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Is the college fund a uniquely American thing? I come from a relatively middle class background (UK) and don't know anyone whose parents paid for college. Their

Is the college fund a uniquely American thing? I come from a relatively middle class background (UK) and don't know anyone whose parents paid for college. Their kids took out loans and got jobs like everyone else. I know some people got help with accommodation costs but most didn't.

istorical 12y ago
It's more common in America only because university costs have skyrocketed in the United States to astronomical proportions. But even with America it's a class thing. For the upper middle class and above you can consider college funds along with summer camps, piano lessons, private SAT tutors, etc. as optional expenses for kids that everyone would love to be able to afford but not everyone can. For those that can afford them it's great. But for those who can't, it can be kind of an affront to see it thrown about as something any loving parent would provide their child with.
- fredkbloggs 12y ago
  > It's more common in America only because university costs have skyrocketed in the United States to astronomical proportions. True in general, but not in the specific. The "big name" universities, mainly private, and the UC system have become so expensive that they are out of reach for the typical working stiff with a high school diploma. That does not mean that every university, or even every university worth attending, is priced that way. Most people in the United States have access to a public university system that will offer them a bachelor's degree that can be paid for solely by working for ordinary wages over the course of 3-6 years. Many of those with good academic records would also qualify for scholarships, and from one's second year onward there are often assistantship positions (teaching, research, administrative) available that may be more convenient or lucrative than other work. Despite the doom-and-gloom you read here and pretty much everywhere else, a 17-year-old American does have choices other than an uneducated lifetime of grinding poverty or entering the workforce half a million dollars in debt.
Mikeb85 12y ago
Probably has to do with the absurd cost of US college. A "good" college/university (basically on par with what most countries think of as a 'University') in the US costs 5 times what it does in Canada or the UK, never mind places like France, Germany, Sweden, etc....
- Alupis 12y ago
  Even when college tuition wasn't at "absurd" levels, people still had college funds for their kids. Dorms/Apartments, food, cars, books, laptops are all very expensive on their own. Even if you put away just $25 a month, when the time comes, you (and your kid) will be grateful.
  - Mikeb85 12y ago
    > Dorms/Apartments, food, cars, books are all very expensive on their own. And how many of these are necessary? If you live in a metro area with a University, you don't need an additional dorm/apartment expense. Cars? Again, if you live in a metro area big enough to have a University, odds are there's public transportation. If you relocate to a dorm, you don't need a car period. I'm curious about the cost of books. I'm currently a University student - the cost of my books is about $400-800 CAD per semester, depending on the exact courses. All in, tuition plus books is around $7000-8000 per year (assuming 5 courses per semester). Not cheap, but compared to rent ($18000 per year, although I'm married so we have a decent enough place) and the overall cost of living, it's not so bad. And I know most Canadians have a college fund too (I didn't however). The worrying part is that costs are rising in large part because college funds exist and credit for education is easy to acquire.
    - JoeAltmaier 12y ago
      My son's engineering textbooks can cost $200-$500 apiece
    - Alupis 12y ago
      > And how many of these are necessary? If you live in a metro area with a University You seem to assume everyone lives in a major metro area, or that all universities are near one. That's not the case for majority of people and majority of universities. A lot of students go away to school, often in different cities or even different states from their home. > The worrying part is that costs are rising in large part because college funds exist and credit for education is easy to acquire. That's an absurd claim. Costs are raising because the government (Fed and State) have been dramatically reducing their share of subsidizing that used to be provided to universities. It costs a lot to put a single student through a single semester, and now families are having to pick up a larger share of that cost burden than ever before. College hasn't gotten more expensive, it's the individuals share that has.
serve_yay 12y ago
Many people here do it, but it is mystifying to me also. I'm in my mid-30s still paying for the damn thing (almost done, but still). I can't imagine someone handing me such a huge gift like that.
alistairSH 12y ago
Two things pop to mind: 1. The cost is ridiculous in the US. A top state-funded school will cost nearly $120,000 over four years (tuition, fees, room, board). 2. Our tax code has incentives for college savings plans.
abuteau 12y ago
We have it in Canada too through Registered Education Savings Plans (RESPs). I live in Quebec and basically every dollar invested in an RESP could be increased by 30% to 60% b/c of government grants. We can receive up to $7,200 from the Canada Education Savings Grant (CESG), up to $3,600 from the Quebec Education Savings Incentive (QESI), and up to $2,000 from the Canada Learning Bond (CLB). Altogether, it's about a $12,800 increase, which is quite nice.
untog 12y ago
(I grew up in the UK, now settled in the US) The cost of university education in the US is pretty insane, compared to the UK. A college fund from your parents might not even pay for college - just reduce your loans to a level comparable to education in the UK.
Jtsummers 12y ago
The US offers some tax advantaged accounts/bonds for education expenses. 529 Plans, for instance, aren't tax deferred, but the earnings aren't taxed if used for college. And a number of people can contribute besides just the parents. I'm curious, what's the cost of college in the UK? In many states in the US it's become outrageous, and that's not even considering private universities. That might be a motivation here to establish college funds.
- k-mcgrady 12y ago
  Tuition is currently around £9,000 per year. Living costs/accommodation is separate. It does depend on which part of the UK you are in though (I believe it's much cheaper in Scotland).
  - Jtsummers 12y ago
    I suspect that's the reason then. In the US college used to be similarly affordable, but costs have gone up this past 10-15 years in most states. And in some states long before that. I had friends at Georgia Tech that came from Pennsylvania because out-of-state tuition at GT was cheaper than in-state in PA.
    - k-mcgrady 12y ago
      I was actually interested in going the college in the US at one point so I researched it a lot (and even spent two weeks visiting a few). If I remember right international students pay out of state tuition and the places I looked (UW campus') went from around $20,000 to $35,000. Not sure about in-state prices but they would have been much cheaper and quite comparable to the UK. Is it more a problem of students wanting to leave their state to study? If they stayed in state it seems like a college fund wouldn't be necessary (of course with exceptions such as the one you mentioned).
      - Jtsummers 12y ago
        In general, yes. Students going out of state drives up their costs sometimes 2-3x higher than staying in-state. With some exceptions like PA where going out-of-state might be cheaper. I really only know PA as being particularly expensive because I knew so many people from there. I'm not sure what the current list of affordable states and unaffordable states are.
JoeAltmaier 12y ago
Ok my kids' college fund came from Dell, who bought our startup. So I don't know what I'd have done otherwise - probably helped pay out of cashflow. But definitely Parents are a component of college funding in the USA. In fact, the FAFSA expects parents to mortgage their house and sell property Before they'll allow a federal student loan.

istorical 12y ago

It's more common in America only because university costs have skyrocketed in the United States to astronomical proportions. But even with America it's a class thing. For the upper middle class and above you can consider college funds along with summer camps, piano lessons, private SAT tutors, etc. as optional expenses for kids that everyone would love to be able to afford but not everyone can. For those that can afford them it's great. But for those who can't, it can be kind of an affront to see it thrown about as something any loving parent would provide their child with.

fredkbloggs 12y ago
> It's more common in America only because university costs have skyrocketed in the United States to astronomical proportions. True in general, but not in the specific. The "big name" universities, mainly private, and the UC system have become so expensive that they are out of reach for the typical working stiff with a high school diploma. That does not mean that every university, or even every university worth attending, is priced that way. Most people in the United States have access to a public university system that will offer them a bachelor's degree that can be paid for solely by working for ordinary wages over the course of 3-6 years. Many of those with good academic records would also qualify for scholarships, and from one's second year onward there are often assistantship positions (teaching, research, administrative) available that may be more convenient or lucrative than other work. Despite the doom-and-gloom you read here and pretty much everywhere else, a 17-year-old American does have choices other than an uneducated lifetime of grinding poverty or entering the workforce half a million dollars in debt.

Mikeb85 12y ago

Probably has to do with the absurd cost of US college. A "good" college/university (basically on par with what most countries think of as a 'University') in the US costs 5 times what it does in Canada or the UK, never mind places like France, Germany, Sweden, etc....

Alupis 12y ago
Even when college tuition wasn't at "absurd" levels, people still had college funds for their kids. Dorms/Apartments, food, cars, books, laptops are all very expensive on their own. Even if you put away just $25 a month, when the time comes, you (and your kid) will be grateful.
- Mikeb85 12y ago
  > Dorms/Apartments, food, cars, books are all very expensive on their own. And how many of these are necessary? If you live in a metro area with a University, you don't need an additional dorm/apartment expense. Cars? Again, if you live in a metro area big enough to have a University, odds are there's public transportation. If you relocate to a dorm, you don't need a car period. I'm curious about the cost of books. I'm currently a University student - the cost of my books is about $400-800 CAD per semester, depending on the exact courses. All in, tuition plus books is around $7000-8000 per year (assuming 5 courses per semester). Not cheap, but compared to rent ($18000 per year, although I'm married so we have a decent enough place) and the overall cost of living, it's not so bad. And I know most Canadians have a college fund too (I didn't however). The worrying part is that costs are rising in large part because college funds exist and credit for education is easy to acquire.
  - JoeAltmaier 12y ago
    My son's engineering textbooks can cost $200-$500 apiece
  - Alupis 12y ago
    > And how many of these are necessary? If you live in a metro area with a University You seem to assume everyone lives in a major metro area, or that all universities are near one. That's not the case for majority of people and majority of universities. A lot of students go away to school, often in different cities or even different states from their home. > The worrying part is that costs are rising in large part because college funds exist and credit for education is easy to acquire. That's an absurd claim. Costs are raising because the government (Fed and State) have been dramatically reducing their share of subsidizing that used to be provided to universities. It costs a lot to put a single student through a single semester, and now families are having to pick up a larger share of that cost burden than ever before. College hasn't gotten more expensive, it's the individuals share that has.

serve_yay 12y ago

Many people here do it, but it is mystifying to me also. I'm in my mid-30s still paying for the damn thing (almost done, but still). I can't imagine someone handing me such a huge gift like that.

alistairSH 12y ago

Two things pop to mind: 1. The cost is ridiculous in the US. A top state-funded school will cost nearly $120,000 over four years (tuition, fees, room, board). 2. Our tax code has incentives for college savings plans.

abuteau 12y ago

We have it in Canada too through Registered Education Savings Plans (RESPs). I live in Quebec and basically every dollar invested in an RESP could be increased by 30% to 60% b/c of government grants. We can receive up to $7,200 from the Canada Education Savings Grant (CESG), up to $3,600 from the Quebec Education Savings Incentive (QESI), and up to $2,000 from the Canada Learning Bond (CLB). Altogether, it's about a $12,800 increase, which is quite nice.

untog 12y ago

(I grew up in the UK, now settled in the US) The cost of university education in the US is pretty insane, compared to the UK. A college fund from your parents might not even pay for college - just reduce your loans to a level comparable to education in the UK.

Jtsummers 12y ago

The US offers some tax advantaged accounts/bonds for education expenses. 529 Plans, for instance, aren't tax deferred, but the earnings aren't taxed if used for college. And a number of people can contribute besides just the parents. I'm curious, what's the cost of college in the UK? In many states in the US it's become outrageous, and that's not even considering private universities. That might be a motivation here to establish college funds.

k-mcgrady 12y ago
Tuition is currently around £9,000 per year. Living costs/accommodation is separate. It does depend on which part of the UK you are in though (I believe it's much cheaper in Scotland).
- Jtsummers 12y ago
  I suspect that's the reason then. In the US college used to be similarly affordable, but costs have gone up this past 10-15 years in most states. And in some states long before that. I had friends at Georgia Tech that came from Pennsylvania because out-of-state tuition at GT was cheaper than in-state in PA.
  - k-mcgrady 12y ago
    I was actually interested in going the college in the US at one point so I researched it a lot (and even spent two weeks visiting a few). If I remember right international students pay out of state tuition and the places I looked (UW campus') went from around $20,000 to $35,000. Not sure about in-state prices but they would have been much cheaper and quite comparable to the UK. Is it more a problem of students wanting to leave their state to study? If they stayed in state it seems like a college fund wouldn't be necessary (of course with exceptions such as the one you mentioned).
    - Jtsummers 12y ago
      In general, yes. Students going out of state drives up their costs sometimes 2-3x higher than staying in-state. With some exceptions like PA where going out-of-state might be cheaper. I really only know PA as being particularly expensive because I knew so many people from there. I'm not sure what the current list of affordable states and unaffordable states are.

JoeAltmaier 12y ago

Ok my kids' college fund came from Dell, who bought our startup. So I don't know what I'd have done otherwise - probably helped pay out of cashflow. But definitely Parents are a component of college funding in the USA. In fact, the FAFSA expects parents to mortgage their house and sell property Before they'll allow a federal student loan.