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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Here is the answer to your question, OP.

Our combined household income is near 200K, but this is a recent development since I finished a degree.  Prior, between reduced job hours and paying tuition, we made under 150.  My husband's job is tenured, and mine is not.  I see no reason to assume that I will always be employed when my child attends college.  My husband's job, if it is our only income, would get us close to a free ride in a top private college since we have two children.  I make less after taxes than the HYPSM tuition, so if a child gets into a top school, my salary will add absolutely nothing to the table.  My salary is 90K, but remove taxes and do your math.

We never saved a penny for college, instead paying down our mortgage and our rental property mortgage instead.  Older child is an excellent student, and may opt to convert her smarts into a free ride in college.  If she gets into a tippy top private college with minimal financial aid, we'll open a line of credit from the house and borrow cheaply.  If I lose my job or something else arises, we'll get financial aid.  Whatever happens, I recommend that the child ONLY applies to colleges that commit to meet the financial aid requirements with grants, not loans.

Why would I EVER want to open a 529 account committing us to paying college tuition when so many factors can change overnight?  I view 529 accounts as a option once all other reasonable investment avenues have been exhausted.  Prepayment of UMD tuition is more sensible, honestly.

The 4 years my older child is in college may be great for going back to school myself for a PhD (reduce our income / expected family contribution), or perhaps joining a volunteer overseas organization as a resume builder / income reducer.  Worst case scenario, the child knows that we'll pay the equivalent of UMD tuition, and she takes out loans for the rest.  Two years in consulting of some kind, while living with a roommate and us paying for her utilities and food, and she'll pay it off.  [/quote]

Have you read what you posted?  You are screaming poverty and yet own two houses and your priority is paying off your mortgages?   I feel bad for your kids.[/quote]

Not poverty, but risk management and asset allocation.  Did you see analysis above that people who save in 529 accounts and would otherwise be eligible for small yet substantial financial aid from private colleges stand to lose 60k?  I am sorry, that is 100k pretax money.  Why would anyone who is not truly wealthy use 529 accounts?  Also, apparently there is no effective way to segregate sibling accounts, so families get penalized twice and more if they have several children.  I suppose there comes a point where tax benefits offset those losses, but that point is well beyond the proverbial donut hole.  The rest of us are better off with a HELOC if / when the kid needs it.[/quote]

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