Will you pay for your kids' college/graduate education?

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golfCaddy
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Re: Will you pay for your kids' college/graduate education?

Post by golfCaddy » Thu Aug 09, 2018 4:20 pm

Irisheyes wrote:
Thu Aug 09, 2018 3:24 pm
(From the VP of admissions at Trinity College: Research shows today’s students may have between 10 and 14 jobs by the time they are 38 years old. Stanford professors Bill Burnett and Dave Evans, write in “Designing Your Life,” that in the United States, only 27 percent of college graduates are working in the field of their major.

Each year, I travel around the world giving speeches about the journey to higher education and counseling families through the process of applying and the transition to college. I find that students and parents are more obsessed now than ever with making sure they choose the “right” college with the “right” major.

Yet for the majority of college graduates, major does not translate directly into a job. In fact, this generation of college graduates will embark on careers that have yet to be imagined, let alone created.
(https://www.washingtonpost.com/news/gra ... 18a5897970)
This reinforces my view too many people attend college.

stoptothink
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Re: Will you pay for your kids' college/graduate education?

Post by stoptothink » Thu Aug 09, 2018 4:28 pm

golfCaddy wrote:
Thu Aug 09, 2018 4:20 pm
Irisheyes wrote:
Thu Aug 09, 2018 3:24 pm
(From the VP of admissions at Trinity College: Research shows today’s students may have between 10 and 14 jobs by the time they are 38 years old. Stanford professors Bill Burnett and Dave Evans, write in “Designing Your Life,” that in the United States, only 27 percent of college graduates are working in the field of their major.

Each year, I travel around the world giving speeches about the journey to higher education and counseling families through the process of applying and the transition to college. I find that students and parents are more obsessed now than ever with making sure they choose the “right” college with the “right” major.

Yet for the majority of college graduates, major does not translate directly into a job. In fact, this generation of college graduates will embark on careers that have yet to be imagined, let alone created.
(https://www.washingtonpost.com/news/gra ... 18a5897970)
This reinforces my view too many people attend college.
Exactly. After 11yrs as a student and then being adjunct for 3yrs (for fun); there are so many more (cost and time) efficient ways to gain this life experience, develop critical thinking skills, and expand one's horizons than spending it at a university. Being in hundreds of interviews and hiring dozens of people a year, I totally agree that the actual area of study isn't always that important, but that someone with a bunch of education with no real direction (in terms of how it directly applies to the workforce) is one of the single biggest red flags.

KlangFool
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Re: Will you pay for your kids' college/graduate education?

Post by KlangFool » Thu Aug 09, 2018 4:35 pm

LiterallyIronic wrote:
Thu Aug 09, 2018 2:20 pm
KlangFool wrote:
Thu Aug 09, 2018 1:42 pm
LiterallyIronic wrote:
Thu Aug 09, 2018 1:34 pm
KlangFool wrote:
Thu Aug 09, 2018 1:21 pm
LiterallyIronic wrote:
Thu Aug 09, 2018 9:50 am


I don't understand how anybody's answer to that question could be "yes." If my net worth is 2X what tuition + living expenses are, then I'd be spending literally half my wealth on my kid's college. I don't see a universe in which I pull out half my retirement funds (technically more than half because I'd have to pay early-withdrawal fees) for that.
LiterallyIronic,

It has nothing to do with where the money is. It could be in any accounts: 529, taxable, tax-deferred, Roth IRA.

If X = 120K, would you pay 120K if your net worth excluding the house at that time is 2X = 240K?

KlangFool
I don't know why I'd have money sitting around that wasn't in an account for a particular purpose, but sure, let's ignore the purpose of the accounts and just consider the value of the money in them. Then the answer would still be absolutely no way would I spend half my money on a child's college education, and I don't know who would. My answer would also be "no" to 3X, 4X, and 5X. I don't know where the cutoff would be, but it's probably at least close to 10X. If it's $10K/year for tuition + rent, then 10X would only be $400,000. It'd be hard to stomach dropping 10% of it.
LiterallyIronic,

My answer is 5X. I am paying 240K for 2 kids.

KlangFool
This is why I agree with this:
bampf wrote:
Thu Aug 09, 2018 1:40 pm
I also think that the starting amount matters. If you have $10M and University is $1M it is different. I wouldn't like it and I wouldn't want to do it, but, I could. If it is $10K and I have $100K I wouldn't be able to do it. It is the difference between paying a lot when you don't have enough vs paying a lot when you have more than you could spend (assuming you are living a reasonable life style). Obviously this are both hyperbolic and skewed, but, it illustrates the point.
Paying $240K out of $1.2 million hurts, yeah, but you still have a million dollars at the end. But I'll never have $1.2 million - I'll retire when I reach half that amount. So, from my peak of $600,000 before I start drawing it down, a tenth of that is $60,000, which I can't do because I don't know if I can have a successful retirement on $540,000.

When values are low enough, I tend to deal in absolutes instead of percentages. I would talk about an increase in rent in percentages, but I would talk about the increase in a price of a can of soup in absolutes. Which, I suppose, could be some of why I would like to give our kid $10,000 rather than some percentage of my net worth as a high school graduation present that could be used on college, if desired.
LiterallyIronic,

<<Paying $240K out of $1.2 million hurts, yeah, but you still have a million dollars at the end. >>

I am paying for the college education out of my annual saving of 50K to 60K. So, my portfolio actually does not go down. The net effect is I have to work 2 to 4 extra years in order to pay for my kids' college education.

KlangFool

getthatmarshmallow
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Re: Will you pay for your kids' college/graduate education?

Post by getthatmarshmallow » Thu Aug 09, 2018 4:44 pm

KlangFool wrote:
Thu Aug 09, 2018 3:58 pm
getthatmarshmallow wrote:
Thu Aug 09, 2018 3:50 pm

Seconded. I know tons of liberal arts majors. Everyone who wants to be (excluding the stay at home parents) is gainfully employed, perhaps not in a field that corresponds to their major, but in a way that supports a good life. And that's true even of millennials who graduated into the Great Recession. That's true of the musicians, philosophers, art majors. It took a bit of time in some cases (but that was true of my tech friends in 2001, too, so I guess we shouldn't study IT?) but as long as one isn't encumbered by debt, a liberal arts degree isn't a bad bet, especially in an economy that is increasingly valuing flexibility and creativity.

I will have no restrictions on what my kids study. I will have recommendations, of course, and I will want them to be able to support themselves. It doesn't mean I won't set a budget. But I'm putting no strings on the gift I'll give them, because it's not an investment. My ROI on *their* education is exactly zero.
getthatmarshmallow,

If they support themselves, it is a zero ROI. But, if you need to support them because they could not support themselves, the ROI would be negative.

The retired parent that re-mortgage his house in order to send his son to a private college is supporting his adult son now. The son is living at home plus needing allowance because his retail job does not pay well enough to support his lifestyle.

KlangFool
Sure, but it was a bad idea to re-mortgage his house to send his kid to a private college whether the kid launched himself into a successful career or not. It's not an investment. ROI just should be stricken from the language here.

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TomatoTomahto
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Re: Will you pay for your kids' college/graduate education?

Post by TomatoTomahto » Thu Aug 09, 2018 4:45 pm

The net effect is I have to work 2 to 4 extra years in order to pay for my kids' college education.
Alternatively, once one feels that the child is well launched, one could say that they have to work fewer years, since they are assured that the child will be gainfully employed and not be dependent.

Irisheyes
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Re: Will you pay for your kids' college/graduate education?

Post by Irisheyes » Thu Aug 09, 2018 4:58 pm

golfCaddy wrote:
Thu Aug 09, 2018 4:20 pm


This reinforces my view too many people attend college.

The evidence shows that college graduates don't overwhelmingly work in the field of their major but use the skills of critical thinking, reasoning, writing and research acquired there to flexibly adapt to a changing work place over the course of their working lives.

I'm at a loss to see how this supports your view that too many people attend college.

golfCaddy
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Re: Will you pay for your kids' college/graduate education?

Post by golfCaddy » Thu Aug 09, 2018 5:04 pm

Irisheyes wrote:
Thu Aug 09, 2018 4:58 pm
golfCaddy wrote:
Thu Aug 09, 2018 4:20 pm


This reinforces my view too many people attend college.

The evidence shows that college graduates don't overwhelmingly work in the field of their major but use the skills of critical thinking, reasoning, writing and research acquired there to flexibly adapt to a changing work place over the course of their working lives.

How does this support your view that too many people attend college?
I don't agree with your assumption college, in general, develops critical thinking and reasoning skills.
At some of the most prestigious flagship universities, test results indicate the average graduate shows little or no improvement in critical thinking over four years.
https://www.wsj.com/articles/exclusive- ... 1496686662

And, if you're citing comments, based on the FRBNY study, you can't cherry pick the data. The same study found only 62% of college graduates worked in a job, which required a college degree at all. Looked at another way, college was a waste for 38% of graduates.
https://www.newyorkfed.org/medialibrary ... /sr587.pdf
Last edited by golfCaddy on Thu Aug 09, 2018 5:12 pm, edited 2 times in total.

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FIREchief
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Re: Will you pay for your kids' college/graduate education?

Post by FIREchief » Thu Aug 09, 2018 5:08 pm

TomatoTomahto wrote:
Thu Aug 09, 2018 4:45 pm
The net effect is I have to work 2 to 4 extra years in order to pay for my kids' college education.
Alternatively, once one feels that the child is well launched, one could say that they have to work fewer years, since they are assured that the child will be gainfully employed and not be dependent.
And here is another excellent point. It doesn't apply to the "wash my hands of them when they're eighteen, unless I need help when I'm old" parents; but for many others it is worth consideration.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

LiterallyIronic
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Re: Will you pay for your kids' college/graduate education?

Post by LiterallyIronic » Thu Aug 09, 2018 5:10 pm

getthatmarshmallow wrote:
Thu Aug 09, 2018 2:27 pm
I'm curious - - if I recall correctly, you're planning to retire early in a very frugal manner. Would you work an extra two years to send your children to college?
I'm going to interpret "send" as "pay for," because my kid(s) (we only have one, but we're thinking about a second and final one), could feasibly go to college through a combination of FAFSA, scholarships, loans, and working. It's not like if I don't pay for it that they couldn't attend college at all.

So, would I work an extra two years to pay for my kid(s) college? Not a chance. The second my portfolio reaches $600,000 and my mortgage balance reaches $0, I'm done. Hopefully this happens no later than age 50. Our kid is currently 1 year old and I'm 34 and if we have a second one next year I'll be 35. That means it will take me until the youngest is at least 15 (if we have a second). Give up two years of potentially being able to spend time with the theoretical youngest child in exchange for having enough money to cash flow their education when they'd be gone off at school and then I can "reminisce" about all the time I didn't spend with my kid(s) in order to pay for their college? Never gonna happen. Time is infinitely more important than money. If someone gave me $679,000 today (the amount I need to reach $600,000 and pay off my mortgage), I'd retire today after a career that only started 2.5 years ago.

Irisheyes
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Re: Will you pay for your kids' college/graduate education?

Post by Irisheyes » Thu Aug 09, 2018 5:13 pm

golfCaddy wrote:
Thu Aug 09, 2018 5:04 pm
Irisheyes wrote:
Thu Aug 09, 2018 4:58 pm
golfCaddy wrote:
Thu Aug 09, 2018 4:20 pm


This reinforces my view too many people attend college.

The evidence shows that college graduates don't overwhelmingly work in the field of their major but use the skills of critical thinking, reasoning, writing and research acquired there to flexibly adapt to a changing work place over the course of their working lives.

How does this support your view that too many people attend college?
I don't agree with your assumption college, in general, develops critical thinking and reasoning skills.
At some of the most prestigious flagship universities, test results indicate the average graduate shows little or no improvement in critical thinking over four years.
https://www.wsj.com/articles/exclusive- ... 1496686662
Article is behind paywall, so I can't read it. But I could fire back with any number of rebuttals. Here's one -- "Yes, Colleges Do Teach Critical-Thinking Skills, Study Finds".https://www.chronicle.com/blogs/ticker/ ... nds/105930

Those skills are what I and my department endeavored to develop in our students. And since the vast majority of my lit students found gainful and satisfying employment after they graduated, I guess employers were satisfied that we did so (even if the WSJ, which I am sure has no axe to grind, is not.)

But of course, now I'm arguing on your terms -- "Employers are satisifed, therefore we did our job."

golfCaddy
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Re: Will you pay for your kids' college/graduate education?

Post by golfCaddy » Thu Aug 09, 2018 5:26 pm

Irisheyes wrote:
Thu Aug 09, 2018 5:13 pm
Those skills are what I and my department endeavored to develop in our students. And since the vast majority of my lit students found gainful and satisfying employment after they graduated, I guess employers were satisfied that we did so (even if the WSJ, which I am sure has no axe to grind, is not.)

But of course, now I'm arguing on your terms -- "Employers are satisifed, therefore we did our job."
Except, employers aren't satisfied, at least not based on the study the Trinity VP is getting the 27% number from. As I added above: If you're citing comments, based on the FRBNY study, you can't cherry pick the data. The same study found only 62% of college graduates worked in a job, which required a college degree at all. Looked at another way, college was a waste for 38% of graduates.

Irisheyes
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Re: Will you pay for your kids' college/graduate education?

Post by Irisheyes » Thu Aug 09, 2018 5:32 pm

I apologize for my part in helping the thread drift from "should i pay for my kids college" to the separate, albeit related, question, "is it worth it to attend college?"

I'm not that interested in engaging in the latter.

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Re: Will you pay for your kids' college/graduate education?

Post by LadyGeek » Thu Aug 09, 2018 5:34 pm

The discussion is getting derailed. Please stay on-topic, which is paying for your kids' college education.

The value of receiving a college education is off-topic.
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Minty
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Re: Will you pay for your kids' college/graduate education?

Post by Minty » Thu Aug 09, 2018 8:17 pm

Bacchus01 wrote:
Thu Aug 09, 2018 1:26 pm
Why do kids of rich parents deserve something different?
I agree in principle that children of rich and poor should be treated alike. But need-based financial aid is generally not available for children, themselves broke, whose parents are affluent, regardless of the parents' willingness to pay. Schools generally require the parental contribution even if the parents say they won't come across, because if they didn't, parents would always plead unwillingness to pay. In this particular sense, children of the rich are worse off than children of the poor at least at schools with need-based financial aid.

BTW, I add the following not to make fun of anyone in this thread, which in my view has been consistently respectful, thoughtful, and illuminating. But discussion of old college days or their alternative somehow brings to mind Monty Python's The Four Yorkshiremen.
Core Four with nominal bonds and TIPS.

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TomatoTomahto
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Re: Will you pay for your kids' college/graduate education?

Post by TomatoTomahto » Thu Aug 09, 2018 8:35 pm

Schools generally require the parental contribution even if the parents say they won't come across, because if they didn't, parents would always plead unwillingness to pay.
I have seen sad cases of this happening to children whose parents divorced. It was financially difficult for the “willing” parent, and served to drive a wedge between the child and the “unwilling” parent.

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Re: Will you pay for your kids' college/graduate education?

Post by bampf » Thu Aug 09, 2018 9:53 pm

getthatmarshmallow wrote:
Thu Aug 09, 2018 3:50 pm
ad. Pious words like "duty" and "stewardship" sound good but the view of college as only worth it when it is a direct route to a clearly discernible career path, shortchanges both our kids and what colleges have to offer.

I think we have a duty to help our kids find meaning and passion in life not just a fast track to financial security. That's partly what college is about. I'd rather my daughter was happy doing an MA in basket weaving than miserable doing a BA in computer science.

I will have no restrictions on what my kids study. I will have recommendations, of course, and I will want them to be able to support themselves. It doesn't mean I won't set a budget. But I'm putting no strings on the gift I'll give them, because it's not an investment. My ROI on *their* education is exactly zero.
Fascinating response. I come from a place where duty and stewardship aren't just words and the for dang sure aren't pious. I believe that the vast majority of the adult life is spent on resource acquisition and or allocation. I also believe that resource allocation and acquisition are some of the most difficult, tedious and and necessary aspects of adult life. I very much believe I have a duty to help my child with the most difficult and complex aspect of becoming an adult.

The great thing about self actualization is that it comes after you have attained the basics (food, water and shelter) which is why Maslow's hierarchy is a hierarchy. If my kid can't feed or clothe themselves but they can weave a basket, I have failed. My job isn't to let them be happy, that is their job. My job isn't to let them follow their passion, that is their job. My job is to teach them survival skills and to ease (to the best of my ability) their transition to self sustaining and productive members of society. If I let them waste my money on a degree of no value to the market place then I have taught them that this is an ok choice. It really isn't. Degrees in basket weaving come with no ability to sustain yourself which makes them a vanity exercise. Education is great for expanding your choices in life and I am all for that. But you need to be able to take care of yourself which is something I am responsible for helping teaching them.

My child wants to be self actualized? Great. So do I. Do it on your time on your dime. I am still working on my own self actualization. This isn't a romantic view of the world, this is a pragmatic view of the world. To that end, my child will invest my resources in tools that allow themselves to be self sustaining. If you have the resources to allow them to be self sustaining on your dime essentially indefinitely (unpack that statement if you will) good on you. My kids will have to contribute to their financial journey and that starts with investing in the tools needed to become self sufficient.

This isn't really about strings or making them do a job they hate, it is about giving them a pragmatic and practical skill set that they can leverage to have a fulfilling, complex and rich life (all meaning of those words). The board is full of people looking to FIRE. They aren't looking to FIRE because they love their job or love working for someone else. They are looking to FIRE so they can become self actualized and do meaningful things. What a gift I am giving my child to allow them to sustain themselves, possibly (probably) FIRE and pursue their passion.

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Re: Will you pay for your kids' college/graduate education?

Post by LadyGeek » Thu Aug 09, 2018 9:58 pm

This thread has run its course and is locked (topic exhausted). See: Locked Topics
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