Anonymous wrote:

Anonymous wrote:Please don't do that. 3X $75k invested and your child will never have to work again after 35. They'd rather have that and a state school degree than working til retirement.

A lot of 18 yr olds cannot understand the impact of $150K student loans.

I ran the numbers with my DC and showed them how long it would take to repay the $150K assuming a $140k job. They don't understand how taxes work; they see $140K, and think big money, but then you show them how much they will deduct in taxes, and they realize just how much their take home really is. Then you show them the repayment schedule, and how that will impact their ability to save to buy a house.

Run the real numbers with your kids.

I hope you also explained to them that very few college grads are making $140K initially. So show them again with the typical starting salary for someone with their degree

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:27k + 75k is enough for 4 years instate. Any 18-22 y/o can make $3k/year at minimum to pitch in on top of that. Done.

Any 18yo can make 8-10K/year in DCUMland or anywhere else that minimum wage is $12/Hr+

Correct but on DCUM parents usually do not expect their children to contribute to college costs at all.

Which is so strange. I'm not talking working 20+ hours during the school year. Work 5-10/week during the school year and breaks. Its entirely possible to earn $10K+ without working more than 40 hours/week on breaks.
While I don't make my kids work, that's only because we have a fully funded 529 for them to attend an $80K/year+ schools if needed. If we didn't have that, they would be required to work to help get trhu college without or with minimal loans.

If your kid is 17-18 and you only have $75K total saved for their college there are only a few logical/reasonable choices. 1) you find somewhere with amazing merit and possibly R&B included for your really smart kid and pay next to nothing. 2) you find a school you can afford with only the $75K/4 per year 3) you find a school you can afford with that $75k spread over 4 years plus your kid working on breaks (summer, winter, spring and a PT job while at school of 5-10 hr/week). 4) you start at CC, while the kid works and takes classes and lives at home and then go to a version of #3 when transferring to 4 year to finish.

So if kid wants to attend a School that costs more than ~$20K all in per year, the kid needs to find a job to help.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Be smart and don’t overspend. Very few students are full pay at 70-80k a years. It’s less than 2% of students with that type of bill to pay. That is a luxury good.

You have 75k, add in 27k for Fed loans (I wouldn’t go above that with high interest private loans). Add in some more for cash flow. Maybe you can swing 40k a year.

That means go state school or only look at private schools with generous merit (they exist, there are lots that will get your cost from the 75k list price closer to 40k).

At the T25 schools, most are more than 50% pay the full weight.

At NYU & USC a lot of “full-pay” students are there on significant amounts of Parent Plus Loans.

Those people are obviously not the brightest then. No school is worth taking out PPL

If my kid got into MIT, I'm taking out parent pluses

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Be smart and don’t overspend. Very few students are full pay at 70-80k a years. It’s less than 2% of students with that type of bill to pay. That is a luxury good.

You have 75k, add in 27k for Fed loans (I wouldn’t go above that with high interest private loans). Add in some more for cash flow. Maybe you can swing 40k a year.

That means go state school or only look at private schools with generous merit (they exist, there are lots that will get your cost from the 75k list price closer to 40k).

At the T25 schools, most are more than 50% pay the full weight.

At NYU & USC a lot of “full-pay” students are there on significant amounts of Parent Plus Loans.

Those people are obviously not the brightest then. No school is worth taking out PPL

Anonymous wrote:

Anonymous wrote:Please don't do that. 3X $75k invested and your child will never have to work again after 35. They'd rather have that and a state school degree than working til retirement.

A lot of 18 yr olds cannot understand the impact of $150K student loans.

I ran the numbers with my DC and showed them how long it would take to repay the $150K assuming a $140k job. They don't understand how taxes work; they see $140K, and think big money, but then you show them how much they will deduct in taxes, and they realize just how much their take home really is. Then you show them the repayment schedule, and how that will impact their ability to save to buy a house.

Run the real numbers with your kids.

A lot of kids understand it, but they also look at starting and mid career salaries at various universities and compare them. Somewhere like Emory may be much more expensive, but their grads are earning a lot more than Radford grads at every stage of their careers

Anonymous wrote:Please don't do that. 3X $75k invested and your child will never have to work again after 35. They'd rather have that and a state school degree than working til retirement.

A lot of 18 yr olds cannot understand the impact of $150K student loans.

I ran the numbers with my DC and showed them how long it would take to repay the $150K assuming a $140k job. They don't understand how taxes work; they see $140K, and think big money, but then you show them how much they will deduct in taxes, and they realize just how much their take home really is. Then you show them the repayment schedule, and how that will impact their ability to save to buy a house.

Run the real numbers with your kids.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:College is such a ripoff. Forget loan forgiveness, how about everyone put pressure on these universities to come back to reality. They are solely responsible for the crippling debt kids find themselves in.

College is crazy expensive, but people like OP constantly make their own beds and then down the line will cry about it. She is barely upper income for this area, she is NOT middle class and has a lot of opportunity however she is planning on squandering it on a school her kid has no business at. If parents didn’t behave like the OP and refused these obscenely expensive schools they can’t even afford, then these prices would not exist.

Americans need to take responsibility for their financial stupidity.

The prices would still exist because there are plenty of people who make what OP makes and have been putting away aggressively since birth, there are people who make what OP makes, but in region where a LOL col would allow them to pay the tuition out of salary, and there are people who make more than OP who are happy to take OP's kid's spot and pay the tuition

^^^This. It is also the case that not that many people pay the full $80,000 tuition. Outside of the top 20 or so colleges, the students at private universities are smart poor kids on financial aid, very smart MC/UMC/rich kids on merit aid, and middling-smart UMC/rich kids. The top 20 schools generally have very generous financial aid, so it’s only the UMC kids who have parents that didn’t save that get admitted to the very “top” schools that struggle to pay. If those kids refused to attend the prestigious schools that don’t offer merit aid, there’d be plenty of smart rich kids happy to take their place.

Some of the smaller private schools that don’t have large endowments are struggling financially, but it’s because they already offering large discounts off their “sticker price” to attract students. If a college is prestigious enough to get away with actually charging $80k a year, it’s because there is excess demand for their product.

Kids don't need to go to private college. They can go to state schools. Mrs too us true middle/upper middle class get this and aren't looking at private colleges. They go to state schools we can afford. We'll probably apply to a few to see if there is merit aid, but we don't rely on it.

What about the military or national guard? You are obviously not in a position to be paying big bucks for a college education.

Anonymous wrote:Please don't do that. 3X $75k invested and your child will never have to work again after 35. They'd rather have that and a state school degree than working til retirement.

You may be banned from this forum because you make so much sense. You are too smart.
There are people here that have $1M in 529 and claim this is not enough.

Please don't do that. 3X $75k invested and your child will never have to work again after 35. They'd rather have that and a state school degree than working til retirement.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:College is such a ripoff. Forget loan forgiveness, how about everyone put pressure on these universities to come back to reality. They are solely responsible for the crippling debt kids find themselves in.

College is crazy expensive, but people like OP constantly make their own beds and then down the line will cry about it. She is barely upper income for this area, she is NOT middle class and has a lot of opportunity however she is planning on squandering it on a school her kid has no business at. If parents didn’t behave like the OP and refused these obscenely expensive schools they can’t even afford, then these prices would not exist.

Americans need to take responsibility for their financial stupidity.

The prices would still exist because there are plenty of people who make what OP makes and have been putting away aggressively since birth, there are people who make what OP makes, but in region where a LOL col would allow them to pay the tuition out of salary, and there are people who make more than OP who are happy to take OP's kid's spot and pay the tuition

^^^This. It is also the case that not that many people pay the full $80,000 tuition. Outside of the top 20 or so colleges, the students at private universities are smart poor kids on financial aid, very smart MC/UMC/rich kids on merit aid, and middling-smart UMC/rich kids. The top 20 schools generally have very generous financial aid, so it’s only the UMC kids who have parents that didn’t save that get admitted to the very “top” schools that struggle to pay. If those kids refused to attend the prestigious schools that don’t offer merit aid, there’d be plenty of smart rich kids happy to take their place.

Some of the smaller private schools that don’t have large endowments are struggling financially, but it’s because they already offering large discounts off their “sticker price” to attract students. If a college is prestigious enough to get away with actually charging $80k a year, it’s because there is excess demand for their product.

Don’t worry OP.

MANY other parents are fretting over the exact same thing. Your child won’t be the only one who will go to a state school for financial reasons. It’s the smart choice! I know people are being hard on you, but they give good advice. Don’t give your future away! Best of luck!

Anonymous wrote:Please help with strategies to help pay for college ~$75k/year x 3 years (DC is planning to finish in 3y).

My savings are $75k with HHI of $270k and no 529 or other accounts.

I'm willing to overhaul our lifestyle and save aggressively to help pay for that. Currently not budgeting.

Would the following make sense or any other thoughts? Thanks a lot.

- Borrow from 401k - 50K and pay to self
- Cut down on 401k deferrals beyond employer matching
- Save $X from now on
- Use HELOC funds
- Explore Federal student loans

OP, I’m sorry you’re getting excoriated here. What you’re doing is not too far off from what I am planning. The difference between us is what will probably give this from a collective heart attack: I am already used to cash flowing $35k a year for private school, on a $230k HHI. We live in a townhouse, have one car, but live what seems to me to be a pretty nice life, and want for nothing that is important.

You are looking to cash flow more than I am (I have an employer benefit that will help with tuition), but you also make $40k more than we do, so you should be OK. Take a hard look at your housing expenses, which, for most people is what makes it undoable.

Your decisions are your decisions for your money based on your values. With your HHI you can do almost anything, you’ll just have some trade-offs. If you’re willing to make them, then you can do this.

I definitely do not think that OP should take out a HELOC or a 401K loan. They can't risk their future in that way. Lifestyle changes, kid gets a job, kid takes out a loan (if they qualify) etc.

With a lifestyle change, not even sure how major, it should not be a problem. Lets assume the all in college costs are 400k. From a cash flow perspective, OP has easy access to 75k in savings, 50k in a 401k loan, and 25k in federal loans, leavings them needing 250k in HELOC and lifestyle changes. Lets assume a 100k HELOC, 10k reduced 401k, and 40k a year in lifestyle changes. Keep those lifestyle changes going for ~10 years (6 years post graduation) and college is paid off.

The impact of trying to save an extra 40k a year is like dropping from a 270 HHI to like 200k. OP will notice it, but living on 200k a year is not a hardship.