College Savings

purplehaze11

We have an RESP (Canadian version of a 529). We can contribute $2500 per year for 17 years, so that is our goal for each child. DD turns 2 next week, and we have $2600 in the account, so a long way to go our goal is to pay our mortgage off by the time she is 15, so we will have a couple of years to focus on that.

FabulousMrs.P

I have a savings account in my name that I have earmarked for our DD's college education. If she ends up not going to college and doing some other type of training we can put it towards that.

blondie42107

We haven't started a 529 or anything specific for college.  We plan to help our kids however we're more focused on our retirement at this time.

Junebug613

We have a 1 year old and a 4 year old and just started this year making monthly contributions of $150 for the 4 year old and $100 for the 1 year old into a 529 plan.

We are still working on paying down our own student debt (started with almost $200k in student loans 5 years ago and we are down to about $60k now) but we wanted to at least start something (even small) until we get to the point where we can save bigger chunks.

I am not completely committed to the 529 plans, and don't feel comfortable putting their entire college savings into them. But I think we will likely keep up the current contribution rate (putting them at approximately $40kish each by the time the go to college, expecting a modest return) and, when we get to the point where we can, open up some other type of mutual fund/money market account that is earmarked for college as well. I figure that at $40k each /$80k combined, even if they got potential scholarship money, I think that money would probably get used by one of them for some of their college expenses.

TarponMonoxide

Mom987 said:

Hi everyone,

If anyone follows Dave Ramsey, we are on baby step 5 (woo hoo!).  We have no debt but the house, 6 months living expenses and contribute 15% to retirement.  Now is the part to save for college, but I haven't seen a guideline or suggested amount (percentage) to save.  I doubt we'll fund college 100% due to scholarships and having kids work to pay part of it, but wanted to see what other people plan on doing.

Thanks!

Are you kidding?

The cheapest private college -- one that is not a state college --- near me is 30 grand a year.

Not including other fees like room and board and books and so forth.

What will those tuitions be in another 18 or 19 years? That's the interesting and pressing question -- and is any kind of a college fund going to be able to cut it when it comes to what tuition will be in about 20 years?

30 grand for a little school where there is a student body of 2 thousand.  How do they get away with charging this kind of money? How do any of them get away with it?

To the PP who said "School is the student's job" I remember the day where there were students who worked their way through school. They either held a job that was nearly full time while they attended classes or they worked one semester and worked full time during the other. One semester in school and the other one working full time.

There was also the option of attaining a full time job over the summer and earmarking that money for tuition purposes.

It worked for those students. Nobody wants to do it that way anymore.

When the community college in our county opened it was $22 per credit hour. Now it's $130 per credit hour. Whose parents can afford to pay for even 2 years at that college, out of pocket? not many.

TarponMonoxide

I came from a time where nearly everybody's parents paid out of pocket for college tuition. Even the more expensive colleges were still somewhat affordable for students.

Community colleges were $20 per credit hour and "the most expensive" school in the state was maybe $90 per credit hour.  Parents still afforded the tuition. very few students came in with a student loan.

Everything is slowly becoming out of reach of the middle class --  and remember, it's the middle class that sends the majority of students to colleges. And it's going to be the middle class that keeps the colleges open and full.

Indeed if the smallest no name college is charging 30K per year for tuition now, what will the tution be in 20 more years? it's a scary thought.

Unless you are very well off or colleges come up with some type of "pay for it in advance" tuition, I can't see how any parent anywhere will be able to afford college tuitions.

It's save what you can and hope for the best --- or hope your son or daughter chooses a career that doesn't require a college degree.

lpstl

I opened a 529 for my son the day I got his social security card, we contribute monthly to that and encourage family to contribute in lieu of tons of gifts around bdays and holidays. We also contribute lump sums from our annual bonuses. I chose a 529 because my state is highly ranked and performs well (double digit annual returns every year so far). That may not be best for everyone, I know several people who chose to go with an IRA instead for the flexibility. 

We're planning to invest in rental real estate in the next year, so another option could be to just sell one of the buildings when it comes time for college or grad school. 

On the subject of expecting a child to work or pay for some of the tuition, we feel it's best to make those decisions once the time comes. But, we will be prepared to fund undergrad and grad school.

 

FabulousMrs.P

When people don't know what to get DD for Christmas or her birthday, I always suggest giving money towards college fund....especially since we usually don't need any new toys or clothes.