Just calculated projected college costs for my kid and almost vomited

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Pete Buttigeg talked about this. Public college should be free. I went to an Ivy and a private grad school with my immigrant parents' help. They did pay as you go for the most part and also took out loans. I paid most of my grad school through loans and scholarship. But the costs of college now and in the future are absurd. I'm sure the bubble will burst, and if it doesn't I may send my kids to university abroad. In the meantime, I'm saving $8k per each child each year in a 529 (enough to get the tax benefit in dc).

The problem with making college free is that it disconnects the major from the economics of the cost of education. A young mind needs the explicit connection and we’ve failed recent graduates who have graduated with debt they can’t pay. Even it the debt is taken away there’s still a difference in career earnings that should be weighed against picking the liberal arts

Nope kids don’t need “skin in the game.” The kids with the highest gpas and graduation rates are usually high ses.

[Anonymous]

Anonymous wrote:She's 3. I used the Vanguard calculator and it came out with the following projected tuition costs:

Public in state: $196,681
Public out of state: $343,454
Less expensive private: $446,837
More expensive private (so the ones that now cost around $60K/year): $539,392

We make a good living and have one kid, but how the hell are we supposed to be able to afford these tuition costs?! To get to the public in-state option, and assuming no appreciation from investment options, we'd have to put away roughly $1100/month starting now. Well, we pay for preschool and have a mortgage, so that isn't happening at all easily. Saving for the most expensive private universities would require putting away $3000/month starting now.

Someone tell me how the hell people do this.

Inheritance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:She's 3. I used the Vanguard calculator and it came out with the following projected tuition costs:

Public in state: $196,681
Public out of state: $343,454
Less expensive private: $446,837
More expensive private (so the ones that now cost around $60K/year): $539,392

We make a good living and have one kid, but how the hell are we supposed to be able to afford these tuition costs?! To get to the public in-state option, and assuming no appreciation from investment options, we'd have to put away roughly $1100/month starting now. Well, we pay for preschool and have a mortgage, so that isn't happening at all easily. Saving for the most expensive private universities would require putting away $3000/month starting now.

Someone tell me how the hell people do this.

Inheritance.

OP here. Well, hopefully my parents will still be alive when DD is in college.

[Anonymous]

OP, when your kids are old enough, I think you need to show them the costs of different schooling options.

I don't know what the college situation will look like in 15 years when your children are ready to go, but the situation for us right now is this:

We live in Prince George's County. PGCC is free to our kids for two years; after which they can attend UMD in College Park or Baltimore for about $12,000 a year (commuting from home and eating at home).

So a four year degree is achieveable for our kids for $24000 or possibly less. Total.

If we have more money, they can do all four years at UMD. If they get scholarships, it will cost less. If we can afford the extra cost, they can live on campus. But bottom line is it is POSSIBLE to get a four year degree for less than $25,000 total.

Any other college situation needs to be compared with that baseline cost. If your child isn't a good enough student to get into one of the UMDs, it might be that a college education is not the best way to spend your money right now. If you do not live within commuting distance of a state college, that will of course affect the cost of attendance, and would make attending a local community college even more important.

If you don't live in Maryland of course do this exercise with your local state schools. (If you live in PA I'm so sorry.)

Americans need to divorce ourselves from this idea that kids should go away to college and live four years in a dorm in a college town. They want to do this because they want the full college-party experience. it is totally understandable but... it has just gotten crazy out of control too expensive! It isn't worth it; it isn't worth sacrificing your own retirement savings or putting them into years of student loan debt.

[Anonymous]

"Happily. I don't want free tuition and I don't want a 60 percent tax rate to provide free stuff for everyone. I want tuition to not significantly outpace inflation."

Tuition outpaces inflation because it is (or at least is thought of as) an investment not consumer "stuff" that is covered by inflation numbers.

People who can afford investments salaries (and even more net worth) go up faster than inflation. Have you noticed how the stock market is doing during the pandemic recession?

[Anonymous]

I guess your kid will have to get student loans like the rest of us poors.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:She's 3. I used the Vanguard calculator and it came out with the following projected tuition costs:

Public in state: $196,681
Public out of state: $343,454
Less expensive private: $446,837
More expensive private (so the ones that now cost around $60K/year): $539,392

We make a good living and have one kid, but how the hell are we supposed to be able to afford these tuition costs?! To get to the public in-state option, and assuming no appreciation from investment options, we'd have to put away roughly $1100/month starting now. Well, we pay for preschool and have a mortgage, so that isn't happening at all easily. Saving for the most expensive private universities would require putting away $3000/month starting now.

Someone tell me how the hell people do this.

Inheritance.

OP here. Well, hopefully my parents will still be alive when DD is in college.

Well it didn't work out for me, but it took a lot of pressure of us for college costs.

[Anonymous]

Anonymous wrote:To be clear to folks questioning the projections: They aren't mine. Of course they might be wrong, but they assume a 5% per year increase, which Vanguard said is roughly what's been happening in recent years.

The Vanguard estimate is correct. Tuition has increased by about 5 percent a year for the past 30 years. I have done this calculation myself when my kids were young and now are approaching college age. It is outrageous. College reform (and health reform) is desperately needed. Nowhere in the world are education costs this high.

[Anonymous]

There will be a reckoning by the time our little kids are old enough for college. Im guessing that a good number of public schools will be much reduced/free, and maybe private schools will start offering more scholarships to more people.

Already, the UC schools are educating more than half the kids in-state kids for free.

That is my belief. But in the meantime, we loaded up our 529s and are counting on compound interest magic. If college is free, they can use it for grad school or a house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:She's 3. I used the Vanguard calculator and it came out with the following projected tuition costs:

Public in state: $196,681
Public out of state: $343,454
Less expensive private: $446,837
More expensive private (so the ones that now cost around $60K/year): $539,392

We make a good living and have one kid, but how the hell are we supposed to be able to afford these tuition costs?! To get to the public in-state option, and assuming no appreciation from investment options, we'd have to put away roughly $1100/month starting now. Well, we pay for preschool and have a mortgage, so that isn't happening at all easily. Saving for the most expensive private universities would require putting away $3000/month starting now.

Someone tell me how the hell people do this.

I was like you when I was starting out with a new-born daughter. Then everything turned upside down after a divorce. I had no savings to speak of. I had to stop my retirement contribution, even if that meant losing out on a 5% employer contribution. Long story short is I am now sending my daughter to an Ivy League. Most of my daughter’s life, I was too overwhelmed by bills to even plan college savings. Things worked out.

I know this is an aside...but why do women leave themselves as vulnerable as this poster did??? Roughly half of marriages end in divorce. People need to stop believing in Donna Reed and plan for all contingencies.

[Anonymous]

Anonymous wrote:So, just to make you feel a tiny bit better....I have a rising Freshman in college. Back when he was an infant, I was running the same numbers and getting the same types of projections (in early 2000s dollars) and the numbers seemed just so bonkers and unattainable.

We started slowly, with what we could afford. Like $50/month. It was better than nothing, then we bumped it up as we could. When daycare ended, we stepped it up to $350/month for years. In just the last year, I doubled that.

Today, he has $80k in his account. Compared to many of the Richie Riches here, that doesn't seem like much. BUT--if we continue to contribute our current $700/month to his college, along with that 529 month, we easily cover his in-state tuition, room and board.

And unlike when I went to college, merit scholarships, particularly at privates, are a BIG part of the equation. Do not blanket rule out privates, as you may find they deeply discount and end up the same as UVA for your kid. I see those stories all over the place. It's a norm. Basically, don't accept the first offer if your kid has the stats a school wants.

Of course, Ivies and the big, popular schools are an entirely different story.

But we didn't find it to be the horror story that we expected it to be. Not to say things won't change in the next 20 years.

Mirrors our story exactly.

[Anonymous]

Virginia 529 prepaid ended. Lucky parents who got in while the getting was good. It was supposed to be rebooted, but with less good benefits for kids attending expensive schools like UVA.

[Anonymous]

Anonymous wrote:It's projecting the cost of college after many years of steady inflation. That always makes numbers seem huge. For example, UMD tuition is around 11k right now. It's been rising maybe 1% per year faster than inflation over the past two decades. So if we assume UMD tuition will increase 3% per year over the next 18 years, it will be nearly 19k per year by the time your child attends.

But, of course, you realize that any invested money will earn a return at higher than the inflation rate, in expectation. Therefore for all intents and purposes you can pretend inflation doesn't exist and just make sure you have enough in your 529 to cover current tuition costs. For example, I have 50k in each kid's 529. That's enough to cover 4 years UMD tuition. It's irrelevant to me how high inflation will be or what the future cost of attendance will be because the 529 will return at least the rate of inflation.

I hear you...but bear in mind that college costs a lot more than tuition. Most kids want to live on campus, even if they go to MD. And books are very expensive, study abroad, fees...it adds up, believe me.

[Anonymous]

Anonymous wrote:Two points:

1. College tuition soared because the federal government made loans easy to get. The $$ was virtually unlimited, and the colleges found ways to spend it. Now, there’s a whole generation of students who regret their choices, but it’s hard to put that genie (plus all his overpaid college admin friends) back in the bottle.

2. Countries that have free universities have lower college attendance rates than the US, and generally select for college potential at a much younger age than the US. I’m sure this wouldn’t affect any of your special children, but limiting the # of kids that can go to college hurts the upwardly mobile.

Oh, and one more — government-funded college is a huge giveaway to the UMC/rich. It’s an incredibly regressive government program.

Actually, college tuition soared because states drastically cut funding for higher education.

Check out the interactive bar graphs here: https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students

As an example, from 2008-2018 Louisiana cut funding per student by more than 54%, and tuition rose 106% in the same time frame. The talking point that "government got involved, and costs went up" is being perpetuated by the very same people who pushed for the funding cuts that actually drove increases in tuition.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Two points:

1. College tuition soared because the federal government made loans easy to get. The $$ was virtually unlimited, and the colleges found ways to spend it. Now, there’s a whole generation of students who regret their choices, but it’s hard to put that genie (plus all his overpaid college admin friends) back in the bottle.

2. Countries that have free universities have lower college attendance rates than the US, and generally select for college potential at a much younger age than the US. I’m sure this wouldn’t affect any of your special children, but limiting the # of kids that can go to college hurts the upwardly mobile.

Oh, and one more — government-funded college is a huge giveaway to the UMC/rich. It’s an incredibly regressive government program.

Actually, college tuition soared because states drastically cut funding for higher education.

Check out the interactive bar graphs here: https://www.cbpp.org/research/state-budget-and-tax/state-higher-education-funding-cuts-have-pushed-costs-to-students

As an example, from 2008-2018 Louisiana cut funding per student by more than 54%, and tuition rose 106% in the same time frame. The talking point that "government got involved, and costs went up" is being perpetuated by the very same people who pushed for the funding cuts that actually drove increases in tuition.

Then why did tuition at my private law school soar over the same time period? Was that also the state cutting support?

No. It was the school taking advantage of how much their students could and would borrow.