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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8138  
Subject: College expenses, postscript. Date: 2/16/2012 5:43 PM
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I have one kid and he graduated in December so my years as a college parent are finished so I thought that I would post a few semi-random ramblings.

1) Choice of school:

He decided to go to a regional state university instead of one of the states well known flagship universities which he could have likely gotten into. He had slacked off some in high school (sort of a teenage boy syndrome) so going to an expensive private school or out of state wasn't something we were willing to pay for until he had proven himself in college for a year or two. He wasn't interested in these so this was pretty much a non-issue.

It turned out that he fit in well at that school well and while his grades were not outstanding he was in a hard major, Computer Science, and now he has a good job with bright career prospects. In retrospect there is a very real chance that he would not have graduated if he had gone to one of the flagship universities.

Lesson learned: Somewhere along the way when he was in high school and we were trying to help with the college selection process I read something like; "The school search isn't about getting your kid in the best school, it is about finding the school that is the best fit for your kid." This is very true.

2) Stay flexible in your funding.

When he was about five years from college we put the college savings into iBonds for their safety and the tax advantages. The majority of these were the ones that pay 3% above the inflation rate. This is way above anything that you can get today so there is no way that we were going to cash them and lose that rate. We ended up shuffling money around to pay for the college with other funds. Having several different types of savings can work out well

3) There are a lot of non-tuition costs.

Between the moderate in-state tuition, and credits like the American Opportunity Credit the net tuition costs were not all that bad, but most semesters the other costs, like room, board, misc fees, etc were several times the out of pocket tuition costs. In planning the tax advantages be sure to look at which costs have tax advantages with the various saving options are covered.

4) Kids working during school.

When my son started school he wanted to get a part time job so that he would have more spending money. We are in the fortunate situation of being able to pay for our sons college so we put the rule in that he could not work during the school year unless it was related to his major. Our reasoning was that if he had enough time to work then he should take extra classes instead because the incremental cost of additional classes was so low. By his junior year he had found a job at the campus computer center and was able to get some good job experience that helped him get his first job after he graduated.

This worked out very well for him since having some real world work experience is almost required for many entry level jobs now. Most internships requires a 3.0 GPA to even apply for them. he did not have that GPA so without the campus work experience his job prospects would have been much worse.

5) A pass it on concept.

My parents had paid for my college at a state university so I felt I was passing it on to my son by paying for his. We have talked about the money and about how so many of his friends have a LOT of debt and he appreciates the good situation he is in. Since he was able to get a good education without a taking on lot of debt I have encourage my son that he should someday help his kids out (if he has them) by "passing on" the money to go to college as much as he is reasonably able to.

6) Selection of major.

When he was in high school I halfway jokingly told him that when we dropped him off at college that we would drop him off in front of the job placement center instead of the dorm because he was there to learn skills for a career and he was going to vocational school and not a college. He was free to pick whatever major he wanted but that it had to have a good job placement rate for the graduates even if it wasn't high paying. He did change from engineering to computers but he was never interested in a major that had questionable job prospects so this was not a real issue.
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