Plan for making child pay for part of college

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caseynshan
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Plan for making child pay for part of college

Post by caseynshan »

I'm interested in making my child pay for part of college, for various reasons.

My current plan.
Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
Pay 50% beyond that.
Child responsible for the other 50%.. Scholarships count towards their 50%

Any recommendations or tweaks one would make on something like this.. It's been a long time since I've paid for college..
We did this for Summer Camps/Trips and it has worked well..

I don't really want to debate reasons.. really looking for ideas/hints on viability....

(Kids starting 11th and 9th grades)
Grt2bOutdoors
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Re: Plan for making child pay for part of college

Post by Grt2bOutdoors »

caseynshan wrote: Mon Aug 14, 2017 7:54 pm I'm interested in making my child pay for part of college, for various reasons.

My current plan.
Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
Pay 50% beyond that.
Child responsible for the other 50%.. Scholarships count towards their 50%

Any recommendations or tweaks one would make on something like this.. It's been a long time since I've paid for college..
We did this for Summer Camps/Trips and it has worked well..

I don't really want to debate reasons.. really looking for ideas/hints on viability....

(Kids starting 11th and 9th grades)
This thread really belongs in the Personal Finance section, not Consumer Issues.
As far as the above - is that per year or total? If it's total, please tell me what school costs $60K for 4 years of college? Why "instate non-flagship" as opposed to instate state flagship?
Viability - depends on how much debt child needs to take on.
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KlangFool
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Re: Plan for making child pay for part of college

Post by KlangFool »

OP,

What is the question? You just need to tell this to your children and make sure that you can hold your ground. It is your money. You get to choose how to spend it.

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JBTX
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Re: Plan for making child pay for part of college

Post by JBTX »

For those that can afford to help pay for their kids college, often those who had to pay for their own college see value in their kids pitching in, those who didn't probably less so. In my case I was lucky enough to have my parents pay for it. But they instilled the values not to squander it. We plan to pay for most or all of our kids colleges.

While there is obviously value in kids / young adults gaining work experience and working their way up, the flip side is they are working a slightly above minimum wage job (and taking on debt ) which takes time away from their expensive college studies and experience.
Last edited by JBTX on Mon Aug 14, 2017 8:09 pm, edited 1 time in total.
runner3081
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Re: Plan for making child pay for part of college

Post by runner3081 »

This is our plan.

Fund 100% of tuition and books at a local community college for 2 years.

Fund 100% of tuition and books at a university for years 3-4.

If our daughter wants to start in a 4-year university, we would only pay the cost of a CC for the first 2 years. If she wants to live in a dorm or somewhere other than home for any of the 4 years, she would be responsible for shelter/food costs.
delamer
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Re: Plan for making child pay for part of college

Post by delamer »

I believe there are limits on how much an undergrad can borrow per school year without a co-signer. I'd take that into account.
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Re: Plan for making child pay for part of college

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (tuition funding).
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123
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Re: Plan for making child pay for part of college

Post by 123 »

I guess we're assuming that the child is not paying out of their personal savings (from allowance/gifts/inheritance) but is actually working to pay their share for college.

I'd be tempted to have the child pay the first $1,000 annually and then add parental support, at whatever level is decided upon, until parental max is hit. If the student takes an "out of pocket" hit for any school they attend I'd assume they'd be more serious about it. If they don't want to cover the first $1,000, and they've got the earnings to do it, I'd be suspicious that they are not yet ready for college.
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MarkRoulo
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Re: Plan for making child pay for part of college

Post by MarkRoulo »

caseynshan wrote: Mon Aug 14, 2017 7:54 pm I'm interested in making my child pay for part of college, for various reasons.

My current plan.
Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
Pay 50% beyond that.
Child responsible for the other 50%.. Scholarships count towards their 50%

Any recommendations or tweaks one would make on something like this.. It's been a long time since I've paid for college..
We did this for Summer Camps/Trips and it has worked well..

I don't really want to debate reasons.. really looking for ideas/hints on viability....
I think you should know how much you are comfortable with your children borrowing (mostly non-dischargeably) at age 18.

You don't need to tell us, but, as an example, if your child wanted to go to a mediocre/random expensive private school (costing, say $60K/year), are you okay with them borrowing 4*(60-15)*0.5 = $90K?

As for viability, I was under the impression that the kids could borrow a LOT of money (because the banks know that the kids can't get rid of it in bankruptcy), so I think your kids borrowing is quite viable.
KlangFool
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Re: Plan for making child pay for part of college

Post by KlangFool »

MarkRoulo wrote: Mon Aug 14, 2017 8:24 pm
caseynshan wrote: Mon Aug 14, 2017 7:54 pm I'm interested in making my child pay for part of college, for various reasons.

My current plan.
Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
Pay 50% beyond that.
Child responsible for the other 50%.. Scholarships count towards their 50%

Any recommendations or tweaks one would make on something like this.. It's been a long time since I've paid for college..
We did this for Summer Camps/Trips and it has worked well..

I don't really want to debate reasons.. really looking for ideas/hints on viability....
I think you should know how much you are comfortable with your children borrowing (mostly non-dischargeably) at age 18.

You don't need to tell us, but, as an example, if your child wanted to go to a mediocre/random expensive private school (costing, say $60K/year), are you okay with them borrowing 4*(60-15)*0.5 = $90K?

As for viability, I was under the impression that the kids could borrow a LOT of money (because the banks know that the kids can't get rid of it in bankruptcy), so I think your kids borrowing is quite viable.
MarkRoulo,

Is that true? I thought that the parent has to cosign for those loans.

KlangFool
gclancer
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Re: Plan for making child pay for part of college

Post by gclancer »

runner3081 wrote: Mon Aug 14, 2017 8:09 pm This is our plan.

Fund 100% of tuition and books at a local community college for 2 years.

Fund 100% of tuition and books at a university for years 3-4.

If our daughter wants to start in a 4-year university, we would only pay the cost of a CC for the first 2 years. If she wants to live in a dorm or somewhere other than home for any of the 4 years, she would be responsible for shelter/food costs.
This is a good idea I don't think I've run across before (I think OP is looking for ideas, no?). I was also going to propose the employer funded approach (100% for A, 80% for B, 60% for C). That may have the unintended consequence of encouraging your child to take easier courses/pick an easier major.
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Re: Plan for making child pay for part of college

Post by delamer »

MarkRoulo wrote: Mon Aug 14, 2017 8:24 pm
caseynshan wrote: Mon Aug 14, 2017 7:54 pm I'm interested in making my child pay for part of college, for various reasons.

My current plan.
Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
Pay 50% beyond that.
Child responsible for the other 50%.. Scholarships count towards their 50%

Any recommendations or tweaks one would make on something like this.. It's been a long time since I've paid for college..
We did this for Summer Camps/Trips and it has worked well..

I don't really want to debate reasons.. really looking for ideas/hints on viability....
I think you should know how much you are comfortable with your children borrowing (mostly non-dischargeably) at age 18.

You don't need to tell us, but, as an example, if your child wanted to go to a mediocre/random expensive private school (costing, say $60K/year), are you okay with them borrowing 4*(60-15)*0.5 = $90K?

As for viability, I was under the impression that the kids could borrow a LOT of money (because the banks know that the kids can't get rid of it in bankruptcy), so I think your kids borrowing is quite viable.

Nope. From the Sallie Mae website:

"Why consider a cosigner for your student loans

A student loan cosigner is a creditworthy adult who signs for a loan along with you. It’s a legally binding agreement stating that they’re willing to share the responsibility of repaying the loan on time and in full.

Since private student loans are credit-based and many students don’t have a credit history yet, it may be difficult to get approved for a loan. When a creditworthy adult cosigns a student loan with you, their good credit can make it easier for the loan to be approved."
MarkRoulo
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Re: Plan for making child pay for part of college

Post by MarkRoulo »

KlangFool wrote: Mon Aug 14, 2017 8:30 pm
MarkRoulo wrote: Mon Aug 14, 2017 8:24 pm
caseynshan wrote: Mon Aug 14, 2017 7:54 pm As for viability, I was under the impression that the kids could borrow a LOT of money (because the banks know that the kids can't get rid of it in bankruptcy), so I think your kids borrowing is quite viable.
MarkRoulo,

Is that true? I thought that the parent has to cosign for those loans.

KlangFool
You may be correct. I'm just starting to look into college prices (and am appalled).

If my kid *CAN'T* sign up for $200K+ in non-dischargeable debt on his own at age 18, I'll be happy. Letting an 18 year old sign up for that much debt strikes me as a very bad thing, but I don't make the rules and don't expect them to match what I want.

I read articles about kids complaining about huge college debt and figured that they were on the hook for it themselves and couldn't dump it on their parents (I've also read articles about parents who did co-sign and are on the hook as well ...).

Maybe someone here who has been through this can pipe up?
runner3081
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Re: Plan for making child pay for part of college

Post by runner3081 »

gclancer wrote: Mon Aug 14, 2017 8:32 pm
runner3081 wrote: Mon Aug 14, 2017 8:09 pm This is our plan.

Fund 100% of tuition and books at a local community college for 2 years.

Fund 100% of tuition and books at a university for years 3-4.

If our daughter wants to start in a 4-year university, we would only pay the cost of a CC for the first 2 years. If she wants to live in a dorm or somewhere other than home for any of the 4 years, she would be responsible for shelter/food costs.
This is a good idea I don't think I've run across before (I think OP is looking for ideas, no?).
It was actually the plan my parents had for me (thus why my wife and I are using it for our daughter - my wife finished school after we were married, we paid all of that - no parental support).

I took the 2-free years of CC and then moved away for the next 2 years. However, I worked as an international student assistant in year 1 and then an RA in year 2 (no room and board as an RA).

Walked away with an undergrad degree and only 10K in loans. Though, at least half of that borrowed money was spent on Jack In the Box, Taco Bell and video games/systems, haha.
Ron
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Re: Plan for making child pay for part of college

Post by Ron »

Back to the OP's question, we (wife/me) made a "deal" with our son in which we would pay 66% tuition/room & board and our son would pay 33%. He stayed in the dorm for the entire time he was at the university.

We paid 100% of all other expenses (books, car, insurance, misc.) for the 4.5 years he attended an in-state university while he pursued his BS/IT degree.

However, we're talking about just over two decades ago, when the cost of going for a degree was a bit more financially sane, and we (along with our son) were able to cover it without any loans.

We did feel that our son needed to have some "skin in the game" and not treat the opportunity as just a reason to party.

FWIW,

Ron...
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badbreath
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Re: Plan for making child pay for part of college

Post by badbreath »

caseynshan wrote: ↑Mon Aug 14, 2017 8:54 pm
I'm interested in making my child pay for part of college, for various reasons.

My current plan.
Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
Pay 50% beyond that.
Child responsible for the other 50%.. Scholarships count towards their 50%

Any recommendations or tweaks one would make on something like this.. It's been a long time since I've paid for college..
We did this for Summer Camps/Trips and it has worked well..

I don't really want to debate reasons.. really looking for ideas/hints on viability....
I pay for college and room, she pays for books and food. She works all summer to save up for her expenses and it seems to work.

But this is only for four years. She now wants to go for a masters and she will be on her own.
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caseynshan
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Re: Plan for making child pay for part of college

Post by caseynshan »

Grt2bOutdoors wrote: Mon Aug 14, 2017 8:03 pm

As far as the above - is that per year or total? If it's total, please tell me what school costs $60K for 4 years of college? Why "instate non-flagship" as opposed to instate state flagship?
# 1 - Yes, Per year.
# 2 - Even if student decides to go to school in-state I would like for them to have a little skin in the game.
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caseynshan
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Re: Plan for making child pay for part of college

Post by caseynshan »

runner3081 wrote: Mon Aug 14, 2017 8:09 pm This is our plan.

Fund 100% of tuition and books at a local community college for 2 years.

Fund 100% of tuition and books at a university for years 3-4.

If our daughter wants to start in a 4-year university, we would only pay the cost of a CC for the first 2 years. If she wants to live in a dorm or somewhere other than home for any of the 4 years, she would be responsible for shelter/food costs.
Thanks, exactly the kind of ideas I was thinking of.
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caseynshan
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Re: Plan for making child pay for part of college

Post by caseynshan »

Thanks for reminding me about thinking about non-college costs.. (car/insurance/outside food etc..)
fourwaystreet
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Re: Plan for making child pay for part of college

Post by fourwaystreet »

Our plan was simply that our three children were required to pay 50% of their undergraduate college costs. All scholarships, merit money and any state aid reduced their share of the cost. My DW was disabled at the time and later passed while the kids were still in school which admittedly increased their aid due to reduction in family income. While I got nickeled and dimed a bit the kids worked hard both in and out of school and all graduated without any student loans. I agree with another poster that kids need to have some skin in the game.
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Re: Plan for making child pay for part of college

Post by Quickfoot »

Another approach is to fund based on grades, < 2.5 you are done, < 3.0 50% funding, 3.0 75% funding, > 3.5 GPA (A average) 100% funding. Personally I'm not a big believer parents should pay for their child's college at all. It is very much inline with "everyone get's a trophy" and "do your best, that's good enough" except it isn't always good enough to do your best and it's healthy for kids to experience failure and to learn how to deal with disappointment.

A college education is an investment in the future, if they have no skin in the game they aren't going to take it seriously or make wise school choices (why should they go to a state college for 8K a year when mom and dad will pay 20 or 30K a year for a different school even though the programs are essentially identical?)

Somewhere along the line people got this notion in their head that we have to give EVERYTHING to our children and it is really messing them up. We as a society love to complain about the entitled generation but it is OUR generation that made them that way. We will allow our children to stay at home for free while they go to college and we may pay for part of their college but certainly not all. They will need to choose their college and program wisely to get a degree that provides them with a career instead of a hobby sold to them as a good idea but that has no economic value.
mckaydw
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Re: Plan for making child pay for part of college

Post by mckaydw »

I agree with the comments about kids needing skin in the game. I wouldn't pay 100% for anything, including community college. In my experience, the "college experience" was part academic education and part being forced to grow up and become an adult. If my parents had paid for all, or even most of my college, I would have missed half of the lesson.

Of course this means that little billy can't go to the $50k/year college unless he earns a full ride scholorship. Do parents realize that they, combined with government loan programs, are enablers for tuition significantly outpacing inflation every year? It's unsustainable. Stop paying ridiculous tuition & board. Shop college the same way bogleheads talk about shopping other things.
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Watty
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Re: Plan for making child pay for part of college

Post by Watty »

caseynshan wrote: Mon Aug 14, 2017 7:54 pm ny recommendations or tweaks one would make on something like this.
You need to be real clear on just what is included as a college cost and what is not included. There will be LOTS of costs other than the things you see on the statements from the college.

I only half joking referred to the college as being a vocational school. My son could major in whatever he wanted, even if it was not high paying, but it had to have a good placement rate for graduates.

You need to also have an general understanding of what is expected as far as grades and the number of class hours in order to keep your financing up.

We paid for our sons room, board, tuition, etc at a state university. Since we were paying for his college we put in a rule that he could not work during the school unless it was something related to his major. Our logic was that it would be more cost effective for him to use that time to take an extra class instead of spending working in a fast food restaurant. One of his roommates was working at a Taco Bell and would often work until well after midnight and it sounded like it affected his grades. My son was in Computer Science and by about his junior year he was able to get a job in the campus computer center which was good experience that helped him get his first job.

Since we were paying for his room and board we wanted him to say in a dorm all four years so that he would have at least some minimal supervision and a food plan. His college had a real shortage of dorms and there was not much space for upperclass students so we had to let him move off campus.

If you can afford it then I would be cautious about putting too much financial pressure on the kids. My son was not a stellar student and the required advanced math classes in particular were rough on him. He managed to get through them eventually even though he had to take one or two of them more than once. If he was under more pressure then there a chance that he would have given up and not graduated. (he is doing great in his career now)
caseynshan wrote: Mon Aug 14, 2017 7:54 pm Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
It would be good to double check your figures.

I live in a state with pretty low college costs and $15K sounds really low if you are talking about the cost for an entire year. If you are looking at something on the college's web site that likely does not include costs for things like computers, transportation, health insurance, misc expenses like clothing household goods(bathroom supplies, sheets, etc), phone, ete.
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Re: Plan for making child pay for part of college

Post by basspond »

Have you communicated to your children they are expected to pay? It is sort of late in the game if you drop this on them now. We told ours we would pay and their job is to make good grades, be active in their faith walk, and volunteer. We opened savings accounts early with them and would match whatever they put in. This was when they were about 5. Then if they had GPA of 3 after each semester they could withdraw 1/16th of the balance of the account at the time they started school. When they graduate they would get the remaining balance.

In our case one finished in less then 4 years so it was a strategy that was very financially successful and most of all has made them very responsible.
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Re: Plan for making child pay for part of college

Post by gasdoc »

We didn't want to encourage our DD to work too much during school. She is interested in premed, which is academically very challenging. In addition, she has many hours of volunteering, research, and physician shadowing that is required. We decided to pay for all of her expenses at a private 4 year school, and gave her an allowance of $500/month to cover other expenses. What she doesn't spend of her allowance she gets to keep which seems to be having the desired effect of having her watch her expenses, while letting her attend college without working too much. She still wants to work some to be able to take an occasional trip with friends. I realize this is somewhat of a "first world" solution, but it is working for us so far.

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Re: Plan for making child pay for part of college

Post by Tamarind »

I agree a kid should have skin in the game, and expectations set that a parent won't pay for any school at any price without reason, not pay more than they can afford without jeopardizing their own retirement.

There are a lot of ways to do this. Mine told me they would pay 100% of costs for in-state flagship with dorm. If I reduced their costs below that amount, whether by getting scholarships, or choosing a cheaper school, they would gift me the difference. If I wanted to spend more for any reason, I had to pay for it myself.

I got a full tuition grant plus other small scholarships for state flagship, stayed in the dorm 4 years, and left school debt free and with a cash reserve that let me max a Roth IRA even during my first years out of school when I couldn't have afforded it from cash flow. Starting out debt free was a huge gift from my parents, but they also capped their liability at a level that was affordable for them. I learned that every dollar not spent matters.

I'm sure the math will have changed again by the time I have a kid who needs college funding. A lot of Boomers benefitted from tuition low enough to be paid for with summer work. Maybe my kid will be able to self fund via ad revenue on their content channels, or some other hustle not yet invented.
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Re: Plan for making child pay for part of college

Post by LEB1230 »

Our kids are young (6 and 3) and we are starting to save for their college. We have discussed college funding and we want our kids to have some "skin in the game." Our plan is to provide 50k (each) for their college education which will be roughly half (trying to guess 12+ years out) of the cost for an instate state university. As they get a little older they will be made aware of this so they can save on their own for college.

Its my thought that we will guide and help them decide on which school, but they get 50k either way. If they choose an expensive private school they get 50K and have to figure the rest out on their own. If they decide to go to a local community college and then a state university they get 50k. If they do well in high school and get a full ride to college they get the 50k when they complete college to use how they wish.
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Re: Plan for making child pay for part of college

Post by CyclingDuo »

caseynshan wrote: Mon Aug 14, 2017 7:54 pm I'm interested in making my child pay for part of college, for various reasons.

My current plan.
Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
Pay 50% beyond that.
Child responsible for the other 50%.. Scholarships count towards their 50%

Any recommendations or tweaks one would make on something like this.. It's been a long time since I've paid for college..
We did this for Summer Camps/Trips and it has worked well..

I don't really want to debate reasons.. really looking for ideas/hints on viability....

(Kids starting 11th and 9th grades)
Hopefully they both currently have part-time jobs, and have been getting as many hours in as they can during this Summer to help save for college. Repeat that every Summer of course. We did the same with our two children, but in reality the amount they are able to make and save from an hourly wage is only a slight contribution compared to the true costs of college - be it a state university or a private college. We're not a big fan of working a too many hours during school (high school or college) as working a 6-8 hour shift on top of a full day at school is a recipe for a run down, possibly poor performing student in and out of the classroom. Many do it, and to it well in spite of the energy required, and challenges that it presents.

Caveat: I'm a college professor and see the effects of today's students who are working off campus/on campus, and trying to get through school. For many it works. For others, it doesn't as they are not good at time management. Most also try too hard to mix in the social aspect of school which leaves very little time for sleep and study. Classroom performance suffers for those, and they pretty much are so exhausted they walk around like zombies, don't turn quality work in on time, and struggle. There are always exceptions, of course, but those are the rare students. You always hear of the student who worked a 40 hour week, raised a child as a single parent, and got their degree in 4 years with a high grade point. They do exist, but it is rare. Striving to find a realistic balance seems to work the best for the majority. Work to contribute, but keep the balance of work/study/classroom performance/social/sleep to something that one can manage.

Suggestions for your two children would include that they take as many AP courses with the final test for college credit, as well as see if they can get some general education courses at your local CC or online courses out of the way before entering college. That way, they may have the chance/opportunity to get a 4 year degree in only 3 years, or 3 1/2 to cut costs. Or at least carry a lighter class load during their 4 years which frees up more time to work to contribute. They should also try to get in programs that have the opportunity for paid internships. Apply early and often. Bug their professors. Take ownership. All of that "go getter" attitude stuff. Our daughter just graduated, and based on doing her taxes the past few years, she averaged about $10-12K per year in paid internships during the school year, plus some Summer ones as well which certainly helped contribute during the school year (plus allowed her to begin a Roth IRA). Ditto for our son, although in his chosen field the internships paid a lot less.

I would teach your kids to paint exterior houses, get all of the equipment, and have them paint 8-10 houses every Summer (usually can make $2 - $4K per house). Mindless work that pays well, and the skills/techniques are easily learned. Line up clients and develop a realistic painting schedule during the Spring for the Summer's work. It's a decent side hustle in a society where too many people are afraid to take painting on themselves, so are more than happy to hire somebody to do it. A power washer, two good ladders, some drop cloths, a few good brushes and rollers - and a little know how - can make some really good cash.

Just make your children well aware of their circumstances for helping to finance their college educations, and work with them on their plan starting today.

You mentioned you didn't want to debate the issues, and I understand. We wanted our children to work and contribute, but we were also realistic with what hourly wages are and how much - or rather - how little it would add to the high cost of education. We invested in stocks from day one after our kids were born into UTMA accounts by targeting savings go in there every year for a good ten years. Long term buy and hold with reinvested dividends worked their magic, and 18-22 years later financed their college educations with a nice chunk of change leftover. No debt for either. In spite of that, both of our children worked during high school, and in college (especially the Summers, as during the school year they landed some nice paid internships).

I'm not saying that is the only solution for each family's choice, but it was a goal of ours that they graduate debt free. We made a plan, and stuck with it. Fortunately, it all worked out according to plan. Part of that plan being developed was fueled by education being critical in the history of both of our families, and part of that also came from observations of working with college students on a daily basis which has included, over the years, many individual talks with hundreds of them - and their parents - about their own financial frustrations, and stresses they feel when paying for it all.

In other words - you can have skin in the game from your children, and if you manage it right, they can graduate debt free.

Your plan sounds reasonable, just work with them on developing all of it and help manage their journey.

What jobs do your children currently hold?
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Re: Plan for making child pay for part of college

Post by Jack FFR1846 »

#1 son is in college. Big dollar northeastern private engineering college.

He takes Stafford loans for skin in the game.
I pay 100% of what is needed at any school.
The major must be one where there is a clear path to a career at the Bachelor's level.
Understanding that if he screws up, with a 1 semester warning, I'd pull him out and he'd go to state university.

Something that parents need to consider. If you put unreasonable limits on your kid, and the kid is bright enough to see that debt after 4 years is going to be unreasonable, the kid may decide that college isn't worth it. What then? Plumbing school? Auto mechanic school (UTI is more expensive than state college), "Would you like fries with that?". Yes, the kid needs to take ownership, but coming out of college with $200k in debt is really easy to rack up. I'm told that the average time to graduate with a 4 year degree is now over 5 years. College doesn't charge by the degree....it charges by the semester.

I have a second son. What I pay towards his college will NOT be measured based on #1 son. There's no "fair" here. I'm paying money. I provide opportunity for each of my kids to get a proper education. If son #2 decides to become a career soldier, for example, there isn't going to be any gifting to match what son #1's education cost. I know others think that all kids should get equal amounts. I don't do that.
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bigred77
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Re: Plan for making child pay for part of college

Post by bigred77 »

One more suggestion to help them have some "skin in the game" would be to sit them down before they make the college selection decision and really explain to them the realities of debt, student loans, and how yes, you really do have to pay it back.

Then once you've put a little fear into them let them know you will pay 100% of the state flagship equivalent (or whatever amount you choose) and then they are on the hook for any more up to the Stafford federal loan limits. I think the aggregate loan limit is something like 31k for an undergraduate degree. Yes you do have to fill out the FAFSA to qualify but those loans don't usually require a cosigner. Private loans typically do. Federal loans also tend to be much more flexible, the interest rates are "reasonable", and in my opinion, getting a bachelors degree now a days with only 31k or less in student loans isn't all that bad. Then if you wanted to be really nice, after they graduate and make payments on the loans for 2 years or something you always have the option of just paying of the remainder if that's something you would be so inclined to do. Makes them know they have skin in the game but limits the amount of trouble they can get themselves in.

Now this might not work if they want to go to a 60k+ COA per year private school with no merit aid. You may have to have yet another conversation with them. But I think it would have the desired effect if they choose any of the 90%+ schools that don't fit that criteria.
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teen persuasion
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Re: Plan for making child pay for part of college

Post by teen persuasion »

Watty wrote: Mon Aug 14, 2017 11:26 pm
caseynshan wrote: Mon Aug 14, 2017 7:54 pm ny recommendations or tweaks one would make on something like this.
You need to be real clear on just what is included as a college cost and what is not included. There will be LOTS of costs other than the things you see on the statements from the college.

I only half joking referred to the college as being a vocational school. My son could major in whatever he wanted, even if it was not high paying, but it had to have a good placement rate for graduates.

You need to also have an general understanding of what is expected as far as grades and the number of class hours in order to keep your financing up.

We paid for our sons room, board, tuition, etc at a state university. Since we were paying for his college we put in a rule that he could not work during the school unless it was something related to his major. Our logic was that it would be more cost effective for him to use that time to take an extra class instead of spending working in a fast food restaurant. One of his roommates was working at a Taco Bell and would often work until well after midnight and it sounded like it affected his grades. My son was in Computer Science and by about his junior year he was able to get a job in the campus computer center which was good experience that helped him get his first job.

Since we were paying for his room and board we wanted him to say in a dorm all four years so that he would have at least some minimal supervision and a food plan. His college had a real shortage of dorms and there was not much space for upperclass students so we had to let him move off campus.

Interesting how viewpoints can differ. We and our kids viewed dorm life as a necessary evil for underclassmen, and moving to an apartment as a huge improvement: cheaper than college highway robbery rent and (worse) extortionate board for food court dining, escaping the noise and circus atmosphere of hundreds of young residents on a floor, freedom to cook for yourself, continuity of habitation year-round (aren't thrown out for holidays and between semesters, made to move in and out of different locations).

If you can afford it then I would be cautious about putting too much financial pressure on the kids. My son was not a stellar student and the required advanced math classes in particular were rough on him. He managed to get through them eventually even though he had to take one or two of them more than once. If he was under more pressure then there a chance that he would have given up and not graduated. (he is doing great in his career now)
caseynshan wrote: Mon Aug 14, 2017 7:54 pm Pay 100% up to 15k (just under cost of instate-non flagship school.. I could easily be talked into 20k)
It would be good to double check your figures.

I live in a state with pretty low college costs and $15K sounds really low if you are talking about the cost for an entire year. If you are looking at something on the college's web site that likely does not include costs for things like computers, transportation, health insurance, misc expenses like clothing household goods(bathroom supplies, sheets, etc), phone, ete.

Not sure if OP is talking about tuition costs, vs total cost of attendance. For my kids at state U now, tuition sounds cheap: $6k/yr. That's what the governor is promising to make "free". What he conveniently neglects to mention is that fees are another $3k, and R&B another $12k+. Add books, transportation, incidentals, and total cost of attendance is >$22k/yr.
BlueCable
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Re: Plan for making child pay for part of college

Post by BlueCable »

Just to be clear, federal loans do not require a cosigner and are not dischargeable through bankruptcy. A family member has around $200k of these loans and no cosigner.
SimonJester
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Re: Plan for making child pay for part of college

Post by SimonJester »

Another problem you run into, you tell your high school kids to get a job and start saving for college, so they go out and get an after school job. They load themselves up on AP, Honors and other advanced courses and the combined stress from the job, school work (home work is usually 2 to 8 hours each night), school activities. Next thing you know their grade slip just a little and their GPA drops. Now they cannot get the scholarships and cannot get accepted into many of the colleges.

Something both of my kids discovered, those summer and after school jobs that High school kids used to do, well they are now taken by middle aged adults. Next even when they do find employment they are only offered part time because of ACA rules requiring benefits for full time employment.

My youngest filled out 50+ applications this summer and never even got a call back on any of them. He ended up mowing lawns and doing yard for in the neighborhood for money.

Its a different world out there today...

PS. Yes both of my kids are looking at the costs and saying no way... If they had to pay for even 50% of it they would both say no thanks and choose other options.
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Re: Plan for making child pay for part of college

Post by djpeteski »

One thing to consider in transitioning your child into a reasonable adult is to use the military model. Young privates are given a place to live, food to eat, and training. However, that private is responsible for toiletries, grooming, eating out, clothing, and any entertainment. It gives a nice divide to where one's responsibility begins and ends.

I was not confident that one of my children would save up his share of his tuition. So I made him pay "rent", that money was saved and then used for his tuition. Once he proved he could do that regularly, it was not necessary.

I like your plan because of the details and the concise nature of it. A college attendant should know exactly how much the parents would pay and how much is their responsibility for any tuition level. Good work on that and that really is the most important part. The actual figures are subject to many factors, they just need to be clearly laid out.
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Re: Plan for making child pay for part of college

Post by Nowizard »

Not what we did, but a very defensible approach, though checking of total costs is in order. Reading between the lines, it appears that you could cover more of the expenses if you choose but feel this approach is reflective of better parenting/guidance, etc. That may very well be the case, but all complex questions often require reacting when the initial plan meets reality. If the pragmatic goal is for your children to be well educated, competent adults with an excellent value system, you sound like someone who will make whatever necessary changes may be indicated. As for now, a very good approach and one that you are consciously attempting to develop further with questions! Keep it up.

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Re: Plan for making child pay for part of college

Post by heerekj1 »

We essentially did what you propose for both children. We said that we would pay tuition/room and board for 4 years but no more than the best public university in the state. They would need to cover the cost above that. With a spreadsheet they were able to focus on whether going to a beach/party/private college was worth it to them.

In the end they both got scholarships which did not reduce what we contributed. They both decided to work while in school for extra income. They are both very happy that they got thru college debt free,
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Re: Plan for making child pay for part of college

Post by NotWhoYouThink »

BlueCable wrote: Tue Aug 15, 2017 8:16 am Just to be clear, federal loans do not require a cosigner and are not dischargeable through bankruptcy. A family member has around $200k of these loans and no cosigner.
Grad school/professional school? You can't borrow that much money for undergrad. Or has this been compounding for a couple of decades?
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Re: Plan for making child pay for part of college

Post by Watty »

This may be getting off topic, the original poster said that he or she was willing to to pay 100% of a non-flagship state University and then possibly some more in addition to that. That is fantastic and a lot more than most students get.

When we were going through this one of the most important things was to have frank talks with the kids about what you are willing and able to pay early on and I think that was what the OP was trying to do so they were on the right track.

That is a lot different than all the "skin in the game" talk.


That said,
... skin in the game...
You need to think through just what that means these days.

For most working during the school year often means some minimum wage job but the catch is that often to get to work they need a car to get to work and the expenses of having a car will eat up a lot of their wages.

At least around here even minimum wage summer jobs are real hard to find now compared to when I was in college. Most employers would rather hire high school students that can work year round. A summer job may also require having a car.

Another problem is that ideally the students will be able to find a able to find a job as a summer intern to get work experience but that it will often require living at some place away from home and the living expenses will often use up most of their wages. In some situation working as an intern may cost more than any income it brings in. The intern jobs that pay a lot are very rare and hard to get.

Realistically "skin in the game" means taking on student loans and way too many 20 years olds are clueless about what it means to graduate from a state university a lot of student debt. They may see that they are likely to get a starting salary of $XX,XXX and that is so much more money than they have ever dealt with that taking on the debt does not seem like a big deal since they expect to be rich with that much money. We get posts here all the time from posters that are still dealing with student loans well into their 30's and beyond.

Part of my paying for my kids college at a state university was that my parents were able pay for my college at a state university. I have made it clear to my son that part of my paying for his college is that I expect for him to "pass it on" and do the same and pay for a state college for any kids he has, at least as much as he is able to. If he graduated with a lot of student loans that would impact his ability to save up to pay for his kids college.

There are limits as to what you can reasonably afford to pay for your kids college and some people may be in a situation where they cannot afford to pay anything but that is a lot different than just holding back so they would have "skin in the game".

My son did have a part time job in high school in part to get work experience and also when he was working that was less free time when he might get into trouble. (I was a teenager once. :D )
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Re: Plan for making child pay for part of college

Post by BlueCable »

NotWhoYouThink wrote: Tue Aug 15, 2017 8:37 am
BlueCable wrote: Tue Aug 15, 2017 8:16 am Just to be clear, federal loans do not require a cosigner and are not dischargeable through bankruptcy. A family member has around $200k of these loans and no cosigner.
Grad school/professional school? You can't borrow that much money for undergrad. Or has this been compounding for a couple of decades?
Yes, professional school.
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Re: Plan for making child pay for part of college

Post by KlangFool »

OP,

I have 2 kids going to the Virginia public state universities now. For the in-state resident, the cost is around 30K per student per year for tuition, food, lodging, and so on.

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Re: Plan for making child pay for part of college

Post by msk »

My experience: I have put 4 kids through college (2 should graduate in 2018) and hundreds of corporate-sponsored scholars. The 100th PhD has graduated just recently from the program I initiated 30 years ago. Approach was identical: the kids can apply to the world's "best" colleges and all their costs will be met on a "modest" basis, 12 months p.a. regardless as to whether they take summer courses or not. Any money they can make in addition, any college bursaries they win, any parental gifts that the corporate scholars get, are all theirs to retain as play money. Observation? The vast majority have done extremely well in subsequent careers, and the failures were actually identifiable up front. The failures were so-so students that the corporation had been arm-twisted by Board Members to give scholarships to. Briefly, it all depends on the kids. IMHO there is rarely any reason to be stingy on your kids if they already have the right attitude towards life. Indeed if they are not made of the right stuff it may be desirable to get them to have some skin in the game, but again, IMHO, shopping for college on the basis of costs may not be the optimal approach. A quick check of Fortune 500 CEOs and board members can quickly illustrate how few CC graduates are in there. If you can afford it, I'd propose that you pay enough to cover academic fees+room&board at the cheapest dorm on campus. Beyond that you can ask them to earn or take loans, for entertainment, phones, text books, etc. And , if you can afford it, pay off the loans when they graduate, without telling them in advance. Speaking as someone who had nil support from my parents after my first year at college. He simply did not have any money to contribute. Luckily, pauper level scholarships, Teaching Assistantship, Research Assistantship kept me going to PhD level. Pauper-level stipend is good enough to instil value-for-money awareness in any youngster, without adding anxieties.
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Re: Plan for making child pay for part of college

Post by stoptothink »

caseynshan wrote: Mon Aug 14, 2017 10:03 pm
Grt2bOutdoors wrote: Mon Aug 14, 2017 8:03 pm

As far as the above - is that per year or total? If it's total, please tell me what school costs $60K for 4 years of college? Why "instate non-flagship" as opposed to instate state flagship?
# 1 - Yes, Per year.
As an aside, my wife currently attends Utah Valley University, her total cost of attendance (including books, lab fees, parking, etc.) this year is ~$6k for a full load. An entire year's tuition for the private school just up the road (BYU) is ~$5.5k/yr, granted you get recommendation from LDS clergy. These are not elite universities, but they have several highly ranked programs and carry plenty of cache around here. It's like people put blinders on when talking about the price of college education, there are plenty of institutions out there where you can get an undergrad degree for <$100k...or $50k...and even a few for $25k.

I am 100% in the "skin in the game" side (truthfully, in part because my wife and I have paid for all of our own education, and while simultaneously financially assisting our parents), but lets not open that can of worms for the millionth time.
Last edited by stoptothink on Tue Aug 15, 2017 9:32 am, edited 1 time in total.
barnaclebob
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Re: Plan for making child pay for part of college

Post by barnaclebob »

I like the OP's plan. I would probably implement something similar myself but then gift any remaining loan balance after a year of my child making payments assuming I could afford to pay it off.
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Re: Plan for making child pay for part of college

Post by MrKnight »

JBTX wrote: Mon Aug 14, 2017 8:08 pm
While there is obviously value in kids / young adults gaining work experience and working their way up, the flip side is they are working a slightly above minimum wage job (and taking on debt ) which takes time away from their expensive college studies and experience.
You would think that's the case, that working takes away time from studying, but surveys have shown that to be untrue. In fact, those who don't work may even study less.

Surveys indicate that college students that don't work tends to use the surplus time for leisure activity and socializing rather than studying.
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Re: Plan for making child pay for part of college

Post by Spirit Rider »

BlueCable wrote: Tue Aug 15, 2017 9:22 am
NotWhoYouThink wrote: Tue Aug 15, 2017 8:37 am
BlueCable wrote: Tue Aug 15, 2017 8:16 am Just to be clear, federal loans do not require a cosigner and are not dischargeable through bankruptcy. A family member has around $200k of these loans and no cosigner.
Grad school/professional school? You can't borrow that much money for undergrad. Or has this been compounding for a couple of decades?
Yes, professional school.
The OP can correct me if I am wrong, but like many people, I seriously doubt they were factoring in anything but undergraduate costs.

So, the $200K is misleading, because the 2017 federal undergraduate total limit is $31K. The 2017 graduate total limit (including undergrad loans) is an additional $138.5K.

Edit: Corrected that the graduate limit includes undergraduate loans received.
Last edited by Spirit Rider on Tue Aug 15, 2017 11:13 am, edited 1 time in total.
Topic Author
caseynshan
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Re: Plan for making child pay for part of college

Post by caseynshan »

Watty wrote: Tue Aug 15, 2017 9:09 am This may be getting off topic, the original poster said that he or she was willing to to pay 100% of a non-flagship state University and then possibly some more in addition to that. That is fantastic and a lot more than most students get.

When we were going through this one of the most important things was to have frank talks with the kids about what you are willing and able to pay early on and I think that was what the OP was trying to do so they were on the right track.

That is a lot different than all the "skin in the game" talk.


That said,
... skin in the game...
You need to think through just what that means these days.

For most working during the school year often means some minimum wage job but the catch is that often to get to work they need a car to get to work and the expenses of having a car will eat up a lot of their wages.

At least around here even minimum wage summer jobs are real hard to find now compared to when I was in college. Most employers would rather hire high school students that can work year round. A summer job may also require having a car.

Another problem is that ideally the students will be able to find a able to find a job as a summer intern to get work experience but that it will often require living at some place away from home and the living expenses will often use up most of their wages. In some situation working as an intern may cost more than any income it brings in. The intern jobs that pay a lot are very rare and hard to get.

Realistically "skin in the game" means taking on student loans and way too many 20 years olds are clueless about what it means to graduate from a state university a lot of student debt. They may see that they are likely to get a starting salary of $XX,XXX and that is so much more money than they have ever dealt with that taking on the debt does not seem like a big deal since they expect to be rich with that much money. We get posts here all the time from posters that are still dealing with student loans well into their 30's and beyond.

Part of my paying for my kids college at a state university was that my parents were able pay for my college at a state university. I have made it clear to my son that part of my paying for his college is that I expect for him to "pass it on" and do the same and pay for a state college for any kids he has, at least as much as he is able to. If he graduated with a lot of student loans that would impact his ability to save up to pay for his kids college.

There are limits as to what you can reasonably afford to pay for your kids college and some people may be in a situation where they cannot afford to pay anything but that is a lot different than just holding back so they would have "skin in the game".

My son did have a part time job in high school in part to get work experience and also when he was working that was less free time when he might get into trouble. (I was a teenager once. :D )
Excellent points
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caseynshan
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Re: Plan for making child pay for part of college

Post by caseynshan »

Spirit Rider wrote: Tue Aug 15, 2017 9:47 am
BlueCable wrote: Tue Aug 15, 2017 9:22 am
NotWhoYouThink wrote: Tue Aug 15, 2017 8:37 am
BlueCable wrote: Tue Aug 15, 2017 8:16 am Just to be clear, federal loans do not require a cosigner and are not dischargeable through bankruptcy. A family member has around $200k of these loans and no cosigner.
Grad school/professional school? You can't borrow that much money for undergrad. Or has this been compounding for a couple of decades?
Yes, professional school.
The OP can correct me if I am wrong, but like many people, I seriously doubt they were factoring in anything but undergraduate costs.

So, the $200K is misleading, because the 2017 federal undergraduate total limit is $31K. The 2017 graduate total limit is an additional $138.5K.
Yes, we haven't even considered Grad School... but we should.
stoptothink
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Re: Plan for making child pay for part of college

Post by stoptothink »

MrKnight wrote: Tue Aug 15, 2017 9:42 am
JBTX wrote: Mon Aug 14, 2017 8:08 pm
While there is obviously value in kids / young adults gaining work experience and working their way up, the flip side is they are working a slightly above minimum wage job (and taking on debt ) which takes time away from their expensive college studies and experience.
You would think that's the case, that working takes away time from studying, but surveys have shown that to be untrue. In fact, those who don't work may even study less.

Surveys indicate that college students that don't work tends to use the surplus time for leisure activity and socializing rather than studying.
I worked full-time through 11yrs of higher education. Undergrad was a little different (football scholarship, but I also managed to work jobs up to the NCAA limit), but I had full-time (career) jobs as I got through my MS and even PhD - never had a single semester under a 3.5. My wife currently works full-time in enterprise sales for a tech company and maintains a 4.0 as a full-time student (and we have two small children). Neither one of us is exceptionally brilliant. If my kids come to me and say they can't work at least part-time to help with the cost of college because it will hurt their grades, they will get little sympathy from me.
bigred77
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Re: Plan for making child pay for part of college

Post by bigred77 »

I was in undergrad about a decade ago now but one thing I really didn't understand until I got out of school is how valuable internships in your field are. I worked every summer doing manual labor type jobs for 2 months for the highest wage I could find but I truly believe most students would be far better off working an unpaid internship (paid is better of course but take what you can get) in their field instead. It's just such a leg up over students who don't have any relevant experience.

I made 10-12 bucks an hour clearing overgrown fields and worked 35-40 hours a week. Probably less than $5000 gross for the summer. I would advise my own kids to really sell out looking for a summer internship. If they fail, I'd still advise them to look for an unpaid role and borrow the extra 5k. Especially the summer before senior year.
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Edie
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Re: Plan for making child pay for part of college

Post by Edie »

Here is how we do it (with a community college as well as a state school where they can live at home).

We will not pay for room and board, we're already paying that at home. If they want to live on campus, or away from home, that's on them, and we will not help. Additionally, if they decide not to go to school, we're not subsidizing room and board anymore, and they start paying rent (although much less than if they moved out, unless they got roommates, and probably still less than that, since we basically just allocate them their expenses, which are low since we have a "small" mortgage).

We will pay for 100% of schooling/supplies (by paying back necessary student loans) provided they graduate.

If they take necessary loans, and do not graduate, they will be responsible for paying those loans back... without a degree.

Proposed plan - 2 years community college, transfer and finish with 2-2.5 years university.

Plans can be modified.

Our oldest got a scholarship that covered 80% of tuition/fees (slowly decreasing percentage since same flat amount per year over the four years) at the state school, but only if she went as a freshman. She went as a freshman :) She also got a job in her sophomore year that provides tuition assistance, so she will have money coming to her from us when she graduates because she will have earned enough in tuition assistance at the end of this year to have paid off the loans she took out in the first three semesters, on top of covering her current shortfall.

Our second went to community college and didn't finish the first semester. He has no desire to do anything but go to his minimum wage job and hang out with his friends. He pays rent. If/when he decides school is the answer, we will start back up again.

Our third has the same scholarship opportunity as the first, if she retakes her ACT and gains 2 points. We'll see. I'd rather she went the community college transfer to university route, but it will be up to her to decide if she wants to hustle and study and get that extra scholarship that lets her go to the state school right off the bat.

Our fourth just started her sophomore year, and is working as hard as she can for a full ride (room and board) for academics, and is busting tail to be the valedictorian while staying involved in extracurricular activities (clubs and sports). Again, we'll see.

The plan is the same for each. Pay fully for tuition/supplies at community college/state school as long as they graduate. Do not pay for outside room and board. How it gets tailored to the child is up to the child (who will soon be an adult, and needs to be responsible for their decisions).
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