Can we afford to pay for our kid's college (at all)?

[ysette9]

All of our cars are paid for and have 90k, 112k, and 110k miles on them. None are worth more than $15k. We drive all of them at the same time a lot of times. Our utilities are insane. Gas, electricity can be $300 each in the winter. Water is $100+ every month. Wife and son got stupid new phones for $1200 that makes our cell bill $250 month. I still use a flip phone and daughter does not have a phone. Trash $46, internet/landline $230. Nothing is cheap here.

We live in a more expensive area of the world and I find these like items to be eye opening in how expensive they are. Yes, our house is smaller, but we pay $100-120 or so for utilities in the winter and maybe $30 in the summer. When we bought our house we got everything insulated: attic, crawl space, inside and outside walls. I’d recommend an energy audit because I expect you are paying to heat the outdoors.

You need to have a conversation with your wife about your values and what is really important to you. If you can frame things in terms of your top two or three priorities, it helps to put things in perspective. Is carrying a phone that costs more than my laptop more important than a college education or a secure retirement?

I’d look into your bills for phone service as you are way over paying for the service you likely are getting. Same with your internet and phone. I realize that us in the US have lousy choices with slow service and high prices compared to the rest of the developed world, but you should be able to get a very decent package for $70 a month.

[cherijoh]

All of our cars are paid for and have 90k, 112k, and 110k miles on them. None are worth more than $15k. We drive all of them at the same time a lot of times. Our utilities are insane. Gas, electricity can be $300 each in the winter. Water is $100+ every month. Wife and son got stupid new phones for $1200 that makes our cell bill $250 month. I still use a flip phone and daughter does not have a phone. Trash $46, internet/landline $230. Nothing is cheap here.

Wife can cut back on discretionary spending and we won't go on vacations. Just trips to see family after this summer. I got her on board with that in order to help pay for college. Son's trip was of his own doing. We gave him $$s to do as he wished with it. Not the best use of the funds, but he might learn something from it. Also, he still plans on study abroad at some point and he wants to check out these areas of the world in person. When he planned this trip he was not planning on going to college right away and was planning on moving overseas. Probably would have not gave him this gift if we knew he would be staying in the US.

So far plan is to get rid of the Heloc. Once that is gone, $2-3k a month will be freed up. Thinking we should just put it all in a taxable at this point. When school expenses come up will pull from this and put into 529 to get state tax credit. Want to support him a good bit for the 1st semester. Will be his 1st time living away from home. Will let him take out fed loans and we will pay the rest for 1st semester. Will demand that he get a part time job either on campus or in town to help contribute to his expenses. Will have to see what the job situation is like there. Unfortunately the town with the college is an even higher HCOL area than where we live now. Hopefully that means the jobs might pay more. It might even be cheaper to live in the dorms. I never lived in dorms, but living was cheaper back east. Shared a room in 2 bedroom apt with 4 other guys. Worked part time and ate a lot of ramen. I'm kind of out of the loop now. Cost of college back then was $900 for 12 credit hours and used books around $300. Things have obviously changed and I was caught a bit off guard.

OP it sounds like you are genuinely on board to make meaningful changes to right your financial ship, but honestly I'm not sure about your wife and son. Especially if the phone contracts were entered into after you had your epiphany about your debt. It sounds like another instance of short-term gratification winning out over long-term goals. While no longer buying things on credit is a step in the right direction, just because you can squeeze something into the budget isn't sufficient justification to buy stuff that you don't need. Two phones at $1200 each and $250/month for 24 months would cover a good chunk of your remaining HELOC balance.

[veindoc]

All of our cars are paid for and have 90k, 112k, and 110k miles on them. None are worth more than $15k. We drive all of them at the same time a lot of times. Our utilities are insane. Gas, electricity can be $300 each in the winter. Water is $100+ every month. Wife and son got stupid new phones for $1200 that makes our cell bill $250 month. I still use a flip phone and daughter does not have a phone. Trash $46, internet/landline $230. Noth

Why is gas and electric up $300 in winter? Our electric is up in summer and gas in winter but never up at same time. How is the HvAC powered?Do yourself a favor and go around the house and unplug everything. Computers, chargers, floor lamps in unused rooms, exercise equipment. To use an item, plug it in first as opposed to just pressing an on-off button. We put the washer dryer in one of those smart plugs. Was too hard to move them back and forth when we needed to use them which is like 3-4 times a week. $100 for water? Inspect your home for any leaks?
Internet landline. Still need landline? Consider stopping once daughter gets phone. Cut internet to next highest level. Remove premium channel. Kids probably steam in their devices so cable is probably not needed. For phone usage are they on an unlimited plan? Or have 3g tablets? Cut that off. Can use WiFi. These measures should be able to get you down to $500-$600. Internet should be down around $60. $230 way too high.

Cut son from insurance and get him a catastrophic health plan when he goes to college. I’m sure you’ve shopped your own health insurance but do this yearly. Tedious I know but you may catch a break. Cut car insurance too for boy once in college. My niece uses zip car in college as needed- not sure how that works with insurance.

When you go to Europe make a conscious effort to not buy souvenirs. Not worth it, or cap to $150 each. Just enjoy the experience with pictures and no material items. Don’t shop for vacation. People take that opportunity to get a new wardrobe or travel clothes or a fancy camera. Don’t.

[ChinchillaWhiplash]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

[KlangFool]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

ChinchillaWhiplash,

What is your plan if your son took more than 4 years to graduate? 5 years? 6 years? What is your cutoff point?

It is better to get those things out of way now before your son gets caught with another surprise.

<<Cover roughly $80,000 for each kid.>>

Are you going to tell your kids about this?

KlangFool

[snowman]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

OP, your son will not qualify for subsidized federal loans. Those loans are based on financial need as determined by FAFSA.

[HereToLearn]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

I do not think your family will qualify for direct subsidized student loans. I have not run the #s, but the subsidized loans are means-tested. This site may help: https://studentaid.ed.gov/sa/types/loan ... subsidized

Unsubsidized loans of $5500 first year, increasing by $500 per year, should be available, but interest accrues as soon as the money is borrowed. You mentioned that you would like your son to consider paying down the loans with earned income. He may need that income to pay for expenses beyond tuition, room & board: textbooks, transportation to & from college, clothing, food not provided by the meal plan, personal expenses (hair cuts, toiletries, etc).

Is there a reason to not fund the 529 now so as to take advantage of tax-free growth? Maybe that is what you have planned, but it sounds as though you intend to transfer the money only as needed.

Others have mentioned earlier that you will save significant sums on car insurance once your son goes away to school. This will vary by carrier. My carrier offers a discount if the student is more than 100 miles from home. The discount was significant.

I don't know if your family's medical insurance is a true family rate that will not change if your son were removed from the plan, but if you would realize savings, you may want to investigate the university health coverage available to students. Some schools offer excellent plans with more comprehensive coverage for better rates than the Exchange plans, whereas others are limited and only useful when in the school service area.

Best of luck to you.

[Jack FFR1846]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max un-subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

OP, your son will not qualify for subsidized federal loans. Those loans are based on financial need as determined by FAFSA.

I think this correction makes is accurate. The amount the son gets doesn't change. Just who pays interest until graduation. I agree the OP will get zero from FAFSA. I make half his household income and FAFSA tells me my EFC is $93,000.

[cshell2]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max un-subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

OP, your son will not qualify for subsidized federal loans. Those loans are based on financial need as determined by FAFSA.

I think this correction makes is accurate. The amount the son gets doesn't change. Just who pays interest until graduation. I agree the OP will get zero from FAFSA. I make half his household income and FAFSA tells me my EFC is $93,000.

The amounts will go up some. The maximum subsidized portion is smaller than the total Stafford you can take out. So, it's really about (not sure what the new numbers are for 2019), $5000+$6500+$7500+$7500 = $26,500 for 4 years.

[ChinchillaWhiplash]

Unsubsidized it is. Guess we can cover the interest while he is in school. He plans on getting his PHD, but he might have to cover those expenses on his own post grad. I did and was a graduate teaching assistant. Made enough to cover most of my living expenses. I left college with $10k in loans. My parents covered my tuition and books for undergrad. I worked part time to pay for living expenses.

[smitcat]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

A cut and paste of a post I made on page one of this thread....
With this additional information a few other ideas....
He is going this fall , correct? He is accepted and knows where he is going correct? Have a face to face meeting with an admissions counselor, its already late in the game so now is the time
Ask the admissions counselor now for help with these questions:
- What is the real total estimated costs with books, fees, food, activities, transportation, etc
- Is it possible for you son to do an overnight and sit in on some classes and activities
- What financial help is available with scholarships and grants (if any)
- What financial help is available in the way of loans
- What kinds of work study might be available (library, athletics, cafeteria, admissions, etc)
- Is there an RA program and what does it take to get into that
- any other ideas on how to soften this bill with and without 'favorable' loans

[dodecahedron]

Cut son from insurance and get him a catastrophic health plan when he goes to college.

Cutting son from insurance could be a very poor decision. OP needs to cover his young daughter and in most places with which I am familiar, the cost of dependent child coverage (up to age 26) is independent of the number of kids covered on the policy. In other words, costs no more to cover two kids under 26 than one kid.

[White Coat Investor]

48 and 51. 1st year being able to fully fund i401k with $56k, HSA $7k, BD Roth $6k. Built up small EF of $20k. Have spent the last 2 years getting rid of bad debt. Currently have mortgage of $3875 month at 4.5% fixed for another 28 years. Heloc that all extra cash has been thrown at w/$15k left variable currently 6.5% (non- deductable interest). And finally a student loan which we just refinanced with $58k left variable rate at 2.54%. That is all our debt. Income is variable each month but usually have around $2-3k after paying all bills, funding account, etc that has been used to kill the Heloc. As far as retirement funding goes, we have about 1/4 of what would be needed to retire and need to fund a taxable account with at least $50k year for a retirement in about 12-13 years. Just started getting serious about it at the beginning of 2018.

Now to the college funding issues. Have around $30k for oldest kid starting in the fall in a 529. Freshman year requires student to live in dorm in our state. Is one of the "cheaper" state colleges in our state. He is dead set on going here and I do not want to discourage him. He is a GT student that got horrible grades in HS and blew any chance of merit based scholarship. He is getting in because his SAT score was high. Average cost of in state tuition, books, fees, room and board are $25k year. Maximum subsidized/unsubsidized federal student loans are: Freshman $5500, Sophomore $6500, Jr/Sr $7500 a year. Kid has no savings of his own. He always spent every penny on stuff (OCD collector). I do not want him to carry all the load, but think it is in his best interest to take on some responsibility. Not sure we can afford to fill in the gaps. Do not want or plan to take out any private or parent PLUS loans. Hoping he can get a part time job to cover some of this and at least pay off any interest of student loans. Gap will be around $18k year. Hoping costs go down once he can share an apt with room mates or something.

Other issue is we have another child who will be out of HS in 5 yrs. She was diagnosed with learning disabilities, but is getting good grades and works hard. Hoping she will be scholarship elegible. Putting a little bit each month into her 529. We get a state tax break of 4.63%. Can we afford to put in any more? Don't want to neglect our own retirement by doing so, but also want kids to be able to get a good education without suffering too much debt. We left school with a lot of debt and it stinks.

I don't think it's a good idea to start saving for your kids' education until your own is paid for. That's kind of water under the bridge for you though. I guess if you have $30K in a 529, I'd put that toward the oldest kid's education, but that's probably it. He's obviously going to need to work in addition and probably take the max federal loans too if going to a cheaper school is not an option (it should be.)

[snowman]

Is there a reason to not fund the 529 now so as to take advantage of tax-free growth? Maybe that is what you have planned, but it sounds as though you intend to transfer the money only as needed.

This actually is a good plan by OP. His kid starts college in less than 3 months, so time for growth has passed. In Colorado, however, one can deposit money into 529 cash account, and withdraw that money very next day to pay for college expenses, and realize 4.63% state income tax deduction. He should definitely take advantage of that tax "loophole".

[dodecahedron]

What is the rush about going to college.

How about:

1) encourage kid to take a gap year to mature AND earn/save some money towards college expenses

2) possibly take some transferable online classes during that gap working year to get some prerequisites and/or gen ed requirements out of the way and to get some practice with academic discipline and time management

3) make financial support in 2020-2021 (first year away from home) contingent on doing well in classes in #2 above

#2 may clarify his interests less expensively than spending a year exploring away

Edited to add: meanwhile the whole household might benefit from some financial education/awareness raising about budgeting/cost minimization. Maybe the members of the household could divide up responsibilities for investigating ideas to reduce utility costs and grocery bills.

By the time fall 2020 rolls around, the whole household may be in much better financial shape.

[snowman]

Cut son from insurance and get him a catastrophic health plan when he goes to college.

Cutting son from insurance could be a very poor decision. OP needs to cover his young daughter and in most places with which I am familiar, the cost of dependent child coverage (up to age 26) is independent of the number of kids covered on the policy. In other words, costs no more to cover two kids under 26 than one kid.

Definitely not correct, at least not here in Colorado. Speaking from experience - 2 kids, both in college, and some of their friends' families we know. Second kid will get bigger discount than the first one, but will not be free.

Also, insurers will not allow (by law) to cut college kid from family coverage and than add him/her to it during breaks. They will offer annual discount instead, depending on distance from home (2 tiers).

[delamer]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

Sounds like you are on the right track, with the adjustments that have been noted already (unsubsidized loans).

I’d urge you to really track your spending for a couple months to see where there might be leaks in your budget — like eating out, entertainment, clothing — so “try and budget more” becomes “knock 5% off annual spending to contribute toward college.”

Good luck.

[HereToLearn]

Cut son from insurance and get him a catastrophic health plan when he goes to college.

Cutting son from insurance could be a very poor decision. OP needs to cover his young daughter and in most places with which I am familiar, the cost of dependent child coverage (up to age 26) is independent of the number of kids covered on the policy. In other words, costs no more to cover two kids under 26 than one kid.

Definitely not correct, at least not here in Colorado. Speaking from experience - 2 kids, both in college, and some of their friends' families we know. Second kid will get bigger discount than the first one, but will not be free.

Also, insurers will not allow (by law) to cut college kid from family coverage and than add him/her to it during breaks. They will offer annual discount instead, depending on distance from home (2 tiers).

I wonder if this varies by state and/or carrier. My car insurance carrier offered three different options, including one where the children's car was classified as 'in storage', even though it wasn't in storage. I stuck with the most expensive option where student was reported as being more than 100 miles away from home, but I recall being surprised by the other two options.

As to medical...the price he quoted for medical made me think he may be purchasing coverage on the Exchange where I believe there is an additional charge for each person. If that is the case, the university's policy may be less expensive. It was for my student.

[snowman]

What is the rush about going to college.

How about:

1) encourage kid to take a gap year to mature AND earn/save some money towards college expenses

2) possibly take some transferable online classes during that gap working year to get some prerequisites and/or gen ed requirements out of the way and to get some practice with academic discipline and time management

3) make financial support in 2020-2021 (first year away from home) contingent on doing well in classes in #2 above

#2 may clarify his interests less expensively than spending a year exploring away

Edited to add: meanwhile the whole household might benefit from some financial education/awareness raising about budgeting/cost minimization. Maybe the members of the household could divide up responsibilities for investigating ideas to reduce utility costs and grocery bills.

By the time fall 2020 rolls around, the whole household may be in much better financial shape.

This indeed is the most sensible plan, and it's what OP originally planned on doing. Read his previous thread on the subject: viewtopic.php?f=2&t=280416

Problem is his son decided to go to college anyway without talking to his parents first, and presented them with an expense OP did not expect to face this year. So OP is in a tough spot - his priority is to clean up personal finances (which is great), but he cannot in good conscious tell the kid he cannot afford to pay. Hence this thread.

Kid knows his parents are rich, and probably does not understand why paying for one of the cheaper state schools is a problem. Based on all info given to us - and I respect OP for coming back and asking questions and formulating plan going forward - lack of communication, clear expectation setting, discipline, and relationship seem to be bigger problems than money.

[cshell2]

Medical insurance at the university here is actually pretty good and is 2K/year for the student.

[quantAndHold]

The basic plan sounds good. Good job thinking it through.

I want to get back to the utility bills and such. I have never seen a household that has electric AND gas bills of $300 EACH, year round. You really need to investigate where that’s coming from. What are your neighbors’ bills like?

I’m still thinking you could get half of what you need without sacrificing your lifestyle, by going through line items in the budget, and examining them. Figure out why the electric and gas bills are so high. Compare actual mobile phone usage to what plans you’re on, and possibly drop a tier or two. Most people are on a more generous plan than they actually need. Drop the landline, go down a tier (or two) on the internet. Most people are on more expensive internet plans than they actually need as well. If you have cable, drop down to a basic plan. Shop insurance. Unplug the second (and third) fridge. If you start tracking miscellaneous spending, it will most likely go down on its own. Son won’t need a car his first year in college. Sell the third car, and drop him from the car insurance.

I would also pay his room and board in the dorms, but make kid earn his own spending money and pay the interest payments on the loans. This is a good time to teach him about how debt works.

It is also a really good time to explain to him your financial situation, and how someone can get into a position where they make $300k+ per year, and still not have enough money to pay $25k per year for his college. Hiding it from him won’t help either him or you.

The other thing is I would make his staying in college contingent on taking at least 15 hours that are applicable towards graduation every term, and having a 3.0 GPA every term, with no grades below C. If he can’t do that, he doesn’t need to be draining your bank account and running up loans. Sometimes kids need time to mature before they can handle college. If he’s there now, great. If not, working for a year or three may help.

[unclescrooge]

After much thought, think we have a plan.

Pay off Heloc to have more cash flow. (Should be able to pay off before end of year)
Try and budget more and limit vacation to $x amount each year to visit family.
Save up in taxable to the max.
Transfer $ from taxable when needed to 529 to get 4.63% tax credit.
Let child take out max subsidized fed loans. $3500, $4500, $5500, $5500 = $19000. (Skin in the game)
Encourage child to get a job and pay down the loans while in school.
Will do this for both kids as long as they keep good grades.
Cover roughly $80,000 for each kid.
Work an extra 2-3 years to cover retirement deficit.

I think this plan seems reasonable and can be accomplished with minimal pain. Will have to set $s aside for a car replacement at some point though. 20-25k miles a year on the main vehicle and it already has over 100k in 4 years. Won't last forever, but we should get another 3-4 yrs out of it.

ChinchillaWhiplash,

What is your plan if your son took more than 4 years to graduate? 5 years? 6 years? What is your cutoff point?

It is better to get those things out of way now before your son gets caught with another surprise.

<<Cover roughly $80,000 for each kid.>>

Are you going to tell your kids about this?

KlangFool

This is good advice. My FIL it's still providing "outpatient" care to his 40 year old son.

He got into Berkeley to study physics, but somehow ended up becoming a wedding DJ. And now a wedding DJ with a law degree.

At 75, FIL would like to travel more but feels compelled to work part time to support family.

[international001]

Don't you have the moral obligation of providing education to your son? At least considering the (perhaps) imperfect world we live in.
Often, your son gets to pay more because you have more income.
So I'd think he should pay only X, X being if you had 0 income.

[remomnyc]

OP, your plan sounds sound. I would personally ask your son to defer admission for a year, get a job and save toward his expenses. If it's too late for that, then you should proceed with the explicit understanding that (i) he will take out max federal loans, (ii) you will only support four years max of education expense, (iii) each year is contingent on an acceptable GPA, (iv) and he must work and save at least $5k each summer toward his expenses. Now is also a good time to make sure you provide him with some financial education about spending and saving so he gets off to a better financial start. Good luck to both of you.

[MrBobcat]

Don't you have the moral obligation of providing education to your son? At least considering the (perhaps) imperfect world we live in.
Often, your son gets to pay more because you have more income.
So I'd think he should pay only X, X being if you had 0 income.

I don't think it's a moral obligation, more of a personal philosophy. I can understand a parent wanting to do everything for a child to give them a leg up. I can also understand the parent who wants a child to "earn" his own way, it comes with a higher risk of failure but it also comes with potentially greater rewards in self satisfaction with oneself when they succeed.

[ThatGuy]

I've not seen it mentioned, but can your son defer his acceptance for a year? Most schools allow this, and it gives you an extra 12 months to get your finances in order.

Your son could also get a McJob and mature a bit in the intervening 12 months, while still knowing he's going to college.

[niceguy7376]

1. Paying $2300 per month for a HSA eligible plan is very high. I understand that the physician is an independent contractor but cant they get any better policies than this?

2. It is not clear to me about their cell phone bills as well. Did they buy $1200 worth of phones and also pay $250 per month for service?

3. $3000 per month for groceries and clothing is also very high in my mind unless they eat out most of the time.

It looks like the Physician (spouse of the OP) is the one that brings the income but has no clue on how much they are really saving per month. Having $60k worth of student loans even after 10+ years of work is very concerning. Hope that OP can get the family together and share a single piece of paper printout listing the income and expenses of their family. This might help in both the mom and the son to get back to reality.

From a non interested high school grades to Astrophysics to now thinking of doing Ph.D !!!!!

[Herekittykitty]

I've not seen it mentioned, but can your son defer his acceptance for a year? Most schools allow this, and it gives you an extra 12 months to get your finances in order.

Your son could also get a McJob and mature a bit in the intervening 12 months, while still knowing he's going to college.

What a fantastic idea if it can be done!

The family would be getting finances together, and the parents working on getting on the same page financially.

And it would be good for the son, as the son would be benefiting from the McJob by saving money toward his first year education expenses and developing and demonstrating responsibility. And it would give the son a year to consider his goals and what it takes to achieve them. At this point, the parents would not be saying yes to sending a smart kid with horrible grades to school, but neither would they be saying no. Rather they would be giving terms and a time frame to meet those terms at which time should the terms be successfully met, the parents' answer to the son would be yes (for that year, anyway.) They would be engaging the son in the process, with the understanding that once he had spent a year in a McJob and saved a certain amount of money from his earned income toward his first year of university education his parents would make it financially possible for him to attend the university.

I would suggest also that once he gets the specified amount of money from earned income into an account toward his first year university expenses, he use the rest of his earned income that year to fund a Roth IRA for himself. His parents could make that a requirement.

(BTW I have 3 adult kids all of whom have waited tables from when younger than the OP's son's age until well into college. It was good for all of them in many ways, and it didn't kill any of them. They were all happy to do it. )

[ncbill]

48 and 51. 1st year being able to fully fund i401k with $56k, HSA $7k, BD Roth $6k. Built up small EF of $20k. Have spent the last 2 years getting rid of bad debt. Currently have mortgage of $3875 month at 4.5% fixed for another 28 years. Heloc that all extra cash has been thrown at w/$15k left variable currently 6.5% (non- deductable interest). And finally a student loan which we just refinanced with $58k left variable rate at 2.54%. That is all our debt. Income is variable each month but usually have around $2-3k after paying all bills, funding account, etc that has been used to kill the Heloc. As far as retirement funding goes, we have about 1/4 of what would be needed to retire and need to fund a taxable account with at least $50k year for a retirement in about 12-13 years. Just started getting serious about it at the beginning of 2018.

Now to the college funding issues. Have around $30k for oldest kid starting in the fall in a 529. Freshman year requires student to live in dorm in our state. Is one of the "cheaper" state colleges in our state. He is dead set on going here and I do not want to discourage him. He is a GT student that got horrible grades in HS and blew any chance of merit based scholarship. He is getting in because his SAT score was high. Average cost of in state tuition, books, fees, room and board are $25k year. Maximum subsidized/unsubsidized federal student loans are: Freshman $5500, Sophomore $6500, Jr/Sr $7500 a year. Kid has no savings of his own. He always spent every penny on stuff (OCD collector). I do not want him to carry all the load, but think it is in his best interest to take on some responsibility. Not sure we can afford to fill in the gaps. Do not want or plan to take out any private or parent PLUS loans. Hoping he can get a part time job to cover some of this and at least pay off any interest of student loans. Gap will be around $18k year. Hoping costs go down once he can share an apt with room mates or something.

Other issue is we have another child who will be out of HS in 5 yrs. She was diagnosed with learning disabilities, but is getting good grades and works hard. Hoping she will be scholarship elegible. Putting a little bit each month into her 529. We get a state tax break of 4.63%. Can we afford to put in any more? Don't want to neglect our own retirement by doing so, but also want kids to be able to get a good education without suffering too much debt. We left school with a lot of debt and it stinks.

https://www.colorado.gov/pacific/vets/r ... -records-0

Kid can also join ROTC via the Simultaneous Membership Program (SMP) & collect the ROTC stipend once contracted (beginning of sophomore year) plus their Guard pay.

Joining the Guard also gives them access to inexpensive health insurance...IIRC, for one Reservist the Tricare premium is under $50/month.

[international001]

Don't you have the moral obligation of providing education to your son? At least considering the (perhaps) imperfect world we live in.
Often, your son gets to pay more because you have more income.
So I'd think he should pay only X, X being if you had 0 income.

I don't think it's a moral obligation, more of a personal philosophy. I can understand a parent wanting to do everything for a child to give them a leg up. I can also understand the parent who wants a child to "earn" his own way, it comes with a higher risk of failure but it also comes with potentially greater rewards in self satisfaction with oneself when they succeed.

Well, if you want to make it more difficult for your children than it is for a low income child, that's your philosophy and stick with it. You may as well steal from him to teach him a life lesson (incidentally, my grandfather used to -just- explain me the same sort of lesson).

But the discussion here is how much you can help your children vs how much you can help yourself. This is why I set my minimum contribution at student_charge-X

[crre]

First time I've heard of a doctor that couldn't (wouldn't) pay for kids' college.

doctor's daughter here. happened to me and all of my siblings. in our case it was "wouldn't".

[JTColton]

Well, if you want to make it more difficult for your children than it is for a low income child, that's your philosophy and stick with it. You may as well steal from him to teach him a life lesson (incidentally, my grandfather used to -just- explain me the same sort of lesson).

But the discussion here is how much you can help your children vs how much you can help yourself. This is why I set my minimum contribution at student_charge-X

Could you clarify this statement? Do you mean to say that if you don't pay for your children's education that you are stealing from them? Or stealing their future?

[Jack FFR1846]

I have one concrete suggestion to bring in more actual money. Dump the travel reward credit cards. Don't travel. Use a Citi 2% and/or Fidelity 2%. This way, instead of getting travel points which simply make you spend money, you can have that 2% either pay your bill or send a deposit right into your checking account.

To me, it's not all about maximizing "points".....it's about getting cash or credit so you don't have to spend cash on normal spending.

[ChinchillaWhiplash]

I've looked into more options. Community college is out as we do not actually have one that offers college credits within 2 hours 1 way drive from us. There is a satelite university campus 40 min away but not sure if he can get in due to his low GPA. We can do an enrollment deferral and he is on board with delaying until at least the Spring. This leads to another question. What is a reasonable amount to expect him to come up with on his own working from June to Dec? Average pay is $11 an hour. Hard to find full time work here also. Guessing hours would be 25-30 a week max. He will need gas money as nearest town is 20 min drive one way. Next closest is 30 min and only city nearby is 45 min. Thinking he should be able to contribute around $4000-5000, which would leave him with money for taxes and some spending. Does this sound doable?

[GCD]

Without specifics on exactly what towns we are talking about and taking traffic patterns into account, it's hard to say what is reasonable. I just saw an ad in our local free newspaper for laborers at a local landscaping company at $15 per hour (Northern Virginia DC suburbs). No experience, must have a driver's license. The economy is roaring right now and unemployment is real low. From time to time in my life I worked 2-3 jobs to cobble together more than a 40 hour week. I really can't say what is reasonable because you aren't specific about where you live and the job market, like real estate, is highly location dependent. With all that said, I would expect 40 hours a week and cobbling together multiple jobs to make it work. What else does he have to do? Play videogames?

[Watty]

Average pay is $11 an hour. Hard to find full time work here also. Guessing hours would be 25-30 a week max. He will need gas money as nearest town is 20 min drive one way. Next closest is 30 min and only city nearby is 45 min. Thinking he should be able to contribute around $4000-5000, which would leave him with money for taxes and some spending. Does this sound doable?

Nope.

In addition to the car and gas costs you or he would still be paying for things like food, health insurance, dental, higher utilities while he is living at home, clothing, etc so even if he finds a full time job he would be barely breaking even, if that, when you combine the extra costs that both you and he will both be paying.

You would be paying most of those even if he went to college but ideally in four years he will graduate and be self supporting. If you delay him going to college for six months then it might be 4.5 years until he graduates so you will pay for the extra six months of support then.

Some colleges also have a set order of required classes that may not be offered every semester. If he starts in the winter he may be out of step and it may be difficult to schedule all the classes he will need to graduate.

If he delays starting college this fall there is also a significant chance that he would not actually start it in the winter even if he could still get into a college then.

He has a "chance to launch" this fall and sounds excited about it and everything seems to be lined up so I would not interfere with that since there is no dire need to change the plans now.

It was not a very good movie but "Failure to Launch" was a movie about a 30 year old who was still living at home and you really don't want to be in that situation.

https://www.imdb.com/title/tt0427229/

[quantAndHold]

What Watty said. Colleges courses are sequenced to start in the fall. If he starts in the spring, it will probably impact his ability to graduate in four years.

Are you really saying that you can’t come up with the $13k you would need to pay for the first semester? Or that you just don’t want to?

[HomeStretch]

+2

7 months at a low-paying job isn’t going to move the financial “needle” that much. A 6-month delay is going to make college life more difficult for reasons given above and put your son on a different calendar for graduation ceremony, employer recruiting, etc.

[ChinchillaWhiplash]

He would be going in with no major. He just wants credits and to bring up his GPA to go into a program somewhere else. College he is going to does not even offer the major he wants. Also, he will have some college credits from the AP classes he took in HS. He took physics, calc, trig and I think at least one other class that count for college credits. He might already have enough to eliminate a semester. Will push him to take summer classes too to accelerate the process.

[ChinchillaWhiplash]

I have encouraged him to consider the military as an option as well. I think he has some good skill sets. He is into linguistics and is learning Japanese, Russian, and Arabic. Think the Air Force or Army would be a good fit for him.

[Watty]

Will push him to take summer classes too to accelerate the process.

With his track record of poor study skills that would not be a good idea since he would have to do something like 16 weeks of school work in 8 weeks and that might be too much for him.

Many colleges will have additional resources for students that need to develop better study skills so it might be good to help him get those in the fall.

[veindoc]

He would be going in with no major. He just wants credits and to bring up his GPA to go into a program somewhere else. College he is going to does not even offer the major he wants. Also, he will have some college credits from the AP classes he took in HS. He took physics, calc, trig and I think at least one other class that count for college credits. He might already have enough to eliminate a semester. Will push him to take summer classes too to accelerate the process.

What did he get on those AP’s? Most schools require at least a 3 before granting credit. Also if the program he chooses has a number of required classes those APs won’t help.

Also I don’t understand how the state college he got accepted into does not have his major? So is he planning to transfer into another school? If you are struggling to pay for a state school, how are you going to pay for a possible private school? Also transferring into another school might mean he graduates in five not four years.

I was all for your son going to school but he is not ready. What is the point of going to a school that does not have what he wants to study? Essentially he is looking for a do-over from high school but an expensive do-over.

He should not go to college unless he has a real workable plan. This is not it.

[maddogio]

One feature of public higher ed in Colorado is that transferability has been legislated by the state. No matter which public 2 or 4 year college your student attends, there will be a very clear list of courses that will be accepted for transfer credits at all other state universities. It makes planning for transfers quite simple and straightforward relative to other systems with which I've been involved.

There are several paths, here. A useful exercise might be to plan out a few for cost/benefit analyses.

[ChinchillaWhiplash]

My son's biggest issue was that since he did so bad in HS, his acceptance options were extremely limited. He did not even plan on attending a college in the US because he did not think he could get accepted. It is different overseas where they don't look at GPA (at least this is what he believed). The state college he got accepted in has very low entry standards and accepted him due to his 1300+ SAT score. He put himself and us in a bind with lack of planning, loss of opportunity, etc. He is gifted, but is a bit of a perfectionist. If he doesn't think he will be the best, he doesn't even try. It has caused him a lot of problems all through school since grade school. Everything used to come easy to him and he was always put into advance classes. If it is something he is interested in, he learns everything about it on his own. He can tell you everything you want to know about black holes, event horizons, worm holes, etc. Hoping that he really excels once in a higher learning facility. It should open a lot of doors for him if he can get through the core stuff. He knows he has to basically have perfect grades to get into the programs he wants. They all have very high entrance requirements. The language route is his backup plan. He is learning languages on his own because he likes it. He is very capable of doing anything he wants. It's just a matter of him applying himself and doing what is required of the education system to acquire the diploma. So far, that has been hard for him. I'm hoping he will figure it out in college. It will be a lot different than his HS that had a graduating class of 20. Tiny school with minimal resources.

[MtnTraveler]

Community college is out as we do not actually have one that offers college credits within 2 hours 1 way drive from us.

Huh? That makes no sense. Colorado law states that any AA/AS degree obtained at a community college within Colorado will have all credits transfer to a Colorado 4 yr school and acceptance is guaranteed with a decent GPA. That being said it is SUPER easy to get community college credits to transfer as long as you ensure it is not a remedial course and that the class meets a requirement needed for the degree he wants at the school he would like to transfer to. I transferred 100% of my credits obtained at a community college (no degree obtained) 20+ yrs ago and my daughter had no trouble transferring credits for classes she took at a Colorado c.c during high school to Boulder 3 yrs ago.

Learning that your son is hoping to transfer to another school in 1+ yrs you really need to talk to him about how his college GPA will be super important. Otherwise he's up a creek to transfer. Also there is no guarantee that the school he ends up transferring to takes his AP exam scores and allows the credit (I'm not even sure how that works). My daughter was all over the place with where she would go to college and what she would study so I didn't allow her to take AP courses as there is no one-size-fits-all appropriate as to which colleges will take what and whether they'll assign credits to certain scores or just say you don't have to take class x. She took 2 classes at the local community college as a h.s. senior instead of taking the equivalent AP classes but I knew there would be no issue with those c.c. credits being accepted wherever she ended up.

Just a suggestion but there are community colleges in Colorado that have dorms. If your son got an AA or AS at one of those schools his GPA wouldn't matter as long as he met the overall GPA requirements, he'd still get the freedom of being on his own (which may be what he is really excited about anyway), and it would be a LOT cheaper than the 4 yr school he got accepted to. Honestly since he is planning on transferring anyway this might be the best approach cause if he doesn't apply himself you are out a lot less money. Also if you want to PM me please feel free to as I went through this with DD 3 years ago and my child applied all over the place within Colorado (CC and 4 yrs). We even put the program deposit down on a C.C and then DD decided a month before graduation that she wasn't going to go into that profession after all (not happy about that decision but it's her life).

[KandT]

You have posted about a lot of vacation travel in the past two months. Maybe you could look at saving those expenses first.
viewtopic.php?f=11&t=280943&p=4540683#p4540683 5/12
viewtopic.php?f=11&t=278899&p=4495690#p4495690 4/15
viewtopic.php?f=11&t=275669&p=4434461#p4434461 3/13

Ages around 50 with 28-year mortgage, outstanding HELOC, $58K in existing student loans, and multiple international trips in one year.

This reminds me of a favorite saying from Paula Pant the host of "Afford Anything". You can afford anything but not EVERYTHING. This looks to me like a life long problem of discipline. The money is there but you have chosen to spend it other ways. No judgement but if you make $100K a year and you want an exotic sports car you CAN have it. You just cant have anything else. You can't vacation your way around the world and then have an awesome retirement and pay for kids college and pay your own debts.

Maybe throw a boat and RV in there to tow it as well!!

[maddogio]

.... I'm hoping he will figure it out in college. It will be a lot different than his HS that had a graduating class of 20. Tiny school with minimal resources.

Most remote schools with 20 students/graduating class don't have the AP options you describe. Many of his classmates will have had fewer resources than he's had.

[KandT]

Everything used to come easy to him and he was always put into advance classes. I

So this may be an issue with many boglehead's kids. I had the gift of watching my HS class valedictorian fail out of college. He was my roommate and I had a front row seat.

1) He had never learned to study OR work.
2) He was being given a free ride and had no skin in the game.

My kid is incredible with math and science. All I can see every time he slacks off is this valedictorian sitting in our dorm room playing video games. So I pushed and pushed the school until now he is challenged. He failed some tests this year and I loved it! But his last and hardest math test he got a 98%. I told him the same thing I told him at the beginning of the year. "This year isn't about math. It's about learning to work and study. Don't worry about the grades but work and study and I will never have a problem with any grade you bring home if you have prepared for the test." Lots of stumbles along the way but he finally got it this year. He is in 7th grade and taking advanced Geometry - but the was skipped ahead so should really be in 6th grade.

It is worth noting that I don't ask him to do more than a typical 7th grader should. He only needs to do 1/2 to 45 minutes of homework a night.

[ChinchillaWhiplash]

I misspoke on CC. It is a technical college with study in things like dental tech, auto mechanic, law enforcement, nail tech, barber, etc. We are not near a real city. Closest city with a mall is 2 hours away. We are in a remote area for sure. 1 stop light in a 30 mile radius. Can drive 3 hours before seeing another one.

Not cutting out vacation as it is a top priority for my wife. She can be a bit irrational. It has taken baby steps to get there to buckle down on finances. She just didn't care if we ran up more debt before. At least now we save up cash to pay for the trips before going. We used our rewards points and got round trip air fare from CO to Portugal for 3 for $1350 total. Used a Marriott card to get several nights free. I just got these cards a few months ago and just put all of our regular expenses on it I can. Pay them off each month and never carry a balance. It seems like a logical way to have vacations for a low cost. Travel card give 2% back for all purchases and can be redeemed for any travel related expense. Marriott card give 1 free night up to 35000 point a year, 5th night free, and 6x points for rooms reserved at Marriott properties. We just need to be careful with spending when eating and not buy anything we don't need. She is worried that we could die tomorrow and we have never really been anywhere. Like I said before, all our previous trips were generally to visit immediate family that can't or won't visit us. I never have been out of the country until we took a caribbean cruise last year at 50. That was basically my 50th birthday gift and I usually get nothing. She has the travel bug. I just need to keep her in check.

[niceguy7376]

She is worried that we could die tomorrow and we have never really been anywhere.

If she applies that rule to real life, what does she think she accomplished or she will leave to the kids?

I feel that it is still a life style change for the whole family that will bring the best result. In the meantime, you just need to nudge your son a bit more about reality