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college savings

Posted by kathyanddave (My Page) on
Mon, Aug 13, 07 at 10:58

Just wondered how everyone was saving for their kids college? I have a kindergartner and a 2 1/2 yr old, and I just read that the projected cost for a public college in 2022 was $114,000. That seems really overwhelming, and I'm not sure I want to put the money in a 'college' fund that HAS to be used for school, since you never know if your kids will WANT to go to school. Anyway what has everyone else got going on for their kids education?

Follow-Up Postings:

RE: college savings

Unless you have maxed out all your retirement options, you should not be worried about funding your kid's college.

Is that end covered already?
(You have more options for funding college - loans, grants, etc. - than you do for retirement.)

RE: college savings

I had the same concerns about saving for my kids. Will they want to go to college? Will they for sure want to go to a college that is in state? I believe that with the 528 fund that is used for instate colleges. You lose money and interest if they go out of state. This is what i did. Years ago i had an acccident that i received alot of money for. I opened a mutual fund in my oldest DD name and mine. She was 1 1/2 years old and i was pregnant with my second. I knew we would have more kids but i didnt know how many. I also knew that i would probably never see this amount of money to give to my other kids. When my oldest turns 18 we will cash out the money and divide it among her brother and sister. This way they can decide on using the money on college or a wedding. The money is NOT intended for a new car or anything like that. I want them to go to college but i will not force them. In the end they will each have an equal amount of money.

RE: college savings

We are well on our way in that direction. Dh and I are 30 and 34. Both of us have been working for 10 + years and contributing the maxium amount to our 401k plan. My DH also works for the union and will receive a pension from them. As for other finances we have enough in savings to finance us for up to a year if we were both to be out of work. We've been working on those things and that is why we are just now getting started on the kids college fund. I think our baby starting school this year kinda opened our eyes to how quick it will be here.

RE: college savings

We started regular savings for our kids, and when college came, we used that money plus some of our own, plus scholarships they received to get through it. Also by the time they were in college, I was working, so that helped too.

Don't panic over college. Community colleges provide a fine and very economical way to start, and that would protect you from 2 years' heavy tuition right there. Also state universities are are much more reasonable than privates. If you have a college near you, your student could live at home, making a big savings.

What happens is that tuition is paid in a variety of ways each school year: cash from you, any loans or grants you might get, scholarships, etc. Our kids' schools allowed monthly payments, which was a help. Students can get financial aid by jobs at the colleges too. It isn't as if they hand you an invoice for $100,000 her first day of school! You put it together bit by bit over the years.

Ideally students finish in 4 years (not always, unfortunately), and then it's OVER!

RE: college savings

Soemtimes the numbers do sound scary. There are a couple of things that we will be considering here in regard to college:

Mommy and daddy will try to help out in the ways they can but we will not guarantee a full ride for college. We cannot. However, if they are going to school and doing well at it, they can live in our house the whole time for free. We live about 30-40 minutes away from UNM which has a good med school, law school, etc. If they want to go to a good tech school, there is one in the state too, but they would have to live in the dorm there. If they want to go out of state, they will have more of a burden on themselves. In school, they will have to live like a student. Mom and dad willnot go into debt to help with school. They should try to avoid debt while in school as well. They can work in the summers at least to help cover the costs. Not to mention, if it is still around, the GI Bill is a really good deal.

RE: college savings

I have two daughters attending 2-year community college. If they want to attend a 4-year school, they will have to take on loans. My DH and I are both disabled. We don't have money for our kids. They can borrow for an education. We can't borrow for our old age. We are too young for those reverse mortgages, and I've heard horror stories about the bank fees connected with them.

RE: college savings

Actually, it's 529 plans, and there are several different kinds. One type is for a specific college (assuming you can identify which college your kid's going to want to attend in 15+ years!), state-specific plans, or general plans with no specific college or state restrictions. You can invest in your state-approved 529 plan or plans as there can be some tax advantages, or you can invest in any other state's 529 plans.

One great advantage of them is that so far, 529 plans are NOT counted in financial aid planning. This is because unlike UTMA accounts, the money belongs to YOU, and you can change the beneficiary any time you want. Thus, if one child gets a full scholarship or decides not to go to college, you can change the beneficiary to another child or even yourself or your spouse.

Many 529 plans offer a simple way to save through automatic account deduction, and often can be set up with as little as $1000 or $2500, with a minimum $50/mo automatic transfer.

Remember that properly invested, the 529 account will show an investment gain over the time period, so you won't necessarily need to save the entire $100K+.

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