How do people fully fund 529s
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Anonymous
| I have 2 girls in HS and a total of $250K saved for college, and yet this only fully funds them for an in-state school. If either goes out of state to public or private, the costs are prohibitive. Even within the confines of the DCUMer, how do people fully fund their child's undergraduate education. Second, do most colleges provide some form of merit aid for strong students, such that that actual costs are less than what I'm seeing on college websites? |
Anonymous
they make a lot of money or they have parents with a lot of money. None of these how do you afford 'x' questions have answer that go further than variations on those two factors |
Anonymous
| Almost no one pays sticker price to colleges. Many more people get FA than you think. |
Anonymous
|
Well, we started when they started public school and put what we used to spend on daycare into the 529s. So basically by starting really early. Also, you don't have to pay for college right when they start! You pay each semester. So as they are in college, you can continue to save and the money to grow.
Yes there is merit aid. Also, I think it is a fine and healthy thing for students to work during the summers to help pay for their own expenses. It prepares them for adulthood and helps them take college seriously. |
Anonymous
Op here, our HHS is $200K, so I'm not counting on FA. Do people get merit aid? I want my children to have choices, but boy I'd really like them to go in-state. |
Anonymous
People who make $200K and have 2 kids in college absolutely get FA. |
Anonymous
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I think they: (1) don't, (2) get help from grandparents, or (3) do so at the expense of their own retirement.
We make $300K/year. We fund two 529s for our young children with the goal of paying for in-state tuition/room and board 100% for each child. When they are college age that is predicted to cost $200K each, so $400K total. It requires saving about $500 per month each from birth. That is all we are willing to do at this time. We ask ourselves the following question: how much of our net worth at our age our children go to college should we pay for college? If at age 50 we are fortunate enough to have $3M saved for retirement, are we going to pay $500K each, $1M total, or a third of our net worth to send them to private colleges? No. I would want to have $5M net worth to pay that. So the answer is probably 10-15%, maybe 20% at most of our net worth spent on college. Depending on our own job and financial situation at the time, we will consider whether it makes sense for us to pay more, either through cash flow or other savings/investments. We both went to expensive private colleges, major universities, including Ivy league, not liberal arts colleges. We also have advanced degrees in STEM. We value education highly. I think the cost of college, particularly private college, is becoming out of reach, or at least not sensible, for many upper middle class families. |
Anonymous
| We are incredibly lucky! Soon after each of my children were born my parents created very well funded 529’s for them. They have said that after five years elapse they will again reload the 529’s as part of their estate planning. We have also set up 529’s but we don’t have the annual income to put more than $5-10k into them. Also, I still have money left in my 529 and I can use it for my children. I’m very hopeful that we will be well covered. |
Anonymous
LOL. No FA @200k. This is where decision gets hard oP. Every parent wants to give their kids choices but, in many cases, the options are not very realistic. Now you are beginning to understand why for families like yours, options are not real options. As for your question on merit aid, yes, a lot of privates give "token" merit aid (discount disguised as a merit aid), usually 15k-25k or so. Helpful but still not enough for many families. |
Anonymous
| Grandparents. |
Anonymous
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I know this wasn't your question, but how about doing what my dad did and telling them that they can go in state and have it fully paid for or go out of state/private and be responsible for the loans?
I didn't love the message at the time, but I am forever grateful that I chose a state school and graduated without loans. College is a good time to teach the life lesson that you need to make choices that are based on living within your means. Plus, having a fully funded option anywhere is a luxury that most kids don't get so don't be apologetic that that's all you have saved! |
Anonymous
No they do not. Maybe for a 70k a year private, but not for public universities. I make just over 100k, and we didn't get any FA. My son did receive merit aid based on GPA and SAT for an out of state public. |
Anonymous
| To answer OP, you likely have enough saved. What you don't have saved, you pay as you go, or take loans. Luckily I can pay as we go. It's kind of like paying for daycare or preschool again. Just set up a monthly payment plan. |
Anonymous
no FA but merit is possible |
Anonymous
| Most people don't. |