What are your college savings goals?

[Ryan]

Since there is a lot of variability in how much you could spend on college, what would be your target for college savings for your kids?  I've heard something that said a realistic goal to save for your kids would be 33% towards expected cost of a 4-year in-state school with 33% being done from cash flow and the final 33% being a loan.

I think my goal will be 50% since I'll have 3 in college at the same time and we'll see how that goes.  We might also get some unexpected help from relatives at the last minute, but not gonna count on that.  

I've also heard some people say that they'll try to get up to $50K per kid and then steer them towards cheaper choices.  They are worried if they save too much, then they'll be more careless about choosing colleges.

[The Captain]

DD has no idea how much we have/will have saved for college, none. 

We only have one child, two incomes so it's easy for me to throw out these numbers.

DH and I are planning on having about 80% of the in-state school cost saved by the time DD starts college.   If things go according to plan, DH and I could easily cash flow the rest, but DD will be taking out loans to have skin in the game.  One flagship school around here is $30K a year so 120K total, 80% of that would 96K.  Based on today's stock market we have about $70K of that saved.  DD is 12.   She's got 5.5 years to go.

If she does well, graduates on time, and is reasonably responsible, we'll pay off the loans as a graduation present.  She doesn't know this either.  We will not qualify for subsidized anything.

DH and I place a huge premium on education, to the point that saving for DD's college takes priority over fancy cars, expensive trips, or lifestyle creep.   Even if DD should choose a 5 year major (and I mean one that does take 5 years like accounting, or some engineering or medical) and not a 5 year plan we'd probably be able to bankroll the extra year.

Bonus points to her if she goes the cheaper route.  We have an excellent community college system.  If her college costs come in way under budget then we'd probably make those funds available to help her launch, buy a house, etc.  No, she doesn't know this either.

 

[Deleted]

No children but will likely provide some kind of support to our two nephews. Community college will very much be encouraged for two years and any support will be provided after they graduate and the loans come due. They are likely to get a lot of grant/loan options with their parents being lower income.

[Deleted]

My goal is to get them through without debt, but, like Captain, I do plan on having them take some loans out while there (for sure any subsidized) with the plan to pay them off after graduation.  That way if they drop out junior year they get to deal with paying some of that back.

Chances are we will qualify for both federal and state grant aid, and we're lucky to live where state schools are pretty reasonably priced as far as tuition goes anyways, so unless he's in for 5 years, I'm fairly certain I will only need to have about 60K to get older son through (he's 13) and we're up to about 50K now.  I'm assuming he'll probably have a part-time job and I can cash flow some too.  Younger son is only 5, so who knows what the situation will look like when in 13 years, but right now just doing the same for him.

[NomoreDramaQ1015]

My goal is to pretty much wing it. I am putting aside what I can and I hope by the time they go to college I can help with something even if it's just textbooks.

I can't predict what our finances will look like by then and I can't predict what college costs are going to be.   So I am just going to do my best.  

I plan on telling them I have it, how much we have and that's it.  If you want to go somewhere that will result in you blowing thru it early then fine, you'll have to figure out how to cover the rest.  If you want to go someplace cheaper and make it last longer that is fine too.

I wish my grandmother had told me she had funds for me.  Not b/c I was going to go blow it on an expensive party school but b/c I could have made more informed decisions in regards to my financial aid packages.   As it was I made the decision based on who gave me the most loans since I thought I had $0 coming from anyone in my family.   By the time my grandmother told me it was when she was signing the checks for my tuition, too late to look at the other schools and see if I could get a better deal elsewhere.

[ArchietheDragon]

My goal is to save nothing for my kids college. I would rather save it all in retirement account. I believe that will give me the most flexibility when the time come. Then cash flow a little and do loans for the rest.

[yogiii]

Oct 19, 2015 12:30:35 GMT -5 ArchietheDragon said:

My goal is to save nothing for my kids college. I would rather save it all in retirement account. I believe that will give me the most flexibility when the time come. Then cash flow a little and do loans for the rest.

After a lot of back and forth, I decided to go that way also.

[souldoubt]

We will save whatever we can after saving for retirement which is priority #1, let future kids know what we have saved for them and that anything beyond that is on them in the form of loans.  Hopefully they'll consider a JC to start as both of us went that route while getting out debt free unless they have scholarships which make a 4 year right off the bat feasible.  My better halfs niece just started at a JC and she's thankful she listened to all of us and didn't move out of state to schools she was looking at which would have had her paying off 6 figures in debt for a 4 year degree.  She's a smart kid but she's still trying to figure out exactly what she wants to do and it's a hell of a lot cheaper figuring that out at a JC.  

[Abby Normal]

Our goal is 75% of the instate schools by the time he starts.  He's 14 now.  Our in states run about 25k/year and I think that is way too much to ask him to take out in loans.  DH did all his on loans.  I was lucky enough to only have about 10k of my last year.  I think loans are great because they do add some skin in the game- but I don't want him to finance it all like DH did.  And we make too much, so there is no way he's getting grants.

But he's pretty dang responsible with money so I'm not worried about him feeling entitled or being a spendthrift.

[swamp]

save about 75%, cash flow 25%. Kids pay their own spending money, books, transportation.

ETA: I am hoping that my kids to do not have to take out loans, I would like them to start adulthood without being weighed down by student loans. However, after school, that's it.  The gravy train ends.

[gooddecisions]

I have a third on the way and my oldest is 4 and no way to predict how much tuition, room and board will be in 14+ years. Our goal has been $400/month per kid per 529. We'll re-evaluate as needed and are already maxing out retirement accounts and have other investments. I imagine cashflowing some will be an option as I'm already cashflowing daycare at $30K/year soon to be $40K/year.

[steph08]

I am hoping to save 40-50k per kid (depending on the market) and then see what happens. I hope the house is paid off and our retirement is sound so we can cash flow some as well.

[teen persuasion]

Oct 19, 2015 12:36:14 GMT -5 yogiii said:

Oct 19, 2015 12:30:35 GMT -5 ArchietheDragon said:

My goal is to save nothing for my kids college. I would rather save it all in retirement account. I believe that will give me the most flexibility when the time come. Then cash flow a little and do loans for the rest.

After a lot of back and forth, I decided to go that way also.

This is what we've been doing.  The older two have graduated with roughly $27k or so in loans, and their monthly payments are manageable for them at less than $300 a month.  DD1 has been throwing extra at the higher interest ones, and has knocked a few off already.  She just turned 25.  DS2 just got a "real" job, and DD3 is in her third year of college.  DS4 is gearing up to go next fall.

A good bit of our financial choices revolve around what is best from a financial aid POV, as well as looking ahead to retirement.  Luckily, they often coincide, but not always  .

[shanendoah]

Our goal is minimum $10k/kid in a "launch fund". Right now there's only one kid. If there ends up being a second kid, the $10k shouldn't be a problem because that's the amount of the tax credit you get for adopting older kids from foster care. (The reason Pop Tart's didn't go right to that was that I was unemployed for 9 months during the time we got the tax refund for her.)
Would I like to have more? Yes, but $10k is the goal.
We're also not calling it a college fund. C didn't complete his BA/BS until he was 40. I should have gone to a CC instead of the U right after high school, and probably would have been even better off taking a year or two off of school before starting. We also have to accept that college may not be in the cards for Pop Tart (though we do have some excellent tech schools around her). Our goal for her is that she be able to have choices, and so we're saving money along those lines - to give her the ability to make choices that make the most sense for her.
That $10k might go toward tuition. It might go toward a reliable car, no car payment. It might go toward down payment on a condo. Who knows. The goal is to help her launch, no matter how she launches.

There's also a good chance we'll have money to cash flow tuition help, especially if C goes back to work.

[NastyWoman]

"Pizza and beer" money for DGS. DS2 and his wife are saving for DGS college education, hoping he'll be able to not need loans, just like his daddy before him. They save at a pretty good clip, so my small contributions get the designation above (by and for me only) 

[midjd]

I don't really have any goals for what I'd like DD's account to look like in 16 years. I suspect the bubble will burst before then and college costs should (hopefully) look different. I mostly use the 529 because I like the 20% state tax credit, otherwise I'd just earmark some of our Roth contributions instead.

According to the Phil Script, if we keep our savings at the same rate, she will have about the same amount in her 529 at 18 as I originally took out in graduate student loans, so she should be set for at least 4 years of undergrad. 

DH and I place a huge premium on education, to the point that saving for DD's college takes priority over fancy cars, expensive trips, or lifestyle creep.

Same here. I am trying to put aside as much as we comfortably can now to let compounding work its magic... we may start shifting more toward retirement as we get older (depending on how much the account has grown). Plus, should anything unfortunate happen to DH and me, I want there to be no question for DD that her college is taken care of. (My ILs are lovely, wonderful, generous people, but education is not high on their priority list.)

[Regis]

We had planned on providing half of their undergraduate degree.  As midjd noted, Indiana is very generous with a 20% tax credit for 529 contributions up to $5k (max. $1k credit) so we used that.  Our kids take after their mother and were fortunate enough to get a fair amount of scholarship money.  Between the two, our oldest son was able to graduate from a state public school with no loans.  Our younger son has one semester left at a private school and he's going to have $ left over to use for grad school.  His advisors are pretty confident he can get a GA position in grad school so I'm hoping he walks away with six years of education and no loans.  Our daughter, who is currently in her sophomore year, is out-of-state and will also have money left over for grad school.  I think she will probably be the one that ends up with loans to complete grad school.  I'll let you know in four more years!  

[giramomma]

We asked the grands to contribute to college instead of doing carnival Christmases. So far, it's worked. We have enough that DS (11) could pay for 4 years of tuition at our state flagship school tomorrow if needed.

My plan was to cash flow the rest. I may have the kids take out loans, and then we'll repay them. It depends on how they choose to live in college and where we are financially in the next decade. A lot could happen in that time. If they insist that they must live in a 2 bedroom apartment with two pools, a volleyball court, and maid service, well, I think we'll just limit our contribution to covering tuition.

I do plan on working until the peanut is done with undergrad.

[weltschmerz]

Zero. College is very cheap here, and I put myself through college by working part-time in a doughnut shop.

He could do the same.

[TheHaitian]

Oct 19, 2015 12:30:35 GMT -5 ArchietheDragon said:

My goal is to save nothing for my kids college. I would rather save it all in retirement account. I believe that will give me the most flexibility when the time come. Then cash flow a little and do loans for the rest.

Same plan here!

[happytraveler]

Our 2 kids are out of college now....youngest graduated last year, oldest the year prior. We made the decision to fully fund their undergraduate degrees. After their merit based aide, we were out of pocket about $120K per child...all in, room, board, transportation, etc. I know a lot of people feel that the kids need to have skin in the game, or they should pay their own way, and I understand those thoughts. For us, and our kids, we were happy with our decision....kids did well in school, both got jobs after graduation, neither one is carrying any loans, both seem to be living responsible lives as young adults. My advice to others has always been to save as much as you can and start early....always better to have too much than too little.

[alabamagal]

I had very little saved for college when kids started. But they were in private school in elementary and high school, we were used to cash flow some. All 3 got full tuition scholarships, 2 in GA where we lived when they started college and one went to a school in AL with scholarship.

DD graduated 2 years ago DS1 10 months ago. Both $25k in loans. DD struggled due to underemployment but just got a good job and can pay her loans. DS has a great job and is making good progress already on loans. DS2 will take 5 years so he may be close to $30k in loans.

[Deleted]

Our goal is to have between 80-100K for DD.  Since we started saving for her late, getting there will be a challenge. We aren't getting much help from compounding.  We have other savings that could be tapped (not retirement) so I don't worry too much about it. 

[bobosensei]

I always hear the 1/3 rule.  Save 1/3 ahead of time, pay 1/3 as they attend, and have the kid pay the other 1/3 either in scholarship or loans or working while in school.  But like someone mentioned if you have multiple kids in school at the same time the cash flowing part could be difficult depending on your salary and the prices of the schools.

I went to an expensive private school, but my poor family didn't pay a penny.  I'd like to give my kids the same if they have the aptitude.  DH and I don't believe every kid is college material.  I see value in vocation training, doing to a service academy, or even enlisting in the military and using education benefits later on.  It all depends on the kid.  I'll probably save in a way that doesn't have to be restricted to education, and as the kids are older the savings rates might be different according to each kid's ability, need, and interest.

One caveat is that I will only help with 4 years of education.  I got my degree in 4 years, never thought of doing otherwise because I could only get 4 years of financial aid from my school.  Many of my friends with parents paying took 5-6 years and are no better off.  So my kids will know from an early age that I will only help with 4 years.

[The Captain]

Oct 20, 2015 3:01:46 GMT -5 bobosensei said:

I always hear the 1/3 rule.  Save 1/3 ahead of time, pay 1/3 as they attend, and have the kid pay the other 1/3 either in scholarship or loans or working while in school.  But like someone mentioned if you have multiple kids in school at the same time the cash flowing part could be difficult depending on your salary and the prices of the schools.

I went to an expensive private school, but my poor family didn't pay a penny.  I'd like to give my kids the same if they have the aptitude.  DH and I don't believe every kid is college material.  I see value in vocation training, doing to a service academy, or even enlisting in the military and using education benefits later on.  It all depends on the kid.  I'll probably save in a way that doesn't have to be restricted to education, and as the kids are older the savings rates might be different according to each kid's ability, need, and interest.

One caveat is that I will only help with 4 years of education.  I got my degree in 4 years, never thought of doing otherwise because I could only get 4 years of financial aid from my school.  Many of my friends with parents paying took 5-6 years and are no better off.  So my kids will know from an early age that I will only help with 4 years.

I started out that way then realized that even in my own profession (accounting) the requirements to sit for the CPA exam changed from a 4 year degree to a 5 year degree.  I know there's a few other professions out there that require 5 years to get all the coursework in.  So yea, I've relaxed a bit on this.

No way in hell will I foot the bill for an extra year or two just because someone failed a class or didn't get enough credits in.

I'm absolutely gobsmacked by how many of our friends' kids are on the 5, 6, and a few - even 7 year plans for a freaking 4 year degree.  Too many changed majors, failed a key class and messed up their course schedule, etc. It's the exception now to make it in four years.

And no, these are not kids going part time and working close to full time. 

[yogiii]

Thinking about this more ... my goal is just general savings. I'm not specifically saving for college. I'll likely have enough to pay 100% for both kids but what if I don't want to? What if one kid goes for the pricy school instead of the state U that would provide the same education for what I consider a frivolous reason, like because friends go there?  Then maybe I'd have the money to pay for the fancy school but would only want to pay the state school price? Who knows? So I'll just save all the money for myself and decide when the time comes. Keeping my options open, which does not mean that I don't value education!

[The Captain]

FWIW with the exception of about 15K in a 529b plan, the rest are in taxable accounts so technically we could spend it on whatever we want.  Yes, like yogiii I want some flexibility as well.  Honestly wished I didn't go the 529b route because our fees and ROI suck.  I've just been too lazy to move it, but I should.

Maybe this thread will give me the kick in the ass I need.

[thyme4change]

My son announced that his goal was to get into Georgetown...and I threw up a little in my mouth.

He is only 11 - maybe he will get into drugs or have a serious head injury or something like that.  

[TheHaitian]

Oct 20, 2015 9:01:39 GMT -5 thyme4change said:

My son announced that his goal was to get into Georgetown...and I threw up a little in my mouth.

He is only 11 - maybe he will get into drugs or have a serious head injury or something like that.  

The tuition bill just went up from 120k to 250k

[Abby Normal]

Oct 20, 2015 8:30:46 GMT -5 The Captain said:

No way in hell will I foot the bill for an extra year or two just because someone failed a class or didn't get enough credits in.

I'm absolutely gobsmacked by how many of our friends' kids are on the 5, 6, and a few - even 7 year plans for a freaking 4 year degree.  Too many changed majors, failed a key class and messed up their course schedule, etc. It's the exception now to make it in four years.

And no, these are not kids going part time and working close to full time. 

This was DH.  He changed majors a couple time and couldn't figure out what he wanted to do so he started talking about quitting.  We were engaged by then and I told him there was no way in hell he was leaving without a degree with all that debt. I have no doubt (and neither does his mom) that he would have quit it hadn't been for me.   I suggested he look at a particular program which I thought he'd like.  He did, and it's the field he works in today and still loves.

Yeah- some just need a cattle prod.