What is wrong with borrowing against home equity for college expenses? Student loans have higher variable rate and can’t be discharged in bankruptcy? Sure it’s better to not borrow at all but if you need cash flow, why is home equity not the best option?

Anonymous wrote:

Anonymous wrote:At your income level you are way behind on college and retirement savings. We are late 40s and make about $170,000 combined. We don't have "college" savings, but have put money into 401Ks and Roths. We are at $1.3 million in retirement savings and have been able to cashflow private school and now UMD college park. Since we are heading into a recession, your 529 accounts aren't going to grow as much. Be in a position to cashflow and borrow once your kids get into college. You are in the donut hole friend. You are not getting financial aid.

You sound kind of like a jerk, actually. "Way behind"? How do you know how long that income has been what it is and what other expenses exist?

And: Why did your kids go to private school when you make such a modest salary?

They likely live in PG, where housing is cheap and there are cheaper private options that are kinda needed to be college ready

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At your income level you are way behind on college and retirement savings. We are late 40s and make about $170,000 combined. We don't have "college" savings, but have put money into 401Ks and Roths. We are at $1.3 million in retirement savings and have been able to cashflow private school and now UMD college park. Since we are heading into a recession, your 529 accounts aren't going to grow as much. Be in a position to cashflow and borrow once your kids get into college. You are in the donut hole friend. You are not getting financial aid.

They are NOT a donut hole. Someone making $320K should have been able to save for both retirement and college and be well positioned at this point. Donut hole is someone making ~$125K in a HCOL area who would have struggled to save fully for college and retirement and own a home, etc. At $320K it's more about their choices that have put them in this position. You can choose the lifestyle or choose retirement/college funds or balance all three things

Have you ever heard of student loans? Have you ever heard of ...NOT MAKING THAT INCOME FOR VERY LONG? Good lord. Maybe you never went to grad school or paid off loans, but most people do - and most people don't make 320k right out of college. Good grief. NUANCE much?

+1 Or having to support aged parents or dependent siblings? Or having had to (gasp!) pay for your own college with loans that you have only recently paid off? Not everyone was born with the benefits you all were, you judgmental DCUM jerks. Take a moment and consider for a moment that not everyone has the same life you do.

Seriously. The money board is laughably out of touch sometimes. You either dine out once a century or have 100 trust funds.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At your income level you are way behind on college and retirement savings. We are late 40s and make about $170,000 combined. We don't have "college" savings, but have put money into 401Ks and Roths. We are at $1.3 million in retirement savings and have been able to cashflow private school and now UMD college park. Since we are heading into a recession, your 529 accounts aren't going to grow as much. Be in a position to cashflow and borrow once your kids get into college. You are in the donut hole friend. You are not getting financial aid.

They are NOT a donut hole. Someone making $320K should have been able to save for both retirement and college and be well positioned at this point. Donut hole is someone making ~$125K in a HCOL area who would have struggled to save fully for college and retirement and own a home, etc. At $320K it's more about their choices that have put them in this position. You can choose the lifestyle or choose retirement/college funds or balance all three things

Have you ever heard of student loans? Have you ever heard of ...NOT MAKING THAT INCOME FOR VERY LONG? Good lord. Maybe you never went to grad school or paid off loans, but most people do - and most people don't make 320k right out of college. Good grief. NUANCE much?

+1 Or having to support aged parents or dependent siblings? Or having had to (gasp!) pay for your own college with loans that you have only recently paid off? Not everyone was born with the benefits you all were, you judgmental DCUM jerks. Take a moment and consider for a moment that not everyone has the same life you do.

First, congrats on even thinking about this and for having saved for college and retirement. You are going to get all kinds of judgy DCUM replies; ignore them.

The equity in your home is great, but it is not going to help with college expenses. DO NOT borrow against your house for college expenses. I have no idea where your income is going. Maybe you had student loans consuming your money or you are supporting a parent or 3rd party. Without knowing we can't know where your money is going. Acknowledging we don't have perfect information, I would say that your saving rate on 300+k seems a bit low. It might be time to buckle down and see if there is room in your life to prioritize some additional savings.

And, yes, most people rely on loans and scholarships and all manner of things to pay for college. DCUM is not reality. It skews to partners at law firms and people who have family money and parents and grandparents who pay for college. It is not reality.

Good luck!

OP- you have a long way to go but you can do it! You need to cancel some frivolous stuff and cut down on things like subscriptions, vacations, gyms, hair/nail care. You need to find at least an extra $1500 a month to throw at this problem. I would put at least 1K a month on top of what you have been saving (and $500 a month more for younger child). You have 6 years for the oldest. That's 72K without any gains.

We put 10K into a 529 when DD was born almost 17 years ago. I think we made about $150K back then. The following year we started adding $500/month and kept that up until a couple of years ago (except during times when one of us were laid off - the longest that ever happened was for six months). We also set our credit card rewards program to contribute to the 529 account. We stopped contributing once there was enough in the account to fully fund four years of tuition, room and board, and fees at our flagship state school (we built annual 8% price inflation into the model). We benefitted from a strong stock market since DD was born, and half of the account's balance is due to market gains.

We now make about $300K and we continue to save aggressively outside retirement, but not specifically for college. If DD gets into a private school and it seems like the right path, we'll do our best to help out more.

DW and I each make $110k. Our DS is in his 5th year and graduates in May. We started a 529 soon after he was born and put in what we could monthly. When he started college I believe the value of the 529 was just over $100k.

*DS attends an OOS state school. Tuition 4 years ago was ~$20k. SAT score in the mid-1300s earned $7,500 off the tuition rate for the first 4 years.
*We did student loans of $5k each of the first two years. We had been paying those down, but stopped and are waiting to see if loans will be forgiven by the feds.
*Athletics has covered the meal plan all 5 years.
*Started with a small athletic scholarship that has increased over the years.

DS will graduate with a undergrad degree, two minors, little debt and about $1,500 remaining in the 529.

Anonymous wrote:

Anonymous wrote:At your income level you are way behind on college and retirement savings. We are late 40s and make about $170,000 combined. We don't have "college" savings, but have put money into 401Ks and Roths. We are at $1.3 million in retirement savings and have been able to cashflow private school and now UMD college park. Since we are heading into a recession, your 529 accounts aren't going to grow as much. Be in a position to cashflow and borrow once your kids get into college. You are in the donut hole friend. You are not getting financial aid.

They are NOT a donut hole. Someone making $320K should have been able to save for both retirement and college and be well positioned at this point. Donut hole is someone making ~$125K in a HCOL area who would have struggled to save fully for college and retirement and own a home, etc. At $320K it's more about their choices that have put them in this position. You can choose the lifestyle or choose retirement/college funds or balance all three things

At 125, there are schools that are fee. Closer to 200, they start expecting closer to full pay.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At your income level you are way behind on college and retirement savings. We are late 40s and make about $170,000 combined. We don't have "college" savings, but have put money into 401Ks and Roths. We are at $1.3 million in retirement savings and have been able to cashflow private school and now UMD college park. Since we are heading into a recession, your 529 accounts aren't going to grow as much. Be in a position to cashflow and borrow once your kids get into college. You are in the donut hole friend. You are not getting financial aid.

They are NOT a donut hole. Someone making $320K should have been able to save for both retirement and college and be well positioned at this point. Donut hole is someone making ~$125K in a HCOL area who would have struggled to save fully for college and retirement and own a home, etc. At $320K it's more about their choices that have put them in this position. You can choose the lifestyle or choose retirement/college funds or balance all three things

80k per year for multiple kids is a lot for 300k HHI unless they have a pension (ie no retirement saving pressure) and good job security)

Saving that much is not really "a lot" if you prioritize it. Start saving early. At that income, you can probably save $20K/year now. So do that from now until kids start college, and use that $20K to cash flow once in college. Also, your kid can get a great education without attending a T20 school. Look outside that and you can find merit for your kid---the best gift you can give your kids is a set free college education---or as close to it as possible. You do NOT need to pay $80K/year. But if attending a T20 school is that important to you (really it shouldn't be if you have to take more than $5K loans each year), they you have to pay for it---with loans or by prioritizing and saving before college.

You still have 15 years left before the younger kid finishes college, so saving $1,500/month plus reasonable 529 market returns should cover in-state public universities for both kids.

Anonymous wrote:

Anonymous wrote:At $320k a year I don’t understand what the problem is. We earn about $150k a year and have been saving since our kids were tiny. They are now 13 and 8 and we have about $120k combined. Still not enough but much more than you have. How much are you saving a month?

Your post is a bit smug, isn't it? Retirement is a priority for most people.

Then they can take out loans for college

You won’t get any FA at your income, people go to the schools they can afford, either in state public or lower ranking private with merits , no expensive private school for your kids if you don’t have enough saved or don’t think 80k/yr is worth it

Anonymous wrote:

Anonymous wrote:At your income level you are way behind on college and retirement savings. We are late 40s and make about $170,000 combined. We don't have "college" savings, but have put money into 401Ks and Roths. We are at $1.3 million in retirement savings and have been able to cashflow private school and now UMD college park. Since we are heading into a recession, your 529 accounts aren't going to grow as much. Be in a position to cashflow and borrow once your kids get into college. You are in the donut hole friend. You are not getting financial aid.

They are NOT a donut hole. Someone making $320K should have been able to save for both retirement and college and be well positioned at this point. Donut hole is someone making ~$125K in a HCOL area who would have struggled to save fully for college and retirement and own a home, etc. At $320K it's more about their choices that have put them in this position. You can choose the lifestyle or choose retirement/college funds or balance all three things

80k per year for multiple kids is a lot for 300k HHI unless they have a pension (ie no retirement saving pressure) and good job security)

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You won’t get FA with your HHI. State school is 40k. Shouldn’t be a problem to cash flow. Private schools can give you merit but with very rare exceptions not the top 30.

I am one of the "irrelevant" posters above. My 2022 high stats but unhooked kid received very few merit offers even in the top 50. The only schools giving her merit (other than Northeastern) were outside the T100. I agree that OP can likely cashflow for just about any school they want to if they keep their spending in check. Hopefully the stock market will rally a bit and help 529 savings (and retirement savings!).

So if you truly could not afford the T50 or T100 schools with their lack of merit, you say you have offers with merit, just outside T100. So at that point, if you can't cashflow college/use their 529, you still have a way to get a great college degree without tons of debt---you take the merit at the school ranked #120 (or whatever) and give your kid the gift of no debt

I was gifted this by my parents and graduated undergrad with no debt. My spouse did not have college debt either although his path was somewhat uncommon.
Having no debt early in our marriage was a game changer compared to some peers. It led directly to our owning our home which has led directly to other significant steps. It truly was the greatest gift and we are trying to give that gift to our kids as well.