improved OUR cashflow while they were in college.</p>
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