How are normal people paying for college?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:by realizing that we had 18 years to save and starting early

+1. You know college is in your parental dreams as soon as your kid is born (if not earlier). Start saving early. Two benefits from starting early: (1) You have more dollars you can put into the 529, and (2) you benefit from stock market growth over the period (your money works for you). Another poster noted that the money they paid for daycare became the college savings after their kid started school. That's smart.

This isn't hard. It just takes thinking ahead, and sticking to your goal.

Eighteen years seems like a long time but sadly it's really not. It's a lot less time to take advantage of compounding than retirement. So starting early is important. Take advantage of the year before the kid is born when you know they're coming to put money in the 529 and let it compound. You can open it in your name and change it to the kid later.

Also, we are an UMC family who ourselves attended prestigious colleges including Ivy (largely on merit scholarships). We cannot reasonably afford to pay for those types of degrees for our children. We have two young children and the projected cost of UMD in 15 years is $200K. So for two kids that $400K. Our goal is to save that and give them an in-state education debt-free. To pay $1 million for two Ivy degrees is not happening unless we have $10 million net worth at the time, which is also not happening. I will not spend more than 10% of our net worth at the time on college.

Ivy League and comparable schools do not award merit scholarships.

[Anonymous]

Normal people generally go to state school. We started saving since birth. We started with the state prepaid or 4 years, and now do a 529 to pay room, board and hopefully graduate school. We've told our child state school except if they get aid or we can somehow afford otherwise and they are fine with it.

[Anonymous]

Anonymous wrote:Pay as you go, choose schools you can afford, loans. Other that, hopes someone dies and leaves an insurance policy or a house to sell. We have a 10th grader, didn’t really save but sold a house earlier this year and put 150k into the college fund but I knew that money would be there at this point so that’s why I didn’t save much.

Or, you could have lived under your means to safe and pay. We have a very small house and never changed up, so that helps a lot in terms of being able to save.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Pay as you go, choose schools you can afford, loans. Other that, hopes someone dies and leaves an insurance policy or a house to sell. We have a 10th grader, didn’t really save but sold a house earlier this year and put 150k into the college fund but I knew that money would be there at this point so that’s why I didn’t save much.

Or, you could have lived under your means to safe and pay. We have a very small house and never changed up, so that helps a lot in terms of being able to save.

That actually really hurts you long term- trading up, if you're using a mortgage, is the lowest risk leveraged investment that most Americans can ever make.

[Anonymous]

Anonymous wrote:Normal people generally go to state school. We started saving since birth. We started with the state prepaid or 4 years, and now do a 529 to pay room, board and hopefully graduate school. We've told our child state school except if they get aid or we can somehow afford otherwise and they are fine with it.

You're a sucker. You should have just levered up and waited for the Biden administration to use taxpayer dollars to forgive the student loan debt of deadbeat losers.

[Anonymous]

Anonymous wrote:by realizing that we had 18 years to save and starting early

+1

I don’t understand how parents of high school students just start asking this question in 2020. You knew college would be a gigantic expense since day 1.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Pay as you go, choose schools you can afford, loans. Other that, hopes someone dies and leaves an insurance policy or a house to sell. We have a 10th grader, didn’t really save but sold a house earlier this year and put 150k into the college fund but I knew that money would be there at this point so that’s why I didn’t save much.

Or, you could have lived under your means to safe and pay. We have a very small house and never changed up, so that helps a lot in terms of being able to save.

Check your privilege, jerk. I was out of work and nearly homeless and on food stamps for over two years with zero savings and a ton of debt. I don't own a home - I rent a tiny one bedroom in a shitty neighborhood because this is all I can afford. DD will have to work her way through college.

[Anonymous]

See if you are eligible for need-based aid. On a college's financial aid website, you can find its Net Price Calculator. You can do the NPC anonymously and try out different financial scenarios.

If need-based aid isn't enough, then go hunting for merit. If you can budget living expenses (15k/yr), it may be possible to find full tuition at a place like U Alabama or Arizona.

[Anonymous]

Anonymous wrote:by realizing that we had 18 years to save and starting early

+100000 unless someone just decided to recently adopt a 16-year-old...

[Anonymous]

I find that somewhat flippant, op. "And in state is off the table?"
In-state is expensive for most people, my family included. Quite frankly, your condescending attitude is off-putting.
-I have two kids in-state and it is a struggle to pay for it. Quite frankly, you can figure it out on your own when so clueless about the realities of life for most "normal!!!!" people.

[Anonymous]

We went to in state schools and are "normal people". We have had no financial assistance from parents since graduating college - no help with house downpayment, no gift to start a college fund for the kids, etc.

We opened 529s when they were born and started contributing a very small amount monthly, as it was all we could afford at the time. 10 years later, we contribute significantly more and if we stay on track, should be able to full pay in-state tuition for our kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Normal people make $70k a year. Their kids go to state schools or community colleges.

People in that HHI bracket get FA.

Not really. I just put 70k household income, $30k in investments, no savings, kid has no money into the EFC calculator and came up with like $3,500 for an EFC.

Okay, well that sounds reasonable. So I went to the Penn State net cost calculator (https://cce.ais.psu.edu/netprice-calculator/) just as a for-instance, and plugged in my $3,500 EFC:

It's telling me total cost is $33k.

Estimated scholarships and grants - $5k
Estimated student loan - $6k
And then it recommends $22k in parent loans.

A family making $70k taking out $22k PER YEAR for their child's undergraduate education is absolutely insane. Talk about a broken system. Your only hope at that income is merit aid. College is becoming out of reach for middle class Americans.

[Anonymous]

Anonymous wrote:Um, in-state is off the table if you’re a DC resident. It’s a myth that you get in-state rates https://www.thecollegefundingcoach.org/the-myth-of-the-d-c-resident-paying-in-state-tuition/

Aside from that, we are saving $20/month for each child in their 529 account. I’m sure most people here will laugh, but it’s what we can afford and it’s better than nothing.
They are in elementary school and have $23k a piece due to a hefty starting gift from a grandparent.

We will hope our child qualifies for financial aid due to our HHI being below $70k. Beyond that I have no idea what we will do to make up the rest. I guess just be real clear with the children that they need to major in a field with a clear job track and marketable skills to pay back loans. No one will be permitted to major in literature or history unless they plan on pursuing a PHD. Will also push community college or technical training/ vocational school.

I'm impressed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Pay as you go, choose schools you can afford, loans. Other that, hopes someone dies and leaves an insurance policy or a house to sell. We have a 10th grader, didn’t really save but sold a house earlier this year and put 150k into the college fund but I knew that money would be there at this point so that’s why I didn’t save much.

Or, you could have lived under your means to safe and pay. We have a very small house and never changed up, so that helps a lot in terms of being able to save.

That actually really hurts you long term- trading up, if you're using a mortgage, is the lowest risk leveraged investment that most Americans can ever make.

No, I'm being financially responsible. I want my house paid off asap so we have financial security in case something happens. Its not low risk and its not an investment as you always need a place to sell and debt is not a good thing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Normal people make $70k a year. Their kids go to state schools or community colleges.

People in that HHI bracket get FA.

Not really. I just put 70k household income, $30k in investments, no savings, kid has no money into the EFC calculator and came up with like $3,500 for an EFC.

Okay, well that sounds reasonable. So I went to the Penn State net cost calculator (https://cce.ais.psu.edu/netprice-calculator/) just as a for-instance, and plugged in my $3,500 EFC:

It's telling me total cost is $33k.

Estimated scholarships and grants - $5k
Estimated student loan - $6k
And then it recommends $22k in parent loans.

A family making $70k taking out $22k PER YEAR for their child's undergraduate education is absolutely insane. Talk about a broken system. Your only hope at that income is merit aid. College is becoming out of reach for middle class Americans.

It depends on the kid and school. People think loans are a good thing around here. Its not. Kids will have to go to community college, take loans or military/work and pay as you can.