Sharing college costs with children

[stoptothink]

$150k is more than the median NW for someone my age (41). Can you imagine the "normal" family making these decisions; the difference in costs can be truly life-changing in many cases. We're bogleheads with a 7-figure NW, but $150k is still a heck of a lot of money to us; it's nearly what we bought our home for in 2015.

As you remember, you and I had this precise conversation almost precisely four years ago.

Vulcan is absolutely correct, the difference being he thinks the gamble may be worth the cost. Me, I don't like to gamble and I'm not that wealthy. We do OK, but I'm not delusional; the difference between paying <$30k total for an undergrad (today's cost for our local universities) or $250k (today's cost for some "elite" universities) could be life-changing for us and our children. And the thought of doing it twice?

Yes, it could be life-changing. So could be an education from one of the top universities in the world.

Trust me, I don't want to spend this kind of money. But if they get admitted to one of the top-notch schools ... I very well might, come what may. Because my kids are worth gambling on.

A year later we were lucky enough to be making the precise decision you are describing for our older. We chose to pay (even though a very attractive full-tuition offer from a top 15 school was on the table), and it has indeed been life-changing beyond our wildest dreams. Should his younger brother be as fortunate with admissions, we will do it again in a heartbeat.

You are in a unique situation, you're children are truly "elite" academically. I'm not sure I understood that when that previous conversation took place. As I think I've made pretty clear in this thread, wife and I are coming around to the idea of doing the same thing if put in your shoes. But, (like many, if not most responding here) there's no indication that either of our children are among the tops in the country in math or computer science, so it's most likely going to be a choice between decent local public U or some similarly-ranked out-of-state public or private U (at 5x the cost).

[user5027]

I've not read all the replies.

We made a deal with our son and daughter. They took the subsidized loans and if they finished school, mom and dad would pay off the loans. If they didn't finish school they had to pay off the loans.

[Makefile]

I've not read all the replies.

We made a deal with our son and daughter. They took the subsidized loans and if they finished school, mom and dad would pay off the loans. If they didn't finish school they had to pay off the loans.

Were you using a 529? Until recently 529s could not be used tax-free for student debt repayment, and now it's a lifetime limit of $10,000.

So to the extent it's about principle and not a family's limited ability to save for college, "skin in the game" has to be weighed against both parents and child paying extra unnecessary taxes by not taking maximum advantage of things like 529s.

[Wannaretireearly]

I've not read all the replies.

We made a deal with our son and daughter. They took the subsidized loans and if they finished school, mom and dad would pay off the loans. If they didn't finish school they had to pay off the loans.

I like this. Fits in with roughly half college costs saved in 529s. Thanks. In fact, I’d like to tie it to success after college. Can’t think how yet…

[guyfromct]

I've not read all the replies.

We made a deal with our son and daughter. They took the subsidized loans and if they finished school, mom and dad would pay off the loans. If they didn't finish school they had to pay off the loans.

I like this. Fits in with roughly half college costs saved in 529s. Thanks. In fact, I’d like to tie it to success after college. Can’t think how yet…

I would be concerned that the more strings are attached the more liable they are to resent it. I’ve had friends who have family that has tried to exercise control this way and it’s gone poorly.

What constitutes success? What bar is high enough?

[Wannaretireearly]

I've not read all the replies.

We made a deal with our son and daughter. They took the subsidized loans and if they finished school, mom and dad would pay off the loans. If they didn't finish school they had to pay off the loans.

I like this. Fits in with roughly half college costs saved in 529s. Thanks. In fact, I’d like to tie it to success after college. Can’t think how yet…

I would be concerned that the more strings are attached the more liable they are to resent it. I’ve had friends who have family that has tried to exercise control this way and it’s gone poorly.

What constitutes success? What bar is high enough?

My dad paid off my small loan after I got a first class honors degree in the UK. He would have paid it off even if I got a slightly lower grade. It doesn’t have to be hard and fast rules. Just a ‘get a 3.5 or above and I’ll guarantee to pay some of your loan!’