March 06, 2010

Paying for College

Financial experts always talk about how you should start saving for your children's college education when they are born.  I'm not sure about anyone else but when our boys were babies we did not have an extra $250 to $300 a month to set aside for college.

My DH and I made a decision a long time ago that we wanted to pay for as much as possible for both of our sons' college education.  Again, this was our decision and I don't push this belief on anyone else.  Everyone knows what they can and cannot afford to do for their children and all of us make choices. 

When we purchased our home we kept in mind that our oldest son would be going to college in 6 years.  We bought a house "below our means" knowing we would have a college education to pay for in a few years.  One year before he went to college, I was given the opportunity to work full time at the law firm.  I had been working 30 hours a week and now I would be working 40 plus. 

Our son worked the last year of high school and while in college he had summer jobs.  The cost of one year of college at the private college he attended was around $23,000 a year (his freshmen year) which included tuition, room and board.  He attended a college out of state.  Scholarships lowered that amount to around $15,000 and along with what we paid and our son's financial contribution he graduated with around $19,000 in student loans.  This is not bad at all for a 4 year private college education. 

Then our son was able to become a graduate assistant at another college and he received his Master's degree tuition free. 

One time when we visited our son and his wife, he talked about the kids he was coaching at his coaching job at the college and how the bulk of them had no financial help from their parents.  Then he looked at us and said "thank you."  I never  doubted that he was grateful for all the financial help that we had given him in paying for college.  It was when he saw the students he was coaching struggling to pay for their own college education, that it was really brought home to him the sacrifice that we had made for him. 

Bottom line my working full time, putting off any major purchases and good planning paid for his education. 

Next year it is our youngest son's turn to go to college and our financial situation has changed drastically from when our oldest son went to college. 

The first thing I asked my DH when I made the decision to stay home was "Are we going to be able to pay for another college education?"  His response, "yes." 

How are we going to do it?  We have paid down debt considerably and by the time our youngest son goes to college our only debt will be a car payment and mortgage.  The money we won't be paying on debt will go towards a college payment.  We have also been setting aside $300 a month for a few years towards his college education.  It's never too late to set aside some money.  Lastly, our youngest son does have an after school job and as his brother did, he will have a job during summer vacations to help defray the costs. 

We left the choice of where our sons would attend college up to them.  We never limited them to a state university.  Actually with the type of financial aid offered to our oldest son, he received a private school education at a state university cost. 

Our youngest son will be attending college in the fall of 2011.  In the past few months he has surprised us by telling us that he wants to attend the private 4 year liberal arts college that is located in our community.  He is adament.  His main reason is that he wants to go into the field of political science and he has been involved in local politics for 3 years.  He is working for the local chamber of commerce and he feels that by going to college here, he will still be able to work and volunteer in the organizations that he is already associated with, and this will add to his education and career goals.

This is not a fleeting feeling, he has made his decision.  At first I tried to talk him out of it as I felt he needed to go to school away from home, but then I realized that his choice was a great fit for him.

Now for some possible ways to pay for his education.  We will have the money to make monthly payments but I am now thinking of other possibilities.  If I am able to get a job at the college, I can get free tuition for my son.  This would be the only reason that I would go back to work. 

Twenty years ago I worked at that college and I did enjoy my job.  I would do it again, for at least four years, if that meant that our son would receive free tuition.  If he wanted to, he could live here at home and then we would save room and board BUT we would never push that on him. 

Now I know that we go against the bulk of what financial experts are advising people in that they say that parents should put money towards retirement ahead of paying for your children's college education.  We are putting the maximum amount matched by my DH's employer into his retirement plan and when our youngest son graduates we will be able to save a lot of money towards retirement.  We do not desire to live a rich life when we are retired, but to maintain the life we have now.  We have done the math and it will happen.

Due to tight finances more families in our community are looking for ways to finance their children's education.  The result is that more and more local students are attending the private college here in our community and are living at home.  The other trend is that many are attending a community college located 25 miles south and are then transferring to a 4 year college. 

More and more kids are not wanting to be saddled with student loans as they are now seeing that they may have a hard time finding a job even after they get out of college.  It is great to see the trend towards fiscal responsibility and the way people are paying for college these days. 

In the end our youngest son is going to have the same opportunity our oldest son had. He will receive a college education at the college of his choice, with the bulk of his education being paid for by us.  Whether he attends a college locally or not, lives at home or on campus, or whether I get a job or not, the end result is the same.  He will get a degree and will not be saddled with a lot of student loan debt when he graduates.


tammyyarbrough said...

The only thing that I can really add to this discussion is from the Yarbrough point of view, long before Alex came along.
Both my husband and myself are college educated, and know that to get anywhere in this world, you must have a college degree. Some may fool themselves to think otherwise.
We began, like you said, to live below our means. We always looked at the big picture. We started saving even before we started a family, because we knew eventually these things would happen. :)
We have some friends who are rather naive when it comes to this matter. For example, "Johnny is a great student- he'll get a full academic scholarship" ,"Tommy is great at baseball- he's sure to get picked by a great college". "We'll let Bob go to community college until he can save money to go to State".
Alex doesn't have this, thank God. Alex has his education paid for, due to the sacrifices that we have made. We expect the best from him, and by providing him with all the tools, he should only have to focus on being the best he is capable of being.
I am sure that when he is a young married man, like your son, to hear the heart felt words Thank You will be well worth all of these sacrifices!!
I know that we are fortunate to be in this situation, and I really wish everyone had the same chance. Alex knows that he is one of the lucky ones, and he also knows that he will carry on this legacy. We would have it no other way, as our parents did the same for us.

Martha said...

No matter what the economy, no matter what your career choice, education is important.

Your comment made me think of one thing I forgot to post and that was that we didn't want our children to "have" to work during the college school year. We want them to concentrate on their classes and give them every opportunity to excel. I cannot imagine the added burden of working a full time or part time job and taking a full class load. I know that some people are doing it, but I never wanted my kids to have that kind of stress.