College for the "well off" but not Rich

I would like to start a thread on the recommendation of another poster. Basically how do people who make a good living save for college? I have 3 kids as I have mentioned in previous posts, college for all 3 could easily be the better part of a million dollars when they go. I will have kids in college 2017-2027, and 3 of those years I will have 2 in college.

Here are my issues with college:

I don’t think it is right to pay for college with mostly loans, or any loans at all really. This is especially true for a liberal arts degree; I make an exception for professional and doctoral programs. This is obviously impossible for 90+% of the population. My feeling is that college is overpriced because the government will guarantee loans, and people will take them. This creates fake demand and pushed the price up. I am 100% sure this is happening, but there is really nothing I can do about it. With 3 kids I am being “squeezed”!
How the F*** does anyone of my generation save that kind of money! The stock market has been flat for 10 years, and interest rates don’t even cover inflation. Even if you make good money and save a lot ($20,000yr for 3 kids) for college, you still will fall short. Basically if you want your kids to go to a private college, or in my case (University of Michigan obviously not private) you need to be rich, not just well off.

My understanding of the system is that if you have no money and are smart enough to get into the school you can get a need based scholarship. If you are very wealthy than you have no issues I guess. But if you are doing OK, and saved and scrimped for years, college will cost you everything!

So basically the point of my thread is to toss around ideas on how people can intelligently mitigate the cost of college. Ideas and strategies that can help people with money, just not all the money in the world.

Why do you feel like you need to pay for the entirety of your children's college costs?

Public schools - don't tell your children that you will pay for their education until they graduate to maximize need based scholarships (best graduation present ever). There is a potential that your kids will not work as hard in high school because they have no financial repercussions to not getting scholarships. These scholarships (at least in SC) are mostly state-funded merit based ones with requirements based solely on GPA, class rank and standardized test scores. Another anecdotal data point - my friends that were in college whose parents were paying the way did not work as hard as those that were paying their own way so I caution you of this.

I got 2 merit based scholarships in SC for an instate school worth 80% of cost of attendance due to my GPA and ACT score and the fact I studied engineering (which had a pretty sizable boost). I was in the 85-90th percentile for my HS graduating class so not the top student but I did have to work for it. I imagine it is the same in other states.

you got 80% scholarship and not even in the top 10%. jesus I shoulda gotten a full ride then. lingham said:   Public schools - don't tell your children that you will pay for their education until they graduate to maximize need based scholarships (best graduation present ever). There is a potential that your kids will not work as hard in high school because they have no financial repercussions to not getting scholarships. These scholarships (at least in SC) are mostly state-funded merit based ones with requirements based solely on GPA, class rank and standardized test scores. Another anecdotal data point - my friends that were in college whose parents were paying the way did not work as hard as those that were paying their own way so I caution you of this.

I got 2 merit based scholarships in SC for an instate school worth 80% of cost of attendance due to my GPA and ACT score and the fact I studied engineering (which had a pretty sizable boost). I was in the 85-90th percentile for my HS graduating class so not the top student but I did have to work for it. I imagine it is the same in other states.

Given the age of your kids, there's still pretty good odds atleast one of them will fall off that proverbial cliff, slashing your projected college costs by atleast 1/3....

blackie7955 said:   So basically the point of my thread is to toss around ideas on how people can intelligently mitigate the cost of college.

Because the Search function is broken???

Wouldn't spoonfeeding you perpetuate the nanny state?

I can answer this question as I was a recruiter for many years (medical officers and others). I saw it all. To begin with, you already have a great understanding of things. But know this: education is a business racket top to bottom. High schools push kids into college (that's how they are graded) and colleges separate you from your money. When we grew up, there was no TV advertising, billboards and such for college. And it was a lot cheaper. I say all this because (GET THIS INTO YOUR HEAD).....drumroll please......NOT EVERYONE NEEDS TO GO TO COLLEGE. In my view maybe 30% of the population does, give or take. That means at least one of your kids has no need to go. I know you WANT them to go, but here is the deal. No way on earth are you paying for 3 kids to go thru school. Not now. Not in the future. Tuition has gone parabolic and increasing, aid is decreasing, interest rates rising, and some loans are disappearing completely. If you spent one week in my shoes, and listened to the horror stories of student debt and how crushing and life-altering it is, you would be stunned. You would not let your kid walk into that debt trap as it is unlike any other debt on this earth. I saw many parents put their homes on the line to give junior a trip to U of M. DON'T DO IT. You will all drown.

But if you insist, here is what you can do:

1. Military ROTC-pays it all at elite schools, but is incredibly competitive, very few get picked. But it's a free ride and resume' afterwards cannot be beat.
2. Community college for the first 2 years, and then transfer to eastern or western MI univ or cheaper instate school. The elite schools know they are elite, and will always charge more and more. You can't afford it. Do you drive a $75k Mercedes? Then you don't "buy" a degree you cannot afford.
3. Stretch school over several years and pitch in a few bucks along with your kids working and doing the same. Not pretty, but beats being a debt slave. Interest kills. And never, ever sleeps.
4. Consider not going to college and doing high paying vocational work (if desired). They are out there. And cannot be outsourced. Do some homework. Friends do this and do better than the average college grad.
5. Under NO CIRCUMSTANCES do you let you kid go into massive debt for a lib art degree. If you do, you should have your parent card pulled. Learn the word "NO" now. The next time you eat out, ask your waitress what her degree is in. You will see.

Wish you all the best. Go Blue!

computerquest said:   outside of the program, they will be getting their own student loans. I don't think it is a parents obligation to pay for college, and I have seen many, many students who blow it in college because they have no skin in the game. We are saving money to pay off lump sums on our kids' student loans once they have successfully graduated, but that is our choice. My parents did not pay for my education either.
Problem is that alot of today's students dont grasp the concept of "having skin in the game". I think a significant portion truly believe that if they rack up loans but cant find a good paying job after graduating (or screw up to the point of not graduating), they'll get a "do-over".

Aren't you suppose to think of future expenses BEFORE you have kids?

Eventually, the economics will prevail and if the costs of education can/should come down, they will. It's not like the schools are just making tons of money hand over fist, their costs are going up too.

As these rates have gone up, the number of private schools are increasing. We are seeing more and more in the way of online college degrees, and all of the efforts in that space will help increase supply and get the price down, if it really is high.

The other option to think about is paying for 2-3 years of their schooling and letting them pay for the other 1-2 years.

blackie7955 said:   I would like to start a thread on the recommendation of another poster. Basically how do people who make a good living save for college? I have 3 kids as I have mentioned in previous posts, college for all 3 could easily be the better part of a million dollars when they go. I will have kids in college 2017-2027, and 3 of those years I will have 2 in college.

Here are my issues with college:

I don’t think it is right to pay for college with mostly loans, or any loans at all really. This is especially true for a liberal arts degree; I make an exception for professional and doctoral programs. This is obviously impossible for 90+% of the population. My feeling is that college is overpriced because the government will guarantee loans, and people will take them. This creates fake demand and pushed the price up. I am 100% sure this is happening, but there is really nothing I can do about it. With 3 kids I am being “squeezed”!
How the F*** does anyone of my generation save that kind of money! The stock market has been flat for 10 years, and interest rates don’t even cover inflation. Even if you make good money and save a lot ($20,000yr for 3 kids) for college, you still will fall short. Basically if you want your kids to go to a private college, or in my case (University of Michigan obviously not private) you need to be rich, not just well off.

My understanding of the system is that if you have no money and are smart enough to get into the school you can get a need based scholarship. If you are very wealthy than you have no issues I guess. But if you are doing OK, and saved and scrimped for years, college will cost you everything!

So basically the point of my thread is to toss around ideas on how people can intelligently mitigate the cost of college. Ideas and strategies that can help people with money, just not all the money in the world.

One thing that I never see people on Fat Wallet mention is "early enrollment" type options during high school. My boyfriend did this: went full time to our local community college for his junior and senior year of high school. In Ohio, the state pays not just tuition but also all fees and buys all of your books. He was still a member of our marching band etc. I'm sure some kids would feel they were missing out, but a LOT of kids I went to school with did this either part or full time. He then spent 2 years at an instate public school (Ohio guarantees credit transfer from comm. colleges to public schools) and now is 23 and makes a substantial salary in IT. Furthermore, when he went to apply to his first job, one of the reasons they cited in interviewing him is that they were impressed that he attended college during high school years. He feels that the education he received was roughly equivalent: good teachers and bad both places, and it's all what you make of it. If you have a really good high school this might be different, but ours was mostly adequate and decreasing AP options every year. Also worth noting that he went from an A/B average to a 4.0 and then graduated college with something like a 3.9. Worth investigating at least.

enrohT said:   GI Bill for the win. Your kids will have the privilege of serving their country in the process

Unfortunately they may get turned into hamburger in some Mid East hell hole before they get to go to college. I'll pass on that, thank you, and fund my child's education myself.

Not only should your kids begin applying for every scholarship under the sun during their high school senior years, but they can get part-time jobs to help out too.

My parents were not rich. They were not well off. They barely qualified as poor. When I was 15, my mother told me I was getting a job. I didn't want to do it. She said, "Tough s-. March your a- down to the supermarket and get a job. " And I did.

When I was 18, I planned to quit the job when I started college. My parents both screamed at me, "The eff you are. " I worked nights, weekends, and summers while in college. It was only because of that job and the scholarships I got (which I never dreamed I'd get) that I was able to make my way through college, as my parents certainly couldn't have afforded the costs on their own. I also went to a state school, which was all we could (barely) afford. I think I turned out OK.

Air national guard. My state pays 100% of undergrad and grad at all public colleges no cap on dollar amount just a max of 15 credits/term. I've never deployed and basic and AIT was the best experience to go from being a boy to a man.

Why cant they get student loans or a part time job while in school to pay for college?

Or they could be like some an realize school isn't for them and start a business or learn a skill/trade.

American kids are really lucky, they have access to great schools and quality education even if they are not rich (I am referring only to the post-secondary level).
So, if they don't really want to go to college they probably shouldn't.
Now, if they want to and money is an issue they can always start at a community college (not Greendale) and continue on to a State university. Working part time is a good idea for various reasons even if the parents are willing to help with the tuition (and assisting with your kid's tuition is not a bad way of spending money - as long as it is not for a useless degree at a private school). There are many chances of merit-based scholarships so kids who are very poor but work hard almost always can get significant help this way.
And then grad school is even better. They usually (depending the degree) pay you instead of you paying them.

galabar said:   Unless your child gets into an Ivy, Stanford, or MIT, send them to an in-state public school.
Why, there are a lot of non-Ivy Private Colleges that are excellent.

ganda said:   enrohT said:   GI Bill for the win. Your kids will have the privilege of serving their country in the process

Unfortunately they may get turned into hamburger in some Mid East hell hole before they get to go to college. I'll pass on that, thank you, and fund my child's education myself.

That is stereotyping the military. Not everyone kicks in doors or goes on patrols/convoys. Let the guys who love getting sweaty, driving at night, shooting 50 cals.. do their job...While we continue churning out Music majors in college who can't find jobs, back in the States. I'm glad to meet kids who are enlisting, a lot of learn what hard money feels like. It taught me a hell of a lot of life lessons.

I was in the Army.. I was actually recalled to go to Iraq.. Ended up fixing computers at a base for 8 months.

Good luck.

depalma13 said:   The stock market has not been flat over the last 10 years. It has been up and down. Since you have been investing regularly since your children were born, I can assume those accounts have a very good amount of money in them.

Unless they took the long term buy and hold approach and haven't been cost average investing over the years. In which case, on average, the gains have been little to none. If they would have just used a simple moving average approach to get in and out, they could have made a lot of money over the last decade.

chripuck said:   HumDoHamaraDo said:   galabar said:   Unless your child gets into an Ivy, Stanford, or MIT, send them to an in-state public school.
Why, there are a lot of non-Ivy Private Colleges that are excellent.

Because you pay for the name, not the education. This is entirely a brand recognition thing. As the OP noted, the college "need" is so over inflated that hiring managers have long since figured out you do not need to hire somebody from South East Tennessee A&T Community College. There's very little learning going on in colleges these days, at least from a real world use case scenario, and since anybody can go to college your best bet is to hire the person who went to the most prestigious and difficult to get in school.

EDIT: And I'll note, this doesn't mean it is a guarantee for a good employee, it's an indicator and should be compared with other components of the people you are looking to hire.
http://colleges.usnews.rankingsandreviews.com/best-colleges/rank...
Lots of non-ivy, non public are quite good and turn out candidates with real-world skills.

If any of your kids tend to do well on standardized tests, make them do some practice before taking the PSAT. At least when I entered college (7 years ago), being a National Merit scholar would guarantee full ride scholarship at several public schools and make you very competitive for merit-based scholarships at others, in addition to the (tiny) stipend paid by the actual scholarship competition.