I genuinely don't get saving for college for kids

[Anonymous]

So I was a first generation college student. I worked really hard in HS and got decent scholarships for college. I primarily had merit-based aid, with a small amount of need-based aid and then student loans. I went to an expensive school. Costs worked out roughly as such:

40-45 k total
25 merit-based aid
5k need-based aid (Pell grant)
2k work study
10k student loans

I worked a lot in college and took out loans. It took me about 10 years to pay back the 40k and it never felt particularly onerous. I went to grad school via a program that paid for my degree entirely.

In my husbands case he had a full ride to a comparable school for tuition and his parents paid 10k/year for his room/board. He also has advanced degrees but did a combined ba/ma program and transferred in with a lot of credits so it ended up not costing much extra.

Our child is young but very bright and I believe she will be similarly high-performing in high school. We make more money than my family did, certainly, but we don't have dedicated college savings. I guess I am expecting my child to get a lot of merit-based aid and then figure we will be fine paying the rest.

I don't get why we would save 300k or whatever when I fully expect her to get merit aid. And if somehow she fizzles out and doesn't get merit-aid, then I would expect her to go to a cheaper school.

Am I missing something?

[Anonymous]

You’re going to get flamed for your opinion here but I agree with you.

[Anonymous]

Yes, you are missing a lot actually. I don't care enough to list them for you though. You do your own homework. Your plan has more holes that swiss cheese...

[Anonymous]

Be aware that times are not the same as when we parents went to college. I had a combo merit/need full tuition scholarship to a college that doesn't offer those today.

These days, merit to a top 40-50 private university is not easy to get, at all. If you are not saving for college, and not eligible for need-based aid, you are crossing a number of schools off the list. Which may be fine, but best to get a more current understanding of the lay of the land first. And make clear to your child that top privates will be off the table.

[Anonymous]

I think it is ironic, that the people on this forum who are most able to save for college in a 529 (this is what DCUM means by "saving for college") could likely afford to cashflow college if they needed to, so probably don't need to amass a small fortune in 529 accounts. 529 accounts are tax friendly and people make so much money, so why not.

[Anonymous]

Well that's fine, but not how I did it.

There are a lot of high achieving kids and I want mine to have all the opportunities available, given I have the income to do it.

So I saved for college. Both of my kids can go almost where ever they want and where they can get accepted. It will provide them with a leg up and create a good future for them.

One of my kids is still in high school. My other kid attends a private college with significant merit aid, although DD could have gone to schools that were full price.

I'm proud to be able to tell my kids they can attend whatever school they can get accepted to and as far as spending my own money, I'm happy to do it and think it's a worthwhile place to spend money.

That said, I'm also for cheaper college options for kids that can't afford it- but mine can and they will have that advantage.

[Anonymous]

Damn, OP. That's a funny way of saying you don't love your kids.

[Anonymous]

It’s kinda like the difference between buying a Honda vs a Mercedes. The Honda gets you from A to B, and the Mercedes is a luxury. If you can afford the luxury and want/enjoy it, then why not? If it doesn’t make sense financially or you don’t value the extra cachet/comfort, then the expense doesn’t make sense. Why judge, either way?

[Anonymous]

Anonymous wrote:Yes, you are missing a lot actually. I don't care enough to list them for you though. You do your own homework. Your plan has more holes that swiss cheese...

+1 OP your kid isn't going to get any need-based aid, and the merit-based aid will likely not allow her to graduate with only $10k/year in debt.

I got a 100% full ride to undergrad and I am grateful for that but it's not a justification for kneecapping your kid.

[Anonymous]

College costs are rising significantly faster than incomes. So, the college you managed to find affordable probably will not be. That starting cost you had of 40-45k is going to be much higher. When we ran net price calculators, most private schools were at least $60K (we don't get need-based aid). Even schools known for "good merit" aid generally just bring it down to about $40K, which is where you were before factoring in merit.

And, your child won't be first-generation or likely qualify for a Pell grant. Some of that merit aid is reserved for first-gen and other underrepresented students. If you can save for college it is foolish to assume that everything will just work out without savings unless you are totally fine with community college + transfer to a public U (which can be a great option) or taking whatever unknown, lower-tier school will give enough merit to make the budget work.

[Anonymous]

People save for college so that they can give their kids a head start in life. Your kid may or may not get merit aid. What’s more, the best schools do not give “merit” aid and your income/net worth will count against their need based financial aid. Even a “cheaper” school may be out of reach for your kid in that case. If you can pay as you go, this is obviously not an issue for you. If not, do you really expect your kid to turn down a top tier school or be saddled with tens of thousands in student loans because you didn’t want to save for college?

[Anonymous]

I kind of agree with you. I feel like we need to save more for our only child, but am less inclined to do it in a 529 anymore. For one thing, special needs are in play and it's not really clear whether the traditional path is going to work. I think there's an equal likelihood of local community college for two years then completing at a 4-year program, or a more expensive, program with supports at a private 4-year. Those are wildly variant costs. Also, I do think there's going to be some serious shaking out of cost models in higher ed after this pandemic. Things simply cannot continue the way they have been going. So, while I don't think things are going to work out for our kids the way they worked out for us (I had a similar experience to yours, finance-wise), I do think there are too many uncertainties in play to lock all of that money into a vehicle like a 529.

[Anonymous]

okay? DH and I were excellent students (I had a 1540 SAT and straight As)... no college aid whatsoever. My parents made too much (150k). My instate school was 15k a year and out of state schools were 45k a year. My parents paid it all though.

DH had 75-80k in student loans. We lived in a den (no closet and 4 other roommates) for several years to pay them off and save for a downpayment. It was doable, but if we both had that much, we wouldn't have been able to pay them off. As it was, it pushed our children back into our 30s since we didn't want student loan debt and daycare.

[Anonymous]

This is a lot of words that boil down to, "I did it, so can she. If she doesn't get merit aid, she'll just have to go to a cheaper/less competitive school."

[Anonymous]

Top schools do not offer merit aid but yes your child can likely get a college education via loans and work study if you make that choice. Doing 2 years at a community college is also a huge cost saver and gets you a degree just as well as anywhere else. It just depends on your priorities.