S/O: adult children, college expenses

[DawnM]

Just curious what you all do/think/have done.

Our kids are just getting to college age. I don't know what they will choose for college or what the costs will be and it will depend on their majors, etc....

But I am just wondering how you make it equitable money wise.

The below is just an example:

Let's say you have $60K available for each kid ($15K per year to contribute).

What do you do if one kid chooses to use all of it, even maybe takes out loans to cover the rest. And the other kid only needs $20K of the $60K. Do you give him the difference in another way, maybe give him a down payment for a house or get a car or something?

Please don't argue, I know everyone does things differently, I genuinely wonder what is equitable.

 

[QueenIsabella]

My kids have college accounts. Whatever is left after college is theirs to keep. My oldest chose to go to the priciest school she got accepted to. Her brother goes to community college. They both understand and accept their choices and the financial differences that result.

As for the question of how to allocate the leftover money, presumably the child would be an adult when they've finished college, so I would just give them the money--and if it's in an account with their name on it, it's legally theirs, anyway. Let them choose if a car, house down payment, wedding, or world cruise is the way to spend it.

 

[ColoradoDisneyFreaks]

I think there are a lot of variables that would go into this. If Kid 1 uses all of their money and Kid 2 doesn't, but does get post-school training and is leading a productive life, then yes, I'd gift the rest of his college fund to Kid 2 to help with a house. If Kid 2 is being a bum, and wasted the $20K he did use, then nope, that goes back to my retirement fund until/unless Kid 2 decides on a career path with training (college or trade) that will move their life forward.

 

[Hrhpd]

Just curious what you all do/think/have done.

Our kids are just getting to college age. I don't know what they will choose for college or what the costs will be and it will depend on their majors, etc....

But I am just wondering how you make it equitable money wise.

The below is just an example:

Let's say you have $60K available for each kid ($15K per year to contribute).

What do you do if one kid chooses to use all of it, even maybe takes out loans to cover the rest. And the other kid only needs $20K of the $60K. Do you give him the difference in another way, maybe give him a down payment for a house or get a car or something?

Please don't argue, I know everyone does things differently, I genuinely wonder what is equitable.

We agreed to pay tuition, room & board and all expenses for their undergrad. We didn't have a set amount per child and didn't track to make it equitable. Their preferred college, within reason of course, is what we paid for.

I am not sure what we would have done if one child's tuition was significantly lower than the other. Or if one child chose not to go to school. We probably would have put money away in a savings plan for their first down payment. But we would also have had to look at other things we spent over the years. For instance, the amount we spent on sports for one child and not the other as one of my children was on a travel team so travel costs were enormous. Are they different sexes so wedding expenses might be different if they go the traditional route of bride's parents paying?

Luckily, the children all chose the same university and the same school within the university, so it all equaled out.

Our family, life is not fair. It is the degree that was paid for, not how much the degree cost.

 

[asta]

We did not worry about giving more to one over the other. Both of our daughters wanted to attend the same university. The first received a big scholarship, partly because she was the first in our family to attend a school in that state. Obviously the second daughter wasn't eligible for that so we paid more for her. Fast forward to grad school and daughter #2 ends up at a university that pays her more and she lives in a lower cost city. Daughter #1 is at a higher ranked school but its grad student stipend is less and rents are much higher. Everything kind of evens out, we don't account to the penny how much we help them out. We are just grateful to be able to help

 

[MickeySP]

Just curious what you all do/think/have done.

Our kids are just getting to college age. I don't know what they will choose for college or what the costs will be and it will depend on their majors, etc....

But I am just wondering how you make it equitable money wise.

The below is just an example:

Let's say you have $60K available for each kid ($15K per year to contribute).

What do you do if one kid chooses to use all of it, even maybe takes out loans to cover the rest. And the other kid only needs $20K of the $60K. Do you give him the difference in another way, maybe give him a down payment for a house or get a car or something?

Please don't argue, I know everyone does things differently, I genuinely wonder what is equitable.

I would think it doesn't need to by monetarily equitable, just college equitable. Get them through college and if you have cash leftover take your DH or SO to Disneyworld!!

Or start a new fund for the future grandkids.

Either way nice saving

 

[LisaR]

My DD will have a huge chunk of change leftover when she graduates in December. My son has another year before he decides what to do. Depending on the option he chooses, he will either have money leftover (much less than DD but still a nice amount) or zero leftover. His choice.

The money we saved is our money, but it was saved for our kids to go to college. Our DD earned scholarships making our out of pocket cost very low. Both DH and I feel she should get a large chunk of that money, but we aren't just handing it over to her. We have told her (and DS depending on what he decides) that the money is there, it is still ours, but we would be willing to use it to help her in the future. We don't know what that will be. Will she need help with rent in the first year or two? A down payment on a house? No clue. We will play it by ear. We have told her that the money was designed to help her in her future (college initially, but that has expanded now). We will not give either one of our kids a lump sum. DH and I don't view this as a gift. For Christmas we give the kids money and there aren't any strings attached because it is a gift. This isn't a gift in our eyes. It is our money that was earmarked for one thing and now there are leftovers that we get to decide what to do with. We could keep it and spend it ourselves if we wanted, but neither of us want that. Any leftover money will be there to help them get settled in their adult lives.

 

[jbcheerchick93]

My Mom and Dad agreed to pay the equivalent of our state school's in-state cost (tuition, room, board). That would equal about 25k a year, which I personally supplemented with loans. I had a scholarship my freshman year and worked after that to try to maintain lower costs, but life happens and my parents weren't able to help me with the final year, so I ended up with a bit more in loans than I initially planned. I chose to go to an out of state school knowing the consequences, and of course, life happens! I intended to graduate with an engineering degree, and ended up with a degree in human services instead, but I am MUCH more passionate about it and way happier with my choice.

My brother also had the same deal and was told that he could go to our state school for essentially no cost, and he also chose an out of state school knowing that he would need to take out a significant amount of loans as well. He is pursuing a finance degree, and wants to stay in the area that he chose to go to school in.

We both decided to participate in greek life, and all of those costs were on us. My parents paid for my dues one month as a Christmas present, and I think they bought my brother's formal tshirt for him. They pay for half of our book costs, and they pay for our housing, whether that be on-campus or renting an apartment off campus. We are responsible for our utilities and any other extras that we want, trips with friends, shopping, alcohol, etc. Occasionally my parents transfer $50 or $100 to our accounts along with the money for our rent.

I graduated a few weeks ago and my parents gave me all of the savings bonds that had been purchased for me over the years, as a sort of emergency fund. I'm letting them continue to mature for now, but if I were in a situation where I really needed to cash them out it would be up to me. They also gifted me the savings account that they had for me as I was growing up. This is where they put the birthday checks, the communion checks, the confirmation checks, and the christmas checks that I received before I was 15 and had my own job. Once I had my own checking account, I kept that money myself. It was a nice surprise to have a little extra as I graduated, but I'm choosing to keep it in a savings account for now.

Since we both chose similar paths, it was pretty easy for my parents to make it equitable, but my mom has some friends who gave their kids the difference when they graduated but they did it as @LisaR did, by helping them with apartment costs in the beginning, buying furniture, buying a new (to them) car for commuting to work, helping with professional wardrobe, etc.

 

[disykat]

Both of our kids were given the same parameters and they made their choices within that. Beyond that, there was no effort to make it "even." Even came with what we offered, not what we spent.

 

[Poohforyou]

Op, life isn't fair and you'll drive yourself crazy trying to make things equitable. I had one brother go to Yale and another to community college. My 3rd brother and I went to schools between the two. There wasn't a cash payout at the end to even things up but, like others have said, there has been help in other ways over the year.

I only have one but she'll be a hs senior next year so these conversations are very common in our house. I don't like giving difinitive answers when I don't have all the facts.

My dd has been asking things like will she need to take out school loans, will she gave to pay them back or will we help. It's so up in the air until she's accepted and we see what kind of merit scholarships she'll get. My answer to her is that we'll have to wait and then make the best decision we can.

My advice to you is to be upfront with your kids about what has been saved and their options with those funds.

 

[mjkacmom]

We have 529's in each child's name, it is assumed that each child will, at the very least, go away to a public university. Unfortunately, that costs over $100,000, and we've managed to save around $30,000 for each child. These funds are for education only - if one of them chooses not to further their education, to money will go towards the education of the other kids.

I can't imagine having anything left over! I'm looking at over half a million dollars for my kids to go to public universities!

 

[Hikergirl]

We have 3 kids, each has their own account for college. If my dd stays on her current path she will spend it all on her college expenses so there won't be anything left over. If she decides not to pursue her Master's then she will have quite a bit leftover to do what she wants with. I hope she would use it for a down payment on a house, but it is her money with no strings attached.
My other 2 have no idea what they are doing yet, but the same "rule" will apply. That money is for college, if there is anything left its theirs to do what they wish with it.

 

[Bluestars]

My son has scholarships that pay some of his expenses and we are paying the rest. I do not have a set amount, so there will be no money left over. We will help him with a down payment on a house someday, but it is not tied to money for college.

Do whatever you feel comfortable doing. Every situation is different.

 

[tvguy]

We sort of felt, first come, first served.
DS went private , so his total college cost to us was 4 times what DD was.
DD went to a California State University, and we had paid off our house, so just spending what we had been spending on a house payment covered her college costs.

I think what many folks don't realize is, college savings need to start when the child is born. We also had Grandparents who felt Christmas and Birthdays are a time for modest gifts, AND a cash contribution to the grand kids college fund. Each kid got a $1000 saving bond (which costs $500) for each birthday and Christmas. That was a huge help.

DW and I both felt, based on different experiences, that parents are responsible for their kids college costs. I know that is not a popular view on these boards. My parents paid my college costs, so I grew up expecting that paying for college was a parents responsibility. My wife's mom did not, preferring to spend her money elsewhere. That experience is why my wife vowed she would pay for college for any children she had.

 

[aprilchem]

We've saved our kids' college money in UGM accounts, which are essentially a trust in the child's name with an adult (me) as the trustee. We intend to have $100,000 in the account for each child that will legally become theirs when they turn 18. My kids will likely not use all of that money for college - I'm a college professor, and one of the benefits of my job is free college tuition at my college or a number of other colleges, and we expect our kids to choose from one of those options. Room and Board is about $10k a year right now, so I'm assuming it'll be about $15k or so a year when my kids are college-aged, so they'll use $60k of that for room and board. The rest can go toward the down-payment on a house, their wedding, or some other expense.

Now, they could also blow it all on something stupid when they turn 18 - that's the risk of a UGM. But we've worked hard to instill responsible spending, budgeting, and money management skills since they were really young. Hopefully those lessons will sink in!

 

[DawnM]

We sort of felt, first come, first served.
DS went private , so his total college cost to us was 4 times what DD was.
DD went to a California State University, and we had paid off our house, so just spending what we had been spending on a house payment covered her college costs.

I think what many folks don't realize is, college savings need to start when the child is born. We also had Grandparents who felt Christmas and Birthdays are a time for modest gifts, AND a cash contribution to the grand kids college fund. Each kid got a $1000 saving bond (which costs $500) for each birthday and Christmas. That was a huge help.

DW and I both felt, based on different experiences, that parents are responsible for their kids college costs. I know that is not a popular view on these boards. My parents paid my college costs, so I grew up expecting that paying for college was a parents responsibility. My wife's mom did not, preferring to spend her money elsewhere. That experience is why my wife vowed she would pay for college for any children she had.

We too want to pay for our kids' colleges. We cannot afford USC at $70K per year, but we can certainly offer something else. Right now we have enough to offer each child a full tuition and fees cost to the local 4 year school while living at home.

IF I can get a dang job, we will be able to offer more. I am looking now.

We started saving when the kids were born, but I am so glad we didn't do the pre-paid plan. We didn't stay in that state and I am not sure how that would all translate if they didn't use it there.

 

[Mickeyluver37]

The deal with DD was 4 years at a state school. She found an out of state option with scholarships that actually makes her tuition/room/board cheaper than our state flagship. DS is offered the same, and his first choice *is* our state flagship. There is a good chance that his will actually cost $5k per year more....or he goes somewhere else all together that's cheaper. Either way, no one gets a big cash payout in the end. The kids have 529s which don't even come close to covering costs, so we are mostly paying as we go. So there won't be anything "left over" to speak of, and by the time the younger 2 get to college, I'm sure costs will be even higher so I can't be "fair."

 

[nkereina]

It depends on how you're viewing the money, IMO. If you're telling the kids you will help them with college, I don't see why you'd have to gift Kid 2 the "leftover money". If you've told each kid you're gifting them 60K, that's different. If you're budgeting 60K for each kid and Kid 1 goes over while Kid 2 has 40K leftover, why not use that money to help pay for Kid 1's loans? My parents covered my college (I have no siblings), but they told me they were going to financially help me with college as best they could. Not that they were giving me a set figure.

 

[NHdisneylover]

As parents with one who just finished her freshman year and one graduating high school next year, who are likely to take very different paths, here is how we are handling it (so far, at least):

The goal is to help the kids be able to have a good start towards a career which they can do well and enjoy and to manage that start with little or no lasting debt. If we can do that for both kids, then we are being fair---even if it costs different amounts to do so. Similarly--we probably spent different amounts on their activities growing up, and on clothes, or what have you--but each got what worked for them and what they needed and that was the right thing to do for our family--treat each child as an individual and meet their individual needs.


Which doesn't mean costs are not part of the equation at all:we do expect the kids to choose a college (or alternate path) which is in the lower end of tuition and work in ways they can (DD will be an RA next year), get scholarships where possible (again, something DD can do--this would be much harder for DS even if he worked twice as hard, the typical way schools measure things does not work as well for him), etc.


In the end--we'll probably spend less than half as much on DS, who will stay in Germany and do an apprenticeship and get a pricey DL here (which is not a minor cost--but will be useful in his career) than for DD, who has returned to the US for college and a more traditional path (though she will work harder at keeping costs down than he will and is doing everything in her power to make things reasonable) but both will be in a good position to have careers they are interested in--which, IMO, means we have fulfilled our end of the bargain.

If we were to be in a position to gift either kid large sums of money after they move into adulthood--I think we'd do that equally unless there was a compelling reason why one needed more, and what it cost to get them to independent adulthood would not be a consideration.

 

[tvguy]

It depends on how you're viewing the money, IMO. If you're telling the kids you will help them with college, I don't see why you'd have to gift Kid 2 the "leftover money". If you've told each kid you're gifting them 60K, that's different. If you're budgeting 60K for each kid and Kid 1 goes over while Kid 2 has 40K leftover, why not use that money to help pay for Kid 1's loans? My parents covered my college (I have no siblings), but they told me they were going to financially help me with college as best they could. Not that they were giving me a set figure.

We had no dollar amount, just we would figure out a way to pay the costs. Worst decision my son made in college, getting a job. Pressured by his girlfriend (now wife). Knocked his grades so he had to go an additional year. $9,000 income versus an additional $40,000 tuition/room/board. We would have given him the lousy $9,000!