This is just dumb.

My son had his heart set on UVA and despite and unweighted 3.9 and a full college semester of APs under his belt, he didn’t get in. He instead went to NOVA and due to his APs only had to do 3 semesters to get his AA for which he got a 4.0. He then used the 4th semester to move and work at a ski resort in Utah. He will head to UVA this fall (guaranteed admissions).

He has saved so much money not only will he graduate debt free, we will be able to use the the money he didn’t touch in his 529 for his younger brother . We paid NOVA out of pocket, so that gave us more growth, plus another 2 years of contributions. Plus his work in Utah came with free employee housing, some free meals, and a free ski pass to multiple resorts. Wayyy smarter than insane amounts of debt or plundering retirement


You are allowing your daughter to make an extremely stupid move. Have you always made poor financial decisions or just when it involves your kids?

Anonymous wrote:So, the general rule from financial planners to is to make sure the student loan debt is not greater than the first year of income. If your child has $100k in student loans, then the job needs to pay at least that much to keep the loans manageable. Is he is a CS major, how realistic is it to have a starting salary of $250k? If I was your kid I think it is better to focus on a less expensive school for undergrad. Kick but there. Then apply to a dream school grad school.

Their chance of unemployment is very high.

So, the general rule from financial planners to is to make sure the student loan debt is not greater than the first year of income. If your child has $100k in student loans, then the job needs to pay at least that much to keep the loans manageable. Is he is a CS major, how realistic is it to have a starting salary of $250k? If I was your kid I think it is better to focus on a less expensive school for undergrad. Kick but there. Then apply to a dream school grad school.

It sounds like you had always set aside that brokerage account for college. I have done a similar thing for my SN son because it’s unclear if college will be a fit for him - he’s also starting HS next year. Should he not go to college I want that money to be free for my use without a penalty because there’s no other kids to use it.

My income is a bit less than yours, but with $200k set aside (I’m presuming you have retirement elsewhere), you pay the rest out of current income. I’d start setting aside about $15-20k per year now, and you should be good. I have started laddering i-bonds instead of CDs. Right now I’m at about $170k, and I hope to put aside another 15k per year which will make the total around $230k. So at that rate, plus the same 15k per year, that puts me with about $70k per year, and plussing up any difference will be doable.

Anonymous wrote:

Anonymous wrote:OP here. Thanks for your inputs and sorry for my delayed response. Since in-state VA flagship didn't work, DD decided to take next best option with OOS school with potentially great prospects. In lieu of 529 plans, I had invested in a second home and sold some time back and have $200K+ in brokerage accounts.

Our plan all along was to use it if in-state option won't work, and supplement with savings/income. In hindsight, we should have planned for more target schools rather than lot of reach schools. Since I don't have any other debts except for primary home mortgage with lot of equity, I was considering if HELOC would be an idea, but looks like it may not. My DS isn't college bound for another 4 years for whom I'm considering Invest529 plan this year. (I know I'm late in the process.)

VA has some of, if not the best, public universities in the country. If it's UVA or nothing she seriously needs to reevaluate. Go to NOVA for a year and transfer to Tech, W&M, Mason, Madison or even UVA.

+1

To the OP, based on your 13:20 update, you can do this.

I hope your DD has a job to cover her incidentals and books. You can find the money in your budget to cash flow most of this. We did a $50k/year school when it started in 2010 (yes, it went up!) - 2014 and then paid $65K to $75K for the next one, 2016-2020.

We had $50K in UGMA for the first, and a mush-mash of 529 funds for (value $50k?) for the second when she started.

Our income was $185-$200K during that time and DH continued to fully fund his 401K.

Anonymous wrote:

Anonymous wrote:Would you advise using home equity for paying college tuition? We don't have any 529 plans and DD is decided to go to OOS college for CS major - $75 -80K/year.

Our HHI 250K and no merit aid. Any other ways you recommend? - Cash from savings? Loans for 401k? Liquidate assets in stocks/mutual funds? Thanks for the advise.

It’s unbelievable that you don’t have a. 529 OP. But of all the assets that you mention, my least favorite option is to mortgage your house. I can’t imagine taking out 300K in home equity to pay for 4 years of college. That just sounds crazy. I also wouldn’t borrow against the 401K. If you have liquid or relatively liquid assets that you can cash out, I might do that first and try to cash flow half of it from your income, but you don’t make enough to cash flow all of it

Question that no one has asked. What is the house worth? What do you owe on it? Do you plan to downsize int he near future?

Anonymous wrote:OP here. Thanks for your inputs and sorry for my delayed response. Since in-state VA flagship didn't work, DD decided to take next best option with OOS school with potentially great prospects. In lieu of 529 plans, I had invested in a second home and sold some time back and have $200K+ in brokerage accounts.

Our plan all along was to use it if in-state option won't work, and supplement with savings/income. In hindsight, we should have planned for more target schools rather than lot of reach schools. Since I don't have any other debts except for primary home mortgage with lot of equity, I was considering if HELOC would be an idea, but looks like it may not. My DS isn't college bound for another 4 years for whom I'm considering Invest529 plan this year. (I know I'm late in the process.)

VA has some of, if not the best, public universities in the country. If it's UVA or nothing she seriously needs to reevaluate. Go to NOVA for a year and transfer to Tech, W&M, Mason, Madison or even UVA.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for your inputs and sorry for my delayed response. Since in-state VA flagship didn't work, DD decided to take next best option with OOS school with potentially great prospects. In lieu of 529 plans, I had invested in a second home and sold some time back and have $200K+ in brokerage accounts.

Our plan all along was to use it if in-state option won't work, and supplement with savings/income. In hindsight, we should have planned for more target schools rather than lot of reach schools. Since I don't have any other debts except for primary home mortgage with lot of equity, I was considering if HELOC would be an idea, but looks like it may not. My DS isn't college bound for another 4 years for whom I'm considering Invest529 plan this year. (I know I'm late in the process.)

No OOS public costs that much.

Berkeley is $70K.

Nobody stays on the meal plan or in the dorms past freshman year (even if they wanted to).

And that's a choice. Don't go OOS.

I am pp who posted what we paid OOS this year, and I'm pretty sure that this year's housing will be slightly more than dorm housing.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for your inputs and sorry for my delayed response. Since in-state VA flagship didn't work, DD decided to take next best option with OOS school with potentially great prospects. In lieu of 529 plans, I had invested in a second home and sold some time back and have $200K+ in brokerage accounts.

Our plan all along was to use it if in-state option won't work, and supplement with savings/income. In hindsight, we should have planned for more target schools rather than lot of reach schools. Since I don't have any other debts except for primary home mortgage with lot of equity, I was considering if HELOC would be an idea, but looks like it may not. My DS isn't college bound for another 4 years for whom I'm considering Invest529 plan this year. (I know I'm late in the process.)

No OOS public costs that much.

Berkeley is $70K.

Nobody stays on the meal plan or in the dorms past freshman year (even if they wanted to).

And that's a choice. Don't go OOS.

Anonymous wrote:

Anonymous wrote:OP here. Thanks for your inputs and sorry for my delayed response. Since in-state VA flagship didn't work, DD decided to take next best option with OOS school with potentially great prospects. In lieu of 529 plans, I had invested in a second home and sold some time back and have $200K+ in brokerage accounts.

Our plan all along was to use it if in-state option won't work, and supplement with savings/income. In hindsight, we should have planned for more target schools rather than lot of reach schools. Since I don't have any other debts except for primary home mortgage with lot of equity, I was considering if HELOC would be an idea, but looks like it may not. My DS isn't college bound for another 4 years for whom I'm considering Invest529 plan this year. (I know I'm late in the process.)

No OOS public costs that much.

Berkeley is $70K.

It also will go up every year because upper class status and many majors cost more.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why don’t you have a 529? Sorry, but you had 18 years to plan for this- it shouldn’t be some surprise that you have to crowd source on DCUM.

I dunno, most kids don’t and they seem to turn out fine. It’s not anything the kid has control over (that is, whether their parent has one or not). My kids are post-college btw.

-NP

most kids don't go to 70-80k/year schools either.

right. Community college or inexpensive state schools.

$70k-80k is a lot even for a college these days. I don’t think any Va or Md instate schools cost that much, nor do a lot of OOS publics or privates.

yea, only a tiny fraction of colleges cost that much. certainly not many out of state publics- I think less than 10.

Unfortunately this assertion is out of date. A surprising number of schools have jumped up to this level or very close to it.

I just looked at my financial spreadsheet and I paid $66,071 for freshman year (incl. room/board) at OOS public for 2021-22.

Anonymous wrote:OP here. Thanks for your inputs and sorry for my delayed response. Since in-state VA flagship didn't work, DD decided to take next best option with OOS school with potentially great prospects. In lieu of 529 plans, I had invested in a second home and sold some time back and have $200K+ in brokerage accounts.

Our plan all along was to use it if in-state option won't work, and supplement with savings/income. In hindsight, we should have planned for more target schools rather than lot of reach schools. Since I don't have any other debts except for primary home mortgage with lot of equity, I was considering if HELOC would be an idea, but looks like it may not. My DS isn't college bound for another 4 years for whom I'm considering Invest529 plan this year. (I know I'm late in the process.)

Is this the only school to which your daughter has been accepted? Is she willing to do the two years at NOVA to get into UVA? There should be other options.

Anonymous wrote:OP here. Thanks for your inputs and sorry for my delayed response. Since in-state VA flagship didn't work, DD decided to take next best option with OOS school with potentially great prospects. In lieu of 529 plans, I had invested in a second home and sold some time back and have $200K+ in brokerage accounts.

Our plan all along was to use it if in-state option won't work, and supplement with savings/income. In hindsight, we should have planned for more target schools rather than lot of reach schools. Since I don't have any other debts except for primary home mortgage with lot of equity, I was considering if HELOC would be an idea, but looks like it may not. My DS isn't college bound for another 4 years for whom I'm considering Invest529 plan this year. (I know I'm late in the process.)

No OOS public costs that much.