Saving Plans For Your Child's Higher Education

[Grumpy Vet]

Good evening everyone. I searched for a thread on the topic here but did not find one....so...

My wife and I are trying to decide how to save for our daughter's education. We've put some money away - but there are a lot of programs out there for kids and college.

www.collegesavingsmd.org (http://www.collegesavingsmd.org)


I've looked at the above link a bit, but was curious if any of you have done exhaustive research and can point me in the right direction.

I did the calculator on that link above earlier today....and it is freakin' scary. To put little GV through four years of University of Turtle, College Park in 2021....I need to put almost $1,000 a month away for 14 years....crazy huh?

I don't see that happening.....

So - the floor is open....what are you doing for your little rugrats? We need to do something more formalized. Thanks for your input.

[IONTOP]

Good evening everyone. I searched for a thread on the topic here but did not find one....so...

My wife and I are trying to decide how to save for our daughter's education. We've put some money away - but there are a lot of programs out there for kids and college.

www.collegesavingsmd.org (http://www.collegesavingsmd.org/)


I've looked at the above link a bit, but was curious if any of you have done exhaustive research and can point me in the right direction.

I did the calculator on that link above earlier today....and it is freakin' scary. To put little GV through four years of University of Turtle, College Park in 2021....I need to put almost $1,000 a month away for 14 years....crazy huh?

I don't see that happening.....

So - the floor is open....what are you doing for your little rugrats? We need to do something more formalized. Thanks for your input.

Do what my parents did... When she turns 16, tell her you will either buy her a new car or pay for her college... She will undoubtedly choose the car...




Problem solved....


You're welcome...

IONTOP

[zoony]

Funny you started this thread, I'm currently setting up a college fund for my son.


If I recall, it's a "419". Don't quote me on that though. Anyways, it is all tax free, similar to a 401k. But the catch is that you HAVE to use the money for educational purposes.


I just did get the paperwork last week, so I haven't filled anything out. But my wife and I plan to put in $5000 initially, and then $200 / month.

At 6%, we hope to have $90k by the time he turns 18. Adjusted for inflation though this is right at about $60,000. So if he wants to go to Harvard, I'll have to get a night job stocking shelves or something. :)


Hopefully he'll go in-state though... Vanderbilt or Tennessee :cheers:



GV, ask your broker/banker about the 419 though. You can save a ton of $$$ by not paying taxes.

....

[Rumrunner6900]

In VA, it is called a 529 plan.

I have been planning on setting one up for my kids, but everytime I look on their website, my brain hurts. :doh:

It sounds like a pretty good idea though....better than just a regular savings account.

[twa]

Since my rug rat starts next year my plan involves a gun and one or more of the local banks :silly:

Seriously we never set up a savings plan for college,just accumulate assets and eliminate debt. If scholarships and grants don't cover it ,we will manage thru student loans.
There are numerous plans including purchasing at todays prices for the future,but not what we chose....Good luck with whatever you decide.

The best advice I can give you is concentrate on the child itself and it's development both academically and otherwise or savings plans are useless.

I am blessed with bright children (must be from their mothers side ;) )that have garnered interest and scholarships that make financing less of a problem than where and what they choose. (Still can't believe the boy chose the Marines instead of a free ride)

[iheartskins]

You could also set up a trust.

Anything that allows you to use pre-tax dollars is good though.

[Gallntfox]

529 has MANY advantages..read up on it! The prepaid tuition type is not a favorite of mine for many reasons. The below link will give you the basics.

We do 529's in my office all day long.

http://www.sec.gov/investor/pubs/intro529.htm

[Major Harris]

move to wv, make sure your kid has at least a "b" average,or decent test scores and you're probably covered in-state. :D

[Predicto]

move to wv, make sure your kid has at least a "b" average,or decent test scores and you're probably covered in-state. :D

Yeah, but what if they want an education?






dems just jokes, son

[twa]

move to wv, make sure your kid has at least a "b" average,or decent test scores and you're probably covered in-state. :D

I hear there are a number of states with that type of program, not here though.

[Major Harris]

Yeah, but what if they want an education?






dems just jokes, son


education? oh, i was thinking more along the lines of college....you know, where parents fund 4-6 years of partying. :party:

[The Brave Little Toaster Oven]

Good evening everyone. I searched for a thread on the topic here but did not find one....so...

My wife and I are trying to decide how to save for our daughter's education. We've put some money away - but there are a lot of programs out there for kids and college.

www.collegesavingsmd.org (http://www.collegesavingsmd.org)


I've looked at the above link a bit, but was curious if any of you have done exhaustive research and can point me in the right direction.

I did the calculator on that link above earlier today....and it is freakin' scary. To put little GV through four years of University of Turtle, College Park in 2021....I need to put almost $1,000 a month away for 14 years....crazy huh?

I don't see that happening.....

So - the floor is open....what are you doing for your little rugrats? We need to do something more formalized. Thanks for your input.

Yeah, my parents are dealing with that right now with my sister. Unless you are a minority, you don't get too much of a break so save as much as you can to make it easier.

[Skinsfan1311]

We were young parents, and didn't have the means to set aside savings for college. By the time that we had the means, it was too late.

My oldest son pulled a 5-yr stint in the service so.....the Army is paying for his college! :D

We'll just have to scale back on our lifestyle, bite the bullet, and pay for our youngest sons education, (he's a junior in high-school). We're applying for every scholarship that we can think of.

Unless he get's one hell of a scholarship, he will be attending the local Community College for a couple of years. I'm hoping that he can avoid having to take out a student loan. Nothing like graduating into the real world with all of that debt hanging over your head.

[Grumpy Vet]

Funny you started this thread, I'm currently setting up a college fund for my son..........GV, ask your broker/banker about the 419 though. You can save a ton of $$$ by not paying taxes.


Good advice as usual there zoonster....I have done most money issues myself - so no real banker / broker to ask....perhaps I should look into one. I was just shocked at what that calculator thing told me I needed to save....I guess we should just do what we can and be happy we have some set aside. I was thinking along the same lines as what you have done for your munchkin....but slightly less initial lump sum.



We were young parents, and didn't have the means to set aside savings for college. By the time that we had the means, it was too late..... Nothing like graduating into the real world with all of that debt hanging over your head.

My wife had school loans from undergrad and graduate school. When we were married she had over $60K plus interest we needed to re-pay. We've got that down to about $12K and are on course to have it all paid off in 2 years. I will say it is and was a major albatross. It retarded our "financial growth" significantly. If we can get away w/o our daughter having to be hamstrung like that.....we sure will.



In VA, it is called a 529 plan.

I have been planning on setting one up for my kids, but everytime I look on their website, my brain hurts. :doh:

It sounds like a pretty good idea though....better than just a regular savings account.

Thank you - I looked through those websites and my eyes glazed over.....glad to hear I'm not alone. I was hoping someone could dumb it down for me a bit. It sounds from reading on here - the prepaid may not be the way to go.


Since my rug rat starts next year my plan involves a gun and one or more of the local banks.........There are numerous plans including purchasing at todays prices for the future,but not what we chose....Good luck with whatever you decide....


You could also set up a trust.

Anything that allows you to use pre-tax dollars is good though.

Not sure how a trust would work - but thank you for your input counselor.


529 has MANY advantages..read up on it! The prepaid tuition type is not a favorite of mine for many reasons. The below link will give you the basics.

We do 529's in my office all day long.

http://www.sec.gov/investor/pubs/intro529.htm

I'll check that link Gallntfox - thanks.

Really appreciate all the input everyone......and down the road the little one will appreciate it too.

http://www.ihatedallas.com/img/IMG_3117.JPG

GV

[dfitzo53]

As a student rather than a parent, allow me to give you a different perspective. The number of scholarships out there is staggering. There are big-name ones, like the National Merit Scholarship, which are great if you can win them, but there are a host of others which people frequently have never heard of. Sometimes the awards are as small as a few hundred dollars, but especially when the same application essays can be used over and over, every little bit helps.

Some scholarships are even so focused (say, a scholarship for the children of Mexican-American Navy officers or the like) that there is little competition for them. A candidate with strong writing skills stands a good chance of winning. You can easily find listings of different scholarships online, and sometimes the schools to which your child applies will have scholarship contests of their own.

English teachers in high school (who have experience with admissions essays) are often willing to proofread and help strengthen scholarship essays as well. Encourage your child to look for these opportunities early (early in the application process that is) and often.

[Grumpy Vet]

As a student rather than a parent, allow me to give you a different perspective. The number of scholarships out there is staggering. There are big-name ones, like the National Merit Scholarship, which are great if you can win them, but there are a host of others which people frequently have never heard of. Sometimes the awards are as small as a few hundred dollars, but especially when the same application essays can be used over and over, every little bit helps.

Some scholarships are even so focused (say, a scholarship for the children of Mexican-American Navy officers or the like) that there is little competition for them. A candidate with strong writing skills stands a good chance of winning. You can easily find listings of different scholarships online, and sometimes the schools to which your child applies will have scholarship contests of their own.

English teachers in high school (who have experience with admissions essays) are often willing to proofread and help strengthen scholarship essays as well. Encourage your child to look for these opportunities early (early in the application process that is) and often.

Interesting reading, thanks....I hope that is the case as well when lil GV is ready to tackle college....Kinda crazy to think how far things have come since I was in college. No real Internets back then....

The world is becoming smaller - but much more expensive.

[Predicto]

Yeah, my parents are dealing with that right now with my sister. Unless you are a minority, you don't get too much of a break so save as much as you can to make it easier.

I think that is pretty much a myth. Although there certainly are minority scholarships and some special efforts are made to recruit particularly well qualified minority students, the overwheming majority of financial aid is color blind and based on financial need.

[skinfan2k]

my parents began saving really late in my teenage years but manage to save up enough for me and my sister.. if i ddin't live on campus for a year, my 4 yrs would be paid off

[Predicto]

Unless he get's one hell of a scholarship, he will be attending the local Community College for a couple of years. I'm hoping that he can avoid having to take out a student loan. Nothing like graduating into the real world with all of that debt hanging over your head.


In my opinion, loans are worth it if they allow you to upgrade to a higher tier of school. In other words, don't turn down Harvard and go to Towson State just to avoid going into debt.

[DjTj]

I think that is pretty much a myth. Although there certainly are minority scholarships and some special efforts are made to recruit particularly well qualified minority students, the overwheming majority of financial aid is color blind and based on financial need.I agree with this. There are many scholarships out there offered by schools, foundations, or corporations for any number of different reasons. Most of them are targeted in some way, but everyone is a minority somehow - whether you are a student-athlete, a female doing science, or the first in your family to go to college, there's probably some scholarship out there for you.

In my opinion, loans are worth it if they allow you to upgrade to a higher tier of school. In other words, don't turn down Harvard and go to Towson State just to avoid going into debt.
While it would be stupid to go to Towson State over Harvard if those were your only two choices, I think it would be reasonable to choose Maryland over Harvard in many cases ... I knew people who were facing similar choices and chose a free ride at UMD over the Ivy League debt. If you are the kind of student that can get into Harvard, you will probably excel in a state school honors program, and you can always go to Harvard for grad school.

You're right that student loans shouldn't be the dealbreaker though - taking on some debt isn't the end of the world, and the interest rates are very favorable. There are few better investments than education. Kids should apply wherever they think they can get in, and the more financial aid offers you can compare the better.

[twa]

In my opinion, loans are worth it if they allow you to upgrade to a higher tier of school. In other words, don't turn down Harvard and go to Towson State just to avoid going into debt.

I agree, it is a investment with good returns.

Ditzo makes a good point though,there is a lot of money out there if you look for it.
It takes effort but it is rewarding,my daughter picked up $500 the other day just by attending a seminar from Sallie Mae...not to mention additional pointers on scholarships and grants.

[chomerics]

In my opinion, loans are worth it if they allow you to upgrade to a higher tier of school. In other words, don't turn down Harvard and go to Towson State just to avoid going into debt.

I disagree Predicto, I would suggest going to a Towson State and getting a Masters at a prestigious school. . .like Harvard :) The undergrad doesn't count for squat, as they will look at where your last degree came from, so then you should shoot for the moon. It is better to be $100K in debt with a BS from Towson and MS from Harvard then to be $250K in debt and to have a MS & BS from Harvard.

For me, I paid my way thorough college, and my employer pays my tuition for graduate classes. . .it also helps that my job is affiliated with Harvard, so I get to go there for basically $3K/course with it reimbursed at the end of the semester :D :D :D

Yes, even the moronic few can jump in a sewer and come up smelling like a rose once in a while ;)

[JMS]

529 has MANY advantages..read up on it! The prepaid tuition type is not a favorite of mine for many reasons. The below link will give you the basics.

We do 529's in my office all day long.

http://www.sec.gov/investor/pubs/intro529.htm

The problem with the Virginia 529 program is that it's for Virginia schools. So I've got a kid in College already and another kid in pre-school.. I was pricing both at the same time...

Anyway my kid in college had above a 3.0 and did close to 1300 on his SAT's. That's a lot better than I did. Only he couldn't get into any of the Virginia schools.

UVA, Tech, Madison, even GMU turned him down. If I had a 529 I think I would have blown my head off.

As the state government cut taxes, all the Virgnia schools started accepting fewer instate students.. because they make more on the out of state students. Your kid is going to have to have a 4.0 and 1450 on his SAT in order to get into any of the State Schools in 2020. You need that now to get into UVA, WM, or Tech.

[Predicto]

While it would be stupid to go to Towson State over Harvard if those were your only two choices, I think it would be reasonable to choose Maryland over Harvard in many cases ... I knew people who were facing similar choices and chose a free ride at UMD over the Ivy League debt. If you are the kind of student that can get into Harvard, you will probably excel in a state school honors program, and you can always go to Harvard for grad school.



I completely disagree. The assumption here is that you will necessarily kick butt and finish first in your class at Towson State and waltz into Harvard, but that isn't necessarily true. You could have one bad semester and mess up the whole plan. The middle of the class guy at college in Harvard still gets to go to Harvard-like grad schools.

[Predicto]

I disagree Predicto, I would suggest going to a Towson State and getting a Masters at a prestigious school. . .like Harvard :) The undergrad doesn't count for squat, as they will look at where your last degree came from, so then you should shoot for the moon. It is better to be $100K in debt with a BS from Towson and MS from Harvard then to be $250K in debt and to have a MS & BS from Harvard.



Look at who is in those prestigious grad schools. Mostly guys from prestigous undergrads. Plus you get the connections and the superior education offered there as well.

My rule is aim high and keep all your options open. Harvard undergrads have the most options of anyone. Those options are almost priceless.

[DjTj]

I completely disagree. The assumption here is that you will necessarily kick butt and finish first in your class at Towson State and waltz into Harvard, but that isn't necessarily true. You could have one bad semester and mess up the whole plan. The middle of the class guy at college in Harvard still gets to go to Harvard-like grad schools.Well, I really think Towson State is an extreme example ... there are a lot of schools in between Towson and Harvard.

At most state schools now, there are honors programs, and there are opportunities to distinguish yourself, and you don't have to finish at the absolute top of your class to get into a good grad school. While you can probably get away with a slightly lower GPA coming from an Ivy League school, it is probably easier to get a higher GPA at a state school.

The guy in the middle of the class at Harvard still does alright, but the guy at the bottom of the class will still have some trouble getting into the grad school he wants - there are no guarantees, and you still have to work hard.

While in your "one bad semester" scenario, an Ivy League school provides a safety net, it won't help if you have three bad semesters ... and in the scenario where you have no bad semesters, you save $100,000 by going to your state school.

There are definitely people for whom the elite private school is the best option - especially those somewhat eccentric but highly intelligent types that are prone to the one bad semester ... but there are a lot of students who are very responsible, can manage their time well, and will do fine at any school - I don't think they're making a huge mistake by saving their parents some money.

Elite grad schools are no longer solely the province of elite undergrads. If you look at the undergraduate institutions of Harvard Law students, http://www.law.harvard.edu/admissions/jd/colleges.php, you'll see that while 113 of them went to Yale, 104 came from the UC system, 27 from Texas, 23 from Michigan, 19 from UVA, and 13 from UMD, UNC, and Florida.

You should never choose Towson over Harvard, but I think that in-state tuition at the flagship university of your state can be a very good deal in many cases.

[Predicto]

Elite grad schools are no longer solely the province of elite undergrads. If you look at the undergraduate institutions of Harvard Law students, http://www.law.harvard.edu/admissions/jd/colleges.php, you'll see that while 113 of them went to Yale, 104 came from the UC system, 27 from Texas, 23 from Michigan, 19 from UVA, and 13 from UMD, UNC, and Florida.



I think that this statistic kind of proves my point, not yours. 113 of the Yalies were at Harvard (and tons of others were at Yale Law and Chicago and Michigan and Stanford and Columbia and so forth.

13 came from UMD.

This is out of a graduating class of 1200 or 1300 at Yale and what, six times that many at Maryland?

Basically, one out of ten Yale Grads are at Harvard Law, while one out of 500 Maryland grads are there.

And this doesn't take into account that those few Yale grads are also filling all the other prestigious grad programs in Medicine, Business, Philosophy, Medieval History and whatever all over the country. Wherever they want to go, whatever they want to study, pretty much all the doors are open to them.

It's not fair, perhaps, but it is still reality.

[DjTj]

I think that this statistic kind of proves my point, not yours. 113 of the Yalies were at Harvard (and tons of others were at Yale Law and Chicago and Michigan and Stanford and Columbia and so forth.

13 came from UMD.

This is out of a graduating class of 1200 or 1300 at Yale and what, six times that many at Maryland?

Basically, one out of ten Yale Grads are at Harvard Law, while one out of 500 Maryland grads are there.

And this doesn't take into account that those few Yale grads are also filling all the other prestigious grad programs in Medicine, Business, Philosophy, Medieval History and whatever all over the country. Wherever they want to go, whatever they want to study, pretty much all the doors are open to them.

It's not fair, perhaps, but it is still reality.But the question is, are they there because of where they went to school, or because of who they are?

The kids at Harvard Law from UMD are likely the same kids that turned down an Ivy League school. They are now in the same place their peers are, except with $200,000 more in their bank accounts.

[Predicto]

But the question is, are they there because of where they went to school, or because of who they are?

The kids at Harvard Law from UMD are likely the same kids that turned down an Ivy League school. They are now in the same place their peers are, except with $200,000 more in their bank accounts.

Some of them are those kids, I suppose.

How many turn down Harvard, go to Maryland instead, don't do quite as well as they thought they would (say only finish in the top 10 percent of their class instead of the top 1 percent), and never get that kind of opportunity again? What a huge risk.

[DjTj]

Some of them are those kids, I suppose.

How many turn down Harvard, go to Maryland instead, don't do quite as well as they thought they would (say only finish in the top 10 percent of their class instead of the top 1 percent), and never get that kind of opportunity again? What a huge risk.I think it's a smaller risk than you think. The risk of not doing as well at Maryland isn't that much higher than your risk of falling into the bottom of the class at an Ivy. Life isn't as simple as getting into Yale and then having the rest of your life handed to you on a silver platter. The top half of the class goes on to great grad schools ... the top three-quarters do very well - heck, the top 90% are probably doing great. But there is still a bottom 5-10% that will struggle - there are no guarantees.

And for a few hundred thousand dollars, I think the choice starts to look very attractive. At least for Maryland, the choice these kids are facing is often a free ride on a Banneker-Key Scholarship versus an Ivy League tuition. That is a tremendous difference.

...and don't forget that a stumble in undergrad won't keep you from an elite law school. You work for a few years to get experience or otherwise distinguish yourself. If you ace the LSAT, you'll still have a pretty good chance.

...and even if you do get into Harvard Law, it doesn't mean easy street - you'll always have to keep working for success, and if you're the kind of person that can do that, I think it actually starts to matter less where you went to school.

[Predicto]

Fair enough. I see where you are coming from, I just view the risk/rewards differently than you do. Maybe because I was one of those "one bad semester" kind of guys you were talking about who benefited from the prestige of my undergrad school.

My concern is not about doing poorly at one place vs another. My concern is about having to absolutely kick butt and kick down the admissions door if you went to Maryland vs just doing well at Yale in order to get to the same place. I just want all the doors open as long as possible if at all possible.
If that requires loans and applying for scholarships etc., I think that it is worth it, especially if you don't know what you want to do at the age of 18 (I sure didn't).


You do make valid points, I just think we value the money/risk differently.