NewlyRetired
Footballguy
Are subsidized loans what I use to call "Guaranteed Student Loans" when I was a kid or are they something different/more now a days?
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PBS Frontline : The Retirement Gamble, sorta Must See (1 Viewer)
- Thread starter Smack Tripper
- Start date
What is she going to be studying? Is there grad school on the horizon? I just can't wrap my head around spending so much on 4 years of undergrad.
Gawain
Footballguy
Mine are Stafford Subsidized Direct Loans. Fairly sure that's still what they're called.
FUBAR
Footballguy
ghostguy123
Footballguy
Ok thanks. I wanted to make sure I had those in the right order.
I still currently do not have any sort of Roth investments. Once I get through my 90 day probationary period for my new job (knock on wood, ya never know) I will be setting up my investments for the start of 2017. For the moment I am maxing out the 403b and that is it as far as investments. Also stashing a little in savings.
If they keep me after the 90 days I get a 3k sign on bonus, so maybe I could use that and some saving to max out the Roth for 2016. If I do go with the HSA, ideally I would like to max the 403b, max the HSA, and max the Roth. I am just not sure if I can do ALL of that and keep up with all our bills with the rest of the take home money.
ghostguy123
Footballguy
Also just found out my new job has a 4 dollar an hour shift differential for working night shift. Old job was 1 dollar. A nice perk I wasn't even aware of since I will likely work quite a few night shifts throughout the year. 
NewlyRetired
Footballguy
She wants do some sort of combination of animation and creative writing. Will either end up in some sort of publishing field or a job as a story border type. My wife and I are engineers so we can wrap our head around these things but we know we can't force her into something she is going to hate.
The costs seems relatively fixed for private schools these days. No matter what private school we visit in New England, be it Ivy league or something lesser, they all seem to come in right around $63k for next year.
Gawain
Footballguy
If you and your wife are retired, is there any way to game your distributions to make your FAFSA show a gross household income under 60K? The 529 is going to get included, so you can't pull that money out, but the colleges in NE often come through big on need if HH income is under 60K.
ETA--Sure a U Mass school isn't an option? The 529 should cover that and help with grad school, which she's going to need at some point.
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NewlyRetired
Footballguy
we have tried to visit some of the bigger public schools, but she hated them. She wants a small campus, which in NE typically means $. We have the money so I don't really care too much, I just want her to find some where she likes.
My wife has filled out the sample forms some schools give you online for financial aid but I have not watched what she does. I do know our income is very low but that our non retirement means (including our fully paid off house) tend to be high which is why we are not expecting any thing meaningful. If we get anything, we are just going to consider it gravy.
NutterButter
Footballguy
Instinctive
Footballguy
Ok team: I fully funded a new Roth IRA (for year 2016) with Vanguard yesterday. I am now deciding on allocations. Let's assume I know very little about this.
I'm planning to just go 4500 in a Vanguard total stock index and 1000 in a Vanguard total bond index. (I'm in my early 20s, figure this gives me a good balance)
Do those exist? Are they easy to pick out? I plan on ETF...is there a reason to go Mutual Funds? ETFs, as I understand, are typically lower expense ratio - which is basically how I plan to choose them.
Any any helpful advice, thoughts, or suggestions?
I'm planning to just go 4500 in a Vanguard total stock index and 1000 in a Vanguard total bond index. (I'm in my early 20s, figure this gives me a good balance)
Do those exist? Are they easy to pick out? I plan on ETF...is there a reason to go Mutual Funds? ETFs, as I understand, are typically lower expense ratio - which is basically how I plan to choose them.
Any any helpful advice, thoughts, or suggestions?
Dentist
***Official FBG Dentist***
I agree... it's one of those things where I don't hate contacts quite enough to pursue it tho
wilked
Footballguy
Well, you gotta spend it on something I suppose.
For me, $265,000 might represent 6-10 years worth of savings so I would be treating it with a bit more scrutiny, but I hope to one day be at the point where that amount of $$ matters a bit less!
Niles Standish
Footballguy
2 and 3 depend on your situation. If you are in a high tax bracket then your 2 and 3 are not in the correct order IMO. If you are a low tax bracket then yes this is correct. HSA depends on your financial situation too. Honestly anyone who gives you a blanket list like this doesn't know what they're talking about.
If you're in the top tax bracket today and don't think you're going to be in the top tax bracket when you're retired you'd be dumb to max your roth before maxing your 403b.
NewlyRetired
Footballguy
We have been saving for her college since she was in my wifes belly
. But we never considered a dime of the money in the 529 plan ours in any way in our assests or in any of our financial models.
So instead of it looking like we are going to be spending $265kish of our assests, it is easier to think of it as spending closer to $80k which is the difference we will have to make up if she does not receive any grants or scholarships. I think there is a better than 50% chance she will receive some decent scholarship money, so even that $80k will hopefully be less. Keeping my fingers crossed.
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Niles Standish
Footballguy
I've done some research on both. I think betterment is a better idea since Schwab keeps ~7% of your portfolio in cash.
Pretend you earn 7% return and have $100,000. With betterment you are going to make 7K in a year and pay 250 in fees. Meaning you're up 6750.
With Schwab you're going to make 6510 (93K x 1.07). As the interest you earn increases you do even better with betterment. That's using the .25% fee for betterment when at 100K you actually pay .15%. But I want to try and be as fair to Schwab as I can. And most of us are going to start below 100K and at the .25% fee.
This is before tax loss harvesting. So assuming you can keep up a 7% rate of return over the long haul you'll do quite a bit better with betterment.
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Tom Hagen
Footballguy
I think the answer to the first questions depends on where the non 529 money is coming from. If it is going to come from a retirement account or generate a significant capital gain, you will want to see how much taxable income you can add without losing the American Opportunity tax credit or pushing you into a higher bracket.
Normally the 529 distribution can be sent to either the account owner (you) or the beneficiary (your daughter). I'm not sure if they will pay the school directly. Whoever receives the money will receive a 1099-Q at the end of the year. Fun fact about 1099-Q, if the money is used for qualified expenses it does not get reported anywhere on your tax return so the IRS knows you received a distribution but has no way to tell if you used it all for education or just forgot to report it.
Unless her plan is to get into the top 1%, something is seriously wrong with this picture. Just invest the $180k for her and have her go to a cheaper college. Within 20 years she will have over a million in the bank if she just gets the average S&P yearly return. She won't even have to work after 45 if she adds to it during her 25 years working. I mean, at 45, she will be bringing in over to 200k for doing nothing.
NewlyRetired
Footballguy
Thanks for the info.
The non 529 plan will be coming from non retirement assets/vehicles.
FUBAR
Footballguy
I happen to agree but there are benefits to maintaining a more balanced approach. And it really depends when you want to use the money, not just age (although age is usually a good guide).
If you want to make it simple and like ETFs, just buy VTI - Vanguard Total Index although I'd probably split it something like 70% VTI, 30% VEU - Vanguard All-World ex-US
NewlyRetired
Footballguy
Does anyone have any recommendations for sources I can reference to start to educate myself on college grants that fall outside of the school merit's or financial aid program?
I have read that there are many smaller grants that kids can apply for that can help out a bit financially.
Have any of you guys who have been through this process used these types of grants for your kids?
I have read that there are many smaller grants that kids can apply for that can help out a bit financially.
Have any of you guys who have been through this process used these types of grants for your kids?
Some examples of places I got grants from to give you an idea: Local church attended, high school athletics booster club, local social club, lawyer's office essay contest, and county alumni club of college I attended
FUBAR
Footballguy
I was just here earlier today (use your own state, I'm in Alabama) or https://www.scholarships.com/, there are other sites but these are a good start.
Bull Dozier
Footballguy
Step daughter is going into her freshman year. This is where we got most of the non school grants. She was also in NHS which gave her some leads on some other grants.
Reading Newlyretired situation makes me feel fantastic about her college situation. Assuming she graduates on time, four years at a public institution. She'll probably end up with about $35,000 in loans. A small percentage paid for in grants, a small amount of 529 contributions, and her kicking butt working all summer and during the school year to pay for the rest.
Yeah. I saw a pricetag that high for private schools up north and knew I was going to stay in state and go the public route. Since college was all on me, I had to shop around and work to get grants/better scholarships. It taught me a lot of about money...
NutterButter
Footballguy
Even a "cheap" college is going to cost close to 100k once you factor in room and board.
wilked
Footballguy
This is not correct, and is what these colleges hope you think.NutterButter said:
Here's state schools and tuition
http://www.usnews.com/education/best-colleges/paying-for-college/articles/2014/12/18/where-to-find-the-highest-and-lowest-in-state-tuition-in-each-state
or another
https://trends.collegeboard.org/college-pricing/figures-tables/2015-16-state-tuition-and-fees-public-four-year-institutions-state-and-five-year-percentage
I figure for 4 years you are into it for $30-60K tuition plus fees, depending on which you choose.
Most uni's want you on campus that first year, so add another $10K all in for that year. Past the first year the student can (and should) live offsite and cut costs in half
I would say you are more like $50-80K for state schools. With some focus you can stay close to that $50K number. If you are even smarter your student goes to CommCollege for two years, and now you can cut the costs down to $30K
NutterButter
Footballguy
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Dentist
***Official FBG Dentist***
This I disagree with.
Maybe the community colleges are vastly different in different parts of the country. But here, every time I see a parent or kid say they are going to do this... it's always with the intent to goto a 4 year school and get a degree... but this almost never happens.
You're not in a good "dialed in" academic environment with liked minded kids shooting for a good degree in a comm. college setting. It's setting yourself up to fail.
The price of a "real" college/university is worth it in almost all cases. If you're not ready for real school, hit a trade program or just work.
wilked
Footballguy
As I noted, room and board only typically matters the first year when you are required to live on campus. After that it is time to get a 4 BR craphole and pay $400/month and get that college experience you are talking about, figure out how to eat on another $200-300 / month. None of my estimate (other than perhaps the community college for two years) assumes living at home.
Quite the strawman with the living at 50 and at home though, hard to argue against that!
Quite the strawman with the living at 50 and at home though, hard to argue against that!
NewlyRetired
Footballguy
here at Umass you still pay plenty when you add every thing up as an instate student
Tuition: 14.5k
Room: 6k
Meals: 5.3k
Books: 1k
wilked
Footballguy
How many data points you have in your study?
I knew a few kids that did this in a top engineering school I went, and they were all well accomplished and have gone on to great things. We are coming at it from two perspectives, but it's actually one of the few 'good deals' left for college. You can get great teaching at CC, smaller classes, much cheaper. Thinking back to college, sitting in a huge lecture hall for freshman Physics and Chemistry was not the times I remember really being challenged or inspired
FUBAR
Footballguy
It's a risk that the kid won't transfer or gets caught up in life outside of college which impacts a decision not to graduate from a better school, but for some kids it's a wise move. Like most things, it's up to the individual. Right now, if I were to guess, I'd guess my 13yo does the community college routine first then moves on to Bama or another school. (obviously it's too early to know what he'll do)
I think that's a tad low (I paid almost double that 20 years ago - but then I actually had some money), but if you're living in a true craphole maybe it's right.
SouthJersey
Footballguy
Agree. The better move is to go to a good 4-year college, but have your kid take a couple classes over the summer at your community college and transfer the credits. When I was in college the kids who went to our community college were 90+% the bozos who barely got through high school.
wilked
Footballguy
My wife went to UMass as well. The thing is, off-campus living is cheap. You shouldn't take that $11.3K and multiply by four, it really only applies when you are 'forced' to live on campus. You can easily cut that in half
Here's your apt for example http://westernmass.craigslist.org/sub/5721959551.html (granted, you would have to live with a Bernie supporter but you are in Western Mass). Your "Room" budget just got chopped in half
xulf
Footballguy
I went to Ohio State which is lecture hall city for many classes (or at least the lecture part of the classes). I also went to a CC to get the additional credit hours to sit for the CPA exam, so I have seen both sides of this. The quality of student at OSU was far above that at the CC. Sure, there are standouts at CC's and slackers at big schools, but on average the students were much more engaged at the larger schools. Try having a classroom discussion, when there are only 8 kids in the class, and you were the only one who did the reading. Makes for a pretty bad experience.
Dentist
***Official FBG Dentist***
A few hundred, I'd say. Again, maybe the comm. colleges here suck and are great in your area.
But kid after kid says they are going to comm. college. I see them years later, and 95+% of them never made it to that back 2 years to get a degree... they ended up just working and then getting promoted to some dead end job at "insert big box store here" and are condemned to a 30K/yr existence.
Here, comm. college is free for two years... so with the "get what you pay for" component.. maybe it's the comm. college as much as the student... that part I don't know.
No question sitting in freshman chem and physics in a lecture hall was terrible. But the value came when I was studying/interacting with those students who were dialed in to pass the class to move on to dental school/med school/pharm school, etc.
NewlyRetired
Footballguy
There is no one right decision for every kid. You just need to do your best with your specific child needs, assuming you want to and have the means to help.
What works for one kid might be a disaster for another and vice versa.
What works for one kid might be a disaster for another and vice versa.
wilked
Footballguy
Let's first acknowledge that you did not track a few hundred students, and using terms like 95% is ridiculous.
Here's some actual stats
https://www.nsf.gov/nsb/sei/edTool/data/college-05.html
Looks like 1/4 or 1/5 transfer into 4 yr programs, which feels about right. For the motivated student I think saving $25K-40K or whatever it might be is a big win, but it would depend on the right community college and the right student
Putting the question of Community College aside, though, this was more about spending $100K or more as a 'requirement' for a 4 yr degree
FUBAR
Footballguy
not to mention the parties and social life are generally a lot better at the big schools than CC.
Niles Standish
Footballguy
So assuming you go the cheapest route on everything (but don't go to community college). We'll say 10K/year so 40K (since there are at least a few states SC/Bama/Illinois (I'm sure more since I didn't go through whole list) that you need about 10K for cheapest state school. Add another 35K room and board. That's 10K year 1 and an additional 700/month (36 months). Not to mention some states it's a whole lot harder to hit those numbers so I bet we'd have 20-25 states that this would be pretty close to the minimum you could do it (again assuming no community college). So 75K for state school. Honestly that's cheaper than I thought it was. If you do CC you can drop it to around 33K room/board + 20K (final 2 years) + 6000 ($100x60 credit hours). Where is my math wrong because I'm getting 60K at CC?
Count me in the camp that thinks it's insane to spend close to $300k (or even $200k) on a child's college. I think it's smarter to encourage them to stay in state and to possibly....gasp....work a little bit while in college.
Whatever money is left over would be very useful as a down payment on their first home.
Whatever money is left over would be very useful as a down payment on their first home.
NewlyRetired
Footballguy
I am trying. I know it is easy to criticize but every situation different. While I am more than happy to try and save some money, money is not a huge concern for us.
My daughter has some personal issues that we also have to deal with when thinking of what type of school she could survive at which is part of why we are looking at the quieter smaller schools near us.
The money is not our issue, the major she wants is. I come from a family of engineers (as does my wife) so I really only understand the math and science based majors. The fact that she wants to be a writer and/or editor is hard for me to wrap my head around in terms of what it means for job prospects some day.
But she is such a good writer (has won multiple awards in high school) and spends 99% of her free time either writing her own stories or editing others stories it is hard for me to crush something that she loves. She is going to try and get her first novella published next year.
Meal plans are one of the biggest scams of college IMO. They required freshman to have meal-plans if you lived on campus at South Carolina. I had enough credits to technically be a sophomore in the system, so I got out of that for the second semester and saved tons of money with sandwiches and Chunky's soup.
RUSF18
Footballguy
Was just joking on the "criticize" part...seems like you're doing everything you can for her and supporting her in what she wants to do. If she was taking on $265K in debt to pursue this I'm guessing it would be a different situation.
Nothing wrong with supporting her dream and encouraging it but also having a good discussion on taking other courses that could help with getting a job one day or pivot into another degree if she changes her mind. I'm sure a lot of people "make it" in writing but don't have the financial gains to show from it anywhere near immediately.
