How do you save for college?

[Lmullin]

Hi,
Do you save for college? If so, how do you do it? Do you feel obligated to save? What do you think about expensive colleges vs inexpensive ones? Do we owe it to our kids? If I knew I was going to have a 50,000 dollar loan at age 22, I may not have attended college. My parents took care of my tuition. I went to a state school and lived at home, so the costs were not outrageous, but not anything to sneeze at either.
I think the expensive schools stay expensive because of simple supply and demand. There's an endless supply of students (from here and abroad) who are WILLING to pay for the tuition, so why would the college or university lower the bill? Only when they can't fill the classrooms will they think about lowering the tuition (imho.)
What's your take on this???

[midwestgal]

We did not save for college for our 4 kids, but by God's grace it worked out just fine. We had our children young, and both DH and I earned our degrees (DH also has an MBA) AFTER we had children (no loans whatsoever--debt free), so we were barely on our feet it seems when it was time for our children to begin college. They all went to prestigious private schools (Notre Dame and 2 Ivy Leagues and a school in NC), so it was not cheap. They all received scholarships, which paid for about 1/3rd I would say, and of course, worked in high school and in the summers during college. They had work-study jobs at college too. DH and I paid the rest, which included lots of airfare. It was a chunk, to say the least! I won't quote it because it may be discouraging for people, but almost all that I made in teaching for 11 years, plus bonuses that DH received went to the college fund. Once we took $20,000 in equity from a sale of a home and put that in the pot too. They graduated debt-free and now all on their own as adults, working in good careers. Dh and I were completely committed to this as parents. Our youngest graduated 6 years ago, and even since then, we have seen tuition jump all over the place. I have to say it would be more scary today to be doing this! Even state schools are getting up there.

PS They have to do their own weddings though!

[wendy]

I've told dd (10yo) that she should get a job at our local university when she's right out of high school as a secretary. That way, she can have a job and the benefits, which include: 2 free classes a semester. I told her that would be enough to slowly work her way through school, not feel overwhelmed and begin working toward putting in for retirement while getting good health insurance.

Even though she's just 10, she's asked a lot of questions about it, and hopefully she'll follow through with it. The key with my dd is to make her feel like she's made the decision. Otherwise, if I tell her she HAS to do something, it's a lost battle before it starts.

I don't know where she gets it

[ewokgirl]

I'm not a parent, so what I say is just hypothetical. I know that I wouldn't want my child to start out life with a big debt. My parents paid for my expensive private university. DH went to a private university totally on scholarship. My hope would be that our child would receive a scholarship or two, and we would foot the rest. I think my parents have been socking money away in trust for my nieces, so I assume they would do the same for any kids I might have. That would be of great help, too, of course. I know that if we had a child, we would set up a fund to sock away whatever we could for him or her each month. I just know that I wouldn't want our kid to have student debt if at all possible.

[treeluva]

I think my opinion on this subject varies from many.

I do not feel obligated to *pay* for my childrens college/university education.

Now this is not to say that I do not plan on helping out, but we have a lot of rules about my helping out.

First of all, I have a cap on what I will pay, and what I will pay for. Also, they have to sustain a certain GPA for the money I will pay.

I see too many children who waste so much of their parents money in college, by not taking it seriously, because they truly have no clue how much it is costing. I mean, sure, they may see the numbers, but if they dont work for it, in my opinion, they do not appreciate it as much.

[dwallyfam]

Well DH and I personally have saved some money for DDs college. My mom (unknowing to me until she passed away) had put aside a inheritance for her college. It isn't much but it will help. We are also hoping that DD will have the grades to get her first two years of college paid for (program called A+). We will have to wait and see.

Kellie

[Labontet]

My husband and I purchased 2 Florida prepaid college plans for Junior College for our 2 daughters. Neither one took advantage of going to college.

Now we have 2 grandsons. The oldest one we have purchased a Fla Prepaid 2year plan for which we will be paying for 5 years then we are through. The youngest we are buying $30.00 I-bonds each month for 5 years (he lives in Louisiana). That will be it. If they use the money for college when the time comes, great. Other than that, they will be on their own.


on and the youngest we are purchasing $30

[staceyy]

I did not save for my daughter's education because at the time, I was a single parent and not in a position to do so. She received financial aid. I strongly believe it is not the quality of the education but the motivation of the individual that makes a person a success in life.

[Telephus44]

I actually don't know how I'm going to save for my child's college education yet. I'll probably use a 529 plan or a Coverdell IRA, but I haven't gotten that far in the planning stages yet.

I went to one of those "expensive" 4 year private colleges - the $30,000 a year kind. I received a significant financial aid package, and my family ended up paying between $8,000-$12,000 per year after grants/scholarships. The deal I had with my parents was that I had to work all summer, and Christmas break, and I turned over everything I made to them at the end of the summer, and they would cover the balance. Most of the time I ended up covering about half of the bill. In addition, I had to cover my own books and all of my spending money at school (I lived on campus). I found that it was a great experience in teaching me about budgeting and money management, but I think if my parents had said "Well, you're on your own, we're not paying anything" that I never would have done it, and probably would not have been successful in my career as I have been. I also graduated with $17,625 in student loans, which was a strong incentive to actually get a job and make sure that I took full advantage of school while I was there (not skipping class, getting good grades, etc.) To me, it was worth every penny and I'd gladly do it again.

I am hoping to set up a similar arrangement with my child. I think that to pay for everything and give them a totally free ride doesn't teach them about responsibility, but to turn them loose after high school with no help and no plan doesn't exactly encourage them to continue their education.

[McD]

From a banking perspective: most states 529 plans are better than a Coverdell. The only good thing about the Coverdell is you can use it for private high schools, etc. I know Iowa's 529 plan is completely tax deductible--up to 10,000$ per spouse filing on a joint income tax. Check with your state and find a reputable wealth management person to talk to regarding your options. I know our bank doesn't charge a comission for the 529.

[frugalnana]

Each child had the opportunity to go to college, the oldest went 1 semester then quit and went into the Army. The next one decided he didn't want college but a trade school would do just fine. The third we paid to go to college to be a teacher. Which she graduates next year. The last one is graduating high school and is taking accounting and business administration. He is going to a local college and its $3000 per year for 5 years. So thats not bad. We saved some for him.

My niece is the odd one. ( I mean this in a good way) I am very, very proud of her. Her dad was married before she was born, and the ex used to spend everything. So when he remarried he instilled in his kids that if you want something you will work for it. When her class went to washington she saved babysitting money and paid for it herself, She wanted a car she got a job and saved and bought one she could afford. Her reward for this will be given to her on graduation day. Her dad bought her a brand new honda Civic which she has no clue about. She also wanted to go to france for a graduation present to herself. She has paid for it all. She also got schloarships for college, she is a 4.0 student, in track and band, and works 30 hours a week. I sometimes wish my kids had that drive. But she knows what she wants and is just going after it. One of the girls has been in trouble so many times I can't count.
I think when you save for college you just have to start putting it away until they are old enough to figure out what they want to pursue as a career.
My friends son, is going to the local vocational school for air conditioning and heating. I know they call this something else but for the life of me can't remember what he told me it was.
I think a good one might be, if she does errands or babysits, then tell her she has to contribute a portion towards her college education. Get an account at the bank to set this up. Try to match it everytime she puts something in. Plus each month contribute what you can afford at the time.

I know some people who have made their kids pay for all their college and I know some who paid it for them.

[Lmullin]

Thank you all for the great input. Keep it coming folks!

[Lorelei]

We plan to pay half the college expenses for our kids to state universities, unless they get scholarships that cover everything. If they do, we've offered an incentive that would actually be more expensive to us, but worth it if it encourages our kids to work harder for their future. So far it's working as good grades are important to our older kids specifically because of their college plans.

As Telephus44 said, "I think that to pay for everything and give them a totally free ride doesn't teach them about responsibility, but to turn them loose after high school with no help and no plan doesn't exactly encourage them to continue their education."

[freedeal]

I guess our way is a little different. We have told both of our boys that they will not have debt getting our of college. We have a college fund set aside for each one. Along with the $5000 for each of the 4 years of college the state awards for the top students they will be able to go to just about any of the state institutions without any debt. But if they want to go anywhere else they must have the money (via scholarships) to go. If for some reason they really blow it and don't get the state money - they will go to the local college and live at home with their dear mom. Not exactly their choice.

My older son is currently looking at a boarding school for his last two years of high school. There is no tution you just have to have 1300+ on the SAT and be and A student. This is a state run school with the top math and science students in the state. We visited this weekend and the seniors all had their college acceptace letters posted on their doors. Many of them had full scholarships - some up to $100,000. I'm not pushing my son to go but I am really encouraging him to consider.

The motivation to do well in school and get scholarships is that once they graduate any money left from their college fund will be handed to them on graduation day.

[Buckeye5]

So far, we are fortunate. Our oldest DD receive a full academic scholarship for 2 years, at our local community college. She also works part-time for a law firm which is in her degree profession. She has maintained an A average . She did not want to leave from home after finishing high school. We barely having a savings account for ourselves so a college fund isn't doable. Our DD will soon be a senior in high school and may go to a regional college, for Physical Therapy Assistant. the cost is $12,000 for 2 years, we will help as much as possible, but she will have to have loans. I know of so many people who do not use their degrees in their specialized fields. Suze Orman says parents should be more concerned with saving for retirement than college education, because while the college grad is working and buying cars, etc. that parents are busting tail to pay off school loans, and not able to retire or do not have enough to reitire. Our youngest is 13 yrs. old so I am hoping we will be better off by the time he graduates.