Sunday, January 29, 2012

College financing

Full question: When your kids attended college, what part of college/living expenses did you pay for vs. what your kids paid for? If they paid part, how did you encourage them to save for college? Share any other details that give insight into how you and your kids dealt with the financial part of attending college.

Some key ideas:

None of the nine who answered this question paid for all college expenses. About 20-30% paid nearly nothing toward college costs, and about 65-75% paid for about half (either tuition, or room and board, or provided room and board at home). Many helped their kids get scholarships or expected them to work summer jobs and part-time while in school. Many say they are glad they didn't pay for all costs because it gave their kids ownership and prepared them better for adult life.

It seems from these answers that the biggest motivation for kids to go to college was the parents' expectation that they go and the financial part of it was resolvable through work, grants, or scholarships (although many parents paid for part of the expenses or provided housing/food). Creating plans with the kids such as detailed budgets and career salary analysis probably helped a lot.

One idea is to give kids a college binder when they start high school so they can collect college and scholarship information. Also sit down with them and help them make a budget and explore careers and salaries.

If you haven't finished college yourself, doing it before or while they attend college will likely motivate your kids (at least two moms fit in this category).

Samantha and Thomas
We paid tuition and they worked every summer starting at 12 (and doing paper routes ages 10-12) to cover the other expenses.  We often covered air transportation, used cars and basic clothing and household items when we could.  We tried to be sure finances were not a deterrent.

In addition we encouraged them to take AP classes, summer community college classes and CLEP tests to reduce the cost of credits.

We built detailed college budgets with each of them which were part of a college binder, started when they entered high school.  (The binder was a good place to keep college, career and scholarship info., list of awards and such for later scholarship applications, and transcripts.)

Because we couldn't afford elite colleges, we were grateful BYU was where they wanted to go.  We didn't want them taking out loans for undergraduate work.  We knew others who took out loans (sometimes for degrees with limited earning potential), saddling their future young families with big debt.

We also spent a lot of time counseling with them about how education raises your earning power and how some college degrees don't pay enough to support a family on one salary.  We felt this was important for both girls and guys, as moms who have to work should be able to spend fewer hours and make more money, so they could spend maximum time at home. 

Investing in education is important, but the cost benefit ratio of the degree program chosen should be carefully examined. 

Marsha and Richard
We planned on our children attending college.  It was an undisputed family goal, however, we were not in a financial position to save for that purpose.  It was all we could do to keep things going from month to month with our large family as my husband developed his career.  Therefore, there was no question in our children's minds that they would need to fund their college and they were grateful for any help we could give them.  They had no sense of "entitlement" which is a problem for many parents today.  We developed a program where our children paid all their expenses for the first semester of school and we paid the second semester.  They worked all summer and saved to accomplish this, then sent in their tuition and paid for the first semester of housing and books.  We set up a budget for monthly living expenses with them and they had part time jobs in college to pay for those expenses, which included food, clothing, grooming essentials, dating, entertainment, etc.  The budget was modest but within their reach.  Their summer savings then would be gone, and the second semester we paid the tuition, housing and books.  

We feel their working through the summer and even up to 20 hours a week while attending school was a blessing to them.  They felt very much in charge of their lives and it was a real boost to their self-esteem to be independent in handling their own money.  It helped them make wise choices.  This started earlier when they paid half for their clothing during their teenage years and covered their own entertainment.  We chipped in extra by paying for big ticket items like coats, shoes, etc. but it made the children think twice about how much they were willing to pay for jeans, shirts, accessories, etc.  If they really wanted those expensive, brand name items, they could get them, but would have fewer things to rotate and wear throughout the week.  We planned on three new outfits of shirt and pants, etc. for each school year.  Birthdays and Christmas supplemented their wardrobe.  Often extra work around the house was made available when they were saving for prom or another major expense.

This continued in college.  We helped them get well outfitted before leaving for college, filled their cupboards and refrigerator when possible and rescued them once in a while, while they were learning to budget their own money.  We were the most grateful for the fact that they took responsibility for themselves and were always grateful for the help.  One of our daughters said she came to really understand the atonement through an experience when she had gotten into quite a bit of debt and we prepared a plan to help her solve the problem.  That was after her college years.  They each learn a lot from experience, and our loving attitude toward helping them while leaving the responsibility on their own shoulders helps them in this process.  When we had a child who was less willing to work, we pulled back and had to let him suffer the consequences.  It's hard to tell if all our decisions were "right".  We just tried to make the best decisions we could along the way, knowing it was a process.

Brianne and Spencer
We talked with our kids as early as 7th grade about how they were very capable of earning scholarships for college.  They remember me pushing them to fill out all kinds of scholarship applications.  Besides knowing they needed to work hard on grades in high school, they all had part time jobs as well and were encouraged to save for college and missions.

It was just sort of expected that they would do all they could on their own – given how capable we believed them to be.

Those who lived at home during college had free room and board, but paid themselves for most everything else, sometimes we paid half of rent, or half of tuition.  If they seemed stressed on occasion we donated unexpectedly towards books, fees or groceries.  They worked 20-30 hrs. a week during college and worked hard during the summers.  We paid for their missions and left their savings for them when they returned to college.  They had each received some money from a relative which helped as well.  (That lump sum gift was good because they didn’t want to spend it all – I’d recommend it rather than paying their way).  We checked with them, asking if they were doing okay and they knew we would help if they got in a bind, but they didn’t want to ask.  At that point they knew we were working hard for our money. It was their contribution to the family to hold their own. (Looking back we realize our business struggles and tight finances were a blessing to our children and family in the long term.)

They say they felt independent and responsible for their own education.  It didn’t seem to hurt - they did very well in college and felt it prepared them for real life and for marriage.

Tamara and Lewis
When our oldest son attended college, he received a scholarship and we were able to pick up the slack in his bills.  He was always on a scholarship, but worked part-time after his mission.  Once he got married, he qualified for a Pell Grant.

Our second son worked part time and went to school full time.  Originally he worked at Carl's Jr., but soon got a job at the Holiday Inn which helped supplement his college.  We tried to take care of tuition and fees and books, and he took care of "living expenses"- but we tried to help as needed.  He, too, qualified for a Pell Grant once he got married. He received a scholarship his last 2 years of college which also helped.

Our third son worked part-time prior to his mission.  After his mission, he still worked part-time at KBYU until he got married and qualified for the Pell Grant.  He also received a scholarship.  We paid for tuition and fees and books and helped out with housing as needed.

When our triplet daughters started college, we had 5 in college at the same time - because of the boys taking time off for missions.  This meant we could no longer financially pay for their tuition and fees and housing, etc. in the same manner as we had done with the boys.  So, the 3 girls had to take out student loans and work part-time and had scholarships.  We continued to help as much as we could.

We felt college was important and we didn't want our children to not be able to go to college because of financial reasons.  Also, we felt that since the boys graduated without any student loan debt, it wouldn't be fair to have the girls have debt.  As a result, we have been paying their student loans.  That's just something we felt like we wanted to do for our children.  We also had to take out a small second mortgage on our home to help pay for college.  I realize many people help their children and many do not.  This seems to be a personal matter for each family.

Our children did not have jobs in high school to save for college because they were all very active in school sports.  That took up all of their free time along with church activities and homework.  We felt like their job was to get good grades to get scholarships - which they all did.

Daniel (and Barbara)
Because I had been part of a failed business my net worth was zero.  During Jimmy Carter's administration our SBA loan went from 8% to 22%.  To avoid bankruptcy we refinanced our home and doubled our house payment.  That meant there was not much money for a lot of things.  The children knew they were going to college; the expectation was there.  So they studied hard and all got scholarships.  Most were academic; one daughter played the violin in the college symphony that paid her tuition.  She was a Sterling Scholar in music. Our other daughters were Sterling Scholars in Science and Dance.  The science scholar is now a M.D.

Our sons all had the Browning Scholarship in Mining Engineering at the U of U.  Three of them graduated in Mining Engineering; one became an Environmental Engineer (Masters Stanford U); one became an attorney (U of U)  He was accepted at Duke U., but the "U" had a better Environmental Law program so he stayed here.  The last has just graduated and is working at a mine.  The one that didn't continue with Mining Engineering ended up getting a  PhD in Pharmacy and is a manager of pharmacy at a hospital.

All also paid for their room and board by working while they were in school.  They were very considerate and didn't expect us to go in debt for their educations.  Education was very important to all of them.  The expectation was always there in our family.  We have great children that know how to make goals and achieve them.

Anna (and Gerry)
For the most part, we did not pay directly for our children’s college expenses.

We always had a strong desire and expectation that they would attend college.  I think that we never talked about “if” you go to college, but “when”. We were not in a financial position to pay all of their expenses, since our children were so close in age (5 in 8 years), and 4 were in college at the same time.  That definitely had some bearing on our decisions, even though we had strong feelings that college was THEIR responsibility, not ours.  We felt that if they were putting out the money, they would take their education much more seriously, and would spend more time being educated than being entertained.  It’s always easier to waste someone else’s money than your own.  We wanted them not to just get an “academic” education, but to get a “life” education as well.

All of our children wanted to attend college away from home, and we encouraged that, knowing that they would gain a great deal by earning and budgeting their own money and  their time, and how to manage the responsibilities of a home (meals, laundry, cleaning, etc.).  Because of the cost of housing, it was  huge expense for them, but we think the pay-off was well worth it.

All five of our children had part-time jobs on and off from the time they were about 14 years old, and began saving their own money.  Because they worked throughout their high school years, they learned how to budget their time for work, friends, school, and family, and church responsibilities.  I believe their experiences then helped them when they attended college.  We provided much, or most of their food, because they took most of their food from our storage (I was a pretty good sale shopper).  They were welcome to take food they wanted from our home, but spent their own money on other items that they needed.  We provided an old car for them to use, and we paid the insurance, and maintenance,  but they provided their own gas.

They all worked part-time during college, and they all came home for the summer and worked and saved for the next year.  Some of the kids had the help of scholarships, others did not.  We did help out in the way a little extra money, or part of the tuition for some of them a rare occasion.  After they had done all that they could do, we made up the difference here and there.  Each one had different circumstances and needs, and we helped where we thought it wise.

We’re proud to say that all 5 of our children graduated with bachelor’s degrees, and the only student loans were those they might have incurred after they were married, or seeking graduate degrees.  It can be done without Mom and Dad footing the entire bill, even though I know it’s harder today than it was even just a few years back.

Some of our children have expressed to us how grateful are that they “did it themselves” for the most part.  We did help, but at the same time, we did not pay their college expenses.

Mary (and Robert)
In principle we expected our children to be responsible for their education.  We had some economic challenges during their teen years so they all understood they needed to be prepared to go to college under their own steam.  The boys all lived at home and attended local university or college.  Our daughter won a scholarship and lived away from home. My husband's company sponsored an educational foundation that took care of tuition for all but one of the kids for most of their education.  Anything else was up to the individual.

The kids worked summer jobs to fill in the gaps.  They lived frugally as far as their social lives were concerned.  In fact they each had the opportunity to work at a school district camp as cooks, counselors, etc.  That meant that they were only home or in town on the weekends.  That certainly limited social life. 

For some of the time our children were in college I was also in school to get my degree.  I used student loans.  So when it came time to decide whether to take the full amount or a partial amount on my loan, I always took the full amount and helped my fellow students with things like fees and books.

Two of my sons have their bachelor's degrees, I finished my degree and even attended classes with some of my kids' friends, one son has his doctorate, and my daughter (the mother of four) is back in school to finish her degree and probably move onto her master's.  They have all worked hard to complete their educations.

We never had any qualms about expecting our children to finance their own educations.  We supported them with encouragement and I edited more papers than I can count in their high school and college years.  But we felt that our primary financial obligation was to help the younger children still in high school and missionaries in the field.   

I truly believe that this is similar to any other purchases in their lives.  They appreciate more what they had to work hard for. 

Karen and Lance
If the children wanted to go to college we encouraged/advised them that they needed to work. They worked in the summer and made enough to pay for tuition and books and we paid room and board. If they got married while in college, we still paid R&B until they graduated. The rest was up to them to get a job and work for any more college.  Two of our children joined the military to pay for their education in Medical School. This was a great help as we couldn't have come up with this tuition for Medical School.

I was not in a position to help much financially though I did all I could to encourage them.  The kids were able to live at home so that there was no cost for housing.  I did provide food and helped with books when I could.  I encouraged them to apply for grants and scolarships and did what I could to help out any other way.  All of them had to work at least part time and I think it helped them appreciate the experience no matter how hard it was.  My family watched me go back to school when they were younger so I think it helped them to understand how importand education is.

Next week's question:
What are the things that you feel best instilled feelings of self-worth in your elementary-aged kids (about ages 6-12)? What gave them courage to try new or hard things?

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