Do most people pay for college out of pocket?

[Anonymous]

Anonymous wrote:I cash flow most of my DS's tuition, apartment etc, but he pays for his food and fun expenses. He does have a small loan - 7500 for one year because I had a low cash period. I put $1700 a month into the 529, and make withdrawals when the payment date arrives and then I pay his $800 rent every month. So basically I'm paying $1700+800 = $2500 post tax per month for him to attend his in state school. I cannot wait to be done in a year! HHI of about 300K. We started with about 10K in his 529 and I always expected to cash flow most of it.

That's what you pay for an infant per month at daycare.

[Anonymous]

Anonymous wrote:I realize many on DCUM are wealthy, but what about vast swaths of the US?
90k for college??! Who is paying this? It is daunting.

Sincerely,
A regular person

No, most people attend a college they can afford. That can range from CC and transferring, all while living at home, in-state 4 year on campus, OOS 4 year, private with great merit and Private at full pay $90K+/year.

If you have saved for college, you typically tell each kid "you have $Y K per year for college that's what we can afford to pay. Let's sit down and figure out how to do this will minimal loans"

[Anonymous]

Anonymous wrote:Most people don't pay the sticker price.

Research from College Board shows that the average tuition/fees sticker price at a private non-profit is $41,540 but the average net price (amount paid after grants/scholarships) is only $15,910.

https://www.brookings.edu/articles/college-prices-arent-skyrocketing-but-theyre-still-too-high-for-some/
https://research.collegeboard.org/trends/college-pricing/highlights

We pay sticker price at an affordable in-state school (about $26k this year with living off campus). And one kid is at a private where our actual cost is less than half of the sticker price.

If we are only paying $26k a year I'll be ecstatic.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The majority of undergraduates get financial aid, and most are at in-state public schools, most take loans. The answer to your question is no, most people are not paying full-freight tuition out of pocket nor are most paying $90K.

This is correct, but the other PP is also correct in saying that there are MANY high-income families that can easily pay full tuition.

Yes, many families that have the income to "cash flow" or who have saved a lot and can use the savings/cash flow to be full pay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are millions of parents earning in the Top 3% and above. Millions. Executives, lawyers, SWE’s in the tech field, doctors, investment bankers.

or someone who may have been driving a beat up car just to save for ivy education for their kids

Like the rest of us are rolling around in 90k cars. Sticker price on my vehicle is less than one semester at ivy league.

But do you drive that $45K vehicle for 10-12 years? Or do you replace it every 5-6 years? For "donut hole families" that can make the difference in. what you can afford for your kid (that and other similar cost saving choices you make along the way)

[Anonymous]

Anonymous wrote:

Anonymous wrote:I will feel markedly like a chump when I write the first check for $84k and change in the summer. Ugh. Full pay over here.

Really? It comes out of the 529 for us, and it’s like Monopoly money.

It's real money. Yeah it's in a 529 but it would be great to put that money towards our retirement.

Signed,

Someone who doesn't have 5m in a retirement account.

[Anonymous]

We have saved 75K per year per kid. We will pay anything additional out of pocket if we have to, but I'm going to strongly encourage my kids to chase merit money or to attend a large state school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Start a 529 when the kid is born. Make monthly contributions. 18 years later = >$500,000.

Our 529 barely grew 4% because we stupidly put it in a targeted fund. I have since moved part of it to an equity fund.

If you put in $1200 per year for 18 years it will not be anywhere near $500K, even at 10% rate.

Even at $12,000 per year, at 6%, it would be about $370K.

Well that is not very smart on your part. Always make the investment choices yourself, never use a "target fund". Up until your kid is3-4 years from starting college you should have 85%+ in stock market/stock funds. Then, based on your risk and how much you need, you can begin to pull back to less risky investments, all while keeping in mind year 4 of college is 7-8 years away.

[Anonymous]

Anonymous wrote:I mean people are paying 40/50k cash for new cars, so you'd think they could dig deeper for college when they had 18 years to save?

We're UMC and will pay for instate. I hope it's not 90k by the time it's our turn.

Yeah, I used to say the same...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are millions of parents earning in the Top 3% and above. Millions. Executives, lawyers, SWE’s in the tech field, doctors, investment bankers.

or someone who may have been driving a beat up car just to save for ivy education for their kids

Like the rest of us are rolling around in 90k cars. Sticker price on my vehicle is less than one semester at ivy league.

But do you drive that $45K vehicle for 10-12 years? Or do you replace it every 5-6 years? For "donut hole families" that can make the difference in. what you can afford for your kid (that and other similar cost saving choices you make along the way)

I have one 14 year old car and one newer 30k car (because our ancient car died) car and that's a drop in the ocean of college costs for two kids if we were to pay full pay for a private college. It's really not comparable at all in terms of cost.

[Anonymous]

Less than 40% of individuals in America have a college degree. Most poor and middle-class kids are trapped in poverty and can't get pass the rigors of basic elementary school math.

[Anonymous]

Anonymous wrote:I will feel markedly like a chump when I write the first check for $84k and change in the summer. Ugh. Full pay over here.

This will be us. Feel like a total sucker when you read 65-70% of the school is getting aid and you are full pay.

My kid got into 2 Ivies, Pomona and Georgetown. He will likely go to one of those over WM & UVA. We did all the tours and for us it’s worth it. UVA is the largest by about 10k more students than most on hiss list.

We have about $140k in 529 for each kid. So will be pulling the rest out of our @sses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I will feel markedly like a chump when I write the first check for $84k and change in the summer. Ugh. Full pay over here.

Really? It comes out of the 529 for us, and it’s like Monopoly money.

Unfortunately if you didn't realize that you have to start contributing$$$$ to 529s at least by the day the child is born (yes--one can start a 529 during pg--use parent ssn, and then change bene once you have child's ssn) it can be almost impossible. And we thought we had enough for 3 kids undergrad but tuition has gone up so much that it was used up with only 7 out of the 12 years finished..................

[Anonymous]

Anonymous wrote:I mean people are paying 40/50k cash for new cars, so you'd think they could dig deeper for college when they had 18 years to save?

We're UMC and will pay for instate. I hope it's not 90k by the time it's our turn.

People aren't buying $50k new cars every year for 4 years, though, and longer if you have multiple kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are upper middle class, so not insanely wealthy like doctors, investment bankers, and executives. But the price of tuition is baffling to me. I don’t know how anyone can pay for out-of-state or private schools. It’s pocket change for the wealthy, and if you are low-income enough you get aid. Middle class parents have it the worst.

I wish we lived in Florida or Georgia. Those schools are cheap and provide solid education!

Middle class do just fine with financial aid at most private schools. You are likely upper class.

To qualify for financial aid, HHI has to be below $100k, $150k, somewhere in that ballpark. $200k-$300k HHI disqualifies you from any type of finaid. I wouldn’t consider 300k to be upper class.