Is it messed up to not save for your kids college even if you can afford it?

[Anonymous]

Anonymous wrote:I actually have the same question as OP except that it’s really not clear we can “afford” it. I mean, we can afford to save something but it’s entirely unclear how much. We are extremely not rich (HHI of 120k). Every year it’s this dance of how much do we put in retirement, how much for college savings for our kid, how much do we allow ourselves some handful of basic enjoyments (vacations, restaurant dinners) so that our life isn’t just a slog of work, school, and saving every penny for a an unknown future.

Sometimes saving for college feels futile because if our kid went to college today, we’d qualify for a lot of aid at many schools. So every dollar in the 529 feels like a meaningless depletion of our aid award. Obviously any school will just take what’s in the 529, so why not sign our kid up for dance classes she wants even if it means saving less for college? Why not go ahead and take a trip on an airplane instead of exclusively doing road trips for vacation, since 20 years from now we might all appreciate that more memorable vacation more than an extra $1200+compound interest in the college fund.

These are the questions that plague me.

At an income of $120,000 a year, I'd save in Roth IRAs, not 529s. If you can do both, kudos. We never could.

[Anonymous]

You don’t have to save for college — I’m not; I’m saving to give my kids a start in life. They can go to college or vocational school or work or whatever when they’re 18. With respect to “useless” degrees, I don’t care what they want to make but they need to know I’m not going to be able to support them after 22 or so, so they need to have a plan. I have several friends who majored in English and arts and they’ve all managed perfectly functional if not necessarily well paid careers.

[Anonymous]

Honestly, OP, I have a similar cynical mentality about college and higher education. We still started a 529 for each kid and contribute a few $k each year. I think I calculated we are on track to have $150k per child give or take whatever the stock market does between now and then. I felt like this was a fair amount to save, and then we can still pay for the balance if we decide to. Or we can split it with our kids, or take loans, or whatever makes sense at the time. Or if they don't go to college, they can hold on to the account and let it keep accruing interest for their own kids.

But don't lose sight of the fact that 529s are tax free withdrawals. At the very least, you should be contributing the maximum your state allows you to deduct. If you contribute more than the deduction in one year, it carries over and can be deducted the following year, so it's good to pad the account ASAP to allow it to grow.

I agree that $500k (or whatever it winds up being in the 2030s) for a college education is ridiculous. But I also don't want to get to 2035 and wish I had done things differently. I'm hoping to land somewhere in between.

[Anonymous]

Wow, your child is not even born yet and you’re already setting them up to want nothing to do with you as an adult. Your justification for not saving because of your perceived problems with the higher education system in this country will do nothing to change the system, but will deeply hurt and disadvantage your child. Basically you are just making an excuse to be cheap.

Maybe you should reconsider this pregnancy. Roe hasn’t been reversed yet.

[Anonymous]

Apart from the tax advantages of the 529, you can hand it down from generation to generation. So maybe your kids won't have to save for their kids' education, because that will just pass down.

Also, if you do not save, please do not then apply for financial aid. It's really not fair to the rest of us if people who can afford to save (such as you and me) then cry poor when it comes time to make the first tuition payment.

[Anonymous]

Anonymous wrote:If the 529 is too limiting for you, save $$ in another place.

This. Or put $4k a year into a 529 and that's it.

You seem to think you have to put $200k into a 529 and I don't think I'd do that personally. But we'd like to have about $75k in each one when our kids go. I know it won't fully fund them most places, and that's ok. It's a nice padding.

[Anonymous]

First, don't assume in-state tuition at a public school will be that cheap--we are paying ~$38k per year (including room and board) for our kid at W&M.

Second, you don't have to save the whole amount in a 529. We pay about half of the $38k out of cashflow on a monthly payment plan and the other half from 529 savings.

We did not qualify for any financial aid at W&M.

[Anonymous]

Anonymous wrote:Millennial here, went to a state school in the early 2010's and paid my way through because parents didn't have the money, and I still graduated with 40k in debt which I paid off in 3 years thanks to a decent starting salary (thank you CS degree). Now I make several times more and my wife is pregnant with our first kid, so thinking about college savings, but reading these forums it seems like everyone is obsessed with fully funding their kids college education. Why should I feel obligated to do so when 1) lots of college degrees these days are completely worthless and won't give anywhere close to a good ROI and 2) higher education is in a massive debt fueled bubble and maybe I don't want to help fuel it by paying extremely inflated tuition costs? I have a lot of friends who aren't in a financial position to contribute to 529's even if they wanted to, yet they still have kids. Honestly I think there's too much emphasis on saving for college given that so many degrees are worthless and the bubble just keeps expanding with all this free government money flowing into higher ed. Not every person should even go to college.

I totally agree that the education bubble will pop before my kids get there. There is simply not the ROI in most degrees

Why do I fund my kids 529s? Because I believe that IF they don't use it for school or grad school, I can roll it down to my grand kids for private school. We will likely see more of this in the future than now. And I'm a strong advocate of private schools these days (DCUM hates this view, but publics just are not close).

My parents made plenty of money and I got full academic scholarships. I didn't use any of their money (not in 529s). I expect my kids will be similar, because they are very bright and motivated. It's another vessel to pass down wealth between generations. Just view it through that lens

[Anonymous]

I’ll go you one better OP. I know families who belong to country clubs or pay for private K-12 (or both) who don’t plan to pay for all of their kids’ undergraduate costs. I find this appalling and so so fake and low class. They see nothing wrong with it. I could not look my children in the eye.

[Anonymous]

Your wife surely will have a maternal instinct and she will overide your duma$$ logic. Or maybe you’ll get a semblance of a paternal instinct when the baby is born

[Anonymous]

Anonymous wrote:Wow, your child is not even born yet and you’re already setting them up to want nothing to do with you as an adult. Your justification for not saving because of your perceived problems with the higher education system in this country will do nothing to change the system, but will deeply hurt and disadvantage your child. Basically you are just making an excuse to be cheap.

Maybe you should reconsider this pregnancy. Roe hasn’t been reversed yet.

..... said the entitled Millennial who never grew up and only see her parents as $$$ bags at her disposal.

You lay the tone for the relationship with your kid. Raise them better than PP's parents raised her.

[Anonymous]

Anonymous wrote:I’m saving for my kids college education so they can graduate without any debt; however there will be strings attached. I will only pay for certain degrees, such as Engineering. Maybe premed if they show good promise, but I’d prefer a 4 years and our degree. Grades will need to be good. My kids will need to work summer jobs beginning at 15 and pay me what they can do that they have at least some skin in the game.

If they can’t do the above but still want higher education they can redeem themselves going to community college.

This is awful and your kids will pay in years of therapy for how controlling you are as a parent - only pay for certain degrees like Engineering or premed if promise? Wow.

[Anonymous]

I think people might be a little obsessed with funding a college education, but to just not do it at all if you can afford it is a little cold.

College is more important and valuable than you’re making it out to be. Really and truly imagine if your kid didn’t go to college. What kind of job could your kid get out of high school? There are a few potential paths that are decent, like becoming an electrician or dental hygienist or going to a coding boot camp while living in a crappy apartment in ramen noodles using funds they’re making from their minimum wage job. Note that even though we don’t call those options college, they do require some sort of educational program , which costs money. If you’re looking at no education at all, its pretty just labor or service industry.

And with college, think of the ways it’s beneficial that aren’t related to future earning potential. Just two that immediately come to mind: meeting future business partners and spouses. Do you really not want your kid to take advantage of the social aspect of college?

So college is actually important, even if the costs in many are inflated and ROI for some majors is questionable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:As someone already said, a multitude of reasons but the only one you need is that you love your child, can afford this and want them to have opportunities you did not.
Maybe your goal isn’t to fully fund, which is valid. But to save nothing for them when you have the means is a d&@k move.

+1 especially because, as PP mentioned, your income will mean they are very limited in aid. The financial aid system assumes parents are contributing. Also, they can take out very little in loans on their own. You will need to co-sign.

+1

I went to a B (c?) rated state school back in the late 80s. Today's tuition is scary AF compared to when I went to college. I have no idea what tuition will look like in 10 yrs, but my kids are teens, and I am funding their 529 to at least $160K each.

This covers a good state school, but not out of state or private. So, they'd have to take out a loan if they want to go elsewhere, unless they get merit aid. If they go to a top tier univ, I think the loan is worth it as they will most likely get a pretty good paying job and will be able to pay back the loan within a few years.

Otherwise, if they choose a mediocre, high cost univ, then a loan is not worth it.

Sure, I did fine with a degree from a low rated degree (making six figures for the past 20 years), but I think I'm an outlier. Plus, who knows what the economy will look like in 10 years.

My niece, a super smart kid, got into a great, but expensive SLAC. My sibling thought that they'd get financial aid, but nope. They didn't qualify. HHI $160K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If the 529 is too limiting for you, save $$ in another place.

This. Or put $4k a year into a 529 and that's it.

You seem to think you have to put $200k into a 529 and I don't think I'd do that personally. But we'd like to have about $75k in each one when our kids go. I know it won't fully fund them most places, and that's ok. It's a nice padding.

Yup, this is basically our plan, but more like 100k each kid. I have a 2024 and a 2028 and will be paying the difference out of w2 income. For my 24, hoping to pay all out of w2 income so that we have more padding for our 28, as we’ll be thinking ahead to retirement then.