Quote:
Originally Posted by thinkxingu
Using these numbers, your daughter has saved $7k for education in eight years. How'd she pay for the rest of college, if you don't mind me asking? $7k is one year of community college these days.
One of the things I teach my seniors is to think carefully about how they will pay for school. We go as deep as talking about the overall interest penalties in unsubsidized vs. subsidized loans.
For many, including myself, starting life in the red because of school loans is a necessary evil...and one that flushes all this talk about having an extra $100k/$300 mth. down the drain.
And this isn't just college anymore—trade schools and certifications have increased in costs, too. And, though unions and businesses will often "pay" for the schooling, the costs are often reflected in lower pay for the initial years.
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We were able to pay her full college education through a Connecticut CHET 529 savings plan which we opened and started contributing to when she was born in 1999. Our early investments in that fund benefited GREATLY from the run-up in stocks after the last recession. Four years ago I moved that funding out of stocks and into a very conservative fund to eliminate any volatility during the four years she'd be in college. Along the way, we benefited from a great annual scholarship that she received and she graduated this December - 1 semester early. All in all, we have $21K left in that fund which I'll reclaim as soon as we've paid a final few college-related expenses. We should be able to reclaim those dollars penalty free since the 529 program recognizes the scholarship meant we didn't need to save as much after all. We'll be taxed however on the earnings portion of the final withdrawal. It really wasn't hard to save in this program. It, again, comes down to starting way ahead and discipline.
Bottom line for her is that she will not need to utilize the education dollars she saved (at least not for her education) - but she did learn the lesson we sought to teach her.