I’m told I need to INVEST $259k over 18 years

[Anonymous]

Anonymous wrote:Use the Vanguard calculator— it shows how much it predicts specific colleges will cost when your kid starts. For my alma mater they’re predicting $650,000 for four years. Oh boy. Better up the savings...

Only $200K for my state school, not bad.

[Anonymous]

Yes, we were told $1,000 per month per child by our advisor. Instead we are saving $500 a month and using some of our annual bonus $ to boost the account every other year

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: I admit I’m confused by the amount we are supposed to invest ($1,200 per month) for each child to fund private college. That means we will be investing approximately $259k over 18 years. That is enough to pay for private college now at 60k per year. Is the calculator not including any appreciation?!?

Our goal is to invest at least 60k by age three. This is one year of tuition. I sure hope this would grow to at least two years of tuition by age 18, which would be in 15 years.

The cost of college has been outpacing appreciation, inflation, damn near every financial sector in the last 10 years, and there's no real indication it's going to stop. So if your kid is under 5 now, you should assume college will be closer to $100k/year when s/he is ready to go.

NP. Cool, so working parents are supposed to pay for a private college degree at current prices out of our monthly cash flow, while also paying $1.5k/mo/kid for childcare, paying back our own student loans, and saving for retirement?
F*** the whole system, I’m sending my kids to Germany or Norway for college and telling them not to come back

Don’t forget at least six months of income in case of job loss or illness!

I can’t do it all. We are trying to get our mortgage paid down and save for retirement now so we can help our kids later. But lower prestige state schools or perhaps a trade program for a few year? Or I’ll send the money to Europe and pay a lot less out of pocket. Even full pay international rate is Europe is like $25 K per year.

[Anonymous]

There are really good in-state public schools in VA and MD. You can go to those for $20-25k/year all-in (tuition + room/board + fees). Even if college costs increase at 5% per year (and it's been like 2-2.5% above inflation per year for the last decade), that comes to about $250k total per kid.

To save up $250k per kid, a lump sum $60k invested at birth, or a $500/mo for 18 years ought to do it.

We're currently saving $400 per kid per month, and our 2 kids are infant/toddler. Maybe we'll up it when we get out of daycare. Maybe we'll keep it constant and just add to it with bonuses/windfalls over the years. Maybe we'll leave a shortfall and cashflow the rest from our salary while the kids attend college.

At a minimum, we should be able to cash flow the current $6k per year we're putting into each 529.

[Anonymous]

We are budgeting $200k per year, per child.

[Anonymous]

Anonymous wrote:We are budgeting $200k per year, per child.

Whaaaaat??

You are budgeting to pay $200,000 a year for college? Per child?

You expect to pay $800,000 for a bachelor's degree in fewer than 16 years?

[Anonymous]

For all the naysayers, Vanguard’s college cost calculator, I call it the “dream destroyer....”


https://vanguard.wealthmsi.com/collcost.php

[Anonymous]

Anonymous wrote:For all the naysayers, Vanguard’s college cost calculator, I call it the “dream destroyer....”


https://vanguard.wealthmsi.com/collcost.php

Yeah. We are saving to meet the goals this projects but realistically I don't see how its possible for the cost of college to increase 5% every year. In 10-15 years that means a LOT of families won't be able to afford it and school loans will be crushing. I suspect the cost will continue to outpace CPI inflation but not double it - its just not sustainable IMO.

[Anonymous]

Anonymous wrote:For all the naysayers, Vanguard’s college cost calculator, I call it the “dream destroyer....”


https://vanguard.wealthmsi.com/collcost.php

The calculator uses a 5% annual increase in costs. Obviously no one knows for sure, but what do people think the annual increase will be for the next 15 years or so? Let's say for this is for the three main state schools in MD and VA: UVA, UMD, and VaTech.

I know that 5% is a good estimate based on the past, but what effect, if any, will be student loan crisis have on tuition increases in the future? I think it could have SOME political effect that would cause politicians to try to slow down the cost increases at state schools.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The cost of college goes up a lot every year.

It has to stop at a point because more and more people will default on student loans. Student loans are what allowed the cost to increase so much anyway.

It won't stop because the internationals can pay full freight. I know deans of law schools who fill half their classes with full freight Chinese students.

[Anonymous]

Anonymous wrote:This is why more people are choosing state schools, some of which are still expensive. Privates are really only for the very rich and very poor.

That has been our experience, OP, some privates are already at $78,000 a year. You need to plan for a lot, lot more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The cost of college goes up a lot every year.

It has to stop at a point because more and more people will default on student loans. Student loans are what allowed the cost to increase so much anyway.

It won't stop because the internationals can pay full freight. I know deans of law schools who fill half their classes with full freight Chinese students.

But that would ruin a school’s reputation (having all Asian foreigners) and then the school wouldn’t appeal as much to the Asian foreigners.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is why more people are choosing state schools, some of which are still expensive. Privates are really only for the very rich and very poor.

That has been our experience, OP, some privates are already at $78,000 a year. You need to plan for a lot, lot more.

More than what? We are already saving the $1,200 a month. We could float the private tuition on our current salaries if we needed to do so.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For all the naysayers, Vanguard’s college cost calculator, I call it the “dream destroyer....”


https://vanguard.wealthmsi.com/collcost.php

Yeah. We are saving to meet the goals this projects but realistically I don't see how its possible for the cost of college to increase 5% every year. In 10-15 years that means a LOT of families won't be able to afford it and school loans will be crushing. I suspect the cost will continue to outpace CPI inflation but not double it - its just not sustainable IMO.

At a certain point, a degree will NOT be worth it. Instead, a high school grad could take the college money and invest it in real estate and in some cities live rent free by having roommates.

[Anonymous]

1 year of UMD plus room and board is $21,000, which is how much we're paying for daycare today. We put just enough to get the state tax deduction now, and I'll worry about college tuition later.