Bogleheads' College Philosophy question

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Mistermooso
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Bogleheads' College Philosophy question

Post by Mistermooso »

The overwhelming consensus on Bogleheads is that it's far more important to prioritize retirement over college because you can't borrow for retirement but you can borrow for college.

So, my question is: what method of borrowing for college do you all feel is best?
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Re: Bogleheads' College Philosophy question

Post by chipperd »

Best borrowing is no borrowing. Save and have the kid work and pay as you go.
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JoMoney
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Re: Bogleheads' College Philosophy question

Post by JoMoney »

chipperd wrote: Sat Jun 09, 2018 8:13 pm Best borrowing is no borrowing. Save and have the kid work and pay as you go.
:thumbsup seek out scholarships, and/or maybe an employer that has a tuition reimbursement program, G.I. bill
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Nate79
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Re: Bogleheads' College Philosophy question

Post by Nate79 »

Borrowing is borrowing. It needs to be paid back by someone. Either you are going to saddle your kids with debt or you will have a much less comfortable retirement. We live by a better motto. If you can't afford it you don't buy it. This pertains to college choice, cars, house, etc.
Jablean
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Re: Bogleheads' College Philosophy question

Post by Jablean »

Move to a state where you can save state taxes when you put money into a 529 account. Know that you can always take money out of IRAs without penalty to pay for education.
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Re: Bogleheads' College Philosophy question

Post by TallBoy29er »

Hoping for a mountain biking scholarship. Or for our youngest, maybe an MMA scholarship. :oops: :D
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Re: Bogleheads' College Philosophy question

Post by livesoft »

Best is borrowing from your grandparents or parents at 0% interest with the possibility of never having to pay back the loan.

Perhaps borrowing from a 401(k) to fund a 529 to the extent of state income tax breaks is another possibility.

But think about the true cost of college at a state university: About $10K per year. Of which $2.5K can come from AOTC and $7.5K can come from working full-time in summer and part-time during the school year.
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Re: Bogleheads' College Philosophy question

Post by downshiftme »

I'm leery of the false dichotomy. In most cases, you don't have to choose exclusively between retirement or college, you just have to make relative choices that work for you. Working a little longer or accepting a slightly less flush retirement might enable you to do more for kids' college. You have to make the best choices that reflect your personal values.

A little extra work can chase more scholarship opportunities. Some careful choices might find good value in a state school. Kids can shoulder some of the expense if that's appropriate or useful to them (depends on the child). Even delaying college for a year or few, or choosing a less expensive path through community college and transfer might be appropriate for some kids or families. Some kids may not be ready or interested in college.

My personal values lean toward education, and providing that for my kids in a way that allowed them to concentrate on their studies was a good trade-off for us and I was happy to retire a bit later and a bit leaner. Kids graduated without debt hanging over them, some worked in school, some didn't, and each made the best of the opportunity and their choices. Everyone has to choose whatever path works best for them, but it's rarely all one or all the other.
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Re: Bogleheads' College Philosophy question

Post by MrPotatoHead »

Minimal.

A college degree should have a clear, career related, monetary purpose. If you want a general education, in the modern world you can find a vast array of free on-line resources by which to gain it. Ergo college should now be viewed as a form of trade school. Colleges should be shopped for value. If you are paying a premium for a name, it needs to afford you valuable consideration in the market place. For example I would consider going in debt for a college that has solid internship possibilities within your area of career interest. That was a major consideration for two of my children. They could have gone locally and saved living expenses but a state college several hours away offered superior internship possibilities as well as multiple recruiters who actively sought that program's graduates. They did not go into debt for it, but if they had to they would have. The internships paid enough to cover the tuition and room and board.

Go to community college and get the first two years put of the way at a nominal cost. The first two years of college are essentially high school II, so in terms of material there is no reason why you cannot work full time during those two years and work two jobs during the summer to build up some cash.

Go in debt only for a distinct competitive advantage. I just had the last of 4 go through college. All emerged debt free and with jobs upon graduation. Two of them went to specificity colleges of which there were only 13 in the nation. They had to choose between bigger name colleges and more plebeian ones. They opted for the plebeian ones, reasoning the big name college offered nothing in their field of study over the lower priced state school. It seems they were correct.

Given my last just graduated, I can say it is very possible for people to go to college and emerge debt free. It takes hard work, social sacrifices, etc, but it is very doable. They need to smart about it. One cost saving measure my kids did was to take their electives as student directed classes. In their case they took an additional internship for the student directed classes. This allowed them to gain more experience in their field and gain college credit at the same time. This lead to multiple job offers, not only for the companies they interned with but those companies competitors.
Last edited by MrPotatoHead on Sat Jun 09, 2018 10:31 pm, edited 4 times in total.
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Re: Bogleheads' College Philosophy question

Post by GCD »

downshiftme wrote: Sat Jun 09, 2018 8:48 pm I'm leery of the false dichotomy. In most cases, you don't have to choose exclusively between retirement or college...
This.
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Re: Bogleheads' College Philosophy question

Post by tenkuky »

MrPotatoHead wrote: Sat Jun 09, 2018 8:53 pm If you are paying a premium for a name, it needs to afford you valuable consideration in the market place. For example I would consider going in debt for, is a college that has solid internship possibilities within your area of career interest. A state college several hours away offered superior internship possibilities as well as multiple recruiters who actively sought that program's graduates.
Where does one find this out?
Online source or college themselves?
Past alumni?
How does one verify this information?
Thanks!
MrPotatoHead
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Re: Bogleheads' College Philosophy question

Post by MrPotatoHead »

tenkuky wrote: Sat Jun 09, 2018 9:20 pm
MrPotatoHead wrote: Sat Jun 09, 2018 8:53 pm If you are paying a premium for a name, it needs to afford you valuable consideration in the market place. For example I would consider going in debt for, is a college that has solid internship possibilities within your area of career interest. A state college several hours away offered superior internship possibilities as well as multiple recruiters who actively sought that program's graduates.
Where does one find this out?
Online source or college themselves?
Past alumni?
How does one verify this information?
Thanks!
The information should be available from the head of the program within the the school of area of focus at the college. At one of the schools my kid attended the person was called the Faculty Coordinator for Professional Practice. They maintain a webpage at the college's website.

They should have no issue with giving you a list of companies that actively offer internships(number of slots vs student load) as well as contacts who participated in them in addition to the companies who actively recruit their graduates.
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Re: Bogleheads' College Philosophy question

Post by Sandtrap »

Mistermooso wrote: Sat Jun 09, 2018 8:05 pm The overwhelming consensus on Bogleheads is that it's far more important to prioritize retirement over college because you can't borrow for retirement but you can borrow for college.

So, my question is: what method of borrowing for college do you all feel is best?
premise is incorrect

1 apple +1 orange = "x" watermelons
??
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MathWizard
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Re: Bogleheads' College Philosophy question

Post by MathWizard »

If you need to borrow, try to stay within subsided direct loans in the student's name. You need to fill out a FAFSA and have cost of attendance exceed expected family contribution.


Private unsubsidized school loans are terrible. You pay interest from day one, often have an origination fee of up to 5% and school loans cannot be forgiven in bankruptcy.
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Re: Bogleheads' College Philosophy question

Post by 123 »

College costs can be significantly reduced if the student attends a junior college/community college the first two year. The student can get most of their general education requirements out of the way and likely get as much out of the general education classes as if they had taken them at a 4-year school. The Bachelors degree you get from a college or university is the same whether you attended all 4 years there or if you transferred with a substantial number of units from elsewhere.
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desafinado
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Re: Bogleheads' College Philosophy question

Post by desafinado »

ivy+peers are worth it at full price.

i often see advice to "go to a state school for undergrad and an ivy for grad school"

this is poor advice.
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Re: Bogleheads' College Philosophy question

Post by DiploInvestor »

Don't discount European colleges. There are great university educations that can be had for a fraction of US costs. Look into Scandanavian countries, Ireland, Netherlands, etc for English language programs. You'll be surprised at how little a college education can (should) cost.
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Re: Bogleheads' College Philosophy question

Post by Beehave »

Community college can be a very good way to save on 2 years of undergrad.
There are surprisingly highly qualified faculty members. Classes are small. Faculty is devoted to instruction -- not publishing. Just be careful about which instructors you choose -- this is easily researchable. It can be an incredible bargain if you select the right instructors.

Four year degree should be completed with a curriculum that includes internships. If your child is interested in liberal arts, try for a double major, one they love and the other marketable and somehow related if possible. Example: music and pre-law so they can consider going into a legal specialty related to the field they love (say, copyright law) if they need to do so because the field they love cannot support them. For example, then they can use their love of music as an enhancement to their ability to attract clients and argue persuasively in court.

There are many possible paths, hope at least this helps in some way. Bet wishes.
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Re: Bogleheads' College Philosophy question

Post by ks289 »

Excellent advice above from other posters about minimizing college costs.

If loans are necessary, be aware of loan forgiveness programs which may be available to certain professions (teachers, healthcare professionals, etc) and with certain employers (government, 501c3 organizations).

https://studentaid.ed.gov/sa/repay-loan ... ncellation
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Re: Bogleheads' College Philosophy question

Post by theplayer11 »

my philosophy...we brought our kids into this world, our choice, not theirs. I feel obligated to educate them. If that meant saving less for retirement than we could have, so be it. Would do the same again.
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Re: Bogleheads' College Philosophy question

Post by beyou »

theplayer11 wrote: Sun Jun 10, 2018 6:11 am my philosophy...we brought our kids into this world, our choice, not theirs. I feel obligated to educate them. If that meant saving less for retirement than we could have, so be it. Would do the same again.
+1
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Re: Bogleheads' College Philosophy question

Post by livesoft »

It is interesting how quickly a consensus was reached in this thread. Not.
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Re: Bogleheads' College Philosophy question

Post by JoeRetire »

Nate79 wrote: Sat Jun 09, 2018 8:22 pm Borrowing is borrowing. It needs to be paid back by someone. Either you are going to saddle your kids with debt or you will have a much less comfortable retirement. We live by a better motto. If you can't afford it you don't buy it. This pertains to college choice, cars, house, etc.
So no student loans, no car loans, and most importantly no mortgages?
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Re: Bogleheads' College Philosophy question

Post by JoeRetire »

downshiftme wrote: Sat Jun 09, 2018 8:48 pm I'm leery of the false dichotomy. In most cases, you don't have to choose exclusively between retirement or college, you just have to make relative choices that work for you. Working a little longer or accepting a slightly less flush retirement might enable you to do more for kids' college. You have to make the best choices that reflect your personal values.

A little extra work can chase more scholarship opportunities. Some careful choices might find good value in a state school. Kids can shoulder some of the expense if that's appropriate or useful to them (depends on the child). Even delaying college for a year or few, or choosing a less expensive path through community college and transfer might be appropriate for some kids or families. Some kids may not be ready or interested in college.

My personal values lean toward education, and providing that for my kids in a way that allowed them to concentrate on their studies was a good trade-off for us and I was happy to retire a bit later and a bit leaner. Kids graduated without debt hanging over them, some worked in school, some didn't, and each made the best of the opportunity and their choices. Everyone has to choose whatever path works best for them, but it's rarely all one or all the other.
Well said!

The advantages of a college education in this economy are tremendous. And student loans can burden individuals for years

My wife and I told our sons to get into the best school that they could without regard to the costs. We paid their expenses throughout their school years so that they could graduate with no debt. They worked during school and summers to pay all of their non-school expenses. When our older son got married, his bride had $70k worth of student loans that we helped pay off as well.

Perhaps this ate into our retirement assets. But not enough that we need to cut back on our planned lifestyle.

Many of us can do both.
Last edited by JoeRetire on Sun Jun 10, 2018 7:09 am, edited 1 time in total.
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Re: Bogleheads' College Philosophy question

Post by Grt2bOutdoors »

desafinado wrote: Sun Jun 10, 2018 12:49 am ivy+peers are worth it at full price.

i often see advice to "go to a state school for undergrad and an ivy for grad school"

this is poor advice.
Be more specific, why do you feel in your opinion it’s poor advice? If specialization is at the graduate level, why spend your dollars on prerequisite level courses that can be had elsewhere for an equivalent degree in say “history” but grad degree will be in totally different field?
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Re: Bogleheads' College Philosophy question

Post by dogagility »

theplayer11 wrote: Sun Jun 10, 2018 6:11 am my philosophy...we brought our kids into this world, our choice, not theirs. I feel obligated to educate them. If that meant saving less for retirement than we could have, so be it. Would do the same again.
This is the answer.

The OP's question is deeply personal to one's parenting philosophy. IMO, parents should be thinking about how to educate their children at a very early stage in their life. Saddling your kids with college loan debt was not the answer us (medical school loans may be an exception). Neither was saddling ourselves with parent plus loans. The answer for us was to treat college expenses for our kids as a parental obligation and part of our financial picture akin to housing or food. And save, save, save.

For my wife and me, we would have a hard time sleeping at night if we retired to "south of France" while knowing our kids were yoked with student loan debt.
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Re: Bogleheads' College Philosophy question

Post by Cop51 »

Sandtrap wrote: Sat Jun 09, 2018 10:29 pm
Mistermooso wrote: Sat Jun 09, 2018 8:05 pm The overwhelming consensus on Bogleheads is that it's far more important to prioritize retirement over college because you can't borrow for retirement but you can borrow for college.

So, my question is: what method of borrowing for college do you all feel is best?
premise is incorrect

1 apple +1 orange = "x" watermelons
??
Your fruit equation made me LOL
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Re: Bogleheads' College Philosophy question

Post by GoldStar »

dogagility wrote: Sun Jun 10, 2018 7:19 am
theplayer11 wrote: Sun Jun 10, 2018 6:11 am my philosophy...we brought our kids into this world, our choice, not theirs. I feel obligated to educate them. If that meant saving less for retirement than we could have, so be it. Would do the same again.
This is the answer.

The OP's question is deeply personal to one's parenting philosophy. IMO, parents should be thinking about how to educate their children at a very early stage in their life. Saddling your kids with college loan debt was not the answer us (medical school loans may be an exception). Neither was saddling ourselves with parent plus loans. The answer for us was to treat college expenses for our kids as a parental obligation and part of our financial picture akin to housing or food. And save, save, save.

For my wife and me, we would have a hard time sleeping at night if we retired to "south of France" while knowing our kids were yoked with student loan debt.
I agree with these answers. I'm relatively new here but have read a LOT of conversations and have seen people say "Don't save for college at all" (KlangFool and followers) and "Don't save for college until you max everything tax advantaged having to do with retirement". I don't believe in either of these. While you can borrow for college but not retirement for many of us college expenses come first so I have always used the tax-free growth of 529 plans to save for college expenses as a required savings vehicle for me in addition to tax advantages retirement accounts. It's worked well.
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Re: Bogleheads' College Philosophy question

Post by Cop51 »

I opened up a 529 about 1.5 years before my sons was born with anticipation of having a child. I invested $100 a month having about $2000 value at birth. Fortunately for me my FIL puts in $500 on his birthday and I continue to do $100 a month. I add all other birthday and Christmas money coming which comes in around $2000-$2500 a year in contributions. Whatever he has come college he has. If I can help out more 18 years from now I will. I do not max out retirement accounts but I am fairly close but I also don’t want to leave my kid future kids out to dry with major college debt.

So I am breaking the rule by investing for my kids college before I’m maxing our my own retirement accounts. I’m satisfied with what we’re doing and are better off then most people.
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Re: Bogleheads' College Philosophy question

Post by legio XX »

Beehave wrote: Sun Jun 10, 2018 3:50 am Community college can be a very good way to save on 2 years of undergrad.
Yes, it can save money, but it's not as straightforward as this post implies.

Beehave wrote: Sun Jun 10, 2018 3:50 am There are surprisingly highly qualified faculty members.
Because there are no other jobs available, especially in fields like humanities. People who in the now-legendary better times would have gone to research unis are now in CCs. Sometimes the fit is good, sometimes not. People highly qualified in their field are not necessarily the best to teach it at the entry level. Different skill sets.
Beehave wrote: Sun Jun 10, 2018 3:50 amClasses are small. Faculty is devoted to instruction -- not publishing.


Classes are small? News to me. Where? What subjects? And why would the fac not be devoted to publishing? They may be struggling with a killer course load - five large undergraduate sections per semester plus committees, etc. - but they haven't given up scholarship, and some are damned resentful of the limits to human endurance that keep them from it. Not to mention the admin that can use lack of publication as an excuse to fire. And not publishing may also mean not keeping up with the field. Prof T is cool and funny and caring - and teaching a syllabus that is a generation out of date.
Beehave wrote: Sun Jun 10, 2018 3:50 am Just be careful about which instructors you choose -- this is easily researchable. It can be an incredible bargain if you select the right instructors.
And how do students fresh out of high school do this? Ratemyprofdotcom? The online blurb used by the school? Do they realize that the highly-rated and very popular Prof Y is an adjunct who won't be there when they matriculate? Or that Prof Z is reviled because of a tough no-cheating policy?
Beehave wrote: Sun Jun 10, 2018 3:50 amFour year degree should be completed with a curriculum that includes internships. If your child is interested in liberal arts, try for a double major, one they love and the other marketable and somehow related if possible. Example: music and pre-law so they can consider going into a legal specialty related to the field they love (say, copyright law) if they need to do so because the field they love cannot support them. For example, then they can use their love of music as an enhancement to their ability to attract clients and argue persuasively in court.
+1 on double major, great advice. Not sure how realistic it is for someone who is also working (how many hours, what kind of job?).
Beehave wrote: Sun Jun 10, 2018 3:50 amThere are many possible paths, hope at least this helps in some way. Bet wishes.
Community colleges can do really great stuff, but it needs a lot of thinking over, and there is a big difference between the tiers. The old "Poor Man's Harvard" tag can be read both ways.

BTW, student loan forgiveness has been mentioned a few times. There's been some problems with that program - go to the NY Times site and search on "student loan forgiveness." Assuming it's still in place when these kids need it of course . . .
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Re: Bogleheads' College Philosophy question

Post by gasdoc »

I have delayed retirement to pay for most of DD's education.

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Re: Bogleheads' College Philosophy question

Post by Grt2bOutdoors »

Mistermooso wrote: Sat Jun 09, 2018 8:05 pm The overwhelming consensus on Bogleheads is that it's far more important to prioritize retirement over college because you can't borrow for retirement but you can borrow for college.

So, my question is: what method of borrowing for college do you all feel is best?
Says who?? I believe the consensus is to spend your money wisely, save your money wisely, invest your money wisely, live beneath your means, be able to retire (on your terms, if possible) and buy that $5,000 watch so you can look at it while drinking your $40/pound coffee. :)

IF you must borrow, borrow no more than the first year expected (based on current average salaries offered in field of study) salary in total. You want to keep debt manageable, so no more than 1 year gross salary for 4 years of education. Use Federal backed loans (believe they are called Stafford loans) but avoid private loans to extent possible. But that's not what's happening today - instead those who are severely burdened by student loans are carrying multiples of gross salary. The reasons why they place this burden upon themselves vary, the results are nearly all the same - unable to get ahead because they are slave to the lender, forever!! Don't do it. You don't need to attend a private college unless the cost/benefit is equal to or better than that offered by the best public university in your state. Why "in your state"? Go look at out of state tuition, room and board rates - little secret - out of state public colleges rely on you to subsidize their "in state" residents; the in-state residency costs are low for a reason.
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Re: Bogleheads' College Philosophy question

Post by EFF_fan81 »

MrPotatoHead wrote: Sat Jun 09, 2018 8:53 pm Ergo college should now be viewed as a form of trade school.
I don't entirely agree but I understand the point. I think there is a place in a four-year education for courses that teach critical thinking skills (e.g., philosophy, rhetoric, political science, if done well). Ultimately I come to the same place as the prior poster because (1) liberal arts in the U.S. at the least has become both pretty politicized AND is also at many schools not as rigorous as it could be and (2) you can read Plato at the public library for free without spending $250k. It's a shame, but at the prices many of these schools are charging it is hard to not just focus on the financial return from the degree. I'd love it if there was a top college that had $20k tuition that taught an old-school "philosophy, politics and economics" (PPE) degree in the rigorous old-school method a la Cambridge and Oxford but there is not really. They either all want $50k or it is not rigorous or both.

In terms of the direct queestion, how to borrow for college, I'd say that when we say prioritize retirement, ideally we mean start retirement super young -- with your very first paycheck if you can pull it off. Hopefully you can also start funding small amounts to 529s when kids are little, a few hundred here and there, and then more as they age. So ideally you will have a reasonable amount in 529s when college rolls around.

I hope to save enough for four years at a state school by the time each kid is 18. Then if for some reason we decide private + pay (e.g., either they get into Harvard / MIT or there is a school where we are convinced the program and environment are just perfect) we will hopefully cover the difference from cash flow if we can. I suppose if I could not and borrowing was the answer, personally I would get a HELOC. By that time my 401(k) would be stuffed and I would not be too far off from 59.5 so if push came to shove and there was an issue I could bridge the gap by pulling money out of Roth IRAs to pay back the HELOC and then rely on the 401(k) for retirement. So the money would really be "there," I would just borrow in order to be able to continue to enjoy the tax advantages of those retirement accounts.
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Re: Bogleheads' College Philosophy question

Post by EFF_fan81 »

downshiftme wrote: Sat Jun 09, 2018 8:48 pm I'm leery of the false dichotomy. In most cases, you don't have to choose exclusively between retirement or college, you just have to make relative choices that work for you. Working a little longer or accepting a slightly less flush retirement might enable you to do more for kids' college. You have to make the best choices that reflect your personal values.
What people are talking about when they say "prioritize retirement" is this.

You are 35 and have $200k to your name and a mortgage and two kids, 5 and 3. After mortgage and buying your Volkwagon to haul around the kiddos you have $20k left over from your job. You hope to get a promotion in a few years and hope that savings will increase when you don't need to pay for preschool anymore. In the meantime, you can't max your retirement accounts AND put a ton in a 529 AND prepay your mortgage AND pay off the car loan. So what do you do?

There is an order of investment priorities (the wiki has this), and after high interest debt the best choice is usually fund the retirement accounts and don't worry about the 529s.

For example, unless your state offers specific benefits such as a state tax deduction (mine does) or matching or something, a Roth IRA is basically a better 529. You don't pay any taxes on gains and you can withdraw contributions early (and some earnings, see here for rules:
https://www.schwab.com/public/schwab/i ... al_rules .

Once college is looming, though, I agree with you that it is not quite as simple as "sock away what you can in the most efficient manner possible and don't worry about it" and then you may need to make some hard choices like drawing down a Roth IRA or using a HELOC and working longer .
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Re: Bogleheads' College Philosophy question

Post by EFF_fan81 »

Cop51 wrote: Sun Jun 10, 2018 7:45 am I opened up a 529 about 1.5 years before my sons was born with anticipation of having a child. I invested $100 a month having about $2000 value at birth. Fortunately for me my FIL puts in $500 on his birthday and I continue to do $100 a month. I add all other birthday and Christmas money coming which comes in around $2000-$2500 a year in contributions. Whatever he has come college he has. If I can help out more 18 years from now I will. I do not max out retirement accounts but I am fairly close but I also don’t want to leave my kid future kids out to dry with major college debt.

So I am breaking the rule by investing for my kids college before I’m maxing our my own retirement accounts. I’m satisfied with what we’re doing and are better off then most people.
Cop51, I don't think it is unreasonable to be putting a reasonable amount in 529s while also funding (but not maxing out) retirement accounts. Particularly if you are funding Roth IRAs but just not maxing our your 401(k). It seems reasonable to me to have some money in various buckets.
KlangFool
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Re: Bogleheads' College Philosophy question

Post by KlangFool »

Folks,

There are 2 extreme ends to this discussion financially.

A) Folks that are willing to starve and sleep on the street just to put their kids to the best college.

B) Someone like my family member that paid for private college plus gives each kid 200K before they graduated college.

There is no discussion needed for people at both ends. But, most of us fall in the between (A) and (B).

My opinion

A) An undergraduate college education is useful but it is not sufficient for success in life.

B) In some cases, it is not necessary and may be harmful.

C) Do not overspend for the college education. There could be some other ways to help our children if we do not use up all our financial resources just for undergraduate education.

My personal choice

1) I pay for my kids' public college education.

2) I matched their summer earning and put the money into their Roth IRA accounts.

3) They will graduate with 20K to 30K of investment in their own names. They saved all those money through their lives.

My family background.

1) Most of my family came from an abject poverty background. We starved regularly in our childhood.

2) Many of my family members are millionaires.

3) Out of those millionaires, some never attended any high school while others attended post-graduate studies from world ranked universities.

4) Some started their own businesses while others reached millionaires status from their salary income.

In summary, the college education does not matter in my family. It is "nice to have".

KlangFool
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ClevrChico
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Re: Bogleheads' College Philosophy question

Post by ClevrChico »

I agree that zero to limited borrowing is best, although not always possible. Keeping costs down is important, whether it's choosing the best scholarship package, starting at a community college, or having an employer pay.

If you have to borrow, direct subsidized loans are best. I'd guess most big savers on here would not qualify, and unsubsidized direct loans are the next best choice.

My goal is to have my own kids not be saddled with ridiculous debt. The culture of parents encouraging their kids to load up on loans is not good.
desafinado
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Re: Bogleheads' College Philosophy question

Post by desafinado »

Grt2bOutdoors wrote: Sun Jun 10, 2018 7:09 am
desafinado wrote: Sun Jun 10, 2018 12:49 am ivy+peers are worth it at full price.

i often see advice to "go to a state school for undergrad and an ivy for grad school"

this is poor advice.
Be more specific, why do you feel in your opinion it’s poor advice? If specialization is at the graduate level, why spend your dollars on prerequisite level courses that can be had elsewhere for an equivalent degree in say “history” but grad degree will be in totally different field?
a smart and conscientious student who gets into an ivy league school in high school with every intention to go to graduate school needs to perform very well for another four years of college to make it in. many student's plans change significantly, or they do not manage to maintain that level of academic performance given the significant differences between high school and college learning environments.

a bird in the hand is worth two in the bush here.
EFF_fan81
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Re: Bogleheads' College Philosophy question

Post by EFF_fan81 »

KlangFool,

To be more specific, an employer or entreprenteur needs to have specific skills and abilities to add value beyond a minimum wage job. For the vast majority of people that comes from further education.

Whether that further education is becoming a plumber's apprentice or studying economics at college is an individual choice. But it will be a hard road for most people to simply walk out of high school at 18 with no specific skills. I understand it possibly CAN be done but that doesn't make it ideal. So most high schoolers need to be thinking critically about how to get the training they need to add value to rise above minimum wage.

For many, college is a fantastic way to do that, if done wisely. It can also add value to life in unmeasurable ways. My dad also grew up in poverty and ended up getting a PhD and becoming a semi-famous research scientist (or at least famous in his field). Sure, he could have made just as much or maybe even more walking out of high school at 15 given his intelligence and work ethic, but there is something to be said for doing intellectually stimulating work, inventing things and ultimately saving lives even if you may make a little less doing it.

I think it is not good advice to say "you can be rich without a college degree so it doesn't matter too much."

At the end of the day, I'd fund my kids to study for four years at the local state school pretty much anything they wanted to study except for a handful of majors. (Not to get too far off topic, but there are a few programs that are basically giant excuses for keggers and others that seem to basically pump out indoctrinated political activists without critical thinking skills -- those aren't things I'd want to fund.) They can then go work 80 hours a week building up a bunch of subway franchises after that if they want to get rich and will be better off for it.
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Re: Bogleheads' College Philosophy question

Post by KlangFool »

blinx77 wrote: Sun Jun 10, 2018 9:11 am KlangFool,

To be more specific, an employer or entreprenteur needs to have specific skills and abilities to add value beyond a minimum wage job. For the vast majority of people that comes from further education.
blinx77,

This is a personal finance forum. Each family has to evaluate individually on the exact value of the college education to their kids.

<<I think it is not good advice to say "you can be rich without a college degree so it doesn't matter too much." >>

1) This is to counter the common argument that a person can ONLY be successful with a college degree. So, the college degree is priceless.

2) I quoted specifically that the statement was true for my family.

<<To be more specific, an employer or entreprenteur needs to have specific skills and abilities to add value beyond a minimum wage job.>>

3) I am from a multigeneration business family. My family taught that to our children. So, the college education aka formal education is not the only way. In fact, the college education is not sufficient. I worked in my family business since I was 12 years old.

The irony of this situation is the parents are willing to pay a huge amount of money for college education. But, they are not willing to teach/coach their children on the equally valuable job skills that they know.

KlangFool
golfCaddy
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Re: Bogleheads' College Philosophy question

Post by golfCaddy »

desafinado wrote: Sun Jun 10, 2018 9:09 am
Grt2bOutdoors wrote: Sun Jun 10, 2018 7:09 am
desafinado wrote: Sun Jun 10, 2018 12:49 am ivy+peers are worth it at full price.

i often see advice to "go to a state school for undergrad and an ivy for grad school"

this is poor advice.
Be more specific, why do you feel in your opinion it’s poor advice? If specialization is at the graduate level, why spend your dollars on prerequisite level courses that can be had elsewhere for an equivalent degree in say “history” but grad degree will be in totally different field?
a smart and conscientious student who gets into an ivy league school in high school with every intention to go to graduate school needs to perform very well for another four years of college to make it in. many student's plans change significantly, or they do not manage to maintain that level of academic performance given the significant differences between high school and college learning environments.

a bird in the hand is worth two in the bush here.
How did we go from the best way to get loans for college to whether the Ivy league is worth it, when there is nothing to indicate the OP's kids would get admitted to an Ivy or even intend to apply there?
EFF_fan81
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Re: Bogleheads' College Philosophy question

Post by EFF_fan81 »

golfCaddy wrote: Sun Jun 10, 2018 9:34 am
desafinado wrote: Sun Jun 10, 2018 9:09 am
Grt2bOutdoors wrote: Sun Jun 10, 2018 7:09 am
desafinado wrote: Sun Jun 10, 2018 12:49 am ivy+peers are worth it at full price.

i often see advice to "go to a state school for undergrad and an ivy for grad school"

this is poor advice.
Be more specific, why do you feel in your opinion it’s poor advice? If specialization is at the graduate level, why spend your dollars on prerequisite level courses that can be had elsewhere for an equivalent degree in say “history” but grad degree will be in totally different field?
a smart and conscientious student who gets into an ivy league school in high school with every intention to go to graduate school needs to perform very well for another four years of college to make it in. many student's plans change significantly, or they do not manage to maintain that level of academic performance given the significant differences between high school and college learning environments.

a bird in the hand is worth two in the bush here.
How did we go from the best way to get loans for college to whether the Ivy league is worth it, when there is nothing to indicate the OP's kids would get admitted to an Ivy or even intend to apply there?
This always happens on these threads. There's always someone that says "just do local community college" and someone that says "I'll pay for Ivy but not another private college," etc. These are financial questions, because the question is really whether the value is worth the cost.

The right answer of course is that it depends on the particular kid and the family's particular circumstances but that's too nuanced for the internet.
Beehave
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Re: Bogleheads' College Philosophy question

Post by Beehave »

legio XX wrote: Sun Jun 10, 2018 7:48 am
Beehave wrote: Sun Jun 10, 2018 3:50 am Community college can be a very good way to save on 2 years of undergrad.
Yes, it can save money, but it's not as straightforward as this post implies.

Beehave wrote: Sun Jun 10, 2018 3:50 am There are surprisingly highly qualified faculty members.
Because there are no other jobs available, especially in fields like humanities. People who in the now-legendary better times would have gone to research unis are now in CCs. Sometimes the fit is good, sometimes not. People highly qualified in their field are not necessarily the best to teach it at the entry level. Different skill sets.
Beehave wrote: Sun Jun 10, 2018 3:50 amClasses are small. Faculty is devoted to instruction -- not publishing.


Classes are small? News to me. Where? What subjects? And why would the fac not be devoted to publishing? They may be struggling with a killer course load - five large undergraduate sections per semester plus committees, etc. - but they haven't given up scholarship, and some are damned resentful of the limits to human endurance that keep them from it. Not to mention the admin that can use lack of publication as an excuse to fire. And not publishing may also mean not keeping up with the field. Prof T is cool and funny and caring - and teaching a syllabus that is a generation out of date.
Beehave wrote: Sun Jun 10, 2018 3:50 am Just be careful about which instructors you choose -- this is easily researchable. It can be an incredible bargain if you select the right instructors.
And how do students fresh out of high school do this? Ratemyprofdotcom? The online blurb used by the school? Do they realize that the highly-rated and very popular Prof Y is an adjunct who won't be there when they matriculate? Or that Prof Z is reviled because of a tough no-cheating policy?
Beehave wrote: Sun Jun 10, 2018 3:50 amFour year degree should be completed with a curriculum that includes internships. If your child is interested in liberal arts, try for a double major, one they love and the other marketable and somehow related if possible. Example: music and pre-law so they can consider going into a legal specialty related to the field they love (say, copyright law) if they need to do so because the field they love cannot support them. For example, then they can use their love of music as an enhancement to their ability to attract clients and argue persuasively in court.
+1 on double major, great advice. Not sure how realistic it is for someone who is also working (how many hours, what kind of job?).
Beehave wrote: Sun Jun 10, 2018 3:50 amThere are many possible paths, hope at least this helps in some way. Bet wishes.
Community colleges can do really great stuff, but it needs a lot of thinking over, and there is a big difference between the tiers. The old "Poor Man's Harvard" tag can be read both ways.

BTW, student loan forgiveness has been mentioned a few times. There's been some problems with that program - go to the NY Times site and search on "student loan forgiveness." Assuming it's still in place when these kids need it of course . . .

My written response to ome of the detail is below, but the key idea is best stated here:

https://www.nytimes.com/2015/01/14/opin ... llege.html

It is possible, if care is taken, to get a good education at low cost at a community college. The CCs I'm familiar with have low class-sizes. If you take intro economics at State U there are probably hundreds in your professor-given lecture section, and your recitation sections for the course are taught by grad students. At your local community college, if you are careful and with just a little luck, you'll find an intro econ course with a max enrollment of 35 but actually only eighteen enrolled being taught by a corporate controller or Wall Street-type who is recently retired and wants to teach because of their own particular personal need to feel connected and productive. With baby-boomers retiring, and with their ability to work part-time for extremely low wages, this is happening more and more.

Imagine needing to outfit yourself from scratch to assemble a work-wardrobe for an office-type job. It will be great to do it at Brooks Brothers; but if you take care you can also get the job done at Marshall's. If it's me and I have the money and grades, I'm off to Swarthmore, Bowdoin, Grinnell, Reed, or a top state U in a flash. If I can get a really good scholarship, Il may instead go to a second-or third tier public or private four-year school. But if the finances or other reasons call for it, the local CC will do. It is a great place for a student to find themselves and I or my kid can excel and move on to greater things.

Just one other thing regarding publication. To get their Ph.Ds the university' teaching assistants must write their theses. It is usually their key concern. To get tenure and maintain reputation, professors must publish, again, a key concern. There is zero-to-negligible concern about publication at the CCs. Tenure is granted based on need (solid enrollments in a subject). If they could get away with it, CC admins would only hire part-timers because they are so inexpensive. But for accreditation they need full-timers. Because CC accreditation does not depend on faculty publication records, it is not a concern of the CC admin, which thus remains focused on instruction. Thus, to get tenure at the CC usually requires course and program development and participation in extra-curricular student activities -- and not journal publications.
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Re: Bogleheads' College Philosophy question

Post by golfCaddy »

blinx77 wrote: Sun Jun 10, 2018 9:49 am This always happens on these threads. There's always someone that says "just do local community college" and someone that says "I'll pay for Ivy but not another private college," etc. These are financial questions, because the question is really whether the value is worth the cost.

The right answer of course is that it depends on the particular kid and the family's particular circumstances but that's too nuanced for the internet.
Worrying about the value of a private or OOS college is a financial question. Worrying about what happens if someone gets admitted to HYPMS is about as likely and relevant to most people as musing about the best path to become a professional athlete.
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Re: Bogleheads' College Philosophy question

Post by cockersx3 »

I've seen a number of references in this thread around the use of direct subsidized / unsubsidized student loans. Just wanted to point out that these are only for students - not parents - and that there is an annual limit on how much they are permitted to borrow through these programs. The annual limit is relatively low - up to $5500 per year, depending on what year of college the student is in. (I'm not sure if there is a different limit for subsidized vs unsubsidized loans, ie if the "up to $5500 limit" is cumulative across the two programs.)

After those student loans, you are looking at either federal PLUS loans for parents, or going to a private lender. Not sure how these programs are now, but back when I was in school the interest rates were high and they charged usurious origination fees as well.

The student loan limit thing is important, and often overlooked I think. I have seen many places where parents insist that they will not fund college costs at all, and so the student will either need to save money for school on their own or borrow the money. However, unless you are planning to cosign their loans, the max a student can borrow is likely unrealistically low for most 4-year colleges.

Like many other posters, I plan to pay up to 8 semesters of our state's flagship university for each child to go to college. However, one issue I am concerned about is the fact that state college admission has become very competitive in many states (including ours) since many other parents are doing the same thing. Something to consider in your plans as well...
desafinado
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Re: Bogleheads' College Philosophy question

Post by desafinado »

golfCaddy wrote: Sun Jun 10, 2018 11:48 am Worrying about the value of a private or OOS college is a financial question. Worrying about what happens if someone gets admitted to HYPMS is about as likely and relevant to most people as musing about the best path to become a professional athlete.
don't think that's true at all. 5-10% admissions rates when many applicants are not particularly qualified and there are a decent number of such schools to apply to lead to a fair chance of getting into one for a smart and conscientious student.

to put it another way, I don't think anything else so valuable comes so easily in life.
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Re: Bogleheads' College Philosophy question

Post by AlphaLess »

This is not meant to be a tactical plan, but rather a strategic directive:

- make sure your kid looks as good as possible on paper when applying to college,
- shelter your assets as much as possible,
- make sure kid applies to top echelon schools which are very generous.

You can play around Harvard's calculator to get a sense (it's set to USA, Missouri below):
https://college.harvard.edu/financial-a ... sidence=MO

Also, research says that the bottom 50% of the kids don't get as much value out of college as the top.
"A Republic, if you can keep it". Benjamin Franklin. 1787. | Party affiliation: Vanguard. Religion: low-cost investing.
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Re: Bogleheads' College Philosophy question

Post by MrPotatoHead »

KlangFool wrote: Sun Jun 10, 2018 9:22 am
The irony of this situation is the parents are willing to pay a huge amount of money for college education. But, they are not willing to teach/coach their children on the equally valuable job skills that they know.

KlangFool
Plus ten!!!!

As well as his other comments.
AlphaLess
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Re: Bogleheads' College Philosophy question

Post by AlphaLess »

KlangFool wrote: Sun Jun 10, 2018 8:56 am Folks,

There are 2 extreme ends to this discussion financially.

A) Folks that are willing to starve and sleep on the street just to put their kids to the best college.

B) Someone like my family member that paid for private college plus gives each kid 200K before they graduated college.

There is no discussion needed for people at both ends. But, most of us fall in the between (A) and (B).

My opinion

A) An undergraduate college education is useful but it is not sufficient for success in life.

B) In some cases, it is not necessary and may be harmful.

C) Do not overspend for the college education. There could be some other ways to help our children if we do not use up all our financial resources just for undergraduate education.

My personal choice

1) I pay for my kids' public college education.

2) I matched their summer earning and put the money into their Roth IRA accounts.

3) They will graduate with 20K to 30K of investment in their own names. They saved all those money through their lives.

My family background.

1) Most of my family came from an abject poverty background. We starved regularly in our childhood.

2) Many of my family members are millionaires.

3) Out of those millionaires, some never attended any high school while others attended post-graduate studies from world ranked universities.

4) Some started their own businesses while others reached millionaires status from their salary income.

In summary, the college education does not matter in my family. It is "nice to have".

KlangFool
Good summary, Klang.

One question:
- do you think you can outline a repeatable formula, based on your family's experience, on how to become successful and affluent without going to college?
"A Republic, if you can keep it". Benjamin Franklin. 1787. | Party affiliation: Vanguard. Religion: low-cost investing.
Broken Man 1999
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Re: Bogleheads' College Philosophy question

Post by Broken Man 1999 »

My undergraduate, and graduate degrees were both paid for almost totally by MegaCorp. As well, same MegaCorp paid for wife's AA degree.

My undergraduate degree was earned 10 years after I graduated from HS. My main driver was to earn my degree PRIOR to attending our 10 year HS class reunion. And I did accomplish my goal. Fourteen years later I earned my graduate degree, though at the time I was earning a very good salary. Two friends and I decided to go back to school. Honestly it was a blast.

We funded our daughters' college, providing what their scholarships did not. One went the whole college experience, joining a sorority, traveling to Europe, at a small private university. The other two selected a public university nearby, one continuing to earn her graduate degree.

I believe strongly in education. I have paid for prepaid tuition plans for all four grandchildren, at the very least they can attend public universities. And, both sets of "other" grandparents and I are contributing to 529 plans for all the grandchildren.

My goal is two-fold. Assist children in increased retirement funds, with no college expenses necessary for their children for the most part. And, ensure my grandchildren have an opportunity to attend college without loading up on debt.

Some of the grandchildren's funds came from my inheritance from my father. While it was nice, we really didn't need anything. So, I think my father would be very pleased with our paying it forward.

To say we have been blessed would be a great understatement. We have been BLESSED!

Broken Man 1888
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
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