How to fund college costs?

How to fund college costs?

College selection and cost is something that weighs heavy on my mind. When I was at the age to go to university I lived in a country where (unless you wanted to go to a private university) the government paid for tuition and most of us lived at home with mom and dad. I personally did not, so I worked full time while finishing my Bachelors, to afford rent and food. Today I am facing a completely different world when it comes to my son. As he begins his last year of high school I am left wondering if he wants to go to college. Asking him is pointless, he changes his mind every week. If he does though, how will I finance it? Or should I? My husband has a straight view on this matter, “we paid for the first 18 years, and college is his financial burden.” But I am not sure I agree.

 

I recently stumbled upon this awesome podcast called VoiceAmerica that talks about all aspects of college considerations, including applications, selection process and more importantly finance considerations.

 

My favorite two episodes are from March this year. One talks about financing options for all 4 years, the other about tax breaks and credits. (If you want to listen to the finance section of the podcasts only, fast forward to the 40th minute).

 

A quick snapshot of both:

 

Financing options:

  • Savings and 529 accounts
  • Cash flow (out of pocket)
  • Financing and loans

Tax credits:

State Level (varies by state):

  • Deductions
  • Credits

 Federal Level:

  • Tuition fee deduction
  • Lifetime learning credit
  • American Opportunity Credit

 This blog post is a great roll up on all these topics.

 

BUT… what if you don’t have any savings? Should I really break the bank and use my regular savings for my kid’s tuition? Should I take out personal loans to finance his education he might not even want to do? I am having a hard time justifying all these expenses mainly because he does not seem to care one way or another. I am dreading the experience many before me have made when their children have started college 3 or 4 times all in different subject and may never finish any of them.

 

I know the answer can only be found internally in our own family and working with our tax advisor… But I am curious to hear what others are doing or not doing when it comes to funding further education for themselves or their children? How do you overcome the ambiguity of it being a good or bad investment in your child's future?

4 REPLIES 4

Re: How to fund college costs?

Tagging @Jessica on this convo as I know she has a son entering his junior year and is probably considering these questions herself. 


------------------
Janice James - W+H Community Manager
BE WELL. BUILD WEALTH.™
Get started in the community.

My goal is to connect people who share a passion for staying well and building wealth to ensure healthy, comfortable futures. Let me know how I can help!

Re: How to fund college costs?

I read a couple of articles recently on ancillary topics, some of the facts that I wanted to share:

 

 

Education is important, but so is your safety in retirement. Consider the timeline differences between you making up for lost retirement contributions versus your child paying off student debt.

Re: How to fund college costs?

I feel that a child becomes a man at 18 and that any benefit of education at that point is for his benefit and hopefully his future wife and family, if he doesn't earn it himself he will not appreciate it or finish the education. and still you will have used up your savings for naught.  Once he/she understands that you are paying for this yourself and what the consequences are they will settle on a subject they love and complete it or they are jeopardizing their future not your retirement. 

Re: How to fund college costs?

Hi @daviscraig37 , this is an interesting standpoint and I very much agree. But how do you feel about ancillary costs? Ie: housing, food, utility bills etc. 

 

In my case I worked really hard to have a scholarship so I had no school fees, but I still had to live somewhere. (I was abroad from my family). So I worked part time but my mom still supported some of my costs of living. Granted I was frugal to make sure I did not abuse the support... but I could have never made it without parental help.