I am an idiot: Next year I will have three kids at expensive private colleges in non-technical majors

What if instead of saving money if your kid's name or your name, you put money into an account that is either the kid's grandparent's or aunt or uncle. That way it isn't factored into FAFSA.

Could this work?

To Laughingostrich:

It's been a few years since we immersed ourselves in the detailed planning on how to fund / pay for our children's educations but clearly it was beneficial for us, in ~2004 to have less money in our children's name as it related to the schools our children went to. I do believe that state schools may calculate "parental contribution" a bit differently than private schools as well and this should also be a factor in how you look at this.

To your question about keeping funds in grandparents or aunt / uncle's accounts, I'd imagine this strategy would work well too since no college looks at funds earmarked by other family members as a means of calculating "parental contribution" but it's always worth checking with the schools financial aid offices to be sure. Of course, you could pay for the services of some the college financial aid planners that tout their ability to find you low-cost approaches to paying college costs but we didn't want to do that. Instead when we had questions we couldn't answer we called the Financial Aid offices of a few state and private schools asked them the questions we had (somewhat anonymously in certain cases).

laughingostrich wrote:

What if instead of saving money if your kid's name or your name, you put money into an account that is either the kid's grandparent's or aunt or uncle. That way it isn't factored into FAFSA.

Could this work?

Sure. If your goal is to let the kid's uncle walk away with tens of thousands of dollars of your money.

Running Faja wrote:

To g54gfdh: I read the paper in 2004 when we went through this process with our children. Thanks for finding that study for me, and for confirming that I've read it correctly:

My statement: "Yes, the average lifetime income from those graduating from Ivy's (or equivalent) are higher than those who graduate from non-Ivy's". Your highlighted statement suggesting I've missed something: "However, the average tuition charged by the school is significantly related to the students’ subsequent earnings'. Am I missing something, or are these saying the same thing?

No, they are not saying the same thing. To say that tuition cost is related to wages earned means that the MORE tuition is at your school of choice, the MORE MONEY you make later in life. This is not the same as saying "selective schools don't make you any more money." In THIS STUDY, the researchers found that school selectivity alone did NOT predict future wage earnings. But, like you advocate, if you turn down a school with tuition for $50,000 a year for one with tuition of $20,000 a year, your career earnings will be less. Independent of how selective the school is. To put it in other words, selectivity does NOT matter, but tuition cost DOES. So your argument that you should pick a less selective school to save money does not hold water, because a lower-cost school (according to this study) does in fact "short-change" your kids.

I should point out that many of the schools in the study's sample which are NOT considered to be "highly selective" would in fact be rated a "top tier" school by most sources, and that I'm a bit suspicious of their methods (does being accepted at the same list of schools imply the same academic achievement? I'm not sure on that one). The other studies I posted, which attempted to control for pre-college academic achievement through other means (like standardized testing scores), DID find a significant wage increase resulting from attending a highly selective school.

great idea wrote:

laughingostrich wrote:

What if instead of saving money if your kid's name or your name, you put money into an account that is either the kid's grandparent's or aunt or uncle. That way it isn't factored into FAFSA.

Could this work?

Sure. If your goal is to let the kid's uncle walk away with tens of thousands of dollars of your money.

Wow, apparently you have some shi*ty siblings if you even thought of that.

It may be too late now, but you should have offered to pay for a standard state university education for each. If they wanted to go somewhere else (i.e., private), then they have to make up the difference themselves with scholarships, work, etc. That's more than fair and instills a work incentive. As it stands now, they see you as the gravy train that never ends.

529 plans owned by the parents are considered assets of the parents according to FAFSA, so they are not as punitive for calculating financial aid compared to 529 plans owned by a student. I am not too concerned about financial aid since need-based grants are not given out at my income level. My only federal financial aid would be in the form of loans.

As far as an uncle "stealing" the 529 money, don't laugh at that. My wife's uncle "stole" his four sister's inheritance. When his Dad died the sole ownership of the family business went to the one son with verbal instructions from the father to "take care of his four sisters". He basically flipped them the bird and kept it for himself. The sisters tried in vain to sue but lost. It was a terrible example of estate planning.

And by state university, I mean "in-state" state university.

I understand wanting to help out your kids, but in reality if you are jeopardizing your own future and retirement that you have worked hard for then it is not worth it. Will they support you if you spend all your money to help them out? I believe you need to have a sit down with each of your children, and explain to them how it is becoming a financial burden, may be causing an issue for other children and yourself. Explain that you could only budget X,XXX amount of dollars each year per child. Then let the child make the decision, either continue on the current track and pay the remaining or transfer somewhere where your support money goes the distance. Ultimately it is your call and you need to make an objective decision that will allow you to maintain financial stability.

Are you kidding me? 150k is not a lot after subtracting expenses? My dad is a teacher and my mom works part time as a nurse. He has three kids in college (and one more in high school), and still has house/car/etc payments, i.e. expenses. 150k is nearly 3 times our family's income, and let me tell you, if our family had 3 times as much income, we would have a lot of money. Perspective, man, some people just don't have it.

Teacher's Kid wrote:

Are you kidding me? 150k is not a lot after subtracting expenses? My dad is a teacher and my mom works part time as a nurse. He has three kids in college (and one more in high school), and still has house/car/etc payments, i.e. expenses. 150k is nearly 3 times our family's income, and let me tell you, if our family had 3 times as much income, we would have a lot of money. Perspective, man, some people just don't have it.

I'm just guessing, but I'll bet your Dad and Mom gross more than 50k a year before taxes. In any event, if your Dad made 3 times as much or 150k a year, he'd be giving a lot more to Uncle Sam and to the colleges. His FAFSA family contribution would be much higher than it is. You really don't have a clue how this works, do you?

To g4asdsdds:

If you'd agree that more selective schools typically cost more money than less selective schools, then that is exactly what the study suggests (suggesting that going to Skidmore, which is more expensive yet less selective than Harvard, is clearly an anomoly).

So let's not digress: The study suggests that if you have a child that could get into an Ivy, and they turn it down for a less selective school (=less expensive school) it will probably have no impact on their lifetime earnings...so you are not "short-changing" your child if you choose this approach.

Now back to the Jets....

Running Faja wrote:

So let's not digress: The study suggests that if you have a child that could get into an Ivy, and they turn it down for a less selective school (=less expensive school) it will probably have no impact on their lifetime earnings...so you are not "short-changing" your child if you choose this approach.

Now back to the Jets....

That's not even close to true. I can think of a more than one school that has higher tuition rates than tuition, room, and board at any of ivy league schools. And I know there's schools that are nearly as selective and not as expensive as an ivy league. Not to mention the financial aid received at most ivy league schools is incredibly generous. So to conclude, nothing you said was accurate.

To A Level:

There are plenty of schools which cost move than Ivy's (never said there weren't).

I already said (see earlier posts) that because of their endowment programs + pressure to educate students with fewer loans / financial burden, all Ivy's + Patriot League + other privates are offering very attractive financial aid packages.

OK, what I said is not true. It's what the study says, but it's not true. OK. You win.

Let move on.

Thanks.

bull wrote:

this is the most BS thread i have ever seen on here. you make $150k and you are complaining about money?? you've got to be kidding me! My family makes less than half of what you make and money has never been a problem (and I go to one of the 10 most expensive schools in the country!) you are only paying 20-25 per kid?? that's half of what some schools charge buddy.

If I am not mistaken at Harvard and over a dozen of the top private schools, if you make less than 75K HH income, you pay zero tuition. Not sure what the aid is at 150K, but please understand that the 150K and up guys are funding your private education by paying full tuition.

laughingostrich wrote:

Wow, apparently you have some shi*ty siblings if you even thought of that.

Every day someone is robbed blind by a person they trusted. Family businesses fold all the time because the brother in law siphoned money from the business. It is ALWAYS stupid to hand your money over to someone else. I don't care who that someone else is or how much you think you can trust them.

Bestville wrote:

If I am not mistaken at Harvard and over a dozen of the top private schools, if you make less than 75K HH income, you pay zero tuition. Not sure what the aid is at 150K, but please understand that the 150K and up guys are funding your private education by paying full tuition.

There are some deals like this at top schools.

You people saying that $150k is a fortune seem to be missing the point. The OP admitted he's an idiot. He didn't say he's poor because there's no way around it even when making $150k per year.

My wife and I both make $110-120k/year early in our careers and you would have no idea based on our lifestyles. In part that's our own choice, but part is also due to her school loans and significant medical expenses not covered by insurance (no, not plastic surgery, thank you for asking). I think those who make less than $100k have this idea that we could be jetting around on nice vacations and eating out every night. Maybe one day, but it certainly doesn't work that way now. In fact, we have never flown anywhere on vacation other than our honeymoon and to visit family, we only own one car (a used 2001 sedan), and my favorite way to buy clothes is to happen upon a good find at buffalo exchange.

Of course this isn't a sob story. My life is completely comfortable and we're really fortunate, but do understand that we both worked non-stop pretty much every day throughout undergrad and grad school, and continue to work hard today (neither of us in finance or management btw). Very few of the modern American whiners who complain about their low incomes have put in the effort that we have while making choices that directed them towards careers with decent earning potential. Of course that won't stop them from voting for tax increases for anyone who makes more than them (i.e., the terrible "rich.").

So I'm off topic, but anyway, I share their disgust for the crony capitalist system run by the idiots in DC, but please understand the anger...even at the super rich crooks...is best directed at the government and not those with money. Rallying against greed and the rich is a waste of effort. Go after the people who are supposed to be enforcing the laws but are failing. Gathering more money from the top and pumping in to the government, interest group pet projects, and the welfare state will only make the problem worse. We need to try to even the playing field a bit with meaningful regulation so that the huge imbalance can't happen in the first place.

It's pretty simple. You've got to get their asses out of those expensive private schools and send them to an in- state university. Pay for what you can and let them find a way to pay for the rest. You've got a chance at a decent future if you do this. Otherwise, you're quicly heading down the highway to financial ruin. Good luck.

If I am not mistaken at Harvard and over a dozen of the top private schools, if you make less than 75K HH income, you pay zero tuition. Not sure what the aid is at 150K, but please understand that the 150K and up guys are funding your private education by paying full tuition.

I could be wrong, but I kinda always thought Harvard's 30 billion dollar endowment kinda helped kids who couldn't pay tuition. The people who actually pay full tuition probably couldn't make up the difference for those that pay nothing. So when you graduate and you have this high paying job that you apparently get just for going to an ivy league school, don't forget to donate!!!!!