Paying for College

[DSM Turbos]

Its even more severe in Europe, many countries have students tracked for college vs trade by the middle of what we'd call high school.

That’s basically here too. They tell kids soph year they gotta think about where they want to go. And what they want to be. And every grade counts the day you get into hs they harped on them day 1.

 

[RatLabGuy]

steering back to useful info for @jeepinmatt or others

You also can use Roth IRA funds (and most 401k/403b) to qualified education expenses for yourself or dependents.
Functionally Roth IRA is the same tax advantages of 529s (minus the state deduction). After-tax contributions that aren't taxed later.

There are some big flexibility advantages to that, bc any $$ not used is still on hand for retirement. Also there are a lot more options for investment vehicles that may have a better rate of return. I don't know if paying loans is a qualified expense, if so it would allow @rockcity 's approach.

The obvious big downside is this steals away from the overhead of what you could be putting into an IRA annually for your own retirement. If you're already making most of IRAs and putting aside close to the max for yourself, then this would take away from your max tax-advantaged savings (since you can only do $6500/yr per person).
But if you have other retirement means (e.g. 401k, classic cars.... bitcoin...) or aren't saving for that anyway, then there's not much reason not to.

It also means you can tell kiddo "OK, you ca use this $$ for college or just let it sit another 40 years," and see if they understand that value proposition

 

[jeepinmatt]

It also means you can tell kiddo "OK, you ca use this $$ for college or just let it sit another 40 years," and see if they understand that value proposition

You laugh, but honestly I think that is a very solid idea.

 

[DSM Turbos]

You laugh, but honestly I think that is a very solid idea.

Not a bad idea at all but most kids at that age would blow the money if given the chance. Not many are really looking towards the future that far away.

I don’t use a 529 at all. If the kid doesn’t go to college that is a down payment on a mountain house for us

 

[RatLabGuy]

You laugh, but honestly I think that is a very solid idea.

The laugh is mostly at watching the potential head explosion if they are any good at math.
Simple calc is 100k dropped today, if you made only 6% more than inflation for 40 years you'd have over a million smackers in today's money value. Not enough for a full retirement but a damn great start.

Not a bad idea at all but most kids at that age would blow the money if given the chance. Not many are really looking towards the future that far away.

Thats why you have it in an IRA. A lot harder to blow it.

 

[DSM Turbos]

Thats why you have it in an IRA. A lot harder to blow it.

So do you open an IRA in their name?

Edit - read a little more about them, looks like it can be in their name, but I assume then it also is taken in account for Financial aid?

Looks like its not a great deal for me since they are less than 4 years away from needing the money now.

 

[RatLabGuy]

So do you open an IRA in their name?

Edit - read a little more about them, looks like it can be in their name, but I assume then it also is taken in account for Financial aid?

Looks like its not a great deal for me since they are less than 4 years away from needing the money now.

In theirs or yours, if you want to retain control.
Doesn't affect FAFSA actually, retirement accounts are not reviewed.

Some good reading here

How To Use A Roth IRA For College Savings

Did you know that you can use a Roth IRA to save for college, but there are pros and cons that you need to be aware of.

thecollegeinvestor.com

I don't know why it wouldn't be a good deal for you, unless you're maxing it for your own retirement.
Personally we stopped 529 contribution bc we're over the income limit and get no state tax exemption and the rate of return is worse, and we're close enough on the 529s amount that I don't want to overshoot, so I put into my own IRA instead earmarked for this (I have other 401k to boot).

 

[R Q]

I saved for his college from early on but never planned to get him a full ride anywhere, I was doing to have some funds for him to get started or to help. As it turned out he went to CPCC foir an Associates degree and thru his high school and credits he was able to go the second half of his senior year and CMS covered those classes.. I paid for him to finish his degree and bought tools for his job with the remainder. If he had gone to a bigtime school I would have helped some more but would have expectded him to get student loans to cover the rest.

 

[ManglerYJ]

I expect that the kids will get student loans to pay for college. Interest rates are low and tax deductible.

... and cannot be included in bankruptcy filings. They are your debt until you pay them off, die or the .gov decides to get rid of them. Good luck with the latter.

 

[Futbalfantic]

I agree…degrees are nothing but a sheet of paper to tell an employer that you can complete a long term task successfully. I’ve never once referred to one of my text books…google to the rescue. And last I checked, something like 80% of people with degrees are in fields other than what their degree was for.

100% respect this philosophy.
I think part of the difference is perhaps how money is viewed in the family...? For some people it is "my money", "wife's money", "kids money" etc.
For others it is more broadly "family money".
Personally I wouldn't say "waste your money not mine," I'd say "Don't waste our [meaning the family's] money." Then its a question of who the decision maker is, and in our family that depends on what the situation/topic is.
I think that changes perspective a bit.

Also it raises the question - if everyone had this philosophy, where would the people in the poorly paid social services professions come from?
If applied universally it would means those degrees could not get any grants or financial aid, help from anyone. Only private loans. Then who would fill those careers we need?

How about lowering the cost of said degrees. Price is way over inflated and provide little to no benefit to society

 

[skyhighZJ]

So a few of these statements have reminded me of the movie “Accepted”(2006) Lewis Black was a defunct college professor brought in as “faculty” and one of his lines about midway of the film talked about college as being a “SERVICE INDUSTRY as in serve us” and it was in regards to the outrageous prices and I ideology higher learning establishments have come to because they have to cater to all these outside influences. It rings even truer now than 17 years ago when the movie was made (god I feel old now lol).


Tried finding the clip but no luck on the interwebs.

 

[DSM Turbos]

In theirs or yours, if you want to retain control.
Doesn't affect FAFSA actually, retirement accounts are not reviewed.

Some good reading here

How To Use A Roth IRA For College Savings

Did you know that you can use a Roth IRA to save for college, but there are pros and cons that you need to be aware of.

thecollegeinvestor.com

I don't know why it wouldn't be a good deal for you, unless you're maxing it for your own retirement.
Personally we stopped 529 contribution bc we're over the income limit and get no state tax exemption and the rate of return is worse, and we're close enough on the 529s amount that I don't want to overshoot, so I put into my own IRA instead earmarked for this (I have other 401k to boot).

I max my 401k out and I’m not on paper the legal guardian. I can’t do a Roth in my name either.

 

[Lizooki]

I guess I should also add, when D1 was in chigh school, I had a job that paid enough, that couple with some savings I planned (and was able) to write one check a semester to get both through college. Once college was over, That same check would be written until we were completely debt free and set pretty good for the future and retire early.
But God had other plans. D1's senior year, my company closed our plant and 11 others to streamline to one.
Bad thing was, we were the only plant showing profit every month and topped the list for 3 years in a row.
BUUUUUT the big wheels lived in Norfok VA, so everything went to that plant.
God and things still worked out ....... just not in mu plan.
And I got early retirement ... but it came in a different way in the form of a medical issue.

 

[NCJeeplover]

That’s basically here too. They tell kids soph year they gotta think about where they want to go. And what they want to be. And every grade counts the day you get into hs they harped on them day 1.

My oldest was a freshman last year and was freaking out about this. He was almost worried sick. I told him to chill and not worry about that now, there's plenty of time for that.

 

[Jody Treadway]

I'm killing time waiting on a truck to arrive, so I'll share a story here.
Regarding schools pressuring kids about their futures.
Senior year in 94/95, I was actually quite studious. Was in the top 15 of my class of around 250 students. I was planning on going to NCSU for some sort of forestry program and had that plan since junior year. I had already spoken casually with guidance counselors about my college plans and had been to NCSU with my Ag teacher on visits. Then my senior year when class schedules came out, I was placed in some type of music elective. Since last name started with a "T", I didn't have much choice as they filled up quickly. i didn't want that as an elective, and my only other option was Auto Technology.
Well, that kinda took off
Within a week I knew what career path I wanted. My teacher got me an after school job at Matthews Ford as a porter and changing oil. I was absolutely hooked. The dealership offered me a scholarship to Ford ASSET training upon graduation. I would be able to attend Spartanburg Tech, FoMoCo would pay my out of state tuition, Matthews would pay half my remaining tuition and sponsor me through the program.
The more I looked into it and spoke to recent graduates who worked there, I decided it was a great match for me. I talked in depth with my parents and they fully supported my decision.
I applied to STC and was accepted.
Then my guidance counselor got word of it...
She had a meeting with me and in short told me I was wasting my talent by attending a 2 year tech school and becoming a "mechanic". She said mechanics are usually unable to attend real schools. She didn't think it was a good idea and wouldn't support it. After school, I told my parents about the conversation with the GC.
Mom and dad smiled and said to do what I wanted to do, they think it's a great idea. The next day, momma Treadway made an unannounced visit to the Enka High School senior class guidance counselor's office and made clear she was to do her job and not demean my plans. Period. (I was unaware of this until later in life). My mom was a pretty kick ass mom.
Here's how my associate's degree program went:
Go to class for 8 weeks. Typical 8-4 college classes. Maths, english, social studies and then a focus on my major. Learn for example AC systems, electrical diag and manual transmissions first quarter. After those 8 weeks, I went back to my dealer for 10 weeks and was to work with techs specializing in those fields whenever possible. Learn with my brain, then apply with my hands. All the while, I was making a paycheck during my time at the dealer. Rinse and repeat for 2 years and earned an associate's in applied science via Auto Technology. I was only in class around 8 months of the 2 years and earned a little over $20k during that time.
I would without a doubt encourage someone to do the same thing I did. Go to a manufacturer accredited program, graduate and go wherever they want to work and do so knowing you'll have a career with great pay.

 

[NCJeeplover]

The dealership offered me a scholarship to Ford ASSET training upon graduation.

This is the direction my son is leaning right now. He wants to be a heavy equipment tech. The local Carolina Cat does a very similar program with Central Piedmont.

 

[jeepinmatt]

Go to class for 8 weeks. Typical 8-4 college classes. Maths, english, social studies and then a focus on my major.

 

[RatLabGuy]

Within a week I knew what career path I wanted. My teacher got me an after school job at Matthews Ford as a porter and changing oil. I was absolutely hooked. The dealership offered me a scholarship to Ford ASSET training upon graduation. I would be able to attend Spartanburg Tech, FoMoCo would pay my out of state tuition, Matthews would pay half my remaining tuition and sponsor me through the program.
The more I looked into it and spoke to recent graduates who worked there, I decided it was a great match for me. I talked in depth with my parents and they fully supported my decision.
I applied to STC and was accepted.
Then my guidance counselor got word of it...
She had a meeting with me and in short told me I was wasting my talent by attending a 2 year tech school and becoming a "mechanic". She said mechanics are usually unable to attend real schools. She didn't think it was a good idea and wouldn't support it. After school, I told my parents about the conversation with the GC.
Mom and dad smiled and said to do what I wanted to do, they think it's a great idea. The next day, momma Treadway made an unannounced visit to the Enka High School senior class guidance counselor's office and made clear she was to do her job and not demean my plans. Period. (I was unaware of this until later in life). My mom was a pretty kick ass mom.
Here's how my associate's degree program went:
Go to class for 8 weeks. Typical 8-4 college classes. Maths, english, social studies and then a focus on my major. Learn for example AC systems, electrical diag and manual transmissions first quarter. After those 8 weeks, I went back to my dealer for 10 weeks and was to work with techs specializing in those fields whenever possible. Learn with my brain, then apply with my hands. All the while, I was making a paycheck during my time at the dealer. Rinse and repeat for 2 years and earned an associate's in applied science via Auto Technology. I was only in class around 8 months of the 2 years and earned a little over $20k during that time.
I would without a doubt encourage someone to do the same thing I did. Go to a manufacturer accredited program, graduate and go wherever they want to work and do so knowing you'll have a career with great pay.

One of our nephews did something similar w/ Toyota. Went someplace in... Chattanooga? Nashville? Can't remember.
But he's killing it as one of their top techs at a dealer now.

 

[mbalbritton]

3 kids here.
Kid 1 - NCSU 2 Year Ag degree. Did it on her own with Student Loans.
Kid 2 - No interest in College, jumped right into the work force. She may go back and do something later.
Kid 3 - Wants a Full ride scholarship for Track and is busting her ass to do it. Her Coach has taken her on as a personal project along with one other girl. He is giving his time everyday through the summers to train them. She just started her Junior year and her times are already better than the school records at SCAD where she wants to go. She wants to pursue Fashion Design as well as Psychology. I told her to get a full ride at SCAD and get her basics and her Design degree then go chase her Psych degree.

 

[OnlyOneDR]

I voted "Other." When my son was born we opened a 529, I dumped some money into it and I contribute a little every month. He has eighteen years for it to grow but I am sure by then it will not remotely be enough to pay for even an in-state degree with as retarded as the tuition rates keep climbing. He will have to make up the difference with loans or whatever we can help with at the time but no guarantees. When I went to school it was barely over $1000/semester. Mind you we both think trades can make him a good living so we will guide him but just let his intellect and interests find a path that suits him best. We are not going to sacrifice retirement or financial security when he can build his own as he gets older.

 

[ghost]

Twins here. One started in machine tooling in High school. Went to Florence Darlington Tech while working for RBC Corporation. Paid for it himself. Once he received his associates RBC reimbursed what he spent on his education. My other son went to Francis Marion and studied English and Education. He enrolled in a program where the state of SC pay off his college loans after teaching in the public school system for 3 or 5 years. He's on his 3rd year teaching High School English and really enjoys it.

 

[RatLabGuy]

OH!

You guys that are freaking out about costs, something to keep in mind.
Especially if you have "big boy" kids.

Remember when they move out, you're gonna save a TON on groceries! We're realizing that a solid 40% of our food expenses was our son, lol.
That's a lot of cash available for tuition!

I'm sure @Ron knows what I'm talkin' 'bout.

 

[jeepinmatt]

OH!

You guys that are freaking out about costs, something to keep in mind.
Especially if you have "big boy" kids.

Remember when they move out, you're gonna save a TON on groceries! We're realizing that a solid 40% of our food expenses was our son, lol.
That's a lot of cash available for tuition!

I'm sure @Ron knows what I'm talkin' 'bout.

My 8 year old has started to hit his stride on appetite. I can see that being a notable savings.

 

[Ron]

OH!

You guys that are freaking out about costs, something to keep in mind.
Especially if you have "big boy" kids.

Remember when they move out, you're gonna save a TON on groceries! We're realizing that a solid 40% of our food expenses was our son, lol.
That's a lot of cash available for tuition!

I'm sure @Ron knows what I'm talkin' 'bout.

Nah - I still pay the same - its just in HIS grocery bill.

 

[RatLabGuy]

Nah - I still pay the same - its just in HIS grocery bill.

Ours is living on campus where the dining hall meals are all-you-can-eat. Told him to fill up there bc anything else is on him.