The Higher Cost of Higher Education

[check]

Good points. My daughter can meet people easily, and I think would be too distracted in residence, especially with a room mate.

 

[MossRoad]

Don't forget the price of concert tickets either. :laughing:

A return of 8% may be too generous. A college savings fund is like a retirement fund, it needs to be largely intact when you need it to be. You don't have 5-10 years to wait out a tough market. Avoiding market volatility usually reduces the returns somewhat.

Compared to withdrawing some portion of a 529 when the market is bottomed out such as in 2008, it may be cheaper to borrow money in the long run rather than locking in a loss. You could always hope that the value of the 529 would increase in one or two years allowing early repayment of the loan. I don't know if that plays within the rules for a 529.

I do feel for you guys who are preparing to send kids to college. Is it worth it, and can it be afforded, are not easy questions and the answer is different for each child.

Our oldest's 529 did, in fact, tank in 2008 by about 30%. It was back to the original level in 2010. She started college in 2011. There's enough to pay for her senior year and she'll have some left when she graduates. Our youngest's 529 tanked and recovere too, but she's 5 years younger and we started it when she was born VS when her sister was 5. Also, just like 401k, IRA, etc... you can pick investment plans. We had them in plans that were extremely high risk and then get automatically adjusted towards lower risk as they get closer to college age. The older one averaged something like 12% annually even including 2008. The younger one is closer to 16% average. I use 8% in my fantasy budgeting at home. Anything above that is icing on the cake. :licking:

 

[MossRoad]

This is a real issue with my kid. She can go to the university where I teach, and the tuition will be free (since I am a faculty member and that is one of the perks), and stay at home for "free", or we can send her off to another city and pay some ungodly amount, most of which is for room and board.

So here is another question: It is better for the kid to stay in residence, or better to have them rent an apartment off campus? (My brothers stayed in residence first year, and they hated it.)

All of my siblings went away to college. I stayed home and went to college while working. Guess which one of the five got out debt free with a positive net worth? :laughing: As far as going away and where to live, our oldest is at a large state school. She has lived in dorms for two and a half years. Fist year room mate was fine. They didn't hang out together, but got along well and didn't interfere with each other's studies. She met her boyfriend in the same dorm, joined a couple orgs, got a job, etc... worked out great. Second year room mate was a promiscuous drunk. YIKES! She had to switch room mates a couple months in. Next room mate was great. They still hang out once in a while. This year she got a private but cheap dorm room. No meal plan or private bath. Saved a ton of money. Spends most of her time with boyfriend anyway, so we call it her $5k closet. Next year she has a single apartment. Its cheaper than dorm. :thumbsup: She has a good group of friends, same boyfriend, buys groceries, pays bills, etc... Worked out fine.

 

[MossRoad]

Good points. My daughter can meet people easily, and I think would be too distracted in residence, especially with a room mate.

From my siblings and my daughter's experience, room mates rarely spend much time together. Their class schedules are different. Their majors are different. They study at different times and in different places (dorm, library, study groups). They have different groups of friends. About the only time they spend together in the dorm room is when both are asleep. Once in a while they'll be studying at their desks at the same time, but not very often.

 

[MossRoad]

As for the original topic of this thread (sorry for the hijack), university presidents are highly overpaid in my opinion. There's a big controversy at Purdue now, because the former governor, who appointed many people to the boards of state universities, is now the president of Purdue working with those same board members. Think about that... a fiscally conservative republican governor sets up the board at a major state university then becomes president of that university. The teaching faculty at most universities is liberal. DING DING DING, FIGHT!

 

[NY_Yankees_Fan]

If your state does not offer a 529 or they offer no tax advantages, check out Utah or New York they use Vanguard funds which have one of the lowest fund costs. I used Utah for 8 years, I live in NJ and had no problems with them. Every time I needed to call them they picked up quickly and I spoke to a live person in the USA.

 

[DeereMann]

Yep - but unless we somehow take our government back from the moneyed interests, we are doomed to failure. Storm the Bastille? :fiery:

 

[rsallen]

Yep, anyone who doesn't understand privatization of our government hasn't been paying attention.

 

[rsallen]

I think it's important to understand that 'money' is not interested in an educated population.
They are interested in a good corporate citizen, subservient and unthinking. That is all.

 

[smstonypoint]

Yep, anyone who doesn't understand privatization of our government hasn't been paying attention.

I pay attention and I am aware of the definition of the privatization of government services/enterprises/etc. I haven't noticed any uptick in that activity in recent months. What are you so up in arms about?

I think it's important to understand that 'money' is not interested in an educated population.
They are interested in a good corporate citizen, subservient and unthinking. That is all.

Really?

Then why did 17 out of the leading 25 individual donors in 2013 (YTD) make their contributions to education, and colleges and universities? The Chronicle of Philanthropy - Connecting the nonprofit world with news, jobs, and ideas

Then why did foundations donate $8.7B and corporations donate $5B to colleges and universities in 2011? Gifts to Colleges Rose 8.2% in 2011, Survey Finds - Administration - The Chronicle of Higher Education

Then why do corporations recruit the best and brightest at our colleges and universities?

Steve