Do most people pay for college out of pocket?

[Anonymous]

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Anonymous wrote:We saved from birth as we are older parents and want to be retired by the time they start college. DH wanted to save everything in one bucket, but I wanted specific college funds for peace of mind. The tax savings have become meaningful, but it wasn't a primary motivating factor.

We saved a reasonable amount but we figure we can always pull from retirement if we need to.

That should never be a plan. Retirement should not be tapped for anything except retirement for you and your spouse/partner.

Why not? Does it matter if we save it in a college fund or retirement plan? Spouse will be retirement age at that point so they can take withdrawals. Assuming they are working we will pay the difference out of pocket.

Because you cannot take loans for your retirement, but the kid can take student loans. What if your spouse (who is retirement age) is suddenly no longer able to work? Would that impact your retirement? What if you also have to retire at age 65 (or sooner due to health issues)? Would you still have enough to live comfortably on? Or would you wish you had the $100-200K that you pulled from retirement for college?

Obviously you can do whatever the hell you want. But it's not a fiscally sound thing to do unless it's a drop in the bucket for you

[Anonymous]

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Anonymous wrote:There are millions of parents earning in the Top 3% and above. Millions. Executives, lawyers, SWE’s in the tech field, doctors, investment bankers.

or someone who may have been driving a beat up car just to save for ivy education for their kids

Like the rest of us are rolling around in 90k cars. Sticker price on my vehicle is less than one semester at ivy league.

But do you drive that $45K vehicle for 10-12 years? Or do you replace it every 5-6 years? For "donut hole families" that can make the difference in. what you can afford for your kid (that and other similar cost saving choices you make along the way)

I have one 14 year old car and one newer 30k car (because our ancient car died) car and that's a drop in the ocean of college costs for two kids if we were to pay full pay for a private college. It's really not comparable at all in terms of cost.

It's comparable in terms of mindset for saving for college (and retirement and other aspects of life). Many buy new cars every 4-5 years and that mindset carries over to most other aspects of life---they spend money they dont' need to spend and then wonder why they haven't been able to save.

Us personally, our last car loan was when we were 26 (Honda Civic). Drove that car for 8 years, once it was paid off (in 3 years) kept saving the monthly payment so that we had over $26 K in the "auto savings". Then sold the car for $5K and had $31K to put towards a new vehicle. We added in 6K and paid cash for a luxury vehicle. And never looked back. Kept that car for 11 years before we gave it to a family member.

I have to laugh when you act like a car is 8 years old. We keep our cars 12-20 years (that one was totaled or we'd still have it). Norm for us is 16 years. We drive them till they are not safe or not worth fixing. And, then we buy new. However my last car was $50K as we could afford it in cash so I don't get how people scream poverty on more money. Our next car will be that much too but cash. I cannot even imagine keeping a car 8-11 years.

I cannot imagine driving around a pos 11 year old car.

Choices, my dear. My car is old but looks and works great, so your loss.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We saved from birth as we are older parents and want to be retired by the time they start college. DH wanted to save everything in one bucket, but I wanted specific college funds for peace of mind. The tax savings have become meaningful, but it wasn't a primary motivating factor.

We saved a reasonable amount, but we figure we can always pull from retirement if we need to.

That should never be a plan. Retirement should not be tapped for anything except retirement for you and your spouse/partner.

Why not? Does it matter if we save it in a college fund or retirement plan? Spouse will be retirement age at that point so they can take withdrawals. Assuming they are working we will pay the difference out of pocket.

There is no one right answer. I'm the PP. I'm the younger spouse. I want to save for college while we are both working. I don't want the timing or the quality of my retirement to be subject to college funding. If we get hit by a bus, I want a portion of my kids’ inheritance earmarked for college. I don't even care if it's entirely rational. It provides peace of mind that I’ve accomplished a specific parenting goal. Capping off the last of our kids’ 529 plans is one of the few reasons I work, as DH’s current income is enough to support current expenses.

THIS 100%. Life can toss you curve balls. You don't want to be living "retirement" in a crappy position all because you chose to send your kids to Harvard with your retirement money because you had to stop working before you could replenish it

[Anonymous]

No, but this site and area would lead you to believe they do.

I have 4 kids and 3 are in college. We are lucky because my ILs have fully financed their educations so they will not graduate with any debt. They are very much in the minority amongst their friends. Most of their friends all have loans in addition to the merit/scholarships and portions their parents pay.

None of my siblings' kids have their educations fully funded. My nieces and nephews all knew this from the start of the process, which I think is important.

Teenagers, even the smart ones, have zero concept of how much money $30k/year actually is when taking out a loan.

[Anonymous]

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I will feel markedly like a chump when I write the first check for $84k and change in the summer. Ugh. Full pay over here.

This will be us. Feel like a total sucker when you read 65-70% of the school is getting aid and you are full pay.

My kid got into 2 Ivies, Pomona and Georgetown. He will likely go to one of those over WM & UVA. We did all the tours and for us it’s worth it. UVA is the largest by about 10k more students than most on hiss list.

We have about $140k in 529 for each kid. So will be pulling the rest out of our @sses.

Unless you have a extremely HHI, why would you pay $85-90K/year when you can attend UVA for ~$40K? especially when you don't have the money saved for college?
Very different story if you have $350K+ saved for college

It sucks for very high star kids of donut hole families. They get effed over. This kid busted @ss most likely and yet if his parents made slightly less he’d get almost a free ride, but since they likely both work their kid can’t go whole a family making $150k can go for free or a $200k family will get $30k knocked off— but live in a high COL area and make $50k more and be on the hook for the full $90k.

It’s just rich and poor at these expensive schools now.

At the T20 or so schools, the FA is gradual. It's not $200K gets nothing and $175K gets a full $85K/year ride.

That kid already has so many advantages by growing up in a family that makes $300K/year.
FYI--his parents could have always chosen to only make $150K or $100K if getting college for free at a T20 was the goal.
However, I suspect most would rather have the higher income all the way along and figure out college.
FYI---if your kid has a resume for a T20 school, they can most likely find many many schools in the 30-100 range that will give them excellent merit. They truly can get an amazing education for much less than $90K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are millions of parents earning in the Top 3% and above. Millions. Executives, lawyers, SWE’s in the tech field, doctors, investment bankers.

or someone who may have been driving a beat up car just to save for ivy education for their kids

Like the rest of us are rolling around in 90k cars. Sticker price on my vehicle is less than one semester at ivy league.

But do you drive that $45K vehicle for 10-12 years? Or do you replace it every 5-6 years? For "donut hole families" that can make the difference in. what you can afford for your kid (that and other similar cost saving choices you make along the way)

I have one 14 year old car and one newer 30k car (because our ancient car died) car and that's a drop in the ocean of college costs for two kids if we were to pay full pay for a private college. It's really not comparable at all in terms of cost.

It's comparable in terms of mindset for saving for college (and retirement and other aspects of life). Many buy new cars every 4-5 years and that mindset carries over to most other aspects of life---they spend money they dont' need to spend and then wonder why they haven't been able to save.

Us personally, our last car loan was when we were 26 (Honda Civic). Drove that car for 8 years, once it was paid off (in 3 years) kept saving the monthly payment so that we had over $26 K in the "auto savings". Then sold the car for $5K and had $31K to put towards a new vehicle. We added in 6K and paid cash for a luxury vehicle. And never looked back. Kept that car for 11 years before we gave it to a family member.

I have to laugh when you act like a car is 8 years old. We keep our cars 12-20 years (that one was totaled or we'd still have it). Norm for us is 16 years. We drive them till they are not safe or not worth fixing. And, then we buy new. However my last car was $50K as we could afford it in cash so I don't get how people scream poverty on more money. Our next car will be that much too but cash. I cannot even imagine keeping a car 8-11 years.

I cannot imagine driving around a pos 11 year old car.

Omg you people are so out of touch. Go back to whatever McMansion you crawled out of PPs.

[Anonymous]

We are paying out of pocket at a very expensive school but my kid did get some merit. So it’s about $67K. I have an avg paying job, my husband has an above avg (but maybe low for standards) but had a handful of above avg years-we used that money to invest wisely and drive normal cars, budget our vacations etc. The profit from those investments and hoping for a few good bonuses otherwise we will dip into savings. We made those investments about 15 years ago.

[Anonymous]

Anonymous wrote:There are millions of parents earning in the Top 3% and above. Millions. Executives, lawyers, SWE’s in the tech field, doctors, investment bankers.

The top 3% is a whole lot different than the top 1% or the top 0.01% where the income is in the millions.

Top 3% starts at about $350,000. As for lawyers only the top 0.01% make 1 million per year or more, generally firm owners or partners of big law firms.

So a lot in the top 3% but the big money is way fewer, way way fewer.

[Anonymous]

Anonymous wrote:I will feel markedly like a chump when I write the first check for $84k and change in the summer. Ugh. Full pay over here.

I’ve never heard of anyone paying full amount before college even starts. Most people pay monthly. Why give up all that money when you don’t have to.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I will feel markedly like a chump when I write the first check for $84k and change in the summer. Ugh. Full pay over here.

This will be us. Feel like a total sucker when you read 65-70% of the school is getting aid and you are full pay.

My kid got into 2 Ivies, Pomona and Georgetown. He will likely go to one of those over WM & UVA. We did all the tours and for us it’s worth it. UVA is the largest by about 10k more students than most on hiss list.

We have about $140k in 529 for each kid. So will be pulling the rest out of our @sses.

Unless you have a extremely HHI, why would you pay $85-90K/year when you can attend UVA for ~$40K? especially when you don't have the money saved for college?
Very different story if you have $350K+ saved for college

It sucks for very high star kids of donut hole families. They get effed over. This kid busted @ss most likely and yet if his parents made slightly less he’d get almost a free ride, but since they likely both work their kid can’t go whole a family making $150k can go for free or a $200k family will get $30k knocked off— but live in a high COL area and make $50k more and be on the hook for the full $90k.

It’s just rich and poor at these expensive schools now.

At the T20 or so schools, the FA is gradual. It's not $200K gets nothing and $175K gets a full $85K/year ride.

That kid already has so many advantages by growing up in a family that makes $300K/year.
FYI--his parents could have always chosen to only make $150K or $100K if getting college for free at a T20 was the goal.
However, I suspect most would rather have the higher income all the way along and figure out college.
FYI---if your kid has a resume for a T20 school, they can most likely find many many schools in the 30-100 range that will give them excellent merit. They truly can get an amazing education for much less than $90K.

This. This!!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I will feel markedly like a chump when I write the first check for $84k and change in the summer. Ugh. Full pay over here.

I’ve never heard of anyone paying full amount before college even starts. Most people pay monthly. Why give up all that money when you don’t have to.

Most of the monthly plans have fees associated with them. If you have the money already saved/in a 529, it's just easier to pay it for each quarter or semester when the bill becomes due.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are millions of parents earning in the Top 3% and above. Millions. Executives, lawyers, SWE’s in the tech field, doctors, investment bankers.

or someone who may have been driving a beat up car just to save for ivy education for their kids

Like the rest of us are rolling around in 90k cars. Sticker price on my vehicle is less than one semester at ivy league.

But do you drive that $45K vehicle for 10-12 years? Or do you replace it every 5-6 years? For "donut hole families" that can make the difference in. what you can afford for your kid (that and other similar cost saving choices you make along the way)

Most people who claim donut hole are making $200-500K and its a joke as they could save and choose not to and then want to complain about the cost of college and expect others to pay.

$200K family of 4 living in a hcol hard pressed to spend $80K x 4 yrs x 2 kids = $640K without impacting retirement.

They won't spend that because 80k schools (privates) will give them FA, especially with 4 kids. Most css schools still consider siblings enrolled.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are millions of parents earning in the Top 3% and above. Millions. Executives, lawyers, SWE’s in the tech field, doctors, investment bankers.

or someone who may have been driving a beat up car just to save for ivy education for their kids

Like the rest of us are rolling around in 90k cars. Sticker price on my vehicle is less than one semester at ivy league.

But do you drive that $45K vehicle for 10-12 years? Or do you replace it every 5-6 years? For "donut hole families" that can make the difference in. what you can afford for your kid (that and other similar cost saving choices you make along the way)

Most people who claim donut hole are making $200-500K and its a joke as they could save and choose not to and then want to complain about the cost of college and expect others to pay.

$200K family of 4 living in a hcol hard pressed to spend $80K x 4 yrs x 2 kids = $640K without impacting retirement.

We could easily do it if we wanted to. It's all about lifestyle choices. When you upgraded your house, we stayed in ours. When you traveled, we didn't. When you buy fancy things, we don't. What does impacting retirement even mean? You want to save a ton for retirement that is ok but then don't scream poverty when it comes to paying for college.

I am so sorry, but who is upgrading their home on a 200k HHi? 🤣

Travel is budget and nothing is fancy. Most people who live in HCOL areas learn to stretch every dollar when their income is in the 200k zone. Housing, health care, child care, food, insurance and retirement savings tend to absorb everything.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I paid cash.

It’s about $25K for one and $40K for another.

Our HHI is ~$300K - 2govt workers

Daycare > private > college

It never seemed too daunting. We just lived within those means.

At $300K, you could have comfortably saved. We make 1/2 what you do and saved plenty for a state college and grad school. It's your lifestyle choices.

It’s actually very easy to pay out of pocket so not sure why I’d save more.

We max our retirement and have pensions.

At 58 we have $3M in retirement and will get $10K/ mth pension plus subsidized healthcare.

Why would I save for college, makes no sense.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I will feel markedly like a chump when I write the first check for $84k and change in the summer. Ugh. Full pay over here.

You pay one semester at a time. Generally, August and late December.

Do most colleges offer a monthly payment plan?