My Mom gave our twins Series EE “Patriot” U.S. Savings Bonds for their first birthday, which was really nice of her and apparently quite easy to do with even small amounts of money. I looked online to check the advisability of buying more and the first site I read described these bonds as a wasted investment opportunity.
We don’t have major funds for this, I was thinking more along the lines of something that could be contributed towards in dribs and drabs. I’d want to attach a few strings - either spend it on tuition, or wait until about age 25 and do what you want with it (teenagers not being known for having tons of sense and all).
You might want to look into a 529 TAP (Tuition Assistance Plan) fund. These are investment funds that are specifically designed to be used for educational expenses.
My parents opened up a fund for Aaron when he turned a year old. They contribute $25 per month and $200 for his birthday and again for Hanukkah. IIRC, it took $250 to open, plus some fee or another. Aaron now has almost $2000 in his account between contributions and investment income.
Here is a page discussing this and other ways to save for college.
I signed up for UPromise. I do a lot of shopping online and use UPromise merchants whenever possible. I also got the UPromise credit card. One percent of everything I charge goes into the UPromise account, and I charge everything I can (groceries, prescriptions, vet, doctor and dentist, etc), then pay it off every month. This month we’re going on vacation, and the airfare and hotel went on the charge card.
Eventually you’ll need to start [529 account](http://www.savingforcollege.com/529_plans/a 529_faq/index.php) that your Upromise money can go into, but you can accumlate money until you’re ready for that.
First, we have one of these. It sits in the kitchen, with a big coin slot in the top. All loose change, dollar coins, loose ones etc go into it. We probably have a few hundred in there now.
Second, we have the UPROMISE thing going, that laina_f mentioned.
First, we have one of these. It sits in the kitchen, with a big coin slot in the top. All loose change, dollar coins, loose ones etc go into it. We probably have a few hundred in there now.
Second, we have the UPROMISE thing going, that laina_f mentioned.
Third, we have Fidelity’s Unique College Investing Plan. We have a few thousand into that, set up for our son. We’ll set up one for our daughter this year.
Lastly, we plan on having them excel at any and all programs for which there are scholarships. I’m sure this last one will be foolproof!!!
The wife and I never graduated HS; hell I never even really *went *to HS. It is our mission to ensure this fate does not await our kids.
Jesus Christ, I put in info for my college assuming someone would start in 2022. It says I need $5k to start and $437 a month for the next 18 years to save the requires $190k for tuition in 2022. However that assumes an annual 7% tuition rate increase and a 7% investment return rate. Thank God i’m just the uncle and my brother (the father) wants to be a dentist.
We have Upromise, but we currently have the kids in a good private school. It’s a bit of a scramble keeping them in, but we’re hoping that with good grades that actually mean something they can get scholarships.
After all, this is a school where an A means an A.
A mix. 529 accounts will cover maybe half of it, other savings, grandparents contributions, and a bit of pay-as-you-go the rest. Hopefully, some scholarsips, grants, etc. will help.
If, in 2022, an average (say a small state school) costs $190,000 to attend?
No one will be going and one hell of a lot of university chancellors and professors will be flipping burgers.
Barring rampant inflation there simply won’t be any return on investment there for students. And college should be all about ROI for the kids.
For the first kid we purchased, in cash, the Virginia College Savings Plan. She’s got 5 years in any Virginia state school she can get accepted at.
This drove my broker bananas. He said, “JC, give the money to me (it was about $17K) and I’ll make it grow so you can pay cash on hand any expenses required when she’s 18.”
But he also said ‘YOU NEED TO SAVE NOW! COLLEGE WILL COST $19,000,000,000 per year when she’s 18!’
There’s just no way to resolve those two statements.
For the second one we started saving as Ohio no longer (so I’m told) has a pre-pay thing. We have about $6K~ in her account already. We’ll probably do something similar to a 529 for her once we get our new broker in line.
In short…do save…but don’t let them railroad you with panic-talk. Yes, it’ll cost more. But college tuition follows the same rules as any other market. Raise the cost beyond A) the affordability rate of the buyers and B) beyond the return on investment of the degree and the market will collapse. People aren’t stupid.
Yes, some of that increased cost can be offset with loans and federal assistance. But the government will NOT (I predict) be in the business of offering $150,000 worth of assistance to 80% of college freshman in 20 years. That’s got budget breaker written all over it.
well, back when the kid was about 1 y.o, we started contributing $100 a month into series EE US bonds. He 16 y.o. now. Also, we [the Mrs and I] -both- are underpaid, since we work for a college/university… and as such, we are eligible for some tuition remission benefits. So, between the EE bonds and the tuition remisission… I figure we have the first year and maybe part of the 2nd year taken care of. After that… it is up to him.
We have some EE bonds purchased when my husband’s employer had a program that encouraged people to buy them, and some from gifts. They’re definitely not a waste as far as I’m concerned. Anything that keeps some of your money unspent gets you ahead. We’ve managed to save enough of those to pay for one year of tuition at a state university.
The kids have a small account set up by thier grandparents that the money can only be taken out for education after they are 16, or taken out when they’re 18. Instead of buying them a lot of toys they don’t need the grandparents give them 100 dollars for the account every gift giving occasion.
The number one most important thing we’ve done to be ready to send them to school is to keep our own debt low and live below our means. When it becomes necessary to pay for college we should be able to do it out of our regular pay or take out a home equity loan.
It helps that we live in an area with a few good colleges. We will not pay for our children to live away from home and go to school for something they can study for here. If they want to do that they can come up with their own living expenses and we’ll pay for tuition still.
We started with govt bonds [three teens 11 months apart], graduated to prepaid tuition and now are saving thru a savings fund that earns fairly decent interest. We will save cashing in the govt bonds for emergencies [their maturity date is way past BA degree graduation].
Its hard to say. People still attend private colleges and out of state colleges in droves (i’v heard 30% of people are in private college or out of state) and those cost around $15000-25000 a year in tuition. That $190k was for 4 years of tuition (45k a year), ignoring inflation that is about the same as the cost of private college now.
I can somewhat agree with your statement that as it becomes unaffordable people will not use it as much, but I don’t think that’ll happen for a while. Plus you have to look at other areas which are growing in cost dramatically like the housing market, how does the housing market respond to grossly unaffordable prices? Houses aren’t going down (although there is speculation they soon will), people are just finding more creative ways to finance houses or not buying at all, the prices aren’t going down. There will just be longer student loan durations (30 year repayment plans instead of 10 year plans like we have now) and people will save more money for their kids education than they do now.
Here’s the kicker. My university system, the PA State System of Higher Education, currently charges around six grand a year for in-state tuition and fees. (I’m not counting living expenses in this equation just yet.) They’ve also had an annual increase of only 4.5%. If this holds true, Aaron will be on the hook for around $11,611 per year in tuition and fees when he starts college in 2020. Penn State, by comparison, charges more than twice that now.
There are ways to save for college now, and there are ways to pay for it later.
