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  • Cost of College

    I was using a online calculator to estimate the all in cost of college for my kids when they reach that age. I had never done the math before, but the estimate came up at about $650,000 for four kids at a state school. The calculator I used had an assumption that college costs increase 5% per year. Can this be correct? For those who have put kids through college, were your predictions about the cost accurate or was there some wiggle room? Our plan was to fund two 529 accounts and pay for two kids out of each one, but it looks like we would need to beef up the contributions for that to have a chance at covering it all.

  • #2
    4 kids x 4 college educations = $900,000 for me so far , 1 year to go , so should be under a million

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    • #3
      Originally posted by Random1 View Post
      4 kids x 4 college educations = $900,000 for me so far , 1 year to go , so should be under a million
      How have you been paying for this so far? Are these private schools? That number causes a visceral reaction and makes my head spin!

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      • #4
        I think these numbers assume dorm living and meal plans for 4 years, basically the most expensive way to live during college. Roommates and Ramen should cut those numbers way down;-) I know state school tuition varies but ours is under 10k/semester.

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        • #5
          Originally posted by FunkDoc83 View Post
          I was using a online calculator to estimate the all in cost of college for my kids when they reach that age. I had never done the math before, but the estimate came up at about $650,000 for four kids at a state school. The calculator I used had an assumption that college costs increase 5% per year. Can this be correct? For those who have put kids through college, were your predictions about the cost accurate or was there some wiggle room? Our plan was to fund two 529 accounts and pay for two kids out of each one, but it looks like we would need to beef up the contributions for that to have a chance at covering it all.
          $650k / 16 kid-years is $40k per kid per year at some (very?) distant point in future dollars.
          If anything that number seems low to me unless your kids are already teens.

          Our state flagship is $31k per year right now.

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          • #6
            Originally posted by FunkDoc83 View Post
            I was using a online calculator to estimate the all in cost of college for my kids when they reach that age. I had never done the math before, but the estimate came up at about $650,000 for four kids at a state school. The calculator I used had an assumption that college costs increase 5% per year. Can this be correct? For those who have put kids through college, were your predictions about the cost accurate or was there some wiggle room? Our plan was to fund two 529 accounts and pay for two kids out of each one, but it looks like we would need to beef up the contributions for that to have a chance at covering it all.
            Here is what i have found out so far sending one kid to college

            College costs for a single kid has 5 parts

            1. Tuition. Most people equate tuition costs with total college costs. Big mistake. Tuition can be between $15K per year for an instate college to 60K for a private school. Usually those in VHCOL areas and Ivy are the highest and they don't offer a cent of assistance for us physicians so don't be fooled by those average costs of $17K. Those are for a low income office or blue collar worker with three kids.

            2. Accommodation. I thought dorm costs were expensive till I found out living off campus is more expensive. The days of cheap 5 kids to a tiny house far away from college are rare. In decent college towns the costs of accommodation in safe neighborhood apartments have become very expensive. And that is with 3 people sharing a 3 bedroom apartment. Have you guys noticed how expensive rents have become in this housing market iin the past 2 years. That has trickled down to college accommodation costs. A friend's daughter lived with 4 others 30 mins off campus to save a few hundred dollars until roaches and a shooting at the next door apartment bought them scurrying back closer to campus in safe areas. Cheap apartments are cheap for a reason.

            3. Food. Again, you might have noticed the rising costs of food. You might think nostalgically of living off Ramen but try enforcing that semi-hunger to your kids, after you have fed them nicely at home for 17 years. You should be happy if they don't order uber-eats.

            4. Other college expenses - e-books, computer, security ( college are passing the costs of those police and their cars and other expenses on to the kids) and wifi in campus and nickel and diming till that becomes a substantial sum.

            5. Miscellaneous expenses like clothes, travel costs to home and some spending money. If you live off campus, gas money and vehicle maintenance.

            All in all, it costs 50K per year in a decent in-state college when you add all up and 80K in a private college in HCOL. So 250K for the 4 years might be a middle of the road costs now. It will be quite a bit up in 10 years. Brace yourself up to sticker shocks and unexpected gotcha expenses.


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            • #7
              I've got about a eight years before first goes to college. Are most docs under saving for college at this point with the projected costs being so high? I know I feel that way now running the numbers a little bit. Our goal is to still pay for our kids college, or at least the equivalent of a state school all in.

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              • #8
                How have you been paying for this so far? Are these private schools?

                4 kids , 4 private schools, I made the wrong choice in setting the standard when my first kid got into a "good private" school. If I would have known better at the time, I would have done it differently. I never really saved directly for college, we just saved money in general. I was lucky enough to pay for school by the cash flow method and dividends.

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                • #9
                  This is an eye popping thread to me. If I were in this position and staring at half a million in education costs, I would have to seriously consider just depending on PSLF. In other words, tell the kid that to take out federal loans for four years (or longer) then as long as they work at a 501c3 for ten years, you’ll pay the loans off during that time, otherwise they can work it out.
                  Of course, if PSLF gets canned, that plan gets blown up, otherwise is it a terrible idea?

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                  • #10
                    Originally posted by FunkDoc83 View Post
                    I've got about a eight years before first goes to college. Are most docs under saving for college at this point with the projected costs being so high? I know I feel that way now running the numbers a little bit. Our goal is to still pay for our kids college, or at least the equivalent of a state school all in.
                    Since college costs are so unknown (not just rising prices but there's a huge difference between private vs public out of state vs public in-state vs community/trade school) and each kid is unique, I think there's a tendency to underfund. We will be underfunded. Have 3 kids and the oldest is just more than 10 years away. We still expect to pay at least 4 years of in-state school just because we are fortunately in an area where the public state schools are pretty awesome, or we have reciprocal agreements with neighboring states that have awesome in-state schools.

                    We contribute the max each year to 529s to get the state tax deduction, but it's a very small max. So another goal we have is to ensure the mortgage is paid off by the time the oldest goes to college so that we can more easily cash flow it (although I still don't think we'll make enough to cash flow). Basically trying to create options for us while also acknowledging we could be underfunding, especially if kids go to expensive 4-year private schools

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                    • #11
                      Originally posted by Lithium View Post
                      This is an eye popping thread to me. If I were in this position and staring at half a million in education costs, I would have to seriously consider just depending on PSLF. In other words, tell the kid that to take out federal loans for four years (or longer) then as long as they work at a 501c3 for ten years, you’ll pay the loans off during that time, otherwise they can work it out.
                      Of course, if PSLF gets canned, that plan gets blown up, otherwise is it a terrible idea?
                      Interesting idea. Future generations are screwed! This sounds like the perfect time for Crixus to make a post about the debt crisis or something.

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                      • #12
                        Your “state school” has a total cost of attendance.
                        ADD 25%-50% to that as Kamban outlined above. Some of those costs won’t be eligible for reimbursement from a 529. Out of pocket is different than COA.

                        Chances of grants for “state schools” is small.
                        Much better chance at private schools that aren’t local. Boxes to be checked for their target demographics.

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                        • #13
                          Administrators will typically claim that the lion’s share goes to hiring and retaining faculty. I just don’t see that being the case when there is so much other waste: the administrators, deans, Title IX Coordinators, president’s salary/home, athletics, and other fixings.

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                          • #14
                            Originally posted by F0017S0 View Post
                            Administrators will typically claim that the lion’s share goes to hiring and retaining faculty.
                            I had plenty of professors who I felt were not great educators. I guess schools don't care about how good they aren't at teaching and more about grant money and how the professors are viewed in their given field. There has got to be a better way out there.

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                            • #15
                              Originally posted by F0017S0 View Post
                              Administrators will typically claim that the lion’s share goes to hiring and retaining faculty. I just don’t see that being the case when there is so much other waste: the administrators, deans, Title IX Coordinators, president’s salary/home, athletics, and other fixings.
                              The state U my partner and I went to has gone through the most unreal building boom - very few things have not been either been torn down and rebuilt or so heavily remodeled to the point that they are unrecognizable from 20-25 years ago. I think universities feel a need to compete in some sort of buildings/technology arms race. "back in my day" our buildings were fine, but most had been built in the 1950's-60's, and not remodeled. Now they know students will just get more loans and pay whatever is asked, but are they actually providing a higher level of education, or admitting more students to use these large new buildings? I doubt they have more professors or that they are anything more than the TAs a lot of them were back in the 90's. I know the campus enrollment numbers are barely up from my time. My 5 years at that university (1994-1999) cost $50,000 all in, including living off campus in a nicer apartment with only one roommate for 3/5 years, dorms the first two. My parents paid mine, they even forbade me from working during the school year! I believe now 5 years, same school, would be more like $150,000, maybe more. I doubt my parents would have paid that much without me taking at least some debt. My dad paid his entire way through college working part time in the dorm cafeteria. Definitely couldn't do that now - when even physicians are gagging on the bills.

                              Another cost driver I'd like to complain about: I've also noticed that while our school used to have a donut around the university of what I would call slum houses - 3-4 students sharing a house, usually a crusty old thing built in the 1920's, always run down, but cheap ($650 for a three bedroom house at the time, split three ways), there are large national housing companies coming in and tearing down wide swaths of these and replacing them with multistory apartment blocks like you see in urban areas, with rents around $1,000 for a bedroom in a multi bedroom apartment, no meals included. All of the traditional on campus dorms are also being torn down and replaced with apartments, where each student gets a room for $x, and they share a living room/kitchen, etc. This is all contributing to higher total cost.

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