College Expenses

boefixepa · #1 (**permalink**) 06-21-2006, 09:39 AM

I've been following the thread on David's Steps. One of them is to fund your children's college expenses. Does anyone else have issues with this?

I came from a family of seven total, the thought of my parents paying for anything, let alone college, what an unrealistic fantasy. I knew there was no way so I made a way for myself and made college happen. My parents paid nothing. How they feel about it I don't know, but I never expected it of them either.

I have friends whose parents did put money away for them and they did use it for college. In some cases it was enough in others it wasn't. What it all boils down to is in the end we all ended up with student loans anyway. I negoatied with my employer and they have paid mine off. With the scholorships I had the first two years and my employer paying off my student loans, I paid only living expenses for college. I worked all through school and carried a heavy load every semester and often worked two jobs during summers.

What gets me is I can't tell you how many kids I saw wasting mom & dad's hard earned and hard saved money! They live high on hog, nice apartment, nice car, nice clothes ect. Many have so-so grade or are failing completely. I know it varies from school to school and since I went to the 'Stone cold sober school' - Aka BYU - I can't imagine it being any better than I saw it, only worse.

I know parents have hope for their children and they want to give them the best start possible, but where's the line? Where does the child have to become the adult and take responsibility? Can you imagine working so hard to save 40K for your child's education just for them to waste it?

I never expected of my parents, but I was often jealous of friends whose parents paid for everything and would not allow them to work. Their grade where worse then mine, their majors easy compared to mine, and they didn't seem to care. They didn't see the gift they were wasting.

With College expenses going up, along with everything else, there is only so much parents can save. I fully expect to help my future children, but only so much. I will expect them to work, live as fugally as possible, and pay for at least half of college themselves. Is that fair? What are your plans?

Diolla · #2 (**permalink**) 06-21-2006, 10:51 AM

First- If you are a serious Dave Ramsey parent then you teach your kids as they are growing up to be financially responsible. I agree that I would not even consider helping my kids pay for college unless they had proved they could handle it. If you raise a spoiled little princess then you get a spoiled little princess. My opinion is that they have to earn the right to have me help them same as they have to earn scholarships, their own money etc...

Second- That step is after you have paid off everything but the house and fully funded your retirement. If you can't help them then they will have to figure out a way themselves.

And Third, if you can help and they are responsible wouldn't you rather they didn't start life with thousands of dollars of debt?

Lori63 · #3 (**permalink**) 06-21-2006, 11:07 AM

My son is leaving for a private college in August-$33,000/yr.
He has won scholarships, gotten grants, a small loan. He has a small savings acct. and most importantly a job this summer.
We have two other kids and Michael knows we are helping him, but he is also earning his way through.
Both my hubby and I had student loan payments to make when we got married, and we made them. Might as well start real life sooner than later!

debtfreeme · #4 (**permalink**) 06-21-2006, 01:18 PM

The parents of a friend of mine paid for her to go to school. It was a state school so slightly cheaper tuition wise but the school is located on the coast, not so cheap. Before she could leave she had to create a budget of all her expenses for each quarter and each semester. Her parents would send to her monthly her money or quarterly for school payments and such on the credit card linked to their that they paid off when she charged tuition and school books. But they made her learn about all kinds of budgeting.

I remember looking at her budget and since I had already spent two year away at school I asked her about laundry costs. She had not put that into her budget! She added it in and had a revised budget. Actually revised her budget many times over. It stuck in my mind because she only had something like 100 a month for fun. Anything more and she had to pay it out of her pocket. She worked pt in school and of course two jobs during the summer until she could intern, then she made 20k a summer!

The important thing was that she had a plan before she left. She could always call home and say XYZ happened and they sent her money, but she was (amazingly) required to submit a document to them that said what happened and showed where the money was spent, down to receipts.

It amazed me but she did a great job and had lots of money left over when she was finished with school. Enough that her parents surprised her when she was accepted to an MA program and paid for the first two years for both her AND her husband, if they followed the same ideas as before . They still worked but it was only on stuff that was directly tied to their MA programs.

It all comes down to the parents and using it correctly.

lucasrd · #5 (**permalink**) 06-21-2006, 02:11 PM

I'm not going to pay for my kids college...My parents didn't pay for mine...

I got a 4-year degree and graduated with only $1600 in loans and a 3.97 GPA. I worked 3 jobs and was a resident assistant for 2 years (free room and board).

I think they'd be more serious about it if they realized they had to pay for it themselves.

Either that, or save for their college and agree to pay for semesters where they make the deans list

Snoopy2645 · #6 (**permalink**) 06-21-2006, 07:20 PM

Well in my family or dhs family college was not paid for by parents & me & my brother & sister all went & all found our own money to pay for it & so did dh. And I wouldnt pay for my kids college either because I believe they can do it we do have savings for each of them I told dh its so they can get a car & get a job to pay for thier own college education!! We have little saved for each of the girls but thats more than my parents did.

I always saved but I did it since I was 7yrs old!! I would save money in a savings account it started from a paper route I got when I was 7 & it was my brothers route, I just took over. And after that I saved babysitting money & whatever else & got my first car at 16 in cash & never took a loan out on a car after that & went to college working ft with a 1 yr old dd at 19 the only regret I have is I didnt take up something else!!

BCHGRL · #7 (**permalink**) 06-21-2006, 08:45 PM

My parents didn't fund my eduction either. I would agree that SOME students are irresponsible and blow their parent's hard earned dollar. Others have been taught to appreciate the help and thrive because of it.

I have coworkers that are proof that not all parent-funded students are irresponsible. Many were able to obtain their masters before entering the job market. Not only did it make them more marketable (in most cases), it meant they didn't have to go to graduate school while they were working full time. They were able to attend better graduate programs and finished more quickly than those of us who are paying our own way.

Consider what life "start-up" costs there are for most people before the age of 30:
-Undergraduate education ($20K & up)
-Graduate education ($10k & up)
-Work Wardrobe ($3k)
-1-2 Automobiles ($15K & up)
-Home ($130,000 & up)
-Furnishings ($3K & up)
-Wedding ($10K & up)
-Children ($10K & up)

Don't get me wrong, I'm for pulling yourself up by your bootstraps. I was the first person in my family to obtain my bachelor's degree at 21 years old. However, I believe that it was my dedication to my studies resulted in my success, not who funded it.

PrincessPerky · #8 (**permalink**) 06-22-2006, 06:32 AM

Personally if I were plannign on socking away thousands of dollars for my kids, I can think of better ways for them to spend it than on a piece of paper...but that might just be me.

Last night I was thinking about the 'entitlement' problem here in america, I caught a glimpse of a malaria concert in Africa (taught me something I thought it was a south american jungle disease, but anyway) How many people in America worry about that? only those traveling! Meaning in general those helping or those rich (or both) even the 'poor' (rememeber I qualify for that statement, silly) have it way better than in Africa.

I think it would be really good for my kids to travel, I think it would serve them better in adult life than a piece of paper. Having a 6 figure(or more) income isn't all that useful if you dont know how to spend it/ what you are gettting for it.

But then a time where I helped with the budget for my kids like the earlier example is also a useful lesson.

If my children want a piece of paper with a fancy seal on it, and if htey choose a proffession that requires it (Dr, lawyer) they have their savings to do with as they see fit (though loits of lessons will be/are being given to help them learn how to spend it)

nanamom · #9 (**permalink**) 06-22-2006, 07:01 AM

Both my DH and I had college paid for by our parents and we are very very grateful. I will always regret that I couldn't offer my first two the same thing. This third one has a small college fund started by his grandmother. She plans on giving each of her grandchildren (she thought it was only going to be 2 until we started a family) an education so they won't have loans. That is all she's talked about for years. Now that the oldest is a senior she is facing reality. She has given tons of money to them and their parents and there is little except a bad attitude and worse habits to show for it. She has said now that she will pay half the tuition but no room and board next year. I applaud her decision but wish she had warned them. He other kids and grandkids need to learn the lessons my DH did.

lillyb · #10 (**permalink**) 06-22-2006, 07:12 AM

I'm having a hard time with that step, also. Technically, if I wait until I'm officially at step 5 then it will be too late, as my one and only will be starting college next year. We'll have to pay in cash as we go. But, if we were 100% doing the baby steps and we get to step 5 and it isn't funded yet, what would he say to that? Put off step 6 for four years because you're trying to keep up with tuition and room and board? Or not fund it at all?

My parents didn't have college money sat aside for any of us. If we wanted to go then we had to figure out a way to go on our own. I took a full load, worked, and got a student loan to carry the difference. Just my personal opinion, but I felt more responsible with my grades and keeping my nose to the grindstone BECAUSE I was having to pay for it.

All that being said we have decided the best course of action for our sitiation. Hey, everyone is at different places in their lives and can't do Dave's plan 100% every time. So, for us, we've decided to put away the yearly bonus the hubby gets for her college. Technically it should go to debt, since we are still on step 2. But if we wait we will have zip saved up to help (see above).

Now, this money will go to 'help'. It won't cover everything, maybe half her living expenses. Daughter will still need to have a job to cover what's left over. She knows this. As she's decided to go to a technical school instead of a university, this helps tremendously with cost. It is her future and her choice and she's choosing to go into dental assisting, which is a one year program. There is no tuition if she goes right out of high school, that is how it is set up with the technical school. However, the school is too far for her to drive daily, so this money we will save will help with living expenses for her year of training. I'm thinking of helping her set up a monthly budget, and then sending a portion of our 'help' monthly, making her responsible for the rest of her living expenses monthly.

For us I think this will work. We'll still feel like we are contributing, yet will also have her contributing to her own future as well. It's not perfect with the plan, but will work for our situation.

sweeps · #11 (**permalink**) 06-22-2006, 07:32 AM

Quote:

Originally Posted by PrincessPerky

Personally if I were plannign on socking away thousands of dollars for my kids, I can think of better ways for them to spend it than on a piece of paper...but that might just be me.

I'm on the flip side of the coin on this one. First, that piece of paper opens up a huge number of opportunities that wouldn't otherwise be available. Sure, some people get a degree and either don't make use of it or they go into a career that can barely pay off their student loans, but that's not typical. Second, students get a lot more out of college than just the degree at the end. There are very few other places where you can meet and become life-long friends with so many other people, learn other people's viewpoints, get an appreciation of and learn to live with people of different cultures and religions, and learn how to manage money, time and other things with minimal parental involvement.

Also I don't believe that attending school, travelling the world, and working part-time are mutually exclusive. I completely agree that a parent should not cover all the expenses for a child's education. But speaking from experience, college students have a lot more to deal with than just tuition. There's room & board, books, fees, extra costs for travelling abroad, clothes, food, entertainment (assuming the kid doesn't want to spend every night in his dorm room), costs to come home and call occasionally, etc. etc. So usually there is plenty of incentive for the student to make some money and practice budgeting.

PrincessPerky · #12 (**permalink**) 06-22-2006, 07:51 AM

Quote:

Originally Posted by Sweepsplayer

There are very few other places where you can meet and become life-long friends with so many other people, learn other people's viewpoints, get an appreciation of and learn to live with people of different cultures and religions, and learn how to manage money, time and other things with minimal parental involvement.

umm how about the real world? I know some think of college as a 'halfway house' of sorts, where mom and dad can oversee but the kid is pretty free. Which is fine and certainly easier to force mom and dad to give up some control than if a kid is under your roof, but I hope by 18 my kid will have already met many people of many cultures and many backgrounds/walks of life. But then I homeschool, so my kid is not locked with the same demographic/age group all day

boefixepa · #13 (**permalink**) 06-22-2006, 09:03 AM

Phew! Glad I'm not the only one. I just think kids will do better and value their choice of education more if it is something they have to fight and work for rather than something that is just handed to them. I know alot of it depends on the individual kid and maybe the situation, but I just saw too many people wasting or better put, not taking full advantage, of the opportunity give them.

sweeps · #14 (**permalink**) 06-22-2006, 09:25 AM

There's a danger at only look at worst-case scenarios when choosing between alternatives. We tend to only see the horror stories about college kids who get a free ride from their parents just to waste all their time partying and making a**es of themselves. We also see horror stories about parents who homeschool their kids so they can have total control over a child's beliefs and perspective of the world. Again, these are not typical situations, just situations that make for good media coverage.

In my view, education (and ultimately, earning potential) is a person's most valuable asset and it is highly undervalued in this country. Many (most?) children don't realize that until it's too late, so it's a parent's duty to strongly encourage their children to take advantage of what education is out there. Funding at least part of your child's education shows them your commitment to that goal. If he decides he doesn't want to go to college, fine, you take back his education fund (or transfer it to another child). But at least you gave it your best shot.

curimind · #15 (**permalink**) 06-22-2006, 01:41 PM

I also come form a family of seven and I had ot take out loans. i applied for as much scholarships and took on two jobs, but still couldnt manage. My loans were a big help... and now I will consolidate them to keep my interest rate down.

Other than that...wehn buying books go to amazon.com or some of the other book buying websites b/c you will be able to find them cheaper.

kealina · #16 (**permalink**) 06-22-2006, 09:57 PM

i say both depending on ability and responsibility.... i went to an affordable state school and got a partial tuition waiver for joining marching/concert band... after my waiver (33-50% or more) i think my 5 years cost around $10,000 total....my parents gave me maybe $3,000 for the first year, my grandma gave me $500 or so for books since my grades were excellent.... i got some financial aid (like $2,000) one year, and DH (then FI) and i paid for the last $5,000 or so...

i also had $2,000 that i saved up from birthdays, christmas, babysitting, etc from the time i was 16 until i started college... i used that for textbooks and bus passes and any other things like lab fees...
i packed lunch and basically saved money everywhere and graduated with no student loans... we're pretty proud of that...

i will say one thing about helping children out... please try to help out fairly... you shouldn't reward irresponsibility and punish responsibility...both DH and I are natural savers so our parents just didnt' give us as much help as they gave to our spendy siblings... it truly does suck to watch them drink starbucks, jamba juice,buy new clothes, nice things, etc and get hundreds (if not thousands) more than you were given just because you were willing to work harder and sacrafice more... i don't know wheter that means giving out equal amounts or giving more to those that are responsible... i guess that's something that has to be decided by us sometime in the future...
i honestly think that me and DH are more likely to reward the more responsible child a little bit extra vs. just giving all chidren completely equal amounts, although we will try to make sure they all get some help from us...

Lori63 · #17 (**permalink**) 06-23-2006, 04:56 AM

Quote:

Originally Posted by kealina

i will say one thing about helping children out... please try to help out fairly... you shouldn't reward irresponsibility and punish responsibility...both DH and I are natural savers so our parents just didnt' give us as much help as they gave to our spendy siblings... it truly does suck to watch them drink starbucks, jamba juice,buy new clothes, nice things, etc and get hundreds (if not thousands) more than you were given just because you were willing to work harder and sacrafice more... i don't know wheter that means giving out equal amounts or giving more to those that are responsible... i guess that's something that has to be decided by us sometime in the future...
i honestly think that me and DH are more likely to reward the more responsible child a little bit extra vs. just giving all chidren completely equal amounts, although we will try to make sure they all get some help from us...

EXCELLENT POINT!
My parents were constantly sending my sister money because she 'needed' more help. Basically she just 'wasted' more than I did.

jodi · #18 (**permalink**) 06-23-2006, 08:13 AM

Quote:

Originally Posted by BCHGRL

Consider what life "start-up" costs there are for most people before the age of 30:
-Undergraduate education ($20K & up)
-Graduate education ($10k & up)
-Work Wardrobe ($3k)
-1-2 Automobiles ($15K & up)
-Home ($130,000 & up)
-Furnishings ($3K & up)
-Wedding ($10K & up)
-Children ($10K & up)

Don't get me wrong, I'm for pulling yourself up by your bootstraps. I was the first person in my family to obtain my bachelor's degree at 21 years old. However, I believe that it was my dedication to my studies resulted in my success, not who funded it.

Wow, those costs are pretty high. But I don't really consider those start-up costs. Yes, college costs were in excess of $20k/year, but DH and I got decent jobs without a graduate education, we bought our clothes secondhand for a few hundred dollars, when we graduated I drove a $3k car and he had none (he later bought one for $5k), our first home was $46k, we furnished it with garage sales and thrift store finds...we were fortunate to have our wedding paid for, and kids were relatively inexpensive - I figured this out a while back and we have only spent about two thousand dollars on our kids (ages 1 and almost 3) - including all clothes, diapers, furniture, health care, food, etc.
I just wanted to address the issue that twenty-somethings NEED all of the above - I think that's why so many twenty-somethings are in major debt. They want to have all that their parents worked 20+ years for, but they want it NOW. There's nothing wrong with putting off home ownership, or renting a small apartment, when you are just out of school, but I see a lot of young couples striving for that 4 bedroom, 3 bath, 3000 square foot place right away, while they are paying for the leases on $30k cars. Sorry, got a little side-tracked there.
DH and I plan to help our kids with "life costs" (not necessarily college costs, as college may not be for everyone - a perfect example is my brother who took over the family farm). I am setting aside a little money on each birthday in savings bonds to give them when they are 18 for college, training, apartment, whatever. I hope they will chose college, if it is the right path for them. The amount will be very modest - probably only a few thousand, but it will be something. The rest is up to them, as it was for DH and I when we were in school. My parents gave a little, and I worked my tail off for the maximum scholarship, but I still had $15k in loans, as did he. I think I would prefer to help my kids out with paying off their loans, after the fact, if we are in a good financial position. I want my kids to work for their education, but I also do not want them to be saddled with the debt DH and I have.

jodi · #19 (**permalink**) 06-23-2006, 08:17 AM

Ooohh, that just gave me a great idea. I turned to DH and asked him how he felt about paying of our kids student loans instead of helping them for college. He immediately came up a with a plan for this - if the child passes all of his classes, we will pay his first year of student loan payments. If not, he's on his own. A built-in incentive for doing well. And since the loan will be interest free for four years, plus six months after graduation, we can put aside the money we would have paid during those four years to gain interest, then use it to pay down the loans after. DS still ends up with some loans, good for building financial responsibility and credit, but we'll help keep the burden down. Hmmmm....

wwjdmsl · #20 (**permalink**) 06-23-2006, 08:55 AM

Quote:

Originally Posted by jodi_m

Ooohh, that just gave me a great idea. I turned to DH and asked him how he felt about paying of our kids student loans instead of helping them for college. He immediately came up a with a plan for this - if the child passes all of his classes, we will pay his first year of student loan payments. If not, he's on his own. A built-in incentive for doing well. And since the loan will be interest free for four years, plus six months after graduation, we can put aside the money we would have paid during those four years to gain interest, then use it to pay down the loans after. DS still ends up with some loans, good for building financial responsibility and credit, but we'll help keep the burden down. Hmmmm....

I really like this plan !