Future college costs - what am I missing?

[Anonymous]

My kids are in 10th, 7th, and 4th. We are saving in the 529s but I'm planning to cash flow what we can't cover with the 529, and would consider loans if we had to.

We also live in VA, and I'm not really planning to pay more than in state tuition (though this could mean in state VA school, or it could mean out of state school that costs same as VA instate, or private school that gives money). I don't think they'd get a better ROI paying full tuition at anything at the smallest minority of top private schools, and for only that, am I willing to pay full price private and it's like a lottery chance of admission anyway - so not something I am worrying about in advance.

[Anonymous]

2 in college now - one is at an out if state flagship with merit, about $35k/year to us. There's enough left over in thwir 529 after 4 years to pay 3/4 of the cost of grad school, and we will cash flow the last 1/4. 2nd one is in a private, $90k+ cost per year. Student will finish in 3 years due to APs, but we will have to pay one full year from cash flow. 2nd will not have grad school paid for by us

Our earnings now are significantly more than when the kids were born, so the only challenge is retirement- we'd like to retire now, but need to wait until both are done with college

[Anonymous]

Anonymous wrote:OP, my child is in college NOW and all I have in her 529 is about $40,000.

We are managing. She's borrowing $5000 per year, and earning another $5000 from her summer job that she contributes. That's $10,000.

I take $10,000 from the 529.

And I cash flow $10,000 (about $1,000 per month).

That's $30,000 for the year which covers her out of state tuition, room and board, more or less. (she has a merit scholarship bringing cost of attendance close to in-state.)

So I cannot comprehend how you won't be in a MUCH better position if you already have $30K in your kid's 529 AND you are contributing $7200 annually?

And if you want to have in state fully in your 529, start with an extra $200 monthly now, so it has time to compound. That should get you there.

But yes, realize that in 18 years you will be making more and can likely cash flow a portion---what you will be paying for ECs in the teens can now go towards college (my kid was a dancer so $1K+ per month was being spent).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, my child is in college NOW and all I have in her 529 is about $40,000.

We are managing. She's borrowing $5000 per year, and earning another $5000 from her summer job that she contributes. That's $10,000.

I take $10,000 from the 529.

And I cash flow $10,000 (about $1,000 per month).

That's $30,000 for the year which covers her out of state tuition, room and board, more or less. (she has a merit scholarship bringing cost of attendance close to in-state.)

So I cannot comprehend how you won't be in a MUCH better position if you already have $30K in your kid's 529 AND you are contributing $7200 annually?

Congrats to you! You have figured out how to "make college affordable". Kid works, kid takes fed loans (it's not that much to pay off). But key is you find a school that is only $30K, which outside the T40 schools is not that difficult to do. Trust me when I say your kid will be happier with minimal debt than at a "higher ranked U"

Thanks ... my older kid managed to get need-based financial aid from several T40 schools with good endowments, too. All in all our expected contribution was about $30,000-$40,000 at each school.

Most on DCUM are not getting "need based aid". If you make more than $200-250K as a family, you won't get anything typically.

[Anonymous]

You need to look at the assumptions the calculator is making about rate of return. They often are too conservative, especially if you’re investing in 100% stocks.

[Anonymous]

Something is completely off…I contributed like $4000 per year for my kids starting at 1 (upped it to like $8000 each in HS) and have way more than needed for an instate school…like double.

Yes, what the market specifically does is important, but I don’t know what your calculator is claiming your in state total COA will be in 18 years.

[Anonymous]

Anonymous wrote:You're not missing anything. College costs are rising at a rate that far outpaces inflation, and have been doing so for quite some time. Plan for her to go to school in-state and either increase your monthly contribution, or plan to pay for the last year out-of-pocket from future current earnings.

Bro the child is 5 months old, they are starting with $30k and saving $600 per month. I think in 17 years they will have enough for college lol

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, my child is in college NOW and all I have in her 529 is about $40,000.

We are managing. She's borrowing $5000 per year, and earning another $5000 from her summer job that she contributes. That's $10,000.

I take $10,000 from the 529.

And I cash flow $10,000 (about $1,000 per month).

That's $30,000 for the year which covers her out of state tuition, room and board, more or less. (she has a merit scholarship bringing cost of attendance close to in-state.)

So I cannot comprehend how you won't be in a MUCH better position if you already have $30K in your kid's 529 AND you are contributing $7200 annually?

Congrats to you! You have figured out how to "make college affordable". Kid works, kid takes fed loans (it's not that much to pay off). But key is you find a school that is only $30K, which outside the T40 schools is not that difficult to do. Trust me when I say your kid will be happier with minimal debt than at a "higher ranked U"

Thanks ... my older kid managed to get need-based financial aid from several T40 schools with good endowments, too. All in all our expected contribution was about $30,000-$40,000 at each school.

I’m cracking up that a family qualifies for “need based aid” but also has $40k/year extra lying around. One of those things can’t be true.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, my child is in college NOW and all I have in her 529 is about $40,000.

We are managing. She's borrowing $5000 per year, and earning another $5000 from her summer job that she contributes. That's $10,000.

I take $10,000 from the 529.

And I cash flow $10,000 (about $1,000 per month).

That's $30,000 for the year which covers her out of state tuition, room and board, more or less. (she has a merit scholarship bringing cost of attendance close to in-state.)

So I cannot comprehend how you won't be in a MUCH better position if you already have $30K in your kid's 529 AND you are contributing $7200 annually?

Congrats to you! You have figured out how to "make college affordable". Kid works, kid takes fed loans (it's not that much to pay off). But key is you find a school that is only $30K, which outside the T40 schools is not that difficult to do. Trust me when I say your kid will be happier with minimal debt than at a "higher ranked U"

Thanks ... my older kid managed to get need-based financial aid from several T40 schools with good endowments, too. All in all our expected contribution was about $30,000-$40,000 at each school.

I’m cracking up that a family qualifies for “need based aid” but also has $40k/year extra lying around. One of those things can’t be true.

Most top 20 schools will provide 100% free tuition (not room and board) to families earning up to $200k.

Completely free to families earning up to $125k.

You can’t have tons of assets, but you can have “normal” savings of up to a couple hundred grand (and they mostly don’t look at equity in your primary home).

[Anonymous]

Anonymous wrote:

Anonymous wrote:You're not missing anything. College costs are rising at a rate that far outpaces inflation, and have been doing so for quite some time. Plan for her to go to school in-state and either increase your monthly contribution, or plan to pay for the last year out-of-pocket from future current earnings.

Bro the child is 5 months old, they are starting with $30k and saving $600 per month. I think in 17 years they will have enough for college lol

Correct…OP doesn’t say what state, but UMD in state total cost of attendance right now is $30k.

Let’s say it’s $60k in 18 years…that’s $240k.

$7200 * 18 =$129,600.00 + $30,000 =$159,600.00. If you just put the money in govt treasury options at 5% you will be well above $240k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, my child is in college NOW and all I have in her 529 is about $40,000.

We are managing. She's borrowing $5000 per year, and earning another $5000 from her summer job that she contributes. That's $10,000.

I take $10,000 from the 529.

And I cash flow $10,000 (about $1,000 per month).

That's $30,000 for the year which covers her out of state tuition, room and board, more or less. (she has a merit scholarship bringing cost of attendance close to in-state.)

So I cannot comprehend how you won't be in a MUCH better position if you already have $30K in your kid's 529 AND you are contributing $7200 annually?

Congrats to you! You have figured out how to "make college affordable". Kid works, kid takes fed loans (it's not that much to pay off). But key is you find a school that is only $30K, which outside the T40 schools is not that difficult to do. Trust me when I say your kid will be happier with minimal debt than at a "higher ranked U"

Thanks ... my older kid managed to get need-based financial aid from several T40 schools with good endowments, too. All in all our expected contribution was about $30,000-$40,000 at each school.

I’m cracking up that a family qualifies for “need based aid” but also has $40k/year extra lying around. One of those things can’t be true.

Most top 20 schools will provide 100% free tuition (not room and board) to families earning up to $200k.

Completely free to families earning up to $125k.

You can’t have tons of assets, but you can have “normal” savings of up to a couple hundred grand (and they mostly don’t look at equity in your primary home).

But families making $200k don’t have $40k lying around.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, my child is in college NOW and all I have in her 529 is about $40,000.

We are managing. She's borrowing $5000 per year, and earning another $5000 from her summer job that she contributes. That's $10,000.

I take $10,000 from the 529.

And I cash flow $10,000 (about $1,000 per month).

That's $30,000 for the year which covers her out of state tuition, room and board, more or less. (she has a merit scholarship bringing cost of attendance close to in-state.)

So I cannot comprehend how you won't be in a MUCH better position if you already have $30K in your kid's 529 AND you are contributing $7200 annually?

Congrats to you! You have figured out how to "make college affordable". Kid works, kid takes fed loans (it's not that much to pay off). But key is you find a school that is only $30K, which outside the T40 schools is not that difficult to do. Trust me when I say your kid will be happier with minimal debt than at a "higher ranked U"

Thanks ... my older kid managed to get need-based financial aid from several T40 schools with good endowments, too. All in all our expected contribution was about $30,000-$40,000 at each school.

I’m cracking up that a family qualifies for “need based aid” but also has $40k/year extra lying around. One of those things can’t be true.

Most top 20 schools will provide 100% free tuition (not room and board) to families earning up to $200k.

Completely free to families earning up to $125k.

You can’t have tons of assets, but you can have “normal” savings of up to a couple hundred grand (and they mostly don’t look at equity in your primary home).

But families making $200k don’t have $40k lying around.

(per year)

[Anonymous]

yeah I am not sure why this is so complicated - you save as much as you can and then expect to either cashflow the rest or take out loans. if you are able to put away 7K a year now I suspect that the potential for higher future earnings would allow you to cashflow quite a bit more on top of that per year.

[Anonymous]

OP,

The college savings plans don't allow you to select individual stocks. Since we have expertise in tech and knew some companies had great fundamentals, we opened regular trading accounts and bought Apple, Amazon, Netflix, Tesla (sold off since when Elon became too political), Nvidia and some others. Those tech stocks FAR outpaced returns and any tax incentives on any 529 we could have had.

I know the market is uncertain right now due to tariffs, but you should consider investing in companies you feel have solid growth potential.

[Anonymous]

^ posted too soon. We can now afford to send our two kids to any college and grad school. My oldest attends an 85K a year uni, where he receives 20K in merit aid.