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insegnante
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| Posted: Feb 17 2008 at 11:26pm | IP Logged
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Any thoughts on letting a grandmother start a college fund for our kids? I want to research the pros and cons. Any good websites or books to consult?
Being an indecisive person who probably complicates many decisions unnecessarily, I'm always putting off the subject while thinking, well, who knows what our society and our world will be like by the time our kids would go to college and will it be the best use of those funds? (Now I think, "Wait, it's not even 20 years till our oldest would go to college... it's 12. Only twice as long as he's lived so far." Maybe this will be an agrarian society or something like that in 2020, but probably not.) Or will it be too easy for our kids if they have college funds just waiting for them? I really did not appreciate the opportunity I had with fully parentally-funded college, and did not graduate. But I doubt there's going to be $200,000 just waiting there for the taking if the kid wants simply to waste it on four years of expensive partying, or interesting-class-taking and major-changing and class-dropping like I did.
It also occurred to me that we are very unlikely to be anywhere near as able to help our grown children out as our parents have been. I hate the constant financial stress -- and that's knowing we have relatives who can and will gladly help if we ever hit a real crisis. I don't want this stress for our kids. And I hate that there are so many jobs my self-employed husband could do (or do with a little more training) that he is not invited to apply for just because he lacks a bachelor's degree there's no way he can pursue any time soon. I don't want that for our kids either, and it's quite possible that "learning a trade" that doesn't require college would be something of a waste of a particular child's gifts. We have at least two boys, so they are probably going to need to be able to support families financially someday while their wives care for children.
So maybe I should stop procrastinating and just gratefully accept Grandma's offer?
Thanks for any ideas.
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Theresa
mommy to three boys, 3/02, 8/04, and 9/10, and a girl, 8/08
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Barbara C.
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| Posted: Feb 18 2008 at 10:07am | IP Logged
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I see nothing wrong with allowing Grandma to set up a fund for your children's futures. I would definitely have your name put on the account so that you can regulate it now and later.
I would also discuss with the Grandmas other possible stipulations. For instance, the money may be used for a college or trade school, but if the child does not attend either they may receive it when they turn 22 to help pay for general life expenses (down payment on a house, for instance).
The fact of the matter is that the cost of college is probably going to go up before our kids reach it. And you don't have to make a big deal about the college fund with your kids in order to encourage them to reach for scholarships. Even with scholarships, there are often extra expenses to college (books, supplies, housing, food) which the funds could help cover. And again, you could tell them that they will receive whatever is leftover after they graduate.
My parents just recently set up a modest cd ($1000) for each of my kids. That wouldn't even pay for one semester of college. It doesn't really gather much interest, either, but maybe just the fact that it is open will encourage me to add a little money here and there. And if nothing else, it may just be a security deposit on their first apartment or pay for their car insurance some day. Every little bit can help when you finally take that plunge into the deep end of adulthood.
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Barbara
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MarilynW
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| Posted: Feb 18 2008 at 11:49am | IP Logged
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Section 529 plans. Virginia has VEST and VPEP plans. Grandparents can contribute and get a tax deduction if VA resident. Or Coverdell Savings Plans. I think having a fund would be helpful. I paid for all of undergrad and grad myself with scholarship - and I sure would have liked even a small fund 
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Marilyn
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PDyer
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| Posted: Feb 18 2008 at 12:14pm | IP Logged
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insegnante wrote:
| Being an indecisive person who probably complicates many decisions unnecessarily, |
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I'm the same way, and so are most of my siblings; hence my parents set up the accounts for the grandkids without asking for our input. All we had to do was say thank you! 
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Patty
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10 Bright Stars
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I would be very interested in the responses to this question too. As a mom of 8 kids, I have NO idea how we are going to pay for all of their schooling in the future. We had planned on "flipping" houses since my husband is very talented in that area, to help offset college costs, but with the current housing sales crash, that will not be a good option after all. I had thought about having all the girls become nurses. We have a community college nearby that has a good nursing program. I thought we could pay for their initial nursing program at the community college so they could become LPNs in two years time, and then if they wanted to go on to become an RN, they could pay for it or we could co-sign a loan or something. (I always wanted to be a nurse and I thought that would be a wonderful thing to have as an education if they all end up staying at home too.)
We have three boys going into school first though, and the first boy who is off to school in 5 years, wants to go to a private Catholic school at this point. I have no idea HOW we could ever afford that and WHY ARE private Catholic colleges so high? I mean, isn't that sort of discouraging large, Catholic families by having your tuition at $25K a year!!!!!! What single earning, large Catholic family can afford that???? I too am at a loss as to where to even start looking into scholarships etc. Does anyone know how to proceed with info./investigating this?? This might be a whole new topic.  It doesn't help matters that our DC are "stair-stepped" so we will be hit with a child entering college and needing tuition every two years!!! I sort of thought of it as a "far off" problem, but 5 years will be here before we know it.  We do live near a university that has somewhat resonable rates. I had considered having the children be day commuters, but I really do not agree with the atmosphere of this university as my husband and I used to attend there. I would be afraid the kids would lose their souls!! So, all very worrisome. Anyone who has been through this have any advice as to where to start???? &nb sp;
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Kim married to Bob (22y)
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insegnante
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| Posted: Feb 18 2008 at 4:23pm | IP Logged
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MarilynW wrote:
| Section 529 plans. Virginia has VEST and VPEP plans. Grandparents can contribute and get a tax deduction if VA resident. Or Coverdell Savings Plans. I think having a fund would be helpful. I paid for all of undergrad and grad myself with scholarship - and I sure would have liked even a small fund |
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Thanks for the info! Grandma is unfortunately not a VA resident, but she has much more ability (i.e., pretty much any) to contribute at this point than we do. I hope she will be around for a long time but because of her age and a serious cancer now in remission, I wonder what the issues might be if the college fund is in another state and there are no longer any contributors there for some time before it is to be used. I'll have to do some searching on the pros and cons of these specific plans and find out about the Coverdell option.
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Theresa
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stacykay
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Eight Wonders wrote:
... I had thought about having all the girls become nurses. We have a community college nearby that has a good nursing program. I thought we could pay for their initial nursing program at the community college so they could become LPNs in two years time, and then if they wanted to go on to become an RN, they could pay for it or we could co-sign a loan or something. (I always wanted to be a nurse and I thought that would be a wonderful thing to have as an education if they all end up staying at home too.)
We have three boys going into school first though, and the first boy who is off to school in 5 years, wants to go to a private Catholic school at this point. I have no idea HOW we could ever afford that and WHY ARE private Catholic colleges so high? I mean, isn't that sort of discouraging large, Catholic families by having your tuition at $25K a year!!!!!! What single earning, large Catholic family can afford that???? I too am at a loss as to where to even start looking into scholarships etc. Does anyone know how to proceed with info./investigating this?? This might be a whole new topic. It doesn't help matters that our DC are "stair-stepped" so we will be hit with a child entering college and needing tuition every two years!!! I sort of thought of it as a "far off" problem, but 5 years will be here before we know it. We do live near a university that has somewhat resonable rates. I had considered having the children be day commuters, but I really do not agree with the atmosphere of this university as my husband and I used to attend there. I would be afraid the kids would lose their souls!! So, all very worrisome. Anyone who has been through this have any advice as to where to start???? &nb sp; |
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stacykay
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| Posted: Feb 20 2008 at 3:48pm | IP Logged
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Ok, sorry for the little guy pushing buttons before I start typing! 
I was quoting Kim to let you know that there are 2 year RN programs, usually at community colleges. There is usually a year or two wait-list for these programs. One would graduate with an associate degree, and most hospitals would reimburse tuition for advanced schooling to obtain a bachelors, or BSN (bachelor of science in nursing.)
As for Grandma and her generous offer, are there any programs, Theresa, in VA, such as a state educational trust? In MI, there is something where you pay a set amount based on the child's age, and then, when they are ready for college, the state pays the tuition. I think MI limits it to in-state schools. But it would be worth checking out. Too bad we didn't do that for our first, as I think it was about $4000 (and actually think it was about $2500) max when he was a babe (and now his tuition is $9000 a year! Not to mention room and board.) Is this the same as the plans mentioned above?
Also, there is the potential for scholarships. One of the hs moms in my local group was so excited her ds got a full scholarship to a local university, all for his great job on the ACT.
We do a combo of scholarships our ds has received, loans, and summer jobs. Where there's a will, there's a way! 
This certainly sounds like you're off to a great start for dc future education!
God Bless,
Stacy in MI
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MaryM
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Eight Wonders wrote:
| I have no idea HOW we could ever afford that and WHY ARE private Catholic colleges so high? I mean, isn't that sort of discouraging large, Catholic families by having your tuition at $25K a year!!!!!! What single earning, large Catholic family can afford that???? |
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Don't rule out the private Catholic universities based on actual tuition comparisons. In general, financial aid packages at private schools are much higher percentage-wise than state colleges and universities. Many (not all) private schools have excellent endowments and what they can offer a student in overall financial aid often puts them right in the same range as what a state school would cost. (Now granted, being local and having the ability to live at home over having to pay room and board might still be an incentive). For our son, all of his private college financial aid package offers (4) brought our expected financial contributions right into range (or lower) than what we were expected to pay at the state university he applied to with their offer.
Now it is possible, as mentioned above, to get some great tutition coverage from state schools - they do have some to offer but those usually go to a few top applicants. Overall general financial aid at state schools is not much and is usually limited to loans. There are need based grants available for all the schools (both public and private) and family size does help contribute to lowering student/family's expected contributuion.
Now all colleges/universities are different and I hesitate making blanket statements because some one will say, "But our son got..." so it pays to do your homework - For the colleges you are interested in find out:
-what percentage of students receive financial aid
-value of the average financial aid package
-what percentage of financial aid is grant and scholarship based (not loan based)
EDITED to ADD:
A very good scholarship search site - Fast Web
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Mary M. in Denver
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insegnante
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I just read that Stanford is waiving tuition for students whose families earn less than $100,000 per year and room and board also for those whose families earn less than $60,000! Link to news story
And here is an article that describes Washington University in St. Louis as "latest elite, wealthy school to announce that it will make the cost of attending school much less burdensome for its neediest students" -- in this case, "students from families that make less than $60,000 annually," which is not what I would have expected to be the "neediest."
I'm not necessarily dreaming of "elite" schools for my kids, but it was encouraging to read of this trend, and what MaryM said above about the actual cost of private and Catholic schools.
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Theresa
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insegnante
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stacykay wrote:
As for Grandma and her generous offer, are there any programs, Theresa, in VA, such as a state educational trust? In MI, there is something where you pay a set amount based on the child's age, and then, when they are ready for college, the state pays the tuition. I think MI limits it to in-state schools. |
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I know the program my mother was thinking of doesn't restrict the child to public or in-state schools.
I am normally so ignorant of and confused by "finance," and my brainpower seems only reduced now that I am pregnant, that I'm having to let go of some of my desire to understand every alternative before making decisions or "letting" other people make decisions!
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Theresa
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MarilynW
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insegnante wrote:
I just read that Stanford is waiving tuition for students whose families earn less than $100,000 per year and room and board also for those whose families earn less than $60,000! Link to news story
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Thanks for sharing Theresa - I had not seen this.
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Marilyn
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MarilynW
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insegnante wrote:
I know the program my mother was thinking of doesn't restrict the child to public or in-state schools.
I am normally so ignorant of and confused by "finance," and my brainpower seems only reduced now that I am pregnant, that I'm having to let go of some of my desire to understand every alternative before making decisions or "letting" other people make decisions! |
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Theresa - your mum can contribute to the Virginia state plans even if she is not Virginia resident - she just will not get a state tax deduction. Check out the different plansVirginia College Savings Plans
The main choices are VPEP and VEST - if we could afford it we would do the VPEP - you can pay the future cost of college either one lump sum or over several years - but monthly costs are very high. This guarantees your child's tuition in a VA college (lots of choices) or you can go elsewhere, even abroad, but you will only get the $ amount equal to tuition at a VA state college.
We have opened VESTS and try to make small contributions when we can. There is no mandatory amount and the fund grows tax free and there is a VA state deduction for any contributions. But this is just like opening a mutual fund account - no guarantees of value.
If you mom can do the lump sum option for each of the kids or even the 5 year option - I would go for that - imagine never having to worry knowing that college was already paid for!!!
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Marilyn
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cheesehead mom
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Ave Marie (www.avemariafund.com)has an educational IRA that my p's start for the kids. It does well as funds go and it is nice knowing that the money is not supporting things contrary to church teaching.
Laura in WI
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4Real Forums : Mothering and Family Life
Topic: college funds, pros and cons
