What do you target for college savings?

[aigel]

I wanted to hear from you how much money you plan on having saved by the time your kid(s) start college. And what do you imagine you will fund (type of school and percentage of costs).

Of course saving money is easier for some than for others - so also post what you think a middle class family should plan on having salted away!

And how do you recommend saving the money? A college saving's plan (usually mutual funds with no taxes on gains) or other vehicles (no pun intended - I could have bought a 993 TT in 09 in the low 40s - excellent investment!)

Cheers,

George

[McLovin]

I will fund 100% of all college costs, living expenses, etc.

I'm planning on it costing $60K per year.

Hopefully it will be less, based on various factors (scholarships, etc. - athletic scholarships are a real possibility for us). But I'm not counting on it.

I'm not doing any kind of tax deferred college saving plans, etc. They probably are a good idea, but I'm not really willing to put the money at risk. I have retirement accounts for that. When the time comes, I'll just write the checks out of regular savings/checking accounts.

What should a middle class family have salted away? It depends on what the goal is, and also what your income is.

If the goal is to send your kid to a state school and have him take out student loans for everything, you probably wouldn't need to save anything. If your goal is to send them to Harvard and pay everything, I think you'd need to be ready to spend at least $60K per year.

But your income matters, too. If you have $200,000 a year in disposable income after all your bills are paid, you wouldn't have to save anything. You could just pay out of your ongoing income.

[PorscheGAL]

For most people, saving enough for one child to go to an Ivy League school is impossible. That being said, most have programs for lower income. For instance: Stanford (not Ivy League but great) has waived tuition for anyone who's parents make less that 100K and will waive room and board for most under 60K.

Stanford Offers Free Tuition To Low and Middle-Income Families » My Money Blog

I say, save what you can. You can't stress over what is not in your budget. We constantly discuss college with our son. We have made it very clear that he will go to the school that can be afforded (either with savings or scholarships). It is not an option to walk away from school with hundreds of thousands of dollars in debt.

[on2wheels52]

As it happened we had $100k in a fund for our son. After his scholarships his four years of college ran $34k/year. Now he's in pharmacy college, that's about $26k/year. But the shop still has a good cash flow, so we're hoping he can graduate and still have his fund untouched.
Jim

[petrolhead611]

In the last couple of years fees went up to triple what they were.Fees for English Universities hardly vary from the bad ones to the best. So anyone gaining a degree in a non-vocational subject from a low ranked University has not much chance of earning enough to ever pay off the loan. Unsurprisingly those types of courses are becoming markedly less popular, and now those Universities have either cancelled the courses or will accept your application if you have a certificate in shoelace tying.

[Hard-Deck]

Nothing....they earn their way; it makes better students and citizens IMHO.

[Christien]

This is something we're starting to consider. Our kids are 6 and 4, so a while yet till post secondary, but it's never to early to start.

University is of course different here than in the states - tuition is much lower, even at our top schools. But I do predict that by the time our kids are in school funding models will be much different than they are today. I say that for a number of reasons. First and foremost is the sheer volume of kids going to university. When I was in high school (graduated in 95) the number thrown about was 12%. Now I think it's around 60. And there's a massive backlash growing against the ever-increasing assembly-line aspect of universities. It wouldn't surprise me if in 15 or 20 years we had kids split 50/50 between community colleges and universities, and tuition to both was free.

[desertt5]

Originally Posted by Snapper33

Nothing....they earn their way; it makes better students and citizens IMHO.

My kids will be. Way too many other ways, lottery and other scholarships and military. I will help them but the brunt will be on them.

[fred cook]

My son went to Georgia Tech, graduating about 5 years ago. Even though he was in the co-op program, we still spent a bit over $100k for his time there. His co-op job paid well enough to cover all of his expenses during the co-op semesters plus allowed him to save enough for pocket money the next school semester. When he graduated, he had no school loans to pay back!

[onewhippedpuppy]

As much as possible. I don't have a target, but every little bit will help when the time comes. We have 529 plans for each of our three kids and encourage grandparents to contribute every birthday and Christmas as part of their gift giving. Unless they get scholarships of some sort, my kids will be going to some variety of in-state public college or technical school. The ROI for going to a big-name out of state institution just isn't there in most cases.

[jhynesrockmtn]

Our deal was we would save enough to fund tuition, fees, books, room/board at a state cool for their undergrad. Kid #1 worked ass off, graduated top 4 in class of 350, paid 100% of her study abroad program in Argentina, graduated with a full time job and has $13k left to put toward grad school. She paid much of her own living expenses along the way thus preserving her account. Kid #2 is a junior on an Army ROTC scholarship, will have much of his account to use as he wishes when he is done to put toward a house eventually, etc. - yes, I paid my own way when I went but costs were much lower then and I graduated with loans to pay back. I was lucky to be able to save some money for my kids. Whatever you invest in maintain control. My deal was if you don't do well, the money stops flowing.

[sammyg2]

It all depends on how much disposable income you have to make up the difference. If you're on a tight budget then you'll need to save more. If you can afford to pay as you go, you need to save less.

We managed to put away about $35k for my daughter. She's a sophomore now and it's costing us about $20k a year.
We're using abouyt $10k/yr of what we saved and the rest is out of pocket.

Our rate of savings is allot more aggressive for my son who probably won't be going to college for another 3 years, maybe less.
By the time he completed his post graduate work I plan to be retired so we need to save a little more.
it would be nice if the cost of his post-work was be sponsored by some organization or corporation like JPL or USGS or Rand etc, but we can't count on that.

[gprsh924]

I had scholarships totaling $7k per year and my parents covered the rest. Tuition, books, housing, groceries, car/insurance, gas. I just paid for entertainment. When I graduated and got a job we figured I was saving them at least $45k per yr in cash, maybe $50k.

I know they had a lot saved but it was just mixed in the general savings/checking accounts. I think they had $10k or so in 529 accts.

My sister stayed in-state for school, I think she's running about $25k per yr. my parents are excited, she graduates in the spring.

[Aggie93]

I plan on paying for my daughters college. Mine was paid for and we can afford it. I'm sure there will be some limitations, especially since both daughters have no interest in staying in PA (at least at this point) and will be looking at out-of-state tuition.

My oldest will be starting high school next year. I'm trying to decide if there should be incentives for getting scholarships. Has anyone offered incentives for really good grades? Right now they get a nominal amount for an A, but only As. And they need all As before getting a cellphone, but don't need to maintain. But that might need to be reassessed, after grades slipped last quarter.

Time got away from me. I started with a 529 a long time ago, but didn't keep up with it. Mainly because I didn't like the investment choices. I work in investments and I'm picky on where I put my money.

I just started back with a 529, today actually is the first automatic payment. I'll just put 1k in each month for each daughter, plus one more payment - I think $26k is all I can deduct for state income taxes, but need to look into it. I have four and six years until they start. I have other savings for them, then general family savings. I'm going into it thinking it will be about $150 - 200k each.

[KFC911]

If I had kids, I'd be targeting banks, armored cars, and little old lady's purses

[Scott Douglas]

My wife says we'd have $100k more to retire on if we hadn't helped our kids thru school.
Son had an academic scholarship for two years. Lost it do to rules changes about scholar/athletes and academic progress. He still graduated a 5 yr Mech Eng program in 5 yrs with honors while playing D1 baseball for 3 yrs.
Daughter went to JC then a State school while living at home.
They both got thru, are debt free and now have jobs and contribute to society.
I couldn't be prouder of them.

[SeanPizzle]

Financial adviser told us we would need $420K in 2023 for our daughter to attend private 4 year school.

[lukeh]

The day my son was born I opened a 529 plan and told all relatives that they should add to that at all birthdays, Christmas, baptism and other events. I explained $25 in this will be worth a lot more than buying an infant a $25 plastic toy that won't last a year. For the first few years it worked great but as he reached age 5 they are getting him toys and still putting cash into the 529.

I also don't believe in setting goals when it comes to saving over the long haul. IMO trying to hit a target 18 years down the road when you have no idea what inflation will be, the rate of return will be, how much money will get added each year... just doesn't make sense to me. My plan is to save as much as I possibly can...whatever that number might be. I automatically have money go in every month and at the end of the year depending what the balance in the bank account is I throw more in. First priority is to fund both ROTHs for me and my wife. You can borrow to go to college but you can't borrow to retire.

[Cajundaddy]

3 kids, 3 college grads, no student loans or undergrad debt. Approx $220k total. How did we do it from 2000-2008?

Planning:
-We brainwashed our kids from an early age that college is the best chapter in most adult lives. Maximum adventure with minimum responsibility. They thought it must be like Disneyland and needed very good grades to get in. They couldn't wait to get there. If they qualified for a UC school we would pay for it or an equivalent tuition. If they wanted to go to Princeton or Yale, they could pick up the difference. They could choose any college they were qualified to attend. All three were very bright so "Not" attending college was not really one of the choices.

-As long as they were involved in HS and collegiate sports, they would not need to get a job. They excelled in both.

- We saved with Scholarshare accounts and bought land as an investment when they were very young. https://www.scholarshare.com/index.shtml

Execution:
-1 chose a Community College program, 2 qualified for and attended UCSD. They each earned some scholarships and grants but that was used up in their freshman year.

- Drew from Scholarshare, sold land at 10X purchase price, paid the rest out of pocket. Savings and investments covered about 1/2 the costs.

Conclusions:
All kids had great college experiences and graduated with self confidence and life skills. All have good jobs, own homes and one went on to a Masters program (on her dime). It was not easy, but it was easier than we thought. Given the choice between college experience for my kids, sacking it all away for retirement, or a shiny new GT2RS, I would choose the same path again.

[Scott R]

I had the same 240k conversation as above, we kicked that into a trust and his grandparents are matching it thankfully.