Why pay all of kids' college?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We plan pay between 80-100% of an in state public undergraduate degree. The way that loan companies go after young adults who have zero experience is shameful and can impact them for the rest of their lives.

For grad school, we’ll work with them on choices and financial pros/cons but it will be their money at that point.

Usually parents do 50/50 split on grad school. Your money is more their money. You will be dead soon anyhow

I don't think this is true at all.

They can use their inheritance to pay off what remains of their grad school loans.

I'm 55, my parents are early/mid 80s and still going strong. Most people could be 60+ before they "get their inheritance". Smart parents (if they have the money) will help kids with grad school and avoid the major interest collection

[Anonymous]

Anonymous wrote:I actually wished I had some loans when I graduated. My work had a loan tuition repayment program and would give 5-10k towards loans every year for 5 years.

But then you'd have been tied to that job for 5-10 years--most jobs like that are lower pay/for the better of the community, hence why they're eligible for it. Much better to not have loans and be able to select whatever job you want.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most of the people I know didn't have loans.

Are most of the people you know from very upper class families?

No, it was just cheaper back then. But now that I think about it, I know people who had grad school loans.

I don't know a single person who didn't have undergrad loans who wasn't very wealthy. (class of '89)

Considering college was cheaper back then, this exemplifies why the pressure for middle class to pay all of it is becoming unrealistic. There was a separate thread about saving $1M(!!!!).

Only the very wealthy can do that, or perhaps middle class who essentially live poorly and/or have some form of generational wealth (like didn't have loans, unexpected inheritance, etc.) to help them in that pursuit.

If you don't have the money, you do college for 25-30K/year, not 90K+. Nobody needs $1M for college and grad school if they cannot easily save it

[Anonymous]

We wanted to pay for our kids' college (public school budget) because our parents did that for us. For me, it was going to a good CA state U, living on campus but had to turn down more expensive private schools. for DS it was living at home to go to the local university, the only place he applied to as a working class kid who'd never been expected to go to college.

Starting off with no loan payments is a huge gift.

We took the same approach my parents did - we set a budget of in-state public cost and let them apply where they wanted. Both picked schools in our budget (one in-state and one OOS) and grandparents ended up paying for one year for each of them.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most of the people I know didn't have loans.

Are most of the people you know from very upper class families?

No, it was just cheaper back then. But now that I think about it, I know people who had grad school loans.

I don't know a single person who didn't have undergrad loans who wasn't very wealthy. (class of '89)

Considering college was cheaper back then, this exemplifies why the pressure for middle class to pay all of it is becoming unrealistic. There was a separate thread about saving $1M(!!!!).

Only the very wealthy can do that, or perhaps middle class who essentially live poorly and/or have some form of generational wealth (like didn't have loans, unexpected inheritance, etc.) to help them in that pursuit.

College was not that much cheaper given incomes and inflation. A private was still $40-50k 30 years ago.

No it wasn't. I attended a T10 uni, graduated in 93 (that university is now 90K+). My last year the total cost/all-in with all fees/travel/etc was estimated at 27K. My first year (took 5 years for 2 degrees) was ~$20 or 21K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We plan pay between 80-100% of an in state public undergraduate degree. The way that loan companies go after young adults who have zero experience is shameful and can impact them for the rest of their lives.

For grad school, we’ll work with them on choices and financial pros/cons but it will be their money at that point.

Usually parents do 50/50 split on grad school. Your money is more their money. You will be dead soon anyhow

I don't think this is true at all.

They can use their inheritance to pay off what remains of their grad school loans.

I'm 55, my parents are early/mid 80s and still going strong. Most people could be 60+ before they "get their inheritance". Smart parents (if they have the money) will help kids with grad school and avoid the major interest collection

My parent gave my sister an interest-free loan for grad school, which I think is a good way to handle it. I would do the same for our kids but also, as a late-50s with one surviving mid-80s parent in poor health, we might consider paying for grad school with the stipulation that it will come out of the kid's share of the inheritance from grandma (since my dad died recently and we helped mom with financial stuff, I have a pretty good sense of what to expect).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most of the people I know didn't have loans.

Are most of the people you know from very upper class families?

No, it was just cheaper back then. But now that I think about it, I know people who had grad school loans.

I don't know a single person who didn't have undergrad loans who wasn't very wealthy. (class of '89)

Considering college was cheaper back then, this exemplifies why the pressure for middle class to pay all of it is becoming unrealistic. There was a separate thread about saving $1M(!!!!).

Only the very wealthy can do that, or perhaps middle class who essentially live poorly and/or have some form of generational wealth (like didn't have loans, unexpected inheritance, etc.) to help them in that pursuit.

College was not that much cheaper given incomes and inflation. A private was still $40-50k 30 years ago.

No it wasn't. I attended a T10 uni, graduated in 93 (that university is now 90K+). My last year the total cost/all-in with all fees/travel/etc was estimated at 27K. My first year (took 5 years for 2 degrees) was ~$20 or 21K.

But the differential between private/public was still huge. My public U cost <$2k in tuition/fees (can't recall the room & board cost) so my parents insisted I do that vs. private college that they felt was too expensive.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most of the people I know didn't have loans.

Are most of the people you know from very upper class families?

No, it was just cheaper back then. But now that I think about it, I know people who had grad school loans.

I don't know a single person who didn't have undergrad loans who wasn't very wealthy. (class of '89)

Considering college was cheaper back then, this exemplifies why the pressure for middle class to pay all of it is becoming unrealistic. There was a separate thread about saving $1M(!!!!).

Only the very wealthy can do that, or perhaps middle class who essentially live poorly and/or have some form of generational wealth (like didn't have loans, unexpected inheritance, etc.) to help them in that pursuit.

College was not that much cheaper given incomes and inflation. A private was still $40-50k 30 years ago.

I went to one of those 100k private colleges 20 years ago, and my freshman year it was 20k COA, so try again.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:All I know is by the time my kids are old enough to buy a house, the average price is north of $1 million around here. If they are saddled with loans, they will never own a home.

Why can't they just move to a low cost of living area? It's how my MD brother in law paid his full med loans off. Why do you expect your kids to buy in a million dollar house area?

Why should they? Imagine the shame when for the parents when their friends learn that their kids fled the area because they were too poor to afford living there.

I'm trying to figure out if you're trolling on this one. Or I hope you are because otherwise you're absurd.

Are you member of a country club? You are probably not otherwise you would understand what PP was saying.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most of the people I know didn't have loans.

Are most of the people you know from very upper class families?

No, it was just cheaper back then. But now that I think about it, I know people who had grad school loans.

I don't know a single person who didn't have undergrad loans who wasn't very wealthy. (class of '89)

Considering college was cheaper back then, this exemplifies why the pressure for middle class to pay all of it is becoming unrealistic. There was a separate thread about saving $1M(!!!!).

Only the very wealthy can do that, or perhaps middle class who essentially live poorly and/or have some form of generational wealth (like didn't have loans, unexpected inheritance, etc.) to help them in that pursuit.

College was not that much cheaper given incomes and inflation. A private was still $40-50k 30 years ago.

College was absolutely cheaper back then...in 1950 Harvard was $625/year and around $1,000/year including room and board and the median HHI was $3,100.

In 1990, Harvard total cost of attendance was $19,395 and median HHI was $50,000.

Today, Harvard total cost of attendance is $83,538 and median HHI is $75,000/

So, Harvard went from 32% to 39% to 111% of HHI over those time periods.

University of MD total COA in 1990 for in-state was $6,500, so, 13% of HHI. Current in-state total COA is $29,637, so 40% of HHI.

Perhaps the bigger issue is just how little median HHI has increased since 1990.

It's a combination issue - tuition costs rising far faster than cost of inflation. HHI income rising slower than the cost of inflation.

Which is where it's harder for MC and UMC parents to fully fund tuition, certainly harder than it was for their parents who may have been more lower middle class to MC, given stagnant salaries relative to accelerating tuition costs.

30 years ago, MC could sometimes fund kids to go to private colleges. Now those kids are going to struggle to fund their kids to attend public in state universities. And no, not everybody needs to go to a private college or should when they can't afford it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:All I know is by the time my kids are old enough to buy a house, the average price is north of $1 million around here. If they are saddled with loans, they will never own a home.

Why can't they just move to a low cost of living area? It's how my MD brother in law paid his full med loans off. Why do you expect your kids to buy in a million dollar house area?

Why should they? Imagine the shame when for the parents when their friends learn that their kids fled the area because they were too poor to afford living there.

I'm trying to figure out if you're trolling on this one. Or I hope you are because otherwise you're absurd.

Are you member of a country club? You are probably not otherwise you would understand what PP was saying.

Ew, no, I'd never join a country club. Nor would I afford one. What's your point? That country club people have to live up to the Jones? How embarassing for them. And sad.

[Anonymous]

My parents paid for college and I paid for grad school. We have paid for our kids colleges and one to medical school. It was a lot of money but we didn’t cheat ourselves to make it happen. Now we are funding 529 plans for our grandchildren as are their parents so they can graduate debt free….hopefully. It is a real privilege to graduate debt free and our kids have made excellent use of their educations.

[Anonymous]

I have been MC all my life. I wanted to be married, have kids, and have at least a MC life. Beginning of marital life, we were quite poor and made very little money. Later on, our earnings increased.

Because of that - we only had 2 kids, only lived in house in a inexpensive neighborhood, only sent my kids to our local public K-12 schools, did not have a pet, lived a modest life, saved for our retirement, emergency fun, and started saving for as much college as we could. My kids went in-state and chose majors that can get them employed.

We first saved for 2 years of community college tuition, then we added 2 years of in-state public university tuition, then we added two more years of Masters in-state public college. Once we had that in place, we started to save for living expenses for 2,4, 6 years. Once we had hit that target, we started to save for MBA, medical school, law school etc.

Paying for kids college gives them a SES leg-up that can help them and future generations. So, I don't have to sing the praises of college education for the kids or why making kids graduate debt-free is a blessing to them. Suffice to say, you need to live with a degree of frugality to save for your kids.

If you are very poor, then at least make your kids high achievers by prioritizing education and enriching them at home.

I think people are critical when parents live a lavish life - vacations, booze, socializing, expensive hobbies and do not save for the kids education.

[Anonymous]

Speaking of escalating college costs, I graduated from college in 2002 and the tuition + room and board was just about $31k. My father celebrated the last year of paying college tuitions by buying a new BMW 3-series, which cost him $31k.

He had that car for 10 years and replaced it with another BMW 3 series in 2021, which cost, I believe, 39k. My alma mater that same year cost 52k all inclusive.

[Anonymous]

Anonymous wrote:I have been MC all my life. I wanted to be married, have kids, and have at least a MC life. Beginning of marital life, we were quite poor and made very little money. Later on, our earnings increased.

Because of that - we only had 2 kids, only lived in house in a inexpensive neighborhood, only sent my kids to our local public K-12 schools, did not have a pet, lived a modest life, saved for our retirement, emergency fun, and started saving for as much college as we could. My kids went in-state and chose majors that can get them employed.

We first saved for 2 years of community college tuition, then we added 2 years of in-state public university tuition, then we added two more years of Masters in-state public college. Once we had that in place, we started to save for living expenses for 2,4, 6 years. Once we had hit that target, we started to save for MBA, medical school, law school etc.

Paying for kids college gives them a SES leg-up that can help them and future generations. So, I don't have to sing the praises of college education for the kids or why making kids graduate debt-free is a blessing to them. Suffice to say, you need to live with a degree of frugality to save for your kids.

If you are very poor, then at least make your kids high achievers by prioritizing education and enriching them at home.

I think people are critical when parents live a lavish life - vacations, booze, socializing, expensive hobbies and do not save for the kids education.

The problem is graduate school really is a complete option, and often times a bad move. I would not blindly agree to pay for my kid to go law school or get an MBA or do any kind of academic graduate program where tuition plus a stipend is not offered (because that means, it is a lifestyle program...not one in demand). Medical school is different.

I am with some PPs that would likely give a low to zero-interest loan to a kid for graduate school...but only if they have a clear plan and it is a top program. Anything other than Medical school (or again, a PhD program that is essentially "free"...so may help with some living expenses)...no way I would pay to go straight to grad school without working in the real world for 3-5 years.