Did you folks not do ANY saving?

[Anonymous]

OP— my kids born in 2002 and 2004. So, both in Hs. Just as we were gearing up on savings, the Great Recession hit. My husband lost a job, was out of work, we had to move to the DMV and deal with housing costs, then it took me time to find a job.

Fact is, the fact we are high earned now, does not mean we had any wiggle room when my kids are younger. We are now saving $3000 a month, split between two kids. And have been for several years. And that gets us WM and some OOS Publix’s completely paid for, no sweat. That’s $160,000 times two kids. $320,000 is a lot of college savings in my book. It still only gets us halfway to a private college for two kids.

So yes, it would have been nice to have consistently saved a lot since birth. But that’s not the way our lives turned out. And financial aid treats opus like we live in a low COL part of the country and have had a donut hole income for 18 years, and the ability to save consistently.

We didn’t lose our house. In 2008, that was winning.

[Anonymous]

Well, our HHI is 110k--which is just at median for our area (NOVA), just above median for the DMV region, below much of what is reported on DCUM etc, but too high to get aid at our state schools.

2 Kids, went to public K-12. Eldest got into the top in-state publics W&M (40k total cost of attendance) and UVA (33k/yr and then up to 38-40k for 3rd/4th year depending on major). We don't qualify for aid at either school except loans and work/study. For 2nd we will be more aggressive looking for private schools that will offer more merit aid.

We've been saving/investing diligently in 529s since they were born while living in this high cost of living area (we rented until we could buy a place, chose a neighborhood with great public schools but relatively low housing prices for the DMV, paid cash for used cars and drive them into the ground, kids did cheap activities not expensive travel sports, taking camping vacations in state parks or visit family on road trips not flights). At this point we have 90k for both kids which would gets us 2-3 years for our eldest kid at our two strongest in-state schools. We're not going to be able to save much more for child 2 while paying for child 1. If they went to our very cheapest in-state, we could fund 1 kid fully and probably could cash flow and take out student loans and cover both easier. But we've got high-achieving kids and I had the basic middle class perception that your kid should be able to go to the best in-state public school they can get admitted to if they want and you should be able to afford it on a median income with diligent savings. I'd rather my kids not graduate with 30K+ debt, but it may be the case.

We're about as median as you can get for this area if you look at the numbers, and I think our situation parallels more people than you realize. It's not all magical thinking, international vacations and oops I didn't save for college! I still feel very fortunate, am not complaining about my lot, don't resent financial aid for lower income families who face far more barriers than us. I'm just looking for solutions/strategies to pay for my kids' college and think there are some structural problems to address in the ways states support their universities.

[Anonymous]

I save $1000 per month per kid and then I put higher lump sums in from windfalls (bonuses, etc). I grew up MC and would have really appreciated being able to choose and a college beyond the few state school options in my state. So, it is a huge priority for me to save for my children’s education. Different people have different priorities.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I guess I'm just surprised at the level of magical thinking that seems to have been going on, when for years the information about the costs of college has been readily available and widely discussed across multiple media platforms.

Well, op. I’m the pp who made the list above. And even saving what I am, I will not have enough to cover a day of grad school. So, I will research the heck out of merit and aid for undergrad with the hopes of having something for their masters if that’s what they are talking about exploring.

DP. You don’t need to save for your kid’s grad school. While college is basically a necessity now, grad school is not, and any program worth doing will pay for itself, either through increased earnings to pay off debt, eligibility for loan forgiveness programs, or grants/stipends from the university for grad students. If none of those are the case for your grad program of choice, you should be seriously reconsidering the program.

+1 I have no plans to pay for my kids' grad school. We saved to pay for in-state public university for undergrad. If they have any leftover they are welcome to use it for grad school. My parents did the same, although I don't think they did any long term savings for college, my SAHM mom just went back to work as a secretary when my sister and I were in high school and her salary went to college (in-state public). Similarly, we live on one of our salaries and the other goes 100% to retirement and college savings.

[Anonymous]

You are making some big assumptions about people, Op. We started saving for our kids' educations when they were babies. But that doesn't mean that our kids don't have to worry about getting merit scholarships and watching how much they spend on tuition/room/board/commuting/books, etc. because they absolutely do.

[Anonymous]

"All these things, and many more, can be the reason why a UMC family hasn’t saved for college."

All true. My question would be why they consider themselves UMC?

If they have the income, they may be UMC someday but not yet because they could always lose their job or end up in a major car accident or have a long term medical problem.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I guess I'm just surprised at the level of magical thinking that seems to have been going on, when for years the information about the costs of college has been readily available and widely discussed across multiple media platforms.

Well, op. I’m the pp who made the list above. And even saving what I am, I will not have enough to cover a day of grad school. So, I will research the heck out of merit and aid for undergrad with the hopes of having something for their masters if that’s what they are talking about exploring.

DP. You don’t need to save for your kid’s grad school. While college is basically a necessity now, grad school is not, and any program worth doing will pay for itself, either through increased earnings to pay off debt, eligibility for loan forgiveness programs, or grants/stipends from the university for grad students. If none of those are the case for your grad program of choice, you should be seriously reconsidering the program.

I was surprised at the people I've met whose parents paid for grad school. That seemed like going beyond. And it was mostly people have not managed to make more money for that expense.

That said, I will be happy if I can pay for half of my kids' undergrad college expenses. If we can do that, I'm hoping we'll be in a financial position to pay as we go for the rest with leaving them with only a small loan. I do want them to have ownership of their college education. If they get merit aid that's great too.

[Anonymous]

Anonymous wrote:"All these things, and many more, can be the reason why a UMC family hasn’t saved for college."

All true. My question would be why they consider themselves UMC?

If they have the income, they may be UMC someday but not yet because they could always lose their job or end up in a major car accident or have a long term medical problem.

The problem is the OP made the inference that they all who are looking for this aid who are not lower income and thus eligible for Pell grants etc. are all a bunch of UMC complainers who were frivolous in their spending (which following posters are arguing isn't true). The bulk of the financial aid system focuses on current HHI, not COL nor cost of education that is required to get the HHI nor history of unemployment prior to current income. The donut hole for public colleges which are far more expensive than they used to be can start at below 100k HHI, which doesn't give a lot of slack in the DMV area.Private colleges actually look at these factors more thus people looking for alternate strategies.

[Anonymous]

Is this a joke? All I see on here is how everyone has their 529 practically funded once that egg turns to a zygote.

Enough already- we get it, you can save! Yay you! Did you not get enough gold stars growing up?

[Anonymous]

My Ivy alma mater is now $74,000 a year. As a reference when I graduated in 2002 it was just about $34,000. Today, four years at my alma mater, assuming no increases, would be just shy of $300,000. But I'm still years away from paying college bills so who knows what it will be in six years' time (it almost makes me sick to think about it as college costs still increase well beyond the rate of inflation and most people's pay increases). There's a certain arrogance in your assumption that people can easily save $300,000 x # of kids over 18 years, when they still have to live a life, raise a family, pay for a place to live, feed themselves, pay their taxes, pay for emergencies, and put aside money into retirement savings. I'm guessing you're one of those people who started his first job in investment banking and has always been making six figures since he was 22, or something similar, and you have no clue that for most people the trajectory to a higher HHI is one that requires patience and time and progression through the career ladder, with even setbacks along the way.

We manage to save quite a lot by being frugal but it does seem like no matter how hard you try the costs of life outpaces what you can manage to save so your hypothetical savings you calculate at the onset of the year rarely come to fruition. We are fortunate that we can save what we can, and we will, barring any unforeseen emergencies or changes in life, be able to swing the college costs. But I am already starting to ask if it's worth it. If it's a choice between my alma mater and in state at a good flagship or another college with a big merit, I'm tempted to encourage the kids to go that route and use the differential to help buy them a house or even to pay for graduate school, which is increasingly more important than your BA these days. Or even just put the differential into a fund and tell them they can't touch it until they turn 70. To be honest, I'm increasingly bitter at the high college costs because there's absolutely no way they're justified nor does it make any sense whatsoever.

[Anonymous]

Anonymous wrote:

Anonymous wrote:"All these things, and many more, can be the reason why a UMC family hasn’t saved for college."

All true. My question would be why they consider themselves UMC?

If they have the income, they may be UMC someday but not yet because they could always lose their job or end up in a major car accident or have a long term medical problem.

The problem is the OP made the inference that they all who are looking for this aid who are not lower income and thus eligible for Pell grants etc. are all a bunch of UMC complainers who were frivolous in their spending (which following posters are arguing isn't true). The bulk of the financial aid system focuses on current HHI, not COL nor cost of education that is required to get the HHI nor history of unemployment prior to current income. The donut hole for public colleges which are far more expensive than they used to be can start at below 100k HHI, which doesn't give a lot of slack in the DMV area.Private colleges actually look at these factors more thus people looking for alternate strategies.

OP may be assuming the people posting about college are the same people making most of the income posts on DCUM (almost nobody under $250k HHI, "anyone with a college degree should be making six figures," etc).

[Anonymous]

I think there are two things going on here and both can be true:

1. The cost of college has far outpaced inflation and wages. This makes it extremely difficult for most people to afford to send their kids to college and pay for it 100%

2. In this area, there are many people making strong UMC incomes who are terrible with money and don't save as much as they can/should for college. Instead they try to keep up with the Joneses and go on tons of vacations, update their homes and kitchens every few years, etc etc. They may get financial aid that they truly don't deserve because they have been completely irresponsible about saving. But, life's not fair and some people game the system. Just be happy that you don't have to live that life. Money is just a tool and watching many friends live this way I've realized just how stressful it is. It's better just to do your own best and focus on what you can control: Saving enough for your own kid and living within your means.

[Anonymous]

Anonymous wrote:"All these things, and many more, can be the reason why a UMC family hasn’t saved for college."

All true. My question would be why they consider themselves UMC?

If they have the income, they may be UMC someday but not yet because they could always lose their job or end up in a major car accident or have a long term medical problem.

Maybe they've only been UMC for a handful of years. Before that they were as middle class as everyone else. Don't assume that everyone has huge generational wealth, deep pockets and decades worth of enormous salaries because they do not.

[Anonymous]

Aren't most people still working when their kids are in college? I'm saving for both my kids, but I'm also assuming that large amounts of my paycheck during their college years will be going towards paying their college expenses. Why are people thinking they need to have saved the total amount by the time their kids start college?

[Anonymous]

Anonymous wrote:My Ivy alma mater is now $74,000 a year. As a reference when I graduated in 2002 it was just about $34,000. Today, four years at my alma mater, assuming no increases, would be just shy of $300,000. But I'm still years away from paying college bills so who knows what it will be in six years' time (it almost makes me sick to think about it as college costs still increase well beyond the rate of inflation and most people's pay increases). There's a certain arrogance in your assumption that people can easily save $300,000 x # of kids over 18 years, when they still have to live a life, raise a family, pay for a place to live, feed themselves, pay their taxes, pay for emergencies, and put aside money into retirement savings. I'm guessing you're one of those people who started his first job in investment banking and has always been making six figures since he was 22, or something similar, and you have no clue that for most people the trajectory to a higher HHI is one that requires patience and time and progression through the career ladder, with even setbacks along the way.

We manage to save quite a lot by being frugal but it does seem like no matter how hard you try the costs of life outpaces what you can manage to save so your hypothetical savings you calculate at the onset of the year rarely come to fruition. We are fortunate that we can save what we can, and we will, barring any unforeseen emergencies or changes in life, be able to swing the college costs. But I am already starting to ask if it's worth it. If it's a choice between my alma mater and in state at a good flagship or another college with a big merit, I'm tempted to encourage the kids to go that route and use the differential to help buy them a house or even to pay for graduate school, which is increasingly more important than your BA these days. Or even just put the differential into a fund and tell them they can't touch it until they turn 70. To be honest, I'm increasingly bitter at the high college costs because there's absolutely no way they're justified nor does it make any sense whatsoever.

Great post which captures the trajectory of many UMC families in the DMV. Our family joke is that we have saved enough to send DS to any school of his choice in 2002! We can afford a $50-55k college but there aren’t too many top rated colleges at this price point (and ds’s stats do place him in the 99+ percentile). We have a modest home (typical older house in DMV that needs a lot of TLC) , cars that are 18 and 8 years old and most of our furniture is from Ikea. So while I feel grateful for what we have I do feel frustrated that we cannot give ds the same opportunity our parents gave us - to go to the best school we were admitted to. We have been talking to ds about this for years now so he is prepared to make some tough choices. He has also seen older friends who are in a similar situation turn down dream schools for UMD. He is a good kid and would try to be sensible but as his parent I feel sad that we couldn’t save more.