Future college costs - what am I missing?

[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.

[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.

They usually have 529 plans which are allowed to accumulate up to like $100k before it counts against you for financial aid.

[Anonymous]

I believe college education has gone much more expensive than it is worth it. Universities are charging whatever they could because there is easy access to student loans.

[Anonymous]

You are doing very well.

Plus there is a good chance your kid will get some merit aid.

Don’t stress, and don’t neglect retirement savings.

[Anonymous]

You will be fine.

My oldest is 16. My youngest has more in her college fund that the oldest. I guess her fund was more aggressive and returns are better.

Oldest has 200k. He will likely go private. We just plan to cash flow whatever is not in his college fund.

[Anonymous]

You need to focus on retirement as a priority.