Brian Canes sent me a question via Twitter and I couldn't quite answer it in 140 characters, so I decided to do a blog post about it since I thought it illustrated some important points. His question was:
Q.
How do you calculate a % funded for a 529 account given an account balance and projected college tuition assuming no future contributions?
A.
In essence, Brian is asking “Am I done saving for college?” It is entirely possible that he is, but in order to decide, we'll have to make a couple of key assumptions and do a little math.
How Do I Know If I am Done Saving for College in My 529 Plan?
In order to make this exercise a little more real, let's use my own personal situation and numbers.
Whitney Wants To Go To Brigham Young University
WCI columnist Whitney is in 8th grade but has been talking about attending BYU already since she was very small. The 2017-2018 cost of attendance at BYU is $18,430. That's a ridiculously inflated number for my daughter given tuition is only $5,460 and she's been well taught in how to be a cheapskate, but that's what we'll use. In order to keep things easy, we'll assume Whitney graduates in just four years, goes straight through, and that during school her 529 will have returns equal to cost of attendance inflation. She just started 8th grade, so she has 5 years left until she will need $18,430 * 4 = $73,720. We'll also assume that the entire cost is paid for out of Whitney's 529, which is most definitely NOT true.
So how much is in her 529? On the day I wrote this (back in August) there was $34,298.82.
Now we'll need to make two key assumptions. First, we'll need to make an assumption about investment returns for the next 5 years, and then we'll need to make an assumption about the rate of cost of attendance inflation over the next five years. I'm going to use 8% and 5%. If you don't like those numbers, use your own, but I think they're reasonable for our situation (aggressive 529 investing and a reasonable rate of tuition increases).
Calculating Whitney's 529 Plan % Funded
Now we'll plug those numbers into a financial calculator, or my preference, the Excel Future Value function.
Without additional contributions, over the next 5 years, at 8%, her 529 will grow to
=FV(8%,5,0,-34298.82) = $50,396.22
Meanwhile, the cost of attendance will grow to:
=FV(5%,5,0,-73720) = $94,087.48
So, Whitney's 529 is $50,396.22/$94,087.48 * 100 = 53.6% funded.
Maren Wants To Go To The University of Utah
Maren is 2 1/2 years younger than Whitney, about the same height, and in the 5th grade. They have been intense rivals from the time Whitney took scissors to Maren's arm during her infancy. When Maren found out Whitney wanted to go to BYU, she instantly decided she would spend her undergraduate years at the rival institution, the University of Utah. Let's repeat the exercise for her using the same assumptions.
Whitney near the summit of iconic Mt. Fuji, blissfully unaware of the pitiful state of her dramatically underfunded 529
University of Utah 2017-2018 Cost of Attendance: $23,444
Maren's 529 Account Balance: $34,318.63
Calculating Maren's 529 Plan % Funded
Without additional contributions, over the next 5 years, at 8%, her 529 will grow to:
=FV(8%,8,0,-34318.63) = $63,521.39
Meanwhile, the cost of attendance will grow from $23,444*4 = $93,776 to:
=FV(5%,8,0,-93776) = $138,549.86
So, Maren's 529 is $50,396.22/$94,087.48 * 100 = 45.8% funded. Perhaps surprising, given her younger age and equal 529 balance. Picking a more expensive school makes a big difference.
Whitney Wants To Go To Medical School
Whitney has also been talking about going to medical school. If we look at the total burden of her education for both undergraduate (again at BYU) and medical school (at the University of Utah), what percentage of her education is already funded?
Again, we'll make some simplifying assumptions. We'll assume Whitney goes straight through and that any invested 529 money keeps up with cost of attendance inflation from the time she starts undergraduate until the time she finishes med school.
The University of Utah School of Medicine Cost of Attendance for 2017-2018 is around $56,000 per year. Again, Whitney has $34,298.82 in the 529.
Calculating Whitney's 529 Plan % Funded to Include Medical School
Without additional contributions, over the next 5 years, at 8%, her 529 will grow to
=FV(8%,5,0,-34298.82) = $50,396.22
Meanwhile, over the next five years, the total cost of her education ($73,720 undergraduate + $224,000 medical = $297,720) will grow to:
=FV(5%,8,0,-297720) = $439,868.
Thus, her total educational cost is currently 11% funded.
Now, have I simplified things a lot? Absolutely. I only wanted big round numbers anyway and the truth of the matter is my simplifications pale in comparison to the assumptions. If you want the most accurate numbers possible, be sure to repeat the exercise each year with updated numbers and assumptions.
Let's Use More Realistic Assumptions Like Scholarships, Work, and Additional 529 Contributions
You can make it a lot more complex if you want to be super realistic. For instance, I have no intention of paying for all of Whitney's undergraduate education, much less her graduate education. I expect her to work and get scholarships to help pay for undergraduate, and take out a few loans to pay for medical school. I also expect to make some more contributions to her 529.
Let's say I invest another $4K per year for 5 years into that 529. Let's also assume she gets a half tuition scholarship and keeps it for four years. And earns $8000 per year by working during the summers and the school year. And lives cheaply and so cuts another $2K of the cost of attendance.
How Much Should Be Left in Her 529 After Completing Her Undergraduate?
First, let's calculate what's in there when she starts undergraduate.
=FV(8%,5,-4000,-34298.82,1) = $75,739.94
Now, let's decrease the cost of attendance by $8,000 per year for her work, $2,000 per year for her frugal living, and $3,000 per year for her scholarship, or $13,000 per year. That adds up to $52,000. $94,087.48 – $52,000 = $42,087.48
$75,739.94 – $42,087.48 = $23,652
That will probably cover the first semester's tuition for medical school. Now I could also add in amounts that I intend to cash flow and additional amounts I may contribute to the 529 above and beyond the tax-deductible $4K per year I've been putting in there and maybe we could get her into her 2nd or even 3rd year of medical school before she has to start taking out loans. But if my intent were to completely pay for 8 years of education, you can see that I would need to be putting a ton of money into that 529 for each of the next five years. And these schools are cheap compared to most. [Update prior to publication: Figures in this post are all a little low given some additional contributions made last year and this year and outstanding market returns since this post was written months ago.]
Well, this post ran 1000 words. No wonder I couldn't fit it into a tweet.
What do you think? Are you done saving for your kids' college? Why or why not? How close are you to funding it completely? Comment below!
This is a tough subject because the question “Are you done saving for your kids’ college” has implications. Are you going to save for a full ride? Are you aiming to save for half the cost? How much should your kid contribute through work/scholarships/etc.
I received a full ride in undergrad through winning one of the two full academic scholarships offerred by my undergrad. I also won a scholarship in medical school, but still came out (with the addition of my wife’s grad school loans) with $180,000 after fellowship. So, I know the feeling of having no loans following undergrad compared to the significant debt we are now dealing with following med/grad school.
I do really hope to put a pretty big dent in my kids education and for them to not have to worry about debt following college, but I am also putting $1100 total each month into my kids’ future college education (split amongst our three kids’ 529’s). If I, instead, put that money towards our loans we would have it paid off five months sooner.
I feel like this question falls into the same trap of “Should I invest or pay down my loans?” It also begs the question of “How much of my kids’ education should I pay for and how much should they contribute?” Both of those can be challenging questions to answer and will likely vary for each person.
To answer question, I hope to have $150,000 in each of my kids 529’s when all is said and done. They are much younger, and I am sure school will cost much more when they get there (ages 7, 4, and 17 months).
I hope by the time your kids are ready for college that someone, somewhere, somehow addresses the Great American Rip Off that is leading parents to spend $150,000 on a child’s college enrollment. That’s just too much money and there really has to be a better way. This gripe is relevant to the post because, as the commenter above noted, he is choosing between adding money to kids’ college funds vs. paying off his own debts from his medical education.
I agree that the sky-rocketing costs of college are ridiculous. I am also a big fan of trade schools since they actually teach you the skills you need for a particular job unlike many undergraduate majors, which (once completed) are never used again.
Fortunately, I’ll have my 180k in debt paid off two years after training. So, I am still well on my way to financial success, but I did decide to invest in my kids now instead of paying down all my debt first.
This is a tough one. It is hard to reasonably predict all of the variables that far ahead. The doctors I know put a lot into 529 since they value education. They know how much it helped them. Also with state tax credits and the ability to transfer account names, the downside to over-funding isn’t too bad. Underfunding could be bad. Most don’t want their kids to start out with a loan burden if possible.
Doctors used to put about 100K per kid into 529, now I more commonly hear 150K or higher per kid. Staggering, but doable. That’s where I’m at currently. From now on I will probably just do the minimum contribution to get my state’s tax credit (different based on your state).
i Got full scholarships for all my education and my wife’s parents paid for her undergrad and she got a scholarship for her grad work. Staring life with zero debt was a great blessing for us. That’s what we intend to do for our kids. As high income professionals, we can afford to do it and I feel like it’s our duty to start them off well. We invested in our states 529 plan that gives a generous tax credit from the day they got a social security number andweareset to fund their education in full when they start ina few years. If they got scholarships or chose to go to a state school, which they are likely given they are good students and great all round kids, we can transfer the money to any future grand kids.
The way I read the post, you are assuming that you are going to sell out and keep the money in cash at the start of Whitney’s education. Would you consider keeping the money invested and paying the tuition bill in “real time.” Each semester you would sell your index fund for the semester amount, and keep the rest invested. Granted, you could have a year like 2009 or 1933. However, the probability is in your favor that you will wind up well ahead. Also, with four little ones, even it were a severely down year you are not selling the entire portfolio. The strategy is even safer if Whitney goes to medical school. That is, you are selling over 16 periods (2 semesters for 8 years). There is a really good course that is partly free on Coursera that covers all kinds of calculations like this. Here is the link. It is amazing: https://www.coursera.org/specializations/valuation-investment
Another way I conceptualize this is that 150k target for 4 kids comes to 600k. Selling off bits of tuition money from your index fund gradually in real time (with cash coming in and out sometimes at the same time) could be a winning strategy over long periods of time. The flexibility to transfer 529 money from Whitney to Maren and vice versa helps with this. For example, a 21 year today, with markets at the world record high, may be over funded. Left over money can be transferred to an 11 year old. Had the 21 year old been “all cash” for 3 years, he would have missed out on a great bull market. Obviously, the sequence of returns is important here. But, investing is a series of probabilities and with time on your side staying fully invested could be considered a reasonable strategy—especially for a parent with a stable job and income that can weather a recession or depression. To be fair, the thought experiment for a 21 year today would need to be run for the tuition payment on Jan 1, 2009. You would have to sell funds to cut a check for 20k. Still though, if you were contributing for 21 years (with the period ending on Jan 1 2009) and dollar cost averaging it would probably still turn out ok. That is because you would have sold some of the index fund 3 years earlier to cover his first semester.
Not sure where you got the idea that I would go to cash the day she turned 18. I plan to leave it invested the entire time. If the market tanks I cash flow more and use that money for a later kid.
Also depends on cash flow. Given we have been paying over 20K annually for grades K-6 and over 50K annually for grades 8-12, “saving” was unnecessary since college will be cheaper. But we did it because the 529 had tax advantages for a pot of money should we need it. we also hedged with splitting money into 529 and an UTMA for flexibility. It worked out because kid got a scholarship so the 529 is overfunded and no other kids to use it on. Already did 529s for niece/nephew. decision now whether to keep the 529 growing for a grandkid, or pull it out without penalty and just call it a day.
Pull it out with a penalty? do you mean Bean1970? I vote for your future grandkids. How awesome would that legacy be?
there is no penalty for scholarship to pull it out.
Assuming one child in the family, and assuming 7th grade is free, (“paying over 20K annually for grades K-6 and over 50K annually for grades 8-12”), one wonders if it would have been better to just buy a house that was $390,000 more expensive to get into a public school district that has good schools instead of paying for private school? If you have two kids instead of one, you are talking $780,000 ! Imagine the neighborhood with good public schools that would get you into? I went to public schools and my district as well as the surrounding districts were always USA Top 100 districts the whole time I was growing up. You don’t have to look too hard to find those districts.
Yes. 7th grade was “free” . we moved to go to the private school cross country and did a year of homeschool and extra traveling. Public schools cannot accommodate kids who miss a lot of school. our kid missed 43 days of school his junior year. not as much this year. think athletes on the highest level.
I think the BYU cost of attendance link should be: https://financialaid.byu.edu/cost-attendance.
Original link doesn’t work.
FYI
One of the downsides of writing stuff so far in advance. Thanks for the correction.
Once you have built up a decent “base” of funding, I think paying for college can be looked at as a fluid endeavor. Son #1 is a college sophomore at an in-state school. We pull from the 529 once each semester to cover tuition, and monthly to cover off-campus rent/utilities. Food & other living expenses are cash-flowed by us. He pays for books. (He rents, so we are talking around $200/semester.) We started with a total of $101k in the combined accounts for our 3 kids. Due to a strong market and some additional (but inconsistent) contributions (always <$1300/mo) over the last 17 months, the 529 is down only $3k – in spite of paying for 4 semesters of tuition, 1 summer course, 2 semesters of living in the dorm and 6 months (so far) of living off-campus. So, we are going to pull back on our 529 contribution over the next 6 months and pay extra on the mortgage. Son #2 leaves for college this fall. God-willing, there should be plenty of money to cover costs for both kids next year. However…son #1 is contemplating a co-op position (so, no tuition for the fall semester and possibly no rent, etc if the position is in our hometown.) Then, we would only need to cover college costs for son #2. If the market stays strong, that will give the fund even more time to grow – espeically when we go back to contributing after the 6 months. By the time sone #3 is ready for school (4 more years), other factors may have changed. For example, we hope to have the house paid off. That means we could almost cash flow his college years. Whatever is left in the 529 from the other two would cover the difference. If son #1 and/or #2 take more than 4 years to graduate, then we will once again readjust our planning.
See what I mean about the situation being fluid? Lots of "ifs."
The comments above are helpful to give a broader scenario for this question. We are 18 months away from our oldest starting college. My husband’s parents fully funded his education and we started funding a UGMA and then 529 from the beginning. Not knowing what our children would decide (public vs private) we contributed what we thought would get us to $150k for the oldest, $160k for the next who is 3 1/2 years away now, and $180k for the youngest (5th grade). The stock market has been a great wind in our sails in the past decade, and we are in age based diversification with our state’s plan. We will surpass these goals, but I still contribute the monthly amount we have done to be safe. Our middle child actually has more than our oldest because he was a little more aggressive at the right time. As one of the other posters also put in the equation, we already pay $10k annually for each of our high schoolers to attend private high school. I haven’t decided if we will continue to pay for college with $10k out of pocket so the 529 can continue to grow for grandchildren, or not. Either way, our oldest wants to go to an instate public university and has a good chance at some academic scholarships. I consider the 529 a potential inheritance to grandchildren.
This month, we crossed an important milestone in our 529 Plans for our two boys, age 7 & 9. I consider them fully funded at just over $100,000 each.
There are so many variables: state versus private schools, scholarships, graduate school, etc… but I think we’ll continue to fund them up to the amount that we receive a state tax deduction as long as I’m earning enough to make the deduction meaningful.
I could see us using any leftover money for other relatives. Future grandkids, even.
Cheers!
-PoF
$100K each was my number too. Just wrote the last tuition check and both accounts are empty. Kids not married and no near term prospects for grandkids, but I am thinking about starting up the donations again to their accounts (with a plan to transfer them at an appropriate time) to take advantage of compounding for those yet to be born grandkids. This has been on my mind since the rule change this year that allows 529s for elementary and secondary education.
100k will be sweet when they start. Depending on what it’s invested in that could be pushing 200k when they start.
I plan on having 100k for my oldest when he starts school, not adjusted for inflation. Then each of the other ones will have the 100k adjusted for tuition inflation when they get there.
I have one grandchild, 3 yo. I am building a nest egg for him, decided to fund a ROTH IRA instead of a 529 because he will have enough 529 from his parents and other set of grandparents. I currently have 35K in his ROTH, planning to get it up to 100K through conversions in the next 24 months. So my goal is to have 100K by the time he is 5 yo. and let time work it’s magic. Assuming no more additions after that as I am retired FIRE. ROTH is invested in 100% equity, moderately aggressive, with Fidelity. —- interested in hearing what you (and fellow WCI) think of this approach. Open to suggestions. Thank you.
Ummmm….you know Roth IRAs can only be funded with earned income, right? What has a 3 yo done that was worth $100K? Or is it your Roth IRA that you plan to leave him?
My ROTH.
Funding through back door Roth conversions
Glad to hear it. That sounded like audit city.
We targeted 4 fully-funded years at a MN state school (or state with reciprocity) and chose UMN Twin Cities as the benchmark, as its the most expensive of the in-state schools. Total cost of attendance is $27,348 and each of our 14 year old twins has 141K in their 529’s — so we consider ourselves fully funded and done. They know what they have, and have been told that they will pay the difference if they go to a more expensive school.
I also plan on fully funding in-state tuition and having kids be responsible for the difference if they want to go somewhere more expensive (I live in VA which has really great state schools). I will need to start doing this math- have one kid (so far) who is almost 2 and has $18k right now
Correct me if I am wrong, but starting in 2018, we can now put $15k/yr (per individual) as they raised the gift limit from 14k to 15k, correct?
That’s correct. Again an issue when you wait 6 months between writing something and publishing it.
Isn’t there a federal tax credit up to $3,000 for college expenses for a dependent? If so, should you put a little less money in a 529 and pay some college expenses out of pocket to qualify for the credit?
Ha ha, I love that you think most readers of this blog will qualify for those. Sorry, phased out.
https://www.thebalance.com/tuition-and-fees-deduction-3193024
I did some similar analysis, but chose to use present value instead of future value. Especially when your kids are young like mine, the cost of college looks pretty steep after factoring in inflation. If your investment returns can outpace inflation of cost of attendance (which you should be able to with a 10+ year time horizon), the present value cost appears to be more manageable. It’s all optics, but sometimes that matters.
Additionally, you can present value your future savings potential for college expenses too, which reduces any funding gap further. The end result is a % to fully funded number just like your future value methodology, but allows you to take into account future savings into account too.
You could be right, it may be better to do a present value analysis instead of a future value analysis. But probably most important- do SOME analysis of some kind!
I think the annual review is important as it takes a little of the guessing out of it.
January is always busy with money moving and numbers so I do it then. fill my 401k,HSA and Roth and see what the monthly 529 contribution should be. With the returns we have had the last few years I’ve been able to drop the monthly payment each year for a while now. Makes for a tight month doing it all in January, but then I don’t have to worry about it the rest of the year.
For your information, listed below are the current estimated costs for private undergraduate and medical school education.
The current estimate for a 4 year undergraduate education at a top ranked private university like Stanford or Harvard is approximately $70,000/year, or close to $300,000 for 4 years.
The current estimate for a 4 year medical school education at a top ranked private university like Stanford or Harvard is approximately $95,000/year, or close to $400,000 for 4 years.
You can probably expect a 3-4% increase per year in these current costs.
Those numbers are good for a dose of reality, but my experience was that I had to pay about 1/2 to 2/3 after scholarships and tuition grants. And of course the kids could always go to a state school. For undergrads in technical majors that can be a better choice. Anyway, I saved $100K for each of my two, geared towards the 2012-2018 timeframe. If I had kids born today and I were planning my contributions I would probably be looking at a goal of $200K each. Again, just me, but I never planned to cover grad or professional school.
Sounds like a good reason to choose a cheaper than average school.
Sure, if the kid gets into Stanford, Harvard, Chicago or Princeton, then it makes sense to foot the bill. The lowest ranked graduate from Harvard each year is allowed to put “Harvard graduate” on his resume for the rest of his life.
However, it doesn’t necessarily make sense to pay full freight for an English or “critical studies” major from Carleton or Smith instead of an engineering major from Iowa State or UC Davis.
Now, there is a whole other debate: is a brand name worth it? It may depend on the field. I run the programs at a national R&D lab, and I can tell you that Harvard or Stanford would get no more credit in a hiring interview than a state engineering school. MIT or Cal Tech would have some cache sure, but so would any number of state schools with good programs. Our top hiring sources are the three premier state schools in the immediate tri-state geographic area. Bottom line: the candidates from brand schools still have to compete in the interviews with new grads that are just as good and know just as much. Lowest kid from Harvard would not even get in the door for an interview.
Depends on the field. In my area, you are nothing if you degree is not from a brand name college/university.
Over half of kids take more than 4 years to complete a 4 year degree. The ability to change major to something the kid will be happy doing for 30 years is a big one that parents may want to be able to fund.
http://college.usatoday.com/2015/12/16/breaking-the-4-year-myth-why-students-are-taking-longer-to-graduate/
A parent can also tell them the gravy train stops a four years, so figure out a way to graduate on time. My rule was: any major you want as long as you take another one I think will be employable. The number one skill my artist daughter took from college was teaching herself to code.
I’m in line with many docs. Well put in 10K until they are 10. If we can afford more later we might. I want them to have motivation for scholarships. They will Work and take loans out to see what’s that is like. We did and feel like it made us better with money.
The variables are too many to give a %funded this far out (14 years) but knowing we won’t 100% Fund, there is wiggle room.
We live in nm. Can a non-working spider contribute to 529? If so, would there be any tax benefit to that? We’re planning on funding 15k this yr for each of our 4 kids. We’d like to contribute more if it would help with my husband’s nm state tax.
Anyone can contribute to a 529, including spiders. The spider may be able to get a state tax deduction for the contribution just like the spider’s working spouse. Check NM law to see what the deduction is. According to this:
https://www.thebalance.com/tax-benefits-of-new-mexico-s-529-college-savings-plan-795335
The deduction is unlimited. So the spider could also put $15K in and the couple, as long as they’re filing MFJ, could take a $30K NM deduction.
Oops, I meant non-working spouse.
How’s this for the tweets:
Keep funding those #529s, you’re nowhere near done, dude! Or…
Have $100K? If not, keep going… or cash flow it if you’re not FIREing. Or…
Education too inflated, kids should have #skininthegame, save enough, not more!
BTW, all those who are about skin in the game, is there a reason those kids should know you’ve fully funded the accounts? Just tell them you expect them to get scholarships, work etc and then when you turn around and pay the rest of the bill…icing!
I’ve got a family member using that approach. His kids know I have a tiny 529 for them, but they don’t know about the big one he has.
I find it interesting everyone has all these grandiose plans for paying their children’s college expense. My plan involves a time tested method; bribery. In exchange for an undergraduate full ride scholarship for my 12-year old son, his ‘price’ is a 45 day dry aged Kobe bone-in ribeye at a restaurant in NYC. I’m thinking a shopping spree at Justice or slim supplies will work for my 10-year old daughter.
More seriously, we have put $500/month towards ours kids 529 since they were born. They both go to public schools that are good and we live relatively close a major state university, so they could potentially live at home while attending undergrad. I hope/expect they will both have enough to get through undergrad. If they get a scholarship, stay close to home, etc., should have some funds left over to pursue an ‘advanced’ degree.
For now, I’m content to stuff as much money now as we can into my 401k, 457, HSA, and our Roth IRAs, about $72k of annual available space, which is more than adequate for us. By the time our daughter is of college age, I’ll be close to retirement and should be able to either just cash flow her college expenses or pay for them from my retirement accounts. I see little to no disadvantage to doing this rather than funding a separate 529 since we’re probably not going to be able to max out all of our tax-advantaged space going forward anyway.
This whole saving thing for college sounds nice. 🙂 Our oldest started college as I started my 3rd year as an attending, so we are now paying tuition, room & board at State U while I pay down my own med school loans. Multigenerational school loan payments!–well, actually, she won’t have loans. It has put a damper on our savings rate, but such is life. Thankfully in-state tuition is only just shy of 7k per year, and our state offers a deduction from state taxes. We will save for our youngest kiddos, but only one has started kindergarten, yet.
I had not realised we could avoid the 10% penalty in case of scholarships so we missed out on a chance to increase our retirement stash tax free/ money for grad school if needed. We were funding 529s for our 2 until oldest got tuition plus scholarship and we thought we might just be saving for grandkids or distant relatives, so we used up both kids’ 529s for living expenses for the older and saved for the younger in our regular investments. Stopped funding oldest at BS- she got Univ. funding for her master’s tuition and living expenses, and if she hadn’t (science, not medicine) we would have tried to convince her maybe she isn’t properly valued in that field of study.
We didn’t use Dad’s GI bill for oldest, either. I figured getting $0 tuition and $17K a year to cover only $10K in living expenses was a bad deal if we could later use it for $25K toward tuition plus $25K for other costs if the youngest went somewhere expensive (most every other state gets higher living and instate tuition expenses from the GI bill than ours does) without scholarships. If she also only costs us $10K/year due to scholarships we’ll save the GI bill in case one wants to go to grad school, and eventually send me or husband back to school for our underwater basket weaving PhD if nothing else. I’ll gamble paying $80-$100K for 2 to be educated (but not 300K total if youngest pays full rate even at in-state tuition school) for the chance to save over $200K on any possible graduate degree. And if we ever live closer to a decent Uni one of us parents will be happy to get a law degree especially if grades are no issue.
Just heard last night youngest got into honors college at out of state college she prefers to our in state; unlikely she’ll get free tuition at this one so we’ll probably use the GI bill for it, and still waiting on even more expensive places she should rank over this place. If she ends up wanting law school we’ll try to talk her out of it…
Oldest about to want help buying a house for investment purposes; we can tell younger one any grad school cost is HER early inheritance for the same amount but we feel our parental duty ends with a bachelor’s degree (at any price; I got a cheap Ivy degree with financial aid so I won’t deny that to my kids just because we’re too well off for them to qualify for similar financial aid).
However I have long disagreed with my husband on the matter of them deserving a reward from us for scholarships. I feel my wunderkinds got their academic prowess mostly from genetics, less from hard work. They don’t seem to study any harder than I did and if they get bad grades it’d be neglectful laziness that caused that, not lack of incentive. If I had an average kid who worked his tail off to succeed I might rethink that and I don’t feel my kids should sacrifice fun or sleep for a scholarship, but I also don’t want either thinking they’ll have more pocket money if they go to state on scholarship than Ivy without one. The oldest was a steady exceller with a good social life- drinks more than I like but never does anything a doctor’s kid should know is dangerous so far as I know (bar extreme sports like WCI enjoys- I think she’ll quit skydiving as I’ve asked her to once/if she is a mother someday)- and if the younger one flunks out partying too hard we’ll be pretty surprised (usually apparent in high school in our community) and we’ll quit funding her away from home (and might put her in a psych ward if she alters that drastically from her current trajectory).
What do others feel about a reward for scholarship? Maybe if my girls were more different in academic ability/ effort I’d think differently?
Haven’t been skydiving yet. Met a guy at the backcountry ski store the other day who was knocked out when his chute deployed and hit the ground unconconscious though.