When you can’t do it all, how to save for college?

[Anonymous]

Anonymous wrote:As a single parent, I could not even start saving until my child was 7...and then began at $50 a month! Slowly, as my salary increased, my contribution increased. By the time she started college, I had saved about $75K. Luckily, she received multiple offers of merit scholarships at Tier 2 SLAC’s (which is where she wanted to go). My share is about $26K a year. I have been withdrawing that from the 529. I am continuing to save in hopes that the remaining need will be there by the time we teach senior year. If not, she will take out a modest loan.

I only have one child, but that is how we managed. Live within your means, and set realistic (not grandiose) goals about where she goes to school.

Nicely said. Even $50 a month is reasonable.

[Anonymous]

Anonymous wrote:As a spinoff of this thread, how much are people actually paying for college?

We make about $170K and hadn't saved very much for college - in large part because both kids (ages 20 and 15) went to private school (the older went just for high school, the younger went for middle and is now in high school).

Our kid goes to a "meets full demonstrated need" school and our bill for next year - including tuition and room/board is about $25K. Books, spending money, etc., are on top of that, which he pays from earnings from jobs during summer and at school.

We're paying that $25K pretty much out of current earnings. It's tight sometimes (especially paying about $15K for private school) but we make it work. Are there schools out there that are leaving families with big gaps between the Expected Family Contribution and the amount of financial aid they offer?

. If part of your son’s demonstrated need met with loans? MOst school that advertise that they meet demonstrated need, use loans to close the gap.

[Anonymous]

I can’t relate to people who say they could not save for college because their kids went to private school.

Since our country offers free school thru high school but not free college, why would you finance the former before ensuring you could cover the latter?

[Anonymous]

Anonymous wrote:

Anonymous wrote:As a single parent, I could not even start saving until my child was 7...and then began at $50 a month! Slowly, as my salary increased, my contribution increased. By the time she started college, I had saved about $75K. Luckily, she received multiple offers of merit scholarships at Tier 2 SLAC’s (which is where she wanted to go). My share is about $26K a year. I have been withdrawing that from the 529. I am continuing to save in hopes that the remaining need will be there by the time we teach senior year. If not, she will take out a modest loan.

I only have one child, but that is how we managed. Live within your means, and set realistic (not grandiose) goals about where she goes to school.

Nicely said. Even $50 a month is reasonable.

+1. Good points about putting the salary increase into college savings and saving what you can.

[Anonymous]

Good advice above. I also think that the expectation for kids should be that any birthday or holiday money goes into college savings as their "found" money, and that kids can develop neighborhood jobs (i.e., petsitting, babysitting, yard work) before they get to summer after junior year of high school. Even if you don't demand that all of that money go into the college fund, you could do a 2/3 to fund/1/3 to them type split. Start talking early about college costs and saving for a better educational future (and start helping them understand the benefits of hard work).

In addition to cutting expenses as much as possible, look into things like Upromise and get the relatives to sign up for Upromise etc. to maximize the returns on what spending you do.

For what it's worth, I feel your pain -- we have had unavoidable and unexpected career moves that resulted in losing money on real estate in the recession, and recently starting over with a new mortgage on a modest house that no one on the Real Estate board would call nice although it is in a good school district and works for our opposite direction commutes. Sometimes you can't avoid the financial hits but you have to do the best you can with what you have.

Also encourage your kids to develop excellent study habits and support them in their school work so that they have the best shot at merit aid possible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:As a spinoff of this thread, how much are people actually paying for college?

We make about $170K and hadn't saved very much for college - in large part because both kids (ages 20 and 15) went to private school (the older went just for high school, the younger went for middle and is now in high school).

Our kid goes to a "meets full demonstrated need" school and our bill for next year - including tuition and room/board is about $25K. Books, spending money, etc., are on top of that, which he pays from earnings from jobs during summer and at school.

We're paying that $25K pretty much out of current earnings. It's tight sometimes (especially paying about $15K for private school) but we make it work. Are there schools out there that are leaving families with big gaps between the Expected Family Contribution and the amount of financial aid they offer?

It doesn't matter what others are paying. It matters what you are paying. You should not expect financial aid if you put both kids in private and choose not to save. For college, your kids will have to take out loans.

LOL. I’m the one who posted this and maybe you missed the part where I said we’re now paying for college out of current earnings. Yes, my kid goes to a school with good financial aid so loans aren’t part of his FA package, but my sense is that many schools have good FA, which is why I asked what price people are actually paying. To people criticizing my choice to pay for private school, I say “Why?” We are working the parameters of the system to pay as we go and get our kids an excellent education. Doing well at an excellent private school has prepared my kid to do well in college and helped him get into a good school with generous financial aid. But I also wonder how many people posting here are actually familiar with the reality of today’s financial aid landscape and how many are just scolding others for not saving as much $ as they think they should

[Anonymous]

I would say you have to tell your children that you will pay two years fully for each, they will need to work in HS and summers to pay one year, and then have a loan for last year.

So, you need to save for 6 years of college at today’s rate. Lock in to pre - Paid instate tuition. That way your pre-k and elementary dc will be affordable.

Tuition is not that bad. It’s room and board. If they are involvecd perhaps can get an RA position 2nd year on.

ROTC? Two years at community college?

However, you really need to save for retirement. That is a priority.

[Anonymous]

My mom worked lots of overtime to put us through college. Perhaps spouse in sales could get a second job to accomplish the same thing?

Also, I would discuss this with your financial advisor. They have the expertise and access to your actual finances, so their advice would be better.

Finally, the more you read to your younger kids, the better they will do academically. My mom read to us at night until the end of elementary school.

[Anonymous]

I can’t relate to people who say they could not save for college because their kids went to private school.

Since our country offers free school thru high school but not free college, why would you finance the former before ensuring you could cover the latter?

Isn't private school tuition in the DC Metro area higher than the cost of tuition, room & board at most of the in-state colleges? I don't see how someone could manage private school tuition yet not scrape together $25 to $30K to send their kids to UMD or UVA.

[Anonymous]

Many people who think their families are private school material might have the same mentality for college.

[Anonymous]

Thank you to the poster who wondered what ppl are actually paying. Our situation is similar. This coming year be the first year of college and navigating expenses. We too have about $25k annual to pay and I hope it does not increase as the years progress (as my salary has increased since two years prior and I surmise that means my need may decrease).

[Anonymous]

Anonymous wrote:I’m looking for advice from parents who are “donut hole” like I expect we’ll be. HHI is currently $170 or so, 3 kids, still have one in daycare but oldest is rising 8th grader. We don’t max out 401(k)s but should, retirement is really behind the curve, both parents early 40s. Contributing a few hundred in 529s per month, skewed toward the oldest, PITI is $3500 and we aren’t (yet) paying extra. Only purchased home two years ago, so will have mortgage during college years, which I understand FAFSA EFC won’t factor in, but CSS schools will.

I am not trying to game the system by any means, but if EFC assumes 47% of HHI to put toward child #1 college costs, we will have a huge deficit. HHI increase over the next five years will likely be modest at best (one parent Fed, capped at step 10 unless a promotion opportunity materializes, other parent in sales, sporadic and fluctuating income, but not likely to have significant boost of more than 5% annually, averaged over the next few years). Do we throw it all in college savings, forgoing increasing retirement (which at our age, scares me). Do we just drip,drip what we can in the 529, knowing we won’t even have enough to cover our in-state fully paid? DC #1 is bright, may perhaps be offered merit aid but for this discussion I am assuming none. How do you we best prepare for this? From websites I have read, the prior, and prior-prior years retirement contributions are counted as gross income, to ostensibly be used to pay for college? I just don’t understand how that can be considered, us MC folks have to save for retirement, right?

I’d love to hear from any families with similar situations, HHI, and tell me how you figured it out. If we devoted all extra available $ after just 401(k) match to 529 for DC #1 for the next 5 years, that might cover close to in-state. But kids 2 &3 would have a pittance in 529s; and retirement saving would be very, very behind. I feel as though there are no good options here, would love any insight to help figure out the next few years of savings.

Here are a few ideas:
Have your kids take as many dual enrollment courses in high school as possible. College board pushes APs, which my 1st DC did, but those really didn't translate to college credits. My 2nd took dual enrollment courses and entered college with enough credits in the basic general ed classes to skip about a semester and a half of regular college credits . Have them go to a "commuter school" and save on the room and board. My niece took summer classes at CC every year she was home from an away college and finished college in 3 years. Have your kid work summers and save half of their pay to go toward the extra spending money in college so you only have to pay for the basic education costs. Have your kid do 2 years ag CC and transfer if they want to go away to school. My other niece worked and went to GMU while taking 3 or 4 classes a semester. It took a little longer that way, but she mostly paid own her way through college.

[Anonymous]

Be very honest with your kids about college when the time comes. We have a lot of mortgage for our income - we decided we wanted short commutes to have more time with our kids and we're trying to pay it down faster. We're on track to pay about half of each of our two kids' undergrad. As we finish off paying our second mortgage and get them both into school, we'll increase. We also get some money from grandparents, which we save for college. However, I am banking on them investing in their own educations and planning to help pay as they go. If they want to go to a private school, they'll understand that they will have to pay more of the costs.

[Anonymous]

Be sure to fill out the Net Price Calculator at a number of schools. In our income bracket, in line with what a lot of people here have mentioned, it turned out that private schools were a little less expensive than state flagships.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:As a spinoff of this thread, how much are people actually paying for college?

We make about $170K and hadn't saved very much for college - in large part because both kids (ages 20 and 15) went to private school (the older went just for high school, the younger went for middle and is now in high school).

Our kid goes to a "meets full demonstrated need" school and our bill for next year - including tuition and room/board is about $25K. Books, spending money, etc., are on top of that, which he pays from earnings from jobs during summer and at school.

We're paying that $25K pretty much out of current earnings. It's tight sometimes (especially paying about $15K for private school) but we make it work. Are there schools out there that are leaving families with big gaps between the Expected Family Contribution and the amount of financial aid they offer?

It doesn't matter what others are paying. It matters what you are paying. You should not expect financial aid if you put both kids in private and choose not to save. For college, your kids will have to take out loans.

LOL. I’m the one who posted this and maybe you missed the part where I said we’re now paying for college out of current earnings. Yes, my kid goes to a school with good financial aid so loans aren’t part of his FA package, but my sense is that many schools have good FA, which is why I asked what price people are actually paying. To people criticizing my choice to pay for private school, I say “Why?” We are working the parameters of the system to pay as we go and get our kids an excellent education. Doing well at an excellent private school has prepared my kid to do well in college and helped him get into a good school with generous financial aid. But I also wonder how many people posting here are actually familiar with the reality of today’s financial aid landscape and how many are just scolding others for not saving as much $ as they think they should

I'm the poster who mentioned about a page back looking at instate or going to community college for two years followed by instate, but I also agree with your post. If your kid is a smart kid, it's worth looking at out of state colleges and universities to see what merit aid or financial aid may be available that brings the cost down to a comparable instate school where you wouldn't get much aid. Everyone has to stop feeling guilty about "gaming" the college aid system. It's a deeply broken and dysfunctional system and there's no higher road involved.