College Savings

[Drake3287]

Although I started out back when CD rates were much higher, for our 3 kids we each set aside a certain amount of money per child from each pay check. For example I got paid 26 times a year and would put $100. per child away each check. ($300.)

My wife would do the same although at a slightly lower dollar amount. After doing this relatively easy savings plan, each child had about $100,000. in their account.

Not only was it nice to be able to pay cash for all the college/living costs, after the youngest finally graduated it was like getting a huge pay raise because I was no longer putting money aside for college.

The only down fall of being a responsible parent and saving money was that none of our kids qualified for any financial help. I felt (and still do) that we were the only one's actually paying the full cash amount for college while everyone else cried poor and received free government help.

[creditcardfree]

The only down fall of being a responsible parent and saving money was that none of our kids qualified for any financial help. I felt (and still do) that we were the only one's actually paying the full cash amount for college while everyone else cried poor and received free government help.

I hear you there. Everyone thinks college is so expensive that NO ONE can pay for it. Not true! I do think government student loans are causing the cost of college to go up faster than if the only loans you could get were private. Easy for universities to raise costs if their customers can always get approved.

[feh]

I felt (and still do) that we were the only one's actually paying the full cash amount for college while everyone else cried poor and received free government help.

How is taking out a loan "free government help"?

[disneysteve]

How is taking out a loan "free government help"?

Subsidized federal loans are "free help".

[feh]

Subsidized federal loans are "free help".

I don't see how it's free if the student is paying interest.

Funny how homeowners don't complain about getting "free help" when they deduct their mortgage interest from their taxes.

[kork13]

I don't see how it's free if the student is paying interest

That's the thing -- they aren't. With subsidized student loans, the student doesn't pay interest or principle on the loan until they finish school*. So they get 4 years of interest-free loans, which start accruing interest & become payable only after they finish (or quit) school.

*=They can choose to pay principle before graduation, but it's not required.

In any case... I'm currently saving $100/mo for my 1.5 y/o son in a 529, and will probably bump that up at some point in the future. His 529 is currently at ~$6500, and by the time he needs it, our plan is to have it cover at least 50% of his needs (at a minimum). We're expecting a second child next summer, and we'll start a new 529 & do the same at that time.

[disneysteve]

I don't see how it's free if the student is paying interest.

Funny how homeowners don't complain about getting "free help" when they deduct their mortgage interest from their taxes.

Subsidized loans are far cheaper than private loans due to government assistance. I'm not saying that's good or bad, but I can see where the "free help" comment came from. Personally, we didn't qualify for subsidized loans, only unsubsidized ones.

I do agree, though, that the easy availability of government loans does contribute to the rising costs of college. It's not the only factor, for sure, but it is a factor. If loans were harder to come by, colleges wouldn't be able to charge as much as they do and still fill their classes.

[Drake3287]

How is taking out a loan "free government help"?

I was referring to the lower cost/discounted college and dorm fee's charged by the California State University System. Because I legally had to disclose my financial worth, (including all my kids college funds) we of course didn't qualify for any discounts.

My wife and I make an average salary here in California (Public employee) but sadly because we decided to be responsible and save for our kids college, the college system penalized us by charging the full un-discounted amount for everything. College, books, dorm, meal plan, you name it.

I have friends that I work with making the same money but didn't save for kids college costs. You guessed it, they received discounted everything.