Parents vs. Kids Paying for College

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Halicar
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Re: Parents vs. Kids Paying for College

Post by Halicar »

BlueCable wrote: Wed Jan 01, 2020 11:21 am
Halicar wrote: Wed Jan 01, 2020 9:45 am
pharmermummles wrote: Wed Jan 01, 2020 4:28 am We would like to help him out, but our retirement will be coming first.
Well, since you asked, I find this shockingly selfish. I can't even imagine saying that about my son.
What would be worse: making your kids pay for their own college, or your retirement?
Never in a million years would I expect my son to pay for my retirement. As the saying goes, retirement is a financial state, not an age.
KlangFool
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Re: Parents vs. Kids Paying for College

Post by KlangFool »

Halicar wrote: Wed Jan 01, 2020 11:54 am
BlueCable wrote: Wed Jan 01, 2020 11:21 am
Halicar wrote: Wed Jan 01, 2020 9:45 am
pharmermummles wrote: Wed Jan 01, 2020 4:28 am We would like to help him out, but our retirement will be coming first.
Well, since you asked, I find this shockingly selfish. I can't even imagine saying that about my son.
What would be worse: making your kids pay for their own college, or your retirement?
Never in a million years would I expect my son to pay for my retirement. As the saying goes, retirement is a financial state, not an age.
Halicar,

And, the reason why you say this is:

A) Your retirement is fully-funded.

B) You have excellent job security and you will not be permanently unemployed or underemployed in your 40s and 50s.

C) You will not be unemployed during the coming recessions over the next 10 to 20 years.

Please let us know. Essentially, you are saying that it is impossible for you to be involuntarily unemployed. Why do you believe this to be true?

I had been through Houston Oil Bust, Texas Saving & Loan Crisis, Asian Currency Crisis, Telecom Bust, and the 2008/2009 recession over the past 30+ years. In every recession, there will be plenty of people that used to believe they had job security until they are unemployed.

KlangFool
theplayer11
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Re: Parents vs. Kids Paying for College

Post by theplayer11 »

We brought our children into this world(they didn't have a choice)..so I feel it is our responsibility to educate them to the best of our ability. For us, that meant starting a 529 plan early and funding it yearly. $5k a year for 20 years at 7% is $200k. I'm sure anyone with a decent income can afford to save an extra $5k a year.
We did not want our children to start off with much debt. Child 1 received his BS degree from a private school and we were able to fund his entire education.. Child 2 received her master's and we had enough saved to fund her entire education except for $20k...which she will pay us back at $1k a month interest free.
SC Anteater
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Re: Parents vs. Kids Paying for College

Post by SC Anteater »

theplayer11 wrote: Wed Jan 01, 2020 12:11 pm We brought our children into this world(they didn't have a choice)..so I feel it is our responsibility to educate them to the best of our ability. For us, that meant starting a 529 plan early and funding it yearly. $5k a year for 20 years at 7% is $200k. I'm sure anyone with a decent income can afford to save an extra $5k a year.
We did not want our children to start off with much debt. Child 1 received his BS degree from a private school and we were able to fund his entire education.. Child 2 received her master's and we had enough saved to fund her entire education except for $20k...which she will pay us back at $1k a month interest free.
Most people can't save $1000 for an emergency fund. They can't save $5K a year.

As I mentioned, when my kids were 5 and under, we had exactly $100 room in our monthly budget. It wasn't until they were in their teen years that we really had a lot of money left over to save. We always funded our retirement, but there wasn't much room for a lot else.
stoptothink
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Re: Parents vs. Kids Paying for College

Post by stoptothink »

SC Anteater wrote: Wed Jan 01, 2020 12:18 pm
theplayer11 wrote: Wed Jan 01, 2020 12:11 pm We brought our children into this world(they didn't have a choice)..so I feel it is our responsibility to educate them to the best of our ability. For us, that meant starting a 529 plan early and funding it yearly. $5k a year for 20 years at 7% is $200k. I'm sure anyone with a decent income can afford to save an extra $5k a year.
We did not want our children to start off with much debt. Child 1 received his BS degree from a private school and we were able to fund his entire education.. Child 2 received her master's and we had enough saved to fund her entire education except for $20k...which she will pay us back at $1k a month interest free.
Most people can't save $1000 for an emergency fund. They can't save $5K a year.

As I mentioned, when my kids were 5 and under, we had exactly $100 room in our monthly budget. It wasn't until they were in their teen years that we really had a lot of money left over to save. We always funded our retirement, but there wasn't much room for a lot else.
Exactly. The reality is, for most families, it really is a decision between saving something and helping to fund children's university education (in many many cases, by co-signing loans or taking out loans themselves). It is mutually exclusive. For most of us here, it isn't.
flaccidsteele
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Re: Parents vs. Kids Paying for College

Post by flaccidsteele »

cshell2 wrote: Wed Jan 01, 2020 10:38 am I mean, right now my son is in a private high school. I pay his tuition and he doesn't have to pay for food or books or rent yet he's pulled straight A's the past 2 years. Not sure why he'll all of a sudden change in 8 months when it's college. Well...actually it might. The kid pulls straight A's without having to study now, so college is probably going to be a shock to the system and he's going to have to learn time management and good study habits to continue to be successful. However, the bank of mom is not going to keep cranking out money if he doesn't progress.
I pulled straight A’s all through high school. Highest I got was 4th highest grade in the school (they listed the top 10)

I still failed in university. Didn’t care either. It wasn’t my money
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
theplayer11
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Re: Parents vs. Kids Paying for College

Post by theplayer11 »

stoptothink wrote: Wed Jan 01, 2020 12:27 pm
SC Anteater wrote: Wed Jan 01, 2020 12:18 pm
theplayer11 wrote: Wed Jan 01, 2020 12:11 pm We brought our children into this world(they didn't have a choice)..so I feel it is our responsibility to educate them to the best of our ability. For us, that meant starting a 529 plan early and funding it yearly. $5k a year for 20 years at 7% is $200k. I'm sure anyone with a decent income can afford to save an extra $5k a year.
We did not want our children to start off with much debt. Child 1 received his BS degree from a private school and we were able to fund his entire education.. Child 2 received her master's and we had enough saved to fund her entire education except for $20k...which she will pay us back at $1k a month interest free.
Most people can't save $1000 for an emergency fund. They can't save $5K a year.

As I mentioned, when my kids were 5 and under, we had exactly $100 room in our monthly budget. It wasn't until they were in their teen years that we really had a lot of money left over to save. We always funded our retirement, but there wasn't much room for a lot else.
Exactly. The reality is, for most families, it really is a decision between saving something and helping to fund children's university education (in many many cases, by co-signing loans or taking out loans themselves). It is mutually exclusive. For most of us here, it isn't.
I think most families could save more if it was a priority. Many waste too much of their incomes on things they don't need..but for each their own.
Dandy
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Re: Parents vs. Kids Paying for College

Post by Dandy »

There are good arguments on both sides --a lot depends on individual circumstances. Just curious if High School wasn't paid for by your taxes and attendance wasn't legally required up to a certain age - would those who don't feel much obligation to pay for or help out for college -- feel the same way for High School?

Is it college, the child's age? or is it any education? I just feel that at one time High School was pretty much most all needed to be reasonably successful. Don't see that as much today. Maybe tech oriented High Schools and/or Junior collleges are part of the answer/solution.

Besides culture and other reasons we have several things pressuring parents and children. Parents have less job security and fewer assurances of employment and work related retirement benefits like pension and health insurance will be there when they retire. Children are feeling the need for more than a High School degree and fear the prospect of being overwhelmed with student debt. On top of that college which was once reasonably affordable now seems to be a massive investment -- with an uncertain return.

Yet many seem to feel that a highly educated population is critical for our country's prosperity going forward. It seems as if "the richest country in the world" would have some better answers.
SC Anteater
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Re: Parents vs. Kids Paying for College

Post by SC Anteater »

I told my kids in-state school were the only option. My D applied to one private but I told her she'd need a half tuition scholarship to make it possible. That didn't happen so they're both at state schools.

We had about $100 wiggle room in our budget when they were little so there wasn't any of this 'contribute $10k to their 529 on the day they were born' stuff. We contributed $50 a month. This ended up being about $18k when they started school. They are taking the subsidized fed loans and we're cashflowing the rest.

The liberal arts major works 9 hours a week. The engineering major doesn't have time to work but is more frugal and had more saved to start.

It's working out so far. They're in their second year and we are still saving for retirement.
Halicar
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Re: Parents vs. Kids Paying for College

Post by Halicar »

KlangFool wrote: Wed Jan 01, 2020 12:03 pmEssentially, you are saying that it is impossible for you to be involuntarily unemployed. Why do you believe this to be true?
I was responding to a comment about retirement. Involuntary unemployment is a completely different topic. That said, I would not expect my son to support me in that situation either.
Ocean77
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Re: Parents vs. Kids Paying for College

Post by Ocean77 »

We plan to pay 100% of our kids college. My parents did the same for me, so it is kind of a tradition. I actually took out student loans every year. But on the day I graduated, my parents payed off all my loans. They had not told me ahead of time, so I still had the incentive to be "efficient" with my time and expenses at college. I plan to do the same for our kids.

Now, it will cost a lot to pay for college. But we save > 50% of our income, so there is enough for both retirement and college. We have a good income, but live in a modest condo, and both our cars are more than 13 years old. No mortgage, no debt. And we're happy.
theplayer11
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Re: Parents vs. Kids Paying for College

Post by theplayer11 »

Ocean77 wrote: Wed Jan 01, 2020 12:43 pm We plan to pay 100% of our kids college. My parents did the same for me, so it is kind of a tradition. I actually took out student loans every year. But on the day I graduated, my parents payed off all my loans. They had not told me ahead of time, so I still had the incentive to be "efficient" with my time and expenses at college. I plan to do the same for our kids.

Now, it will cost a lot to pay for college. But we save > 50% of our income, so there is enough for both retirement and college. We have a good income, but live in a modest condo, and both our cars are more than 13 years old. No mortgage, no debt. And we're happy.
I think many have that mentality. If their education was paid for by their parents, then they want to do same for their own kids..and those that had to pay their own way believe their kids should as well.
cshell2
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Re: Parents vs. Kids Paying for College

Post by cshell2 »

I think people get too hung up on the total cost and panic. I think that's where OP is. The "OMG, how can I save for college and retirement and a house down payment"? It doesn't have to be either/or. When my oldest son was born all the calculators were saying I'd need to save like $400-$500/month...or probably more (can't remember). I decided I could afford $100/month. I set it on auto contribute and in 17 years never waivered from that amount. He has 35K in that account now. Not a fortune, but enough to pay 100% tuition and fees for 4 years at the local university, and a lot more than most kids have set aside for them for college. Turns out his grandfather was also putting away $100/month, and he landed a lot of scholarships at the schools he applied to. If the kid plays his cards right and finishes in 4 he could end up with money left over. :sharebeer
Grt2bOutdoors
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Re: Parents vs. Kids Paying for College

Post by Grt2bOutdoors »

SQRT wrote: Wed Jan 01, 2020 10:48 am
My personal view is that the value of hardship is overrated, but it depends on the child. If you think paying for an education will “spoil” your child, don’t do it. I don’t really see how graduating with a lot of student debt will enhance a person’s character but maybe sometimes?
+1. I don't understand this "skin in the game" intentional burden put upon a child. Yes, a child, they are not adults in the true sense of the word until they are old enough to drink and in most cases, smoke now. Most kids today understand the hardships of life, they are quite observant taking it all in. If you have the means today, what is the cost of allocating some percentage of those means to advanced schooling in the future for your offspring. Having the means, enables you to change your family tree for better, who intentionally wants to place burdens on the future success of their family? Why have kids then? Spoiling is giving materials goods, an education is an intellectual gift - what does Ben Franklin say "An education pays the best interest"?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Wanderingwheelz
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Re: Parents vs. Kids Paying for College

Post by Wanderingwheelz »

Ocean77 wrote: Wed Jan 01, 2020 12:43 pm We plan to pay 100% of our kids college. My parents did the same for me, so it is kind of a tradition. I actually took out student loans every year. But on the day I graduated, my parents payed off all my loans. They had not told me ahead of time, so I still had the incentive to be "efficient" with my time and expenses at college. I plan to do the same for our kids.

Now, it will cost a lot to pay for college. But we save > 50% of our income, so there is enough for both retirement and college. We have a good income, but live in a modest condo, and both our cars are more than 13 years old. No mortgage, no debt. And we're happy.
My wife and I were well prepared to cover 100% of the expenses associated with college when our oldest was finally ready to start. Unbeknownst to me so were my parents. So, with only one semester left until she graduates, she’s paid nothing and my wife and I have paid very little out of what we had set aside to educate her. My folks have paid for essentially all of it, figuring it was best to educate their grandkids than leave money in their estate for their three grown children, each of whom are doing well on their own.
cshell2
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Re: Parents vs. Kids Paying for College

Post by cshell2 »

Halicar wrote: Wed Jan 01, 2020 11:54 am
BlueCable wrote: Wed Jan 01, 2020 11:21 am
Halicar wrote: Wed Jan 01, 2020 9:45 am
pharmermummles wrote: Wed Jan 01, 2020 4:28 am We would like to help him out, but our retirement will be coming first.
Well, since you asked, I find this shockingly selfish. I can't even imagine saying that about my son.
What would be worse: making your kids pay for their own college, or your retirement?
Never in a million years would I expect my son to pay for my retirement. As the saying goes, retirement is a financial state, not an age.
I'm guessing you are set for retirement then.

Also, you might not expect them to, but it's kind of hard for a kid to turn their back on a parent in financial distress. They're most likely going to help you whether you expect them to or not and if you refuse they're just going to be all stressed out worrying about their parent on the verge of losing their house or not getting adequate care because they can't afford it.
KlangFool
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Re: Parents vs. Kids Paying for College

Post by KlangFool »

Halicar wrote: Wed Jan 01, 2020 12:42 pm
KlangFool wrote: Wed Jan 01, 2020 12:03 pmEssentially, you are saying that it is impossible for you to be involuntarily unemployed. Why do you believe this to be true?
I was responding to a comment about retirement. Involuntary unemployment is a completely different topic. That said, I would not expect my son to support me in that situation either.
Halicar,

Just for the complete understanding of your stand.

A) If you are involuntarily unemployed, would you still pay for your kids' college education?

B) If you need money to pay your mortgage and feed your family, would you take money out of the 529 to pay the bills?

<<I was responding to a comment about retirement. Involuntary unemployment is a completely different topic.>>

In my opinion, it is the same topic. Unless you predict your own future, how would you know that you would not be involuntary unemployed? Aka, normal retirement is not possible for you.

KlangFool
KlangFool
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Re: Parents vs. Kids Paying for College

Post by KlangFool »

SC Anteater wrote: Wed Jan 01, 2020 12:18 pm
theplayer11 wrote: Wed Jan 01, 2020 12:11 pm We brought our children into this world(they didn't have a choice)..so I feel it is our responsibility to educate them to the best of our ability. For us, that meant starting a 529 plan early and funding it yearly. $5k a year for 20 years at 7% is $200k. I'm sure anyone with a decent income can afford to save an extra $5k a year.
We did not want our children to start off with much debt. Child 1 received his BS degree from a private school and we were able to fund his entire education.. Child 2 received her master's and we had enough saved to fund her entire education except for $20k...which she will pay us back at $1k a month interest free.
Most people can't save $1000 for an emergency fund. They can't save $5K a year.

As I mentioned, when my kids were 5 and under, we had exactly $100 room in our monthly budget. It wasn't until they were in their teen years that we really had a lot of money left over to save. We always funded our retirement, but there wasn't much room for a lot else.
SC Anteater,

+1,000.

KlangFool
theplayer11
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Re: Parents vs. Kids Paying for College

Post by theplayer11 »

SC Anteater wrote: Wed Jan 01, 2020 12:18 pm
theplayer11 wrote: Wed Jan 01, 2020 12:11 pm We brought our children into this world(they didn't have a choice)..so I feel it is our responsibility to educate them to the best of our ability. For us, that meant starting a 529 plan early and funding it yearly. $5k a year for 20 years at 7% is $200k. I'm sure anyone with a decent income can afford to save an extra $5k a year.
We did not want our children to start off with much debt. Child 1 received his BS degree from a private school and we were able to fund his entire education.. Child 2 received her master's and we had enough saved to fund her entire education except for $20k...which she will pay us back at $1k a month interest free.
Most people can't save $1000 for an emergency fund. They can't save $5K a year.

As I mentioned, when my kids were 5 and under, we had exactly $100 room in our monthly budget. It wasn't until they were in their teen years that we really had a lot of money left over to save. We always funded our retirement, but there wasn't much room for a lot else.
people are having kids much later than past generations, meaning they are more established in their careers and should have the ability to save more for their education.
cshell2
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Re: Parents vs. Kids Paying for College

Post by cshell2 »

Grt2bOutdoors wrote: Wed Jan 01, 2020 12:55 pm
SQRT wrote: Wed Jan 01, 2020 10:48 am
My personal view is that the value of hardship is overrated, but it depends on the child. If you think paying for an education will “spoil” your child, don’t do it. I don’t really see how graduating with a lot of student debt will enhance a person’s character but maybe sometimes?
+1. I don't understand this "skin in the game" intentional burden put upon a child. Yes, a child, they are not adults in the true sense of the word until they are old enough to drink and in most cases, smoke now. Most kids today understand the hardships of life, they are quite observant taking it all in. If you have the means today, what is the cost of allocating some percentage of those means to advanced schooling in the future for your offspring. Having the means, enables you to change your family tree for better, who intentionally wants to place burdens on the future success of their family? Why have kids then? Spoiling is giving materials goods, an education is an intellectual gift - what does Ben Franklin say "An education pays the best interest"?
The only "skin in the game" I expect my son to carry is to cover his personal expenses while in school. All the college cost of attendance calculators include a line item of 2-4K for this and I find it mostly unnecessary. If they have all their needs met with food, shelter, and tuition what is this $300-$400/month for? He can stock up on toiletries at home. I do not want to be paying for pizza delivery and Starbucks when he has an unlimited meal plan, nor do I want to be footing the bill to go to concerts and other paid entertainment while in school. But really, it's not like they have to work much to cover this. DS works 8 hours a week while in high school and saves half his pay for college and this summer he will work a lot more hours to bank funds. I'm guessing he has several thousand in his savings by then and can just work summers every year to refill it. Or maybe 5-10 hours a week in an on campus job.
cshell2
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Re: Parents vs. Kids Paying for College

Post by cshell2 »

flaccidsteele wrote: Wed Jan 01, 2020 12:32 pm
cshell2 wrote: Wed Jan 01, 2020 10:38 am I mean, right now my son is in a private high school. I pay his tuition and he doesn't have to pay for food or books or rent yet he's pulled straight A's the past 2 years. Not sure why he'll all of a sudden change in 8 months when it's college. Well...actually it might. The kid pulls straight A's without having to study now, so college is probably going to be a shock to the system and he's going to have to learn time management and good study habits to continue to be successful. However, the bank of mom is not going to keep cranking out money if he doesn't progress.
I pulled straight A’s all through high school. Highest I got was 4th highest grade in the school (they listed the top 10)

I still failed in university. Didn’t care either. It wasn’t my money
[OT comment removed by admin LadyGeek] :? My son knows how hard I've worked as a single mom and is very appreciative of everything he's given.

But, half of the college savings IS his money as it's in an UTMA.
Grt2bOutdoors
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Re: Parents vs. Kids Paying for College

Post by Grt2bOutdoors »

cshell2 wrote: Wed Jan 01, 2020 1:07 pm
Grt2bOutdoors wrote: Wed Jan 01, 2020 12:55 pm
SQRT wrote: Wed Jan 01, 2020 10:48 am
My personal view is that the value of hardship is overrated, but it depends on the child. If you think paying for an education will “spoil” your child, don’t do it. I don’t really see how graduating with a lot of student debt will enhance a person’s character but maybe sometimes?
+1. I don't understand this "skin in the game" intentional burden put upon a child. Yes, a child, they are not adults in the true sense of the word until they are old enough to drink and in most cases, smoke now. Most kids today understand the hardships of life, they are quite observant taking it all in. If you have the means today, what is the cost of allocating some percentage of those means to advanced schooling in the future for your offspring. Having the means, enables you to change your family tree for better, who intentionally wants to place burdens on the future success of their family? Why have kids then? Spoiling is giving materials goods, an education is an intellectual gift - what does Ben Franklin say "An education pays the best interest"?
The only "skin in the game" I expect my son to carry is to cover his personal expenses while in school. All the college cost of attendance calculators include a line item of 2-4K for this and I find it mostly unnecessary. If they have all their needs met with food, shelter, and tuition what is this $300-$400/month for? He can stock up on toiletries at home. I do not want to be paying for pizza delivery and Starbucks when he has an unlimited meal plan, nor do I want to be footing the bill to go to concerts and other paid entertainment while in school. But really, it's not like they have to work much to cover this. DS works 8 hours a week while in high school and saves half his pay for college and this summer he will work a lot more hours to bank funds. I'm guessing he has several thousand in his savings by then and can just work summers every year to refill it. Or maybe 5-10 hours a week in an on campus job.
That is reasonable. There are others who make IMO unreasonable demands - thou shall take out student loans as did I in my uninformed youth. There is a big difference is $2-$4K as compared to taking out $100K in loans with no direction or concept of careers, personal budget, future income potential all due to this "skin in the game" prescription.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
oldfatguy
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Re: Parents vs. Kids Paying for College

Post by oldfatguy »

Dandy wrote: Wed Jan 01, 2020 12:36 pm There are good arguments on both sides --a lot depends on individual circumstances. Just curious if High School wasn't paid for by your taxes and attendance wasn't legally required up to a certain age - would those who don't feel much obligation to pay for or help out for college -- feel the same way for High School?

Is it college, the child's age? or is it any education?
For me, the difference is age. College students are (nearly always) adults. I don't think that should preclude parents from helping their kids pay for college, but that it why I do not think of it as an obligation.
oldfatguy
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Re: Parents vs. Kids Paying for College

Post by oldfatguy »

theplayer11 wrote: Wed Jan 01, 2020 1:06 pm
people are having kids much later than past generations, meaning they are more established in their careers and should have the ability to save more for their education.
Saving enough to fund a college education (or more than one) just isn't realistic for the majority of workers in the US, who are not high income earners.
Many of us can't even afford to adequately fund our own retirement savings.
User avatar
TomatoTomahto
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Re: Parents vs. Kids Paying for College

Post by TomatoTomahto »

oldfatguy wrote: Wed Jan 01, 2020 1:44 pm
theplayer11 wrote: Wed Jan 01, 2020 1:06 pm
people are having kids much later than past generations, meaning they are more established in their careers and should have the ability to save more for their education.
Saving enough to fund a college education (or more than one) just isn't realistic for the majority of workers in the US, who are not high income earners.
Many of us can't even afford to adequately fund our own retirement savings.
And that I understand completely. What I don’t understand is the well off ones who hide their selfishness behind a smokescreen of tough love or “skin in the game.”

My father came to this country, penniless, 50 years old and not speaking English. He put his kids through college. We knew that we’d put our kids through college, back when our financial situation was much more precarious than it has subsequently turned out.
Okay, I get it; I won't be political or controversial. The Earth is flat.
MathWizard
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Re: Parents vs. Kids Paying for College

Post by MathWizard »

My family did not and could not help pay for college, but then though it seemed really expensive then, more financial aid was available per person, partly because fewer people were going to college, and state aid was a higher percentage of the cost.

If the EFC is high, the ability of the student to get aid is greatly lessened.

Personally,I felt that it was responsibility to set them up for success to the best of my ability.

We agreed to pay for entire cost except spending money which they would earn from summer jobs if they went to the land grant in the state,in our home town, and they could stay in our basement and eat at home. They had a back door 3 bedrooms, a bathroom, a fridge and microwave downstairs and could treat it like some
"apartments" in our town.

If they wanted to stay on campus or in an apartment,any scholarships were theirs to use for that. If we paid less than tuition fees books, etc. This was theirs for grad school if they wanted.

Our cost ended up being a little under $100K for the two kids together.

The younger ended up with no debt and the older paid off $23K in loans in 4 his first years out.
SimonJester
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Re: Parents vs. Kids Paying for College

Post by SimonJester »

TomatoTomahto wrote: Wed Jan 01, 2020 8:33 am
Jack FFR1846 wrote: Wed Jan 01, 2020 8:05 am
Old_Dollar wrote: Wed Jan 01, 2020 5:15 am Anyone can get a loan for University.
I hear this often here. Besides Stafford, what loans do you think students can take WITHOUT A COSIGNER?
Yeah, I think the availability of those loans rises to the level of Great Urban Myth.
If things stay the way they are right now, many will be very surprised to find most "financial aid" in the form of loans offered as a Parent Plus loan. Both of my kids are offered a few thousand $3-4K as direct loans they could take out and we were offered tens of thousands more then the cost of college in the form of parent plus loans.
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Re: Parents vs. Kids Paying for College

Post by scubadiver »

We are planning fully cover our children's undergraduate college education at one of our state's four year public institutions. Graduate education, should they pursue it, is on them.
TomatoTomahto wrote: Wed Jan 01, 2020 1:57 pm And that I understand completely. What I don’t understand is the well off ones who hide their selfishness behind a smokescreen of tough love or “skin in the game.”
We don't share the tough love mindset with respect to funding college. That said, it's a perfectly legitimate position that can be taken from a position of love for one's children. I don't see how assigning such a negative intent to a position you disagree with advances a civil discussion.
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Re: Parents vs. Kids Paying for College

Post by flaccidsteele »

theplayer11 wrote: Wed Jan 01, 2020 12:48 pm I think many have that mentality. If their education was paid for by their parents, then they want to do same for their own kids..and those that had to pay their own way believe their kids should as well.
Or like my sibling and I. Our education was paid for by our parents and I saw how little we valued it when it wasn’t our money

I had a good time tho. All in my parents dime. I thank them for the experience

To this day, I continue to believe university to be over-rated
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Re: Parents vs. Kids Paying for College

Post by Grt2bOutdoors »

flaccidsteele wrote: Wed Jan 01, 2020 2:32 pm
theplayer11 wrote: Wed Jan 01, 2020 12:48 pm I think many have that mentality. If their education was paid for by their parents, then they want to do same for their own kids..and those that had to pay their own way believe their kids should as well.
Or like my sibling and I. Our education was paid for by our parents and I saw how little we valued it when it wasn’t our money

I had a good time tho. All in my parents dime. I thank them for the experience

To this day, I continue to believe university to be over-rated
So then your own personal physician graduated from the school of “hard knocks”? How about your tooth cleaner/puller?
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Re: Parents vs. Kids Paying for College

Post by TomatoTomahto »

scubadiver wrote: Wed Jan 01, 2020 2:30 pm We don't share the tough love mindset with respect to funding college. That said, it's a perfectly legitimate position that can be taken from a position of love for one's children. I don't see how assigning such a negative intent to a position you disagree with advances a civil discussion.
I am sorry that we disagree on this. I am afraid that I feel strongly that the message sent to one’s kids that see one vacationing, driving flash cars, buying lots of affluenza toys, and then citing tough love when it comes to paying for education is not one of a “legitimate position of love.”

I’m not opposed to tough love in certain circumstances (eg, substance abuse issues), but I don’t consider it appropriate when applied to eager hard-working students.
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Re: Parents vs. Kids Paying for College

Post by Nate79 »

In my experience college student age kids do not understand debt and treat it as free money without any repercussions. Working and spending the money that they have earned themselves is something they actually understand. Skin in the game is opposite of taking out student loans. Skin in the game is working and paying for as much college cost as they can with parents supporting the remainder to leave college debt free.

I will not participate in the stupidity of student loans and will make sure my child learns the value of money, hard work, and not student loans. If parents and the student can't figure out a way to pay for college without debt it is something they can't afford. There is always a way to get thru college debt free. Maybe not every college will be possible and maybe not the easy way.
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Re: Parents vs. Kids Paying for College

Post by KlangFool »

Folks,

Whatever you choose to do, please do not do the following:

A) The parent paid for the daughter to go to one of the expensive universities.

B) In year 3, the parent lost his job and can no longer pay for a college education.

C) The daughter wanted to transfer to a cheaper school and earn a degree without debt.

D) The parent insisted that the daughter took a student loan and finish the degree at the expensive school even though they are not paying.

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Re: Parents vs. Kids Paying for College

Post by Pdxnative »

OP, Most parents don’t need to settle the moral obligation question. They WANT to help their kids in life to the extent possible. In your case, yes it’s perfectly reasonable to make sure your retirement is funded and to buy a home that works for your family. But if you’re doing those things early in life you’re almost certainly going to find it possible to also save something for college.

People get terrified by the big numbers so it’s better to start small. Maybe start putting $50-100/month aside. Sometime in the next few years set a reasonable goal: something like funding 1/3 of the state flagship cost by age 18. Figure out the monthly savings needed and as your income rises, increase the monthly college savings. If you get a large bonus one year, put a portion of it in the college fund. Pretty soon you’ll be on target. At age 5 or whenever, reassess the goal and adjust monthly savings accordingly. Same at age 10, etc. None of this needs to be in a 529 but some of it could be.

If your child turns 18 and you still want him to take out loans, YOU can be the bank. Chances are you’re going to be glad you saved something. And unless something has gone awry, you’re probably in good shape for retirement also.
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Re: Parents vs. Kids Paying for College

Post by Grt2bOutdoors »

Nate79 wrote: Wed Jan 01, 2020 2:47 pm In my experience college student age kids do not understand debt and treat it as free money without any repercussions. Working and spending the money that they have earned themselves is something they actually understand. Skin in the game is opposite of taking out student loans. Skin in the game is working and paying for as much college cost as they can with parents supporting the remainder to leave college debt free.

I will not participate in the stupidity of student loans and will make sure my child learns the value of money, hard work, and not student loans. If parents and the student can't figure out a way to pay for college without debt it is something they can't afford. There is always a way to get thru college debt free. Maybe not every college will be possible and maybe not the easy way.
How about the frivolous spending of resources to the detriment of the family unit? That is the point many of us posting about “skin in the game” excuses are talking about. Is it necessary to eat out twice a week? How about taking a car loan for $50k at terms of 5-7 years? How about the car fleece? Then the parents claim they can’t afford college. That is the biggest travesty. Which is worse? Student loans or prolific and uncontrolled spending.
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Re: Parents vs. Kids Paying for College

Post by Xrayman69 »

Halicar wrote: Wed Jan 01, 2020 11:54 am
BlueCable wrote: Wed Jan 01, 2020 11:21 am
Halicar wrote: Wed Jan 01, 2020 9:45 am
pharmermummles wrote: Wed Jan 01, 2020 4:28 am We would like to help him out, but our retirement will be coming first.
Well, since you asked, I find this shockingly selfish. I can't even imagine saying that about my son.
What would be worse: making your kids pay for their own college, or your retirement?
Never in a million years would I expect my son to pay for my retirement. As the saying goes, retirement is a financial state, not an age.
I have a relative (BIL) who is not the most astute financially savvy individual. I would actually call him and his spouse highly functional idiots who were caught up in the “obligation” of paying for the kids college education.

The kid by all metrics was average. Did not qualify for our Major state university and thus went to a “major” university in an adjacent state and had to pay out of state tuition. Parents wanted the “pride” of going to a “major” university as opposed to doing time in a community college or alternative in state university.

They divested from their 401k’s each year to pay for tuition and off campus apartment for the kid. The kid couldn’t even live in The dorm to save them money because it had other people. 200K in tuition and probably another 150k in living expenses. They now have lost on the value of being in the market for 4 years as well as had to pay the penalty and put them in a higher tax bracket every year.

The kid graduated 4 years ago and still doesn’t have a “real” job. Lived at home for 2 years and now they have to pay for his apartment just to get him out.

They are now both in their 50’s and I suspect the self imposed sense of “obligation” and false appearance they wanted to portray in funding their kids college is likely deemed a bad investment with little if any ROI. He will not be able to provide them with any support in the future both financial or emotionally when the time arises. I have mad it absolutely clear to my wife that her brotherS situation will NEVER affect my family or my child’s resources.

There is risk in taking money out of your retirement needs as a means to “keep up with the Jone’s”
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Re: Parents vs. Kids Paying for College

Post by Normchad »

probably not mentioned enough, but military service can be an amazing thing. Lots of training in the military, and of course, lots of benefits helpful to getting a college degree. There are no “one size fits all” answers, but military service is a great option for a lot of people.
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Re: Parents vs. Kids Paying for College

Post by Watty »

flaccidsteele wrote: Wed Jan 01, 2020 10:29 am
Watty wrote: Wed Jan 01, 2020 8:19 am 7) Since we were paying for his college we also put in the rule that he could not work during the school year unless it was in a job related to his major. Our reasoning was that if he had spare time then it was more cost effective for him to study and take extra classes instead of working at a job flipping burgers.
My parents paid for my university and had a rule like this

I didn’t work and didn’t study

And then I failed

Free money is never as appreciated as earned money

Working (at any job) > free money
There is no one right answer as to what will work for any kid or parent.

One consideration that may not have been mentioned is that when a parent is willing and able to pay for college if the kid flunks out then they do not need to second guess themself about if they should have helped out more financially. If my son had flunked out of college I would still have loved him, but at that point it would be up to him to figure out how to make his life work.

I was lucky and my parents paid for my college so I felt that "paying it forward" and paying for my kids college was the right thing to do. When my son thanked me for paying for his college after seeing a lot of his friends have large student loans I suggested that if he is able that he should also "pay it forward" and help out his kids with college as much as is reasonably possible. I suspect he will when the time comes.
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Re: Parents vs. Kids Paying for College

Post by Nate79 »

Grt2bOutdoors wrote: Wed Jan 01, 2020 2:54 pm
Nate79 wrote: Wed Jan 01, 2020 2:47 pm In my experience college student age kids do not understand debt and treat it as free money without any repercussions. Working and spending the money that they have earned themselves is something they actually understand. Skin in the game is opposite of taking out student loans. Skin in the game is working and paying for as much college cost as they can with parents supporting the remainder to leave college debt free.

I will not participate in the stupidity of student loans and will make sure my child learns the value of money, hard work, and not student loans. If parents and the student can't figure out a way to pay for college without debt it is something they can't afford. There is always a way to get thru college debt free. Maybe not every college will be possible and maybe not the easy way.
How about the frivolous spending of resources to the detriment of the family unit? That is the point many of us posting about “skin in the game” excuses are talking about. Is it necessary to eat out twice a week? How about taking a car loan for $50k at terms of 5-7 years? How about the car fleece? Then the parents claim they can’t afford college. That is the biggest travesty. Which is worse? Student loans or prolific and uncontrolled spending.
In my book there is no difference between student loans and uncontrolled spending (which is also likely on debt). Both are spending money they can't afford.
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Re: Parents vs. Kids Paying for College

Post by flaccidsteele »

Grt2bOutdoors wrote: Wed Jan 01, 2020 2:40 pm
flaccidsteele wrote: Wed Jan 01, 2020 2:32 pm
theplayer11 wrote: Wed Jan 01, 2020 12:48 pm I think many have that mentality. If their education was paid for by their parents, then they want to do same for their own kids..and those that had to pay their own way believe their kids should as well.
Or like my sibling and I. Our education was paid for by our parents and I saw how little we valued it when it wasn’t our money

I had a good time tho. All in my parents dime. I thank them for the experience

To this day, I continue to believe university to be over-rated
So then your own personal physician graduated from the school of “hard knocks”? How about your tooth cleaner/puller?
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I can only speak for myself
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Re: Parents vs. Kids Paying for College

Post by Old_Dollar »

Jack FFR1846 wrote: Wed Jan 01, 2020 8:05 am
Old_Dollar wrote: Wed Jan 01, 2020 5:15 am Anyone can get a loan for University.
I hear this often here. Besides Stafford, what loans do you think students can take WITHOUT A COSIGNER?
I was talking about Stafford.
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Re: Parents vs. Kids Paying for College

Post by Vulcan »

Grt2bOutdoors wrote: Wed Jan 01, 2020 2:54 pm How about the frivolous spending of resources to the detriment of the family unit? That is the point many of us posting about “skin in the game” excuses are talking about. Is it necessary to eat out twice a week? How about taking a car loan for $50k at terms of 5-7 years? How about the car fleece? Then the parents claim they can’t afford college. That is the biggest travesty. Which is worse? Student loans or prolific and uncontrolled spending.
With the exception of family vacations now and then we largely live the same lifestyle today we did 15 years ago when our household income was less than a third of what it is today. We still drive the same two cars that now average 20 years in age.

We closed 2019 with our total net worth (including our fully paid off modest 200K starter home we bought in 2005 and never moved out of) crossing into the two comma territory for the first time.

We live simple lives, but we did not come to this country to deny our then future children the best educational opportunities they deserve. To us the value of learning exceeds economic considerations and transcends ROI calculations.

YMMV.
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Re: Parents vs. Kids Paying for College

Post by cshell2 »

Old_Dollar wrote: Wed Jan 01, 2020 3:10 pm
Jack FFR1846 wrote: Wed Jan 01, 2020 8:05 am
Old_Dollar wrote: Wed Jan 01, 2020 5:15 am Anyone can get a loan for University.
I hear this often here. Besides Stafford, what loans do you think students can take WITHOUT A COSIGNER?
I was talking about Stafford.
The limit for the Stafford is really low though.

$3500 Freshman year
$4500 Second year
$5500 Third year and beyond

With no savings or help from parents a kid can't feasibly borrow their way through college with that.
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Re: Parents vs. Kids Paying for College

Post by scubadiver »

TomatoTomahto wrote: Wed Jan 01, 2020 2:46 pm
scubadiver wrote: Wed Jan 01, 2020 2:30 pm We don't share the tough love mindset with respect to funding college. That said, it's a perfectly legitimate position that can be taken from a position of love for one's children. I don't see how assigning such a negative intent to a position you disagree with advances a civil discussion.
I am sorry that we disagree on this. I am afraid that I feel strongly that the message sent to one’s kids that see one vacationing, driving flash cars, buying lots of affluenza toys, and then citing tough love when it comes to paying for education is not one of a “legitimate position of love.”

I’m not opposed to tough love in certain circumstances (eg, substance abuse issues), but I don’t consider it appropriate when applied to eager hard-working students.
I know someone mentioned some of the personal sacrifices they made to pay for their children's college education at the beginning of the thread, but did someone actually state, "I drive flashy cars, buy lots of affluenza toys and will be making my kids pay for college out of tough love"? Or anything remotely to that effect. Really?

It seems like the position that you disagree with most strongly is the one held by the bogeyman that lives in your head.
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Re: Parents vs. Kids Paying for College

Post by TomatoTomahto »

scubadiver wrote: Wed Jan 01, 2020 3:35 pm
TomatoTomahto wrote: Wed Jan 01, 2020 2:46 pm
scubadiver wrote: Wed Jan 01, 2020 2:30 pm We don't share the tough love mindset with respect to funding college. That said, it's a perfectly legitimate position that can be taken from a position of love for one's children. I don't see how assigning such a negative intent to a position you disagree with advances a civil discussion.
I am sorry that we disagree on this. I am afraid that I feel strongly that the message sent to one’s kids that see one vacationing, driving flash cars, buying lots of affluenza toys, and then citing tough love when it comes to paying for education is not one of a “legitimate position of love.”

I’m not opposed to tough love in certain circumstances (eg, substance abuse issues), but I don’t consider it appropriate when applied to eager hard-working students.
I know someone mentioned some of the personal sacrifices they made to pay for their children's college education at the beginning of the thread, but did someone actually state, "I drive flashy cars, buy lots of affluenza toys and will be making my kids pay for college out of tough love"? Or anything remotely to that effect. Really?

It seems like the position that you disagree with most strongly is the one held by the bogeyman that lives in your head.
This seems curiously personal to you rather than the civil discussion that you accuse me of disrupting. Bogeyman aside, why don’t we just agree that we disagree and move on.
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Re: Parents vs. Kids Paying for College

Post by frugalmama »

I worked all the way through college and so did my husband. My parents paid my college and my husband's didn't. We both graduated at the top of our class, were very hard workers, and have done really well in life, now on to 2nd (more enjoyable quality life) careers. Seeing that I purchased our first house the week after I turned 21 with money I earned in high school and college, I do not think that I would have worked any less hard if my parents didn't pay for my education. Likewise, my husband didn't work any harder because he had debt - rather it was an overwhelming amount to him and figuring out how to tackle it with no guidance from anyone wasn't ideal. I would never wish that on anyone.

We want our children to share our values and be successful, responsible, ethical adults who contribute to the world. The best way to show our values is to put our money where our mouth is. We say we value education. We show we value education by paying for their educational endeavors. It isn't whether you are going to college here, but rather what are you majoring in. We teach work ethic and money management in other ways (kids pay their car insurance and have to learn to budget for it or they won't drive at 16, kids pay for their boy scout/school trips, chores, etc. etc.). You can find other ways to make sure your children are not entitled and if you are waiting until college to work on that, honestly you have waited too long as that behavior is created long before that. My kids also know that if I don't see them working hard, it will not be paid for. I have a lot of kids...so college is going to be really really expensive for us - possibly a million dollars. I am prepared for that. I do have stipulations to control costs - good grades, advanced placement tests, I don't pay for failed courses, state schools, taking classes at the local community college that will transfer in during the summers, etc. etc.) I think that is fair as my state has really great schools. My kids think it is beyond fair from what I gather as they realize it is a gift.

Would I put paying for college before your own retirement? No. Is it ok to overfund retirement or FAT FIRE and not pay for college? For me, it is not. It is also not OK to frivously spend and eat out constantly and then not pay for our kids' college. I am confident I'm going to be just fine at my savings rate and a pension, so I am going to pass on the gift. To each his own. However, if you do decide to pay for college, I recommend starting with small amounts, putting the rewards from credit cards in the account each month if you work credit cards for rewards. You will be surprised how quickly you get there.
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Re: Parents vs. Kids Paying for College

Post by ChrisC »

Grt2bOutdoors wrote: Wed Jan 01, 2020 12:55 pm
SQRT wrote: Wed Jan 01, 2020 10:48 am
My personal view is that the value of hardship is overrated, but it depends on the child. If you think paying for an education will “spoil” your child, don’t do it. I don’t really see how graduating with a lot of student debt will enhance a person’s character but maybe sometimes?
+1. I don't understand this "skin in the game" intentional burden put upon a child. Yes, a child, they are not adults in the true sense of the word until they are old enough to drink and in most cases, smoke now. Most kids today understand the hardships of life, they are quite observant taking it all in. If you have the means today, what is the cost of allocating some percentage of those means to advanced schooling in the future for your offspring. Having the means, enables you to change your family tree for better, who intentionally wants to place burdens on the future success of their family? Why have kids then? Spoiling is giving materials goods, an education is an intellectual gift - what does Ben Franklin say "An education pays the best interest"?
I think the value of hardship is underestimated. Of course, I would say that as someone raised in a family well below the poverty line by loving parents who were barely functionally literate. I’m not sure this so-called “skin in the game” is the primary driving force for us parents who believe children on the verge of adulthood would be better prepared to begin the launch process by getting them to do chores in the household, engage in wage earning employment during high school and college, learn to get along with other folks from different backgrounds, budget their finances and generally learn to pay their own freight in life.

My wife and I were the generous recipients of free tuition and student financial aid for the undergraduate, graduate and professional schools we attended and we worked part-time throughout our postsecondary education. We had some debt that followed us into our early 30’s. But we made it our obligation to provide full funding of our children’s undergraduate education at public colleges in our state of residence. We began modestly saving for them through payroll savings for US Bonds, and later when 529 plans became available, we funded one plan. We figured with 3 children, each of whom was talented or gifted in different ways, we were optimistic that one would obtain some scholarship assistance. All 3 of our kids worked at part-time jobs in HS, all while engaged in academically challenging programs and demanding extra-curricular activities, including sports, music, art activities.
We believe their part-time work and activities, though at times exhausting for them, made them very well rounded and more competitive in college applications. We told them if they wanted to go to the Ivy League or selective schools that accepted them for admission — that they would have to pay the difference between the cost of the elite selective college and UVa where all of them gained admission. None decided that it was worth it for them to pay for the extra cost of an Ivy League education. We were also fortunate that 2 of our children attended tuition free in college.

All 3 went to graduate/professional schools where they assumed the entire financial burden for the cost of their graduate and professional education — we did refinance one daughter’s law school debt of $160k from her government student loan rate of 7% to 3% interest — we paid off her government debt and now she’s paying us at the lower 3,

We parented our children for them to become responsible adults — others I’m sure could be equally successful in launching their children and doing it differently than us, but this has nothing to do with intentionally depriving or burdening our children because of some idea that they need skin in the game or need to be intentionally burdened to succeed.
Last edited by ChrisC on Wed Jan 01, 2020 3:54 pm, edited 2 times in total.
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Re: Parents vs. Kids Paying for College

Post by multiham »

I truly don't understand the dilemma here. Please pay/partially pay or don't pay for your kids education as you see fit. It is no one else's business on how you handle this. If there is a question on "best" ways to save and pay, then I think the posters here can help. Otherwise what you get is other peoples perspective on paying for college.

Since you asked, I will give you my perspective. My wife and I have saved since birth for our 2 kids educations. Every year since they have been 13 I share with them the balance in their 529 plan. We discuss how much I estimate to be available when they go to school and talk about the decisions they will be faced with. My son is a freshman this year and he knows roughly what is available to cover his college costs. He used this information to help him decide where he was going to go. I anticipate my daughter will do the same thing in a couple of years.

I also do not want my kids working during college. I want 100% of their effort and time directed to school. On long breaks (Christmas) or during the summer, I fully expect they will work and use these $'s to cover some college costs. I'm talking about books and activities.
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Re: Parents vs. Kids Paying for College

Post by TomatoTomahto »

ChrisC wrote:We told them if they wanted to go to the Ivy League or selective schools that accepted them for admission — that they would have to pay the difference between the cost of the elite selective college and UVa where all of them gained admission. None decided that it was worth it for them to pay for the extra cost of an Ivy League education.
Well, you did stack the deck a bit, being in-state for one of the 3 or 4 state schools nobody can claim provide a less than great education. Regardless of that, congrats to your kids.
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Re: Parents vs. Kids Paying for College

Post by JoeRetire »

theplayer11 wrote: Wed Jan 01, 2020 12:48 pm I think many have that mentality. If their education was paid for by their parents, then they want to do same for their own kids..and those that had to pay their own way believe their kids should as well.
I'm sure that's true for many. For my wife and I, it was the opposite.

My parents couldn't afford to pay for my college education. I always expected and understood that and never felt unhappy about it. My wife's situation was the same.

But when we had kids, we decided that we were in a position to do more. So we did and our sons started their post-college lives with zero debt.

When our oldest son got married, his wife came to the marriage with $70k remaining in student loans. Her parents weren't in a position to help her. We helped our son and daughter in law pay off the loans in about 4 years. We were in a position to help and wanted them to start their married life without that burden hanging over their heads.

We are funding 529 plans for our grandchildren.

It's nice to be in a financial position where we can help our family and still meet our retirement goals. We did without the McMansions that some of our friends purchased, and we probably spent less on vacations, cars, etc. But it makes us happy.

Money can buy happiness for you and your family. To us, that's money well spent.
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