6 ms·

I am sure there is truth to the article, but as someone forced to pay the full price for 2 kids, the idea that tuition is not going up is laughable. I'll pay $8

I am sure there is truth to the article, but as someone forced to pay the full price for 2 kids, the idea that tuition is not going up is laughable. I'll pay $80,000 this year for my daughter and about $40K for my son who chose the in-state university. College prices are insane. My daughter is in her final year, and even in those years, including a Covid gap year, the cost went up $10,000 for those of us stuck paying full price. I am in no way wealthy, but thankfully went through 2 small exits in my career where I could bank enough away to cover this. There will be nothing left though. I also put money in a 529 for each kid their whole life. For my son's account I actually lost a small amount of money over the life of the investment and for my daughters it only went up slightly. If that had been all I had I could have paid for 1 year of school each.

beambot 3y ago
It seems counterintuitive that one of the largest bull cycles in modern history would result in flat or negative returns. Is this due to the 529's limited investment vehicles...? At that point, wouldn't you be better off putting the funds into a taxable account instead?
- runako 3y ago
  A lot of 529s have relatively high fees and low returns. I stopped funding 529s for this reason.
- deleted 3y ago
  [deleted]
- bombcar 3y ago
  529s are not really worth it unless you have need for additional tax shelter (owning broad-market mutual funds is already relatively "tax advantaged" if you buy and hold) OR you can get tax write-offs for contributing (which is true in some states). As with all investments, when you get in and when you get out can affect total return, even though you can't time it perfectly. The problem with 529s is you can't really "choose to let it ride" when college starts, whereas with retirement you DO have that option (by using other funding sources). Unfortunately the way the college racket is setup, it's often much better to simply be a paper pauper when the FAFSA comes around (hint: they ignore the house and the car(s)).
  - frumper 3y ago
    You can now roll 35k from your 529 into a Roth IRA for your kid. That is a great jump start on their retirement.
- markphip 3y ago
  My 529 was invested in CENAX
  - Workaccount2 3y ago
    If their historic allocation was similar to their current one, it's no surprise; its a very bond heavy vehicle and bonds over the last decade have had basically non-existent interest rates.
    - markphip 3y ago
      Most 529 plans are target date funds timed to when you start college. So it lost a lot of money when the pandemic hit and then moved into its very conservative phase as the market recovered. It also took a big hit in 2008 though I was only a few years into investing at that point.
      - Workaccount2 3y ago
        So it's a reactive fund that buys the peaks and sells the dips, even worse.
tptacek 3y ago
The in-state university is private? UIUC is a high-ranked state flagship (both my kids went, my daughter's still there) and in-state tuition is less than $20k.
- applecrazy 3y ago
  Flagship public schools in some states can approach $40k in costs if you don’t qualify for aid: https://admission.ucla.edu/tuition-aid/tuition-fees https://admission.ucla.edu/tuition-aid/tuition-fees
  - davidf18 3y ago
    The article above is referring to UCLA. "California on Thursday became the first state to guarantee free health care for all low-income immigrants living in the country illegally..." https://apnews.com/article/health-california-immigration-gavin-newsom-medicaid-b09edcb2b89ab041b520f431f8aab4b6 https://apnews.com/article/health-california-immigration-gav... Billions of dollars are being spent on health care for illegal residents instead of spending the money for California residents at California Universities. There is plenty of money in California. The problem is that the leadership doesn't prioritize affordable university education, preferring instead to fund people living in the country illegally. California residents are taking out student loans to subsidize people living in the country illegally. It is tremendously unfair.
  - jjav 3y ago
    That's a bit misleading though, even if I can see why they do it. The in-state UCLA tuition there is ~15K, which while high, isn't terrible. My child's elementary school bill is higher than that! The larger line item they list is food & housing. That's expensive, but you're paying those whether going to school or not so it is not really a cost of going to the university. Also, there is a lot of leeway to vary those costs if you need to be very frugal.
- deleted 3y ago
  [deleted]
- bklyn11201 3y ago
Dig1t 3y ago
There is so much variance in cost between colleges! 80k and even 40k seem like really high yearly costs. I went to a community college for 2 years in California and then transferred to a mid-tier state university for the last two years. I graduated in 2017 and the total cost for my education was about 30k. It was expensive, but spread out over 4 years I was able to pay for most of it by working part time. As a father what were the tradeoffs you considered when planning to put your kids through college? Did you consider the route through community college? Was the dorm experience important? It seems like the decision to not put your kids through community college is usually more for social reasons rather than academic, since community colleges, at least in California, are MORE rigorous than regular universities, since they are preparing to send kids to the full range of colleges. Parents and kids seem to think that it’s important to live on campus in a dorm because they will make more friends. But idk, I am very curious to hear the thought process from a parent’s point of view.
- bombcar 3y ago
  Given that 80k is around the median salary for a professor it seems that you could just hire a live-in tutor at that point ...
- markphip 3y ago
  I had my kids in 2001 and 2003. I just started putting money away into 529 funds and that was kind of all my thought process. If I spent time then thinking how expensive it would be when the money would be needed, that would have been paralyzing. As I mentioned, along the way I got lucky and was involved in two modest exits that let me put enough into savings that I had enough combined with the 529 to basically say I would pay for their undergraduate. Obviously, I could have just kept that money for myself but it was what I wanted to do. I have had various retirement savings all along so that I feel like I am OK provided I do not live to be 90 or something. My last exit happened end of 2019, just in time for me to get it all invested in time for the pandemic to start. I am pretty sure I turned all that investment into cash at the bottom of the stock market and did not really get it back into investments in time to make it all up. Around end of March 2020 I was definitely expecting the stock market to keep falling and panicked. I probably would still have money for myself after paying for college if I had just not touched it and caught the rebound.
cm2012 3y ago
Just so you know, most research nowadays says there's basically no difference in outcomes between which school your kids go to and future income/other life outcomes, after you correct for SAT score. You can send them to state or city school and save the money.
- credit_guy 3y ago
  That research is highly dubious, but let's take it at face value. You can send them at a state or city school. But they have a word to say about that choice too. For them, it's not research, it's life. They can't run a controlled experiment with their life. If they go to the city school, and their career tanks, will they ever forgive you? Will they buy your counterfactual that their career would have tanked anyway, even with an elite school diploma framed on their wall?
- markphip 3y ago
  Certainly considered things like that. Not sure if you are a parent, but just wait until you go on school tours with your kid and see them fall in love with a specific school. My daughter is not likely to pursue a high paying career either. I wonder if she would have been better off finding a job and just having me give her the $300,000 I will have spent on her education. As it is, she is planning on going to graduate school, which she will have to pay for so she is weighing these things now.
  - mistrial9 3y ago
    > better off finding a job and just having me give her the $300,000 this is "all or nothing" thinking.. other posts show that other school systems have different cost structures. If she has the character and health for it, you could send her to an overseas school also.. think out of the box!
    - markphip 3y ago
      She is graduating this year so too late. But that is her thought process for graduate school
rconti 3y ago
This makes me feel at least slightly better. I attended a top-100-but-definitely-not-top-10-or-even-top-20 private university in the early 2000s and I'm quite sure my family paid very close to full sticker. I don't recall qualifying for any merit scholarship. I had and have merits, but excellent grades in high school were not among them :)
cwmma 3y ago
There is a section about this, basically collages are able to price discriminate much more effectively in a way that disproportionately hurts non-wealthy people.
lazyant 3y ago
For comparison, the local tuition for the CS program at the U of Waterloo is about CAD $6k for a semester (for three courses), or about US $4.5k. It also includes things like health insurance.

beambot 3y ago

It seems counterintuitive that one of the largest bull cycles in modern history would result in flat or negative returns. Is this due to the 529's limited investment vehicles...? At that point, wouldn't you be better off putting the funds into a taxable account instead?

runako 3y ago
A lot of 529s have relatively high fees and low returns. I stopped funding 529s for this reason.
deleted 3y ago
[deleted]
bombcar 3y ago
529s are not really worth it unless you have need for additional tax shelter (owning broad-market mutual funds is already relatively "tax advantaged" if you buy and hold) OR you can get tax write-offs for contributing (which is true in some states). As with all investments, when you get in and when you get out can affect total return, even though you can't time it perfectly. The problem with 529s is you can't really "choose to let it ride" when college starts, whereas with retirement you DO have that option (by using other funding sources). Unfortunately the way the college racket is setup, it's often much better to simply be a paper pauper when the FAFSA comes around (hint: they ignore the house and the car(s)).
- frumper 3y ago
  You can now roll 35k from your 529 into a Roth IRA for your kid. That is a great jump start on their retirement.
markphip 3y ago
My 529 was invested in CENAX
- Workaccount2 3y ago
  If their historic allocation was similar to their current one, it's no surprise; its a very bond heavy vehicle and bonds over the last decade have had basically non-existent interest rates.
  - markphip 3y ago
    Most 529 plans are target date funds timed to when you start college. So it lost a lot of money when the pandemic hit and then moved into its very conservative phase as the market recovered. It also took a big hit in 2008 though I was only a few years into investing at that point.
    - Workaccount2 3y ago
      So it's a reactive fund that buys the peaks and sells the dips, even worse.

tptacek 3y ago

The in-state university is private? UIUC is a high-ranked state flagship (both my kids went, my daughter's still there) and in-state tuition is less than $20k.

applecrazy 3y ago
Flagship public schools in some states can approach $40k in costs if you don’t qualify for aid: https://admission.ucla.edu/tuition-aid/tuition-fees https://admission.ucla.edu/tuition-aid/tuition-fees
- davidf18 3y ago
  The article above is referring to UCLA. "California on Thursday became the first state to guarantee free health care for all low-income immigrants living in the country illegally..." https://apnews.com/article/health-california-immigration-gavin-newsom-medicaid-b09edcb2b89ab041b520f431f8aab4b6 https://apnews.com/article/health-california-immigration-gav... Billions of dollars are being spent on health care for illegal residents instead of spending the money for California residents at California Universities. There is plenty of money in California. The problem is that the leadership doesn't prioritize affordable university education, preferring instead to fund people living in the country illegally. California residents are taking out student loans to subsidize people living in the country illegally. It is tremendously unfair.
- jjav 3y ago
  That's a bit misleading though, even if I can see why they do it. The in-state UCLA tuition there is ~15K, which while high, isn't terrible. My child's elementary school bill is higher than that! The larger line item they list is food & housing. That's expensive, but you're paying those whether going to school or not so it is not really a cost of going to the university. Also, there is a lot of leeway to vary those costs if you need to be very frugal.
deleted 3y ago
[deleted]
bklyn11201 3y ago

Dig1t 3y ago

There is so much variance in cost between colleges! 80k and even 40k seem like really high yearly costs. I went to a community college for 2 years in California and then transferred to a mid-tier state university for the last two years. I graduated in 2017 and the total cost for my education was about 30k. It was expensive, but spread out over 4 years I was able to pay for most of it by working part time. As a father what were the tradeoffs you considered when planning to put your kids through college? Did you consider the route through community college? Was the dorm experience important? It seems like the decision to not put your kids through community college is usually more for social reasons rather than academic, since community colleges, at least in California, are MORE rigorous than regular universities, since they are preparing to send kids to the full range of colleges. Parents and kids seem to think that it’s important to live on campus in a dorm because they will make more friends. But idk, I am very curious to hear the thought process from a parent’s point of view.

bombcar 3y ago
Given that 80k is around the median salary for a professor it seems that you could just hire a live-in tutor at that point ...
markphip 3y ago
I had my kids in 2001 and 2003. I just started putting money away into 529 funds and that was kind of all my thought process. If I spent time then thinking how expensive it would be when the money would be needed, that would have been paralyzing. As I mentioned, along the way I got lucky and was involved in two modest exits that let me put enough into savings that I had enough combined with the 529 to basically say I would pay for their undergraduate. Obviously, I could have just kept that money for myself but it was what I wanted to do. I have had various retirement savings all along so that I feel like I am OK provided I do not live to be 90 or something. My last exit happened end of 2019, just in time for me to get it all invested in time for the pandemic to start. I am pretty sure I turned all that investment into cash at the bottom of the stock market and did not really get it back into investments in time to make it all up. Around end of March 2020 I was definitely expecting the stock market to keep falling and panicked. I probably would still have money for myself after paying for college if I had just not touched it and caught the rebound.

cm2012 3y ago

Just so you know, most research nowadays says there's basically no difference in outcomes between which school your kids go to and future income/other life outcomes, after you correct for SAT score. You can send them to state or city school and save the money.

credit_guy 3y ago
That research is highly dubious, but let's take it at face value. You can send them at a state or city school. But they have a word to say about that choice too. For them, it's not research, it's life. They can't run a controlled experiment with their life. If they go to the city school, and their career tanks, will they ever forgive you? Will they buy your counterfactual that their career would have tanked anyway, even with an elite school diploma framed on their wall?
markphip 3y ago
Certainly considered things like that. Not sure if you are a parent, but just wait until you go on school tours with your kid and see them fall in love with a specific school. My daughter is not likely to pursue a high paying career either. I wonder if she would have been better off finding a job and just having me give her the $300,000 I will have spent on her education. As it is, she is planning on going to graduate school, which she will have to pay for so she is weighing these things now.
- mistrial9 3y ago
  > better off finding a job and just having me give her the $300,000 this is "all or nothing" thinking.. other posts show that other school systems have different cost structures. If she has the character and health for it, you could send her to an overseas school also.. think out of the box!
  - markphip 3y ago
    She is graduating this year so too late. But that is her thought process for graduate school

rconti 3y ago

This makes me feel at least slightly better. I attended a top-100-but-definitely-not-top-10-or-even-top-20 private university in the early 2000s and I'm quite sure my family paid very close to full sticker. I don't recall qualifying for any merit scholarship. I had and have merits, but excellent grades in high school were not among them :)

cwmma 3y ago

There is a section about this, basically collages are able to price discriminate much more effectively in a way that disproportionately hurts non-wealthy people.

lazyant 3y ago

For comparison, the local tuition for the CS program at the U of Waterloo is about CAD $6k for a semester (for three courses), or about US $4.5k. It also includes things like health insurance.