42 responses

  1. henrymilathy
    August 24, 2012

    Every parents plans a lot for the better future of their child.They give their best effort for securing the money for the child's higher education..And for this all the services and money insurance plans which you have been mentioned are revolutionary in the field of child development…Certificates of deposit is one of the best option for child education and it gives very high interest after maturity.One can use it for the future safety of their child..

  2. john
    December 15, 2011

    Wow. Anything assuming an 11% return should be labeled an idiot and laughed at.

    • YFS
      December 15, 2011

      I value your opinion on the matter but, the example was simply to show why saving early rather than later makes most sense.

      Would you have preferred I used the 20 year rolling period average of the S&P 500 in my time value of money calculation?

      If I used 9.1% rather than 11% my point would remain the same.

      What else did you like or dislike about the article?

  3. Pam at MoneyTrail
    December 13, 2011

    We are looking at colleges right now for our oldest child. State schools are averaging $20K per year and private are ranging from $38K to $50K per year. It's a bit intimidating!

    • YFS
      December 13, 2011

      Woah 20k for a state school??? What state are you in? I'm in VA and it costs less than 15k

      • Pam at MoneyTrail
        December 13, 2011

        We are in Georgia. She is looking at the University of GA at Athens and GA Tech.

      • YFS
        December 13, 2011

        Ouch! 20k seems steep to me for a instate school. But, tuition costs seem to have not boundary so maybe I'm just out of the loop. What is she planning to study? Does it justify the cost of the education?

      • Pam at MoneyTrail
        December 13, 2011

        The $20K is the estimated cost of attendance. It includes tuition, room and board, books and supplies, transportation and living expenses. Most colleges, if not all, are now posting the entire estimated cost of attendance which makes for great comparisons. Her travel expenses would be far less than they estimate and I am hoping that the book cost can be reduced by going for the used textbooks. It's been a "few" years since I was in college so it has definitely changed!

        At this point, she is interested in the medical field, either the research part or biomedical engineering.

  4. The Saved Quarter
    November 19, 2011

    So far, I'm working hard to put myself through college. I'm at a private college and spending significantly less than the CNBC estimate!

    Once I graduate, I'll start saving for the kids. The thing that worries me the most is how the cost of higher education has risen at a rate much higher than inflation. I don't know if today's estimates will hold true when my kids actually reach the age of needing an education!

    I'll definitely encourage my kids to take community college courses while in high school, and on summer breaks. It's free in California for high schoolers, and sometimes high schools will allow the courses to count for high school credit as well. Students might be able to kill two birds with one stone and get some general ed out of the way before even starting their college careers.

    • YFS
      November 19, 2011

      College cost are always rising it is amazing how selling the same information suddenly doubles/triples in cost!

      What do you think the cause of tuition increase is?

      I think it is a combination of demand and the capability that any and everyone who is breathing can get a student loan. If you owned a school wouldn't you just keep raising rates if you know that a student loan will be given regardless of what tuition is?

  5. Mid Life Miser
    November 18, 2011

    Great post!

    My parents paid for my tuition. I had to pay for everything else (books, food, fraternity, rent, utilities, etc..). I couldn't agree more with saving early. If you can contribute even a small amount to one of your mentioned accounts/plans your future college graduate will be in such a better position. I recently posted a tip on how to get family members to contribute to your kid's college account. check it out here: http://midlifemiser.com/?p=109

    • YFS
      November 18, 2011

      I see you listed Fraternity, rent and utilities. What Frat did you join and why? Also did you live off campus? I thought living on campus was always cheaper?

      • Mid Life Miser
        November 18, 2011

        Fraternity was Sig Ep. Not exactly sure why I joined. I went through the formal rush process and came across a house with a bunch of great guys. Some of these guys remain my best friends to this day. I lived on campus for only one quarter. I rented cheap apartments with anywhere from 2-5 roommates. The campus housing and fraternity housing was not for me.

      • YFS
        November 18, 2011

        I went to GMU (George Mason University) when I was in college Sig Ep. Had some of the best parties! Living off campus in a group setting is a great way to save money. But, man 5 roommates!!! You have to have some stories. Feel free to share

  6. UltimateSmartMoney
    November 18, 2011

    Saving early is the key. Can you imagine if you started 529 plan on the year your child was born and continued saving for next 18 years? You'll be in much better situation compared to if you started saving say 10 years prior to your child starting college. This sounds easy but difficult to actually execute.

    • YFS
      November 18, 2011

      This is the plan I have for my child. I won't start a 529 due to the restrictions and penalties if you do not use the money for educational expenses. But, I definitely will invest in a taxable account that is ear marked for my child.

      Why do you feel it is difficult to execute?

  7. YFS
    November 18, 2011

    Congratulations on having a PHD. What did you receive your PHD in? Also, what do you consider modest student loans?

  8. Maria@moneyprinciple
    November 18, 2011

    I did my undergrad in Bulgaria and this was free (apart from my Dad paying my living expenses); my Masters in the UK was paid by a schalarship, and my PhD was paid by a combination of a scholarship and part time work. We are helping our older sons through university but they also have student loans – modest ones. With the youngest son (now ten) we have started saving – tuition fees increased dramatically in the UK and the cost of living can be hight (a minimum of $30,000 per year, is my estimate but this may raise further).

  9. krantcents
    November 18, 2011

    My parents paid for my college education and I paid for my children's education. Education was a priority for my parents and me.

    • YFS
      November 18, 2011

      That is so cool. I hope to start a legacy like that with my future children. What vehicle did you use to accumulate the money? Trust, 529, ESA, taxable account, prepaid tuitoin. What method did you take?

  10. Eric J. Nisall – Dol
    November 18, 2011

    A great way to save is also to get an early start on the classes themselves. If you can take classes for college credit in high school, that will knock a few credit hours off of the total cost. That was how I got started. Also, starting out at a 2-year college will also save on everything and sometimes, given the effort, the student can bump up their profile and gain scholarships and other aid which may not have been available previously.

    I took a couple loans and won some grants in addition to earning credits my senior year of HS.

    • YFS
      November 18, 2011

      Good suggestions! You can save a ton of money by sending your child to a junior college before a 4 year university. What are your thoughts on the child objecting to the junior college then 4 year university method.

      • Eric J. Nisall – Dol
        November 18, 2011

        Well, for one, no one ever asks if a degree was earned by attending all 4 years at the same University. Secondly, I can understand that going away to school is a very attractive thing, but it's not all that it's cracked up to be, and the whole "going away experience" can still be had in the final 2 years. Plus, where I grew up, we had a 2-year (now a full 4-year) college that half of everyone I grew up with attended anyway, so it's not like anyone was left behind.

      • YFS
        November 18, 2011

        I think that's why many children object to the 2 year school before 4 years school route. A lot of the 2 year colleges have people they have known / scene in highschool so it doesn't "feel" like college. I had a friend of mine child call the 2 year school "The 13th grade" because of it. I say this, if the child isn't paying for school via scholarships/grants or their own income they have no choice in the matter.

        When I was a credit counselor at the Money wise fair. I spoke with this lady who only had 400 bucks left at the end of the month. Her daughter was a senior and interested in going to an out of state college which will cost 40k a year. No it was not an ivy league school either. Her daughter objected to going the junior college route!

        What are you thoughts on limiting the student loans a person can have based on debt to incoem ratio's or some other metric?

      • Eric J. Nisall – Dol
        November 21, 2011

        I always thought that the grants and loans already too into account the debt-to-income ratio since the applications pretty much ask for a personal financial statement.

      • YFS
        November 21, 2011

        The personal finance statement is for eliminating your to get certain types of loans/grants. for example. If you make too much money you cannot get a subsidized loan. A person will still qualify for student loans. Weird huh?

  11. Jason@LiveRealNow
    November 18, 2011

    I gave my kids two kidneys. If they want college paid for, they can sell one of them.

    Seriously, I'm focused on debt repayment right now. My oldest is probably going to get screwed out of having me pay for his college education because of that.

    • YFS
      November 18, 2011

      hahah Great comment. I instantly envisioned you saying "I gave you life! You expect college?" :-)

  12. Shaun @ Money Cactus
    November 18, 2011

    I wasn't very smart, I deferred my debt until I finished university and got a job. In Australia you can get a 25% discount if you pay your fees upfront, but I just didn't have the money at the time.

    I'm definitely thinking about my child's education, we have to tackle school first, so started a savings plan from birth.

    • YFS
      November 18, 2011

      Wow I wished college in the USA was discounted for full pay upfront. Great job on saving since birth. What investment vehicles are you using to save for your kids education? How much do you plan on saving?

      • Shaun @ Money Cactus
        November 22, 2011

        At the moment we only save a small amount, but we have time on our side at the moment. Currently it just goes into a savings account, but as it grows I think we will use relatively safe term deposits or bonds to help it along a little.

  13. cashflowmantra
    November 18, 2011

    Well, I managed to get through college with no debt. I worked to pay one third of it, my parents paid a third, and I got scholarships for one third. Of course that was many years ago when tuition and room and board were much cheaper. Gas was less than $1 per gallon if that gives you a clue.

    • YFS
      November 18, 2011

      I also would assume that wages were reflective of the times. So, in my mind that was still impressive.

      My question to you is how did you get the scholarships? Where they given for you academic abilities, sports or did you have to win them through competition?

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