How much are you saving for college?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is anyone using the Maryland prepaid tuition plan? I'm thinking about it, but then again, if the bubble bursts, it may not be such a good deal any more...

We are using the MD prepaid plan, but supplementing with some saving on the side.

Pre-paid tuition plans are truly the worst kind of college funding plan. Talk about lack of flexibility! and you're totally negotiating against yourself. If you research it, you will be hard-pressed to find much positive press on pre-paid tuition plans.
Not to mention, I work in the college financial planning industry and see first hand the number of VERY BRIGHT seniors - we're talking 4.2 GPA, Blair Magnet, tons of extra-curricullars getting outright rejection letters from Maryland - College Park.
Same thing is happening in California's UC system. All these kids are being forced to go out-of-state....ouch!

You clearly don't know what you are talking about, at least with respect to the MD prepaid plan. MD's plan is unusual in that there is no penalty at all for going out of state (or going in state private)-- you get the weighted average tuition paid by UMD students to spend wherever you want (there are slight variations in tuition throughout the UMD system but this works out to be essentially the College Park tuition). I did a lot of research and I don't listen to generalities that apply to other plans, I look at the specifics of the plan I am offered and weigh the risks and benefits.

Actually it looks as though they may have changed this so there something of a penalty for going out of state.

[Anonymous]

I guess I may be boasting a little by answering this thread: about $16,000 in our 529, and no kids yet- we're late 20s/early 30s. The 529 is in my name and we use it to take advantage of the state income tax break, to get ahead before daycare costs start.

I also believe , as much as I believe in anything -- college is WAAAAYYYYY oversold. There is a college 'bubble.' College costs CANNOT keep rising at the same rate, so far past the amount of inflation. The value of a college degree is very questionable, compared to the costs- and ultimately it is going to come crashing down just like the mortgage meltdown.

I highly recommend this article from this month's New York Magazine:

The University Has No Clothes
The notion that a college degree is essentially worthless has become one of the year’s most fashionable ideas, with two prominent venture capitalists (Cornell ’89 and Stanford ’89, by the way) leading the charge.
http://nymag.com/news/features/college-education-2011-5/

[Anonymous]

Fascinating thread. I'm wondering if those with really healthy 529s ever worry about saving too much? We put quite a lot of money from an inheritance we got into DS's 529, so he's not yet 2 and has more than $30K. Part of me has wondered how much more we should add. It seems like college costs are very difficult to predict.

I know that 529 funds can be transferred to others for educational purposes, but even that feels limiting to me. For those of you with lots of money to add to these accounts, how do you decide how much to put in?

[Anonymous]

Anonymous wrote:Fascinating thread. I'm wondering if those with really healthy 529s ever worry about saving too much? We put quite a lot of money from an inheritance we got into DS's 529, so he's not yet 2 and has more than $30K. Part of me has wondered how much more we should add. It seems like college costs are very difficult to predict.

I know that 529 funds can be transferred to others for educational purposes, but even that feels limiting to me. For those of you with lots of money to add to these accounts, how do you decide how much to put in?

Our goal is to have about half of college saved in a 529 and the other half in other investments. I agree that there may be a bubble but tuition is not going to go down to $5K a year in the next 15 years. Even when I went to school almost 20 years ago, private colleges were in the $30K range. All these PPs who are relying on the supposed bubble as an excuse to not save for college are taking a pretty bad gamble, I think.

And remember, the money in a 529 is still yours. You can withdraw it for non-educational purposes, you just get taxed. It's not ideal but it's not like you forfeit the money.

[Anonymous]

$50K for 3 kids, ages 3, 2 and 1. Our house will be paid off in 5 years - we plan on diverting the $12K/month we spend on double mortgage payments into educational funds.

[Anonymous]

I have to say that I'm amazed at how many people on this thread have the "let them fend for themselves" attitude. The last thing I want to do is saddle DD with a huge debt just as she's starting her adult life. Just as my parents paid for me, I am committed to paying for her college. And I don't think having my parents pay for me made me soft or spoiled - I did pay my way through law school by working full-time and going to school at night. Rather, it made me grateful.

[Anonymous]

Anonymous wrote:Fascinating thread. I'm wondering if those with really healthy 529s ever worry about saving too much? We put quite a lot of money from an inheritance we got into DS's 529, so he's not yet 2 and has more than $30K. Part of me has wondered how much more we should add. It seems like college costs are very difficult to predict.

I know that 529 funds can be transferred to others for educational purposes, but even that feels limiting to me. For those of you with lots of money to add to these accounts, how do you decide how much to put in?

We slowed way down/virtually stopped when we thought we had enough to generously cover tuition, room & board, books etc. at a state school. Then we started putting more money into things like prepaying the mortgage (so it will hopefully be paid off during college), I-bonds, misc/emergency savings accounts, etc. I think it's a mistake to have too much in a 529 and I am happy to have a balance between 529 savings and other things.

[Anonymous]

The .dot .com bubble withered away the college savings of numerous families. There always are risks in all kinds of investments.
I think everyone is taking for granted that their savings are safe.
Either way, you might be better off not saving.
There is no law that say parents must pay. You are only obliged to keep your kid in your house until the age of 18, or completion of high school.

[Anonymous]

Anonymous wrote:The .dot .com bubble withered away the college savings of numerous families. There always are risks in all kinds of investments.
I think everyone is taking for granted that their savings are safe.
Either way, you might be better off not saving.
There is no law that say parents must pay. You are only obliged to keep your kid in your house until the age of 18, or completion of high school.

This is correct. Likewise, there is no law that says you must send your children to a good school; feed them nutritious meals; read aloud to them; help them with homework; get them haircuts; ensure they have access to good medical and dental care; enroll them in music, sports, and other lessons; or provide them with the tools they need to get along in the 21st century (e.g. access to a computer). And yet, we do these things because that is what is in their best interest. And because we love them.

I would no more expect my 18yo to foot the bill for a college education than I would expect my 10yo to cover any of the above. To do any less would mean negligence, to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The .dot .com bubble withered away the college savings of numerous families. There always are risks in all kinds of investments.
I think everyone is taking for granted that their savings are safe.
Either way, you might be better off not saving.
There is no law that say parents must pay. You are only obliged to keep your kid in your house until the age of 18, or completion of high school.

This is correct. Likewise, there is no law that says you must send your children to a good school; feed them nutritious meals; read aloud to them; help them with homework; get them haircuts; ensure they have access to good medical and dental care; enroll them in music, sports, and other lessons; or provide them with the tools they need to get along in the 21st century (e.g. access to a computer). And yet, we do these things because that is what is in their best interest. And because we love them.

I would no more expect my 18yo to foot the bill for a college education than I would expect my 10yo to cover any of the above. To do any less would mean negligence, to me.

If you do leave the kid to fend for itself after high school, then they can get better financial aid because the parents income is no longer factored

[Anonymous]

@12:20, this is 8:44 on 5/6 again. If DD gets accepted to an Ivy or another real game-changer school (e.g. Stanford, MIT), we'll make the sacrifices, or I'll make my wife go along.

@17:53, so you'll shell out $200k for a mediocre liberal arts degree that is just as useful as a $40k degree from NOVA/GMU or Montgomery College/Maryland?

Or maybe our DCs can work part time, get useful experience in a chosen field, and graduate debt-free (or nearly-so.) The kids have to have SOME skin in the game, otherwise they'll be liable to use our $200k to party it up.

[Anonymous]

Anonymous wrote:Fascinating thread. I'm wondering if those with really healthy 529s ever worry about saving too much? We put quite a lot of money from an inheritance we got into DS's 529, so he's not yet 2 and has more than $30K. Part of me has wondered how much more we should add. It seems like college costs are very difficult to predict.

I know that 529 funds can be transferred to others for educational purposes, but even that feels limiting to me. For those of you with lots of money to add to these accounts, how do you decide how much to put in?

We could fully fund now, but don't for some of the reasons you mention. We're aiming to have 3/4 of each child's college tuition in their 529 plans, but no more.

[Anonymous]

Anonymous wrote:@12:20, this is 8:44 on 5/6 again. If DD gets accepted to an Ivy or another real game-changer school (e.g. Stanford, MIT), we'll make the sacrifices, or I'll make my wife go along.

@17:53, so you'll shell out $200k for a mediocre liberal arts degree that is just as useful as a $40k degree from NOVA/GMU or Montgomery College/Maryland?
Or maybe our DCs can work part time, get useful experience in a chosen field, and graduate debt-free (or nearly-so.) The kids have to have SOME skin in the game, otherwise they'll be liable to use our $200k to party it up.

I will pay for DD's college - whatever her choice of college is. And I disagree with your statement about which degree from which college will be more "useful." You have no way of knowing what is useful to my daughter. Plus, the environment - whatever environment is best for her - will be key to her experience, as well.

[Anonymous]

It bugs me that there is such a "if they don't pay for any of it, they will just waste our money" mentality. I know some kids do, but a good majority of my friends at a top national liberal arts university worked VERY hard to get good grades, even if their parents were footing the bill.

Not to mention, being one of those lucky children who had parents paying for my education, there is no way my parents would have allowed me to waste their money for a full 4 years. I had one not-so-good semester (which had NOTHING to do with partying), and my parents told me I had to either shape up or be brought back home to attend the state school down the road on my own dime. They weren't going to continue paying my tuition if I was going to bring home C's. So, if you let your kids half-ass their way through an expensive college and bring home subpar grades, that is your own fault.