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GarrAarghHrumph
09-16-2010, 01:08 AM
If you work for a year or two and file your own income tax, your parents are out of the equation. I went to radiology school, worked and supported myself, then went back to school. I paid for every penny of my college education.

In order to be able to be considered independent for the purposes of financial aid, a student needs to be either:

- Age 24 or older
- Married
- Have dependents other than a spouse
- A veteran of the US military
- A grad student, or
- An emancipated minor

Otherwise, you need to include your custodial parent's income on your FAFSA.

When the US gov't calculates your aid, they'll take your parent's earnings into account. However, if your family absolutely refuses to give you financial assistance, you can appeal to the director of financial aid at your school, and they do have some leeway to make adjustments. If their school has the money to do so. Which they may not.

Garden Kitty
09-16-2010, 01:16 AM
Now that I have a baby, I'm thinking of college. What do you guys think of those 529 plans where you lock in today's prices? That's the way I'm leaning, but I'd be interested to know if anyone had experiences with them.

I don't have kids, but I did some research on the plans when my parents wanted to start one for my niece and nephew. If you're interested, research the options in your state, and in some others. Many plans allow people in other states to invest, and some states have better investment options and lower fees. But also consider the impact of a state tax deduction. Typically, you'll only get the state tax deduction if you contribute to the plan for your state.

If you are otherwise maxing out or at least are comfortable with your retirement contributions, then the college plans can be a useful way to save. If not, you may want to consider a Roth IRA instead if it's available (or converting a regular IRA if you're otherwise not income eligible). You can always withdraw the contributions for college expense, while getting the benefits of tax free earnings. It also keeps the money more flexible if it turns out your kid doesn't want to go to college, or doesn't need the money because of scholarships.

Again, I don't have kids so I'm not that familiar with the issues, but just a few thoughts to consider.

GarrAarghHrumph
09-16-2010, 01:37 AM
I have a 529 plan for my daughter, but not one that locks in tuition at any one school, or can only be used in one state. Mine is more flexible than that, because we're not sure if we'll all stay here in NY, or move back to Mass.

Prancer
09-16-2010, 01:49 AM
I think this is the problem: parents don't have money because they're not saving for it.

While that's true, it is also true that a lot of people can't realistically save enough to put their kids through four years of college--or at least not the private college of their kids' dreams--without hurting themselves in the process. And while it is nice that you supported your parents in your turn, I don't want my children to support me, ever, and I don't think most American parents would.


Even if you don't live with them?

Even if you don't live with them, unless you're married (and some other exceptions). It is possible for colleges to override that particular rule, but it is very rare for them to do it.` Students have to prove that they have basically been completely abandoned by their families.

If you want to do the emancipation route, you usually have to do it before you are 18 and you can't do it for financial aid reasons. It's a choice, but it definitely won't work for everyone.


Between the two of them they put both of themselves through school, graduated with no debt, owned a house which made a nice profit when they sold it and moved to where they now live. It can be done if the student wants it to happen.

Yes, and that's basically how my husband and I (and a lot of our friends) did it, but I don't think it is something that anyone can do. We were very lucky in that everything went according to plan--no real disasters, no unplanned pregnancies, no big health problems, etc.

Anita18
09-16-2010, 02:12 AM
I think this is the problem: parents don't have money because they're not saving for it.

Which leads me to my rather unpopular conclusion: I found Americans in general don't set aside enough money for the most important things in life like retirement or college but dump much of their money on fixed assets (e.g. housing, cars, stuff in general). That leads to liquidity issues during tough times.
But you're supposed to use your house as another form of income! Yay home equity! :saint:


My parents paid for my college. They lived very cheaply and paid through the nose for my school. I wasn't proud of it but I was a foreign student at that time and I couldn't work off campus or qualify for US government aid. That had a real impact on me and I felt kinda depressed about myself throughout college.

After I graduated and got a job I supported my parents in return.
You could think of it this way: your parents chose to put you through college. You didn't squander it and obviously you're grateful, but there's no need to feel guilty about it. It's what your family chose to do.

The solution isn't to persuade the well-off into denying themselves opportunities out of guilt, it's to make it easier for everyone to get the same opportunities.


My niece got married right out of high school. She had a full academic scholarship and her husband had worked for Wal-mart since he was 16. He was 21 when they got married. He sold all those stock options they gave employees rather than money, continued to work and not only paid all his college expenses but their living expenses as well. Between the two of them they put both of themselves through school, graduated with no debt, owned a house which made a nice profit when they sold it and moved to where they now live. It can be done if the student wants it to happen.
And luck was a huge factor as well, like Prancer mentioned.

My parents live fairly cheaply. We were always pretty frugal and have a pervasive saving mentality. My mom was able to retire at 48 and my dad might actually follow through with retirement at 60. But that development (my mom's retirement particularly) wasn't just because they saved enough to do so - they sold their Bay Area house, which had doubled in value during the 7 years we lived in it, right before the real estate bubble burst.

It's always a combination of things.

rfisher
09-16-2010, 02:24 AM
Yes, and that's basically how my husband and I (and a lot of our friends) did it, but I don't think it is something that anyone can do. We were very lucky in that everything went according to plan--no real disasters, no unplanned pregnancies, no big health problems, etc.

It worked for my niece and her husband because he's the most fiscally responsible person I've ever known. :lol: They are in their early 30s and he just bought out his employer's CPA firm and she quit teaching this year. He kept working at Wal-mart while they were in school in order to keep health insurance for both of them.

jlai
09-16-2010, 03:07 AM
But you're supposed to use your house as another form of income! Yay home equity! :saint:

Quite a few Chinese parents I know mortgaged their house/flat/apartment to get their kid through college. It's not uncommon at all.


You could think of it this way: your parents chose to put you through college. You didn't squander it and obviously you're grateful, but there's no need to feel guilty about it. It's what your family chose to do.

The solution isn't to persuade the well-off into denying themselves opportunities out of guilt, it's to make it easier for everyone to get the same opportunities.

I wasn't guilty because of that. It is a long story.

We weren't well-off. In fact, we were blue collar folks who earned less than average folks--that's why I think many more families can financially put their kids through college if they are determined to do so and plan early. Of course, in many families like mine, the whole family pitch in, so it's not just on the parents.
Not that I think the family owe the kids college though, mind you. If my parents hadn't paid I would have gone for something cheaper.


My parents live fairly cheaply. We were always pretty frugal and have a pervasive saving mentality. My mom was able to retire at 48 and my dad might actually follow through with retirement at 60. But that development (my mom's retirement particularly) wasn't just because they saved enough to do so - they sold their Bay Area house, which had doubled in value during the 7 years we lived in it, right before the real estate bubble burst.

It's always a combination of things.

That sounds just like my parents. :) Despite being blue collar, my parents managed to retire early and put me through college--no small feat I'd say.

jlai
09-16-2010, 03:11 AM
While that's true, it is also true that a lot of people can't realistically save enough to put their kids through four years of college--or at least not the private college of their kids' dreams--without hurting themselves in the process. And while it is nice that you supported your parents in your turn, I don't want my children to support me, ever, and I don't think most American parents would.


Well if every American believes they need to buy a house with a bedroom for every child, have two cars, go on annual vacations, have nice Xmas presents every year, etc etc and whatever the Joneses are expected to have regardless of their income level, then no, they won't have enough for college.

Prancer
09-16-2010, 04:23 AM
Well if every American believes they need to buy a house with a bedroom for every child, have two cars, go on annual vacations, have nice Xmas presents every year, etc etc and whatever the Joneses are expected to have regardless of their income level, then no, they won't have enough for college.

Does no one on this board know people who aren't middle or upper middle class? :huh:

Considering that the average American household income is all of $56K, I find it rather unreasonable to think that that is the way most Americans live. The average tuition for one year of private college is $26K. If your child is able to get into a top private college, then good for you; you probably will have little or no debt. But if your child ends up, as nearly all of them do, in something less than an Ivy or near-Ivy, then it is very likely that someone is going to have to pay a whacking chunk of tuition.

I don't know when you went to college, but tuition is bit more expensive now than it used to be. How much could your parents have saved? And at what cost and for what purpose?

[P]ublished college tuition and fees increased 439 percent from 1982 to 2007 while median family income rose 147 percent.

http://www.nytimes.com/2008/12/03/education/03college.html

Even parents who have planned and saved usually haven't planned and saved enough. Colleges across the country had double digit tuition increases this year and that's not going to stop any time soon. Endowments are down, states have slashed education spending, costs are up, and most colleges are dealing with financial trouble, which is going to be passed on.

I would be very careful about choosing to send a child to college at all right now unless my child was truly academically inclined. Of the freshmen who entered college this fall, the majority will not graduate. And of those who do:

Average starting salaries are down, and employers plan to make only 5 percent more job offers to new graduates this spring compared to last spring, when job offers were down 20 percent from 2008 levels, according to a study by the National Association of Colleges and Employers,

http://www.nytimes.com/2010/05/25/business/economy/25gradjobs.html

I think most Americans are completely unrealistic about college in all kinds of ways.


It worked for my niece and her husband because he's the most fiscally responsible person I've ever known. :lol: They are in their early 30s and he just bought out his employer's CPA firm and she quit teaching this year. He kept working at Wal-mart while they were in school in order to keep health insurance for both of them.

Yes, but he COULD work at WalMart and in a position that gave him health insurance.

When my husband and I got married, he had an Associate's Degree in computer science and got a job as a programmer. He worked full time, we had health insurance, blah blah blah. But again--we were both healthy, he never got laid off (although it's been close a few times), I didn't get pregnant, etc., etc. There's more to it than just being fiscally responsible. Your niece's husband could be the most fiscally responsible person in the world and that certainly gives him a huge advantage, but he was still just one bad accident away from disaster.

genevieve
09-16-2010, 04:31 AM
Why are you harping on Americans? Is the US truly the only culture that prioritizes those things?

ETA: sorry - my post was in response to jlai, not Prancer.

IceJunkie
09-16-2010, 05:46 AM
I'm a senior in college right now, and I'm roughly 25 grand in debt. My parents haven't paid for any of my education, and have always said that college is something that for me to truly appreciate, I have to pay for. It sucked because my parents have quite a high income, so I was never able to get the good scholarships or the like. I was a 3.5 GPA student in high school, good but not exceptional. Overall, my freshman year I probably had $700 in scholarships, so I essentially got a few books paid for. Everything else was federal loans. I've also worked throughout college.

I lived in the dorms or in an apartment my first three years, and this year I couldn't stand the possibility of taking out any more loans, so I moved back home and have just been paying for my school out of pocket. Not exactly how I envisioned my senior year, but I have to start thinking long term. I'm also thinking about joining the Navy and becoming an officer when I graduate. They don't have a loan repayment program, but all the perks of being on active duty, like free housing and other stipends coupled with the good income, I shouldn't have any problems paying the loans back after a few years. Plus if I decided to get a graduate degree, they'll cover it.

modern_muslimah
09-16-2010, 06:23 AM
deleted post

vesperholly
09-16-2010, 12:12 PM
On top of that, it has become tradition for alumni classes celebrating major reunion years to raise funds toward paying off student debt. Even before the debt cap was adopted, those gifts were wiping out the debt of 30-40 students each year, approximately 1/10 of the graduating class.

Wow. :cheer2:

I was accepted into Ithaca and Sarah Lawrence, but they were averaging around $22-26K per year in 1998. Ithaca was the only one that offered me a merit-based scholarship ... of $2,000 per year. :lol: I didn't even bother applying to Northeastern like I wanted. I suppose if I had really wanted to go to a private school, I could've worked my butt off to get more scholarships. Our deal was that my parents pay for undergrad within reason, and anything past that was on us. I could've gone to Ithaca, but I would've had to quit skating and not have a car. I worked part-time jobs every year but freshman for spending money.

I was happy with the out-of-state public school that I chose, and I got a good education. My program focused on professors with real-world experience and getting people jobs. I have former classmates who now design for the Washington Post and St. Pete Times.

I can't imagine what careers, outside of medicine, law, engineering and computer science, could possibly justify the burden of $100K in debt. The amount boggles my mind.


Your niece's husband could be the most fiscally responsible person in the world and that certainly gives him a huge advantage, but he was still just one bad accident away from disaster.
Exactly. My aunt fought ovarian cancer for 13 years before she died last year, and it bankrupted their family. My cousins are on the hook for about $40,000 apiece for their college, and they rent a small house on the outskirts of our city. No matter how healthy or frugal someone is (and they were), it can all go bad so quickly. So much of life is luck and timing.

Hannahclear
09-16-2010, 12:42 PM
Does no one on this board know people who aren't middle or upper middle class? :huh:

Considering that the average American household income is all of $56K, I find it rather unreasonable to think that that is the way most Americans live. The average tuition for one year of private college is $26K. If your child is able to get into a top private college, then good for you; you probably will have little or no debt. But if your child ends up, as nearly all of them do, in something less than an Ivy or near-Ivy, then it is very likely that someone is going to have to pay a whacking chunk of tuition.

I don't know when you went to college, but tuition is bit more expensive now than it used to be. How much could your parents have saved? And at what cost and for what purpose?

[P]ublished college tuition and fees increased 439 percent from 1982 to 2007 while median family income rose 147 percent.

http://www.nytimes.com/2008/12/03/education/03college.html

Even parents who have planned and saved usually haven't planned and saved enough. Colleges across the country had double digit tuition increases this year and that's not going to stop any time soon. Endowments are down, states have slashed education spending, costs are up, and most colleges are dealing with financial trouble, which is going to be passed on.


:respec: Thank you! My husband and I could save every possible penny over our child's first 18 years and we wouldn't be able to save enough for most colleges. That's why I'm considering the lock-in 529. It will get my dollars to go further.

My goal is about $25K for each child.

To address jlai's list: 1) no house, we rent 2) one car 3) no annual vacation 4) modest Christmas gifts. :rolleyes:

jlai
09-16-2010, 01:27 PM
Considering that the average American household income is all of $56K, I find it rather unreasonable to think that that is the way most Americans live. The average tuition for one year of private college is $26K. If your child is able to get into a top private college, then good for you; you probably will have little or no debt. But if your child ends up, as nearly all of them do, in something less than an Ivy or near-Ivy, then it is very likely that someone is going to have to pay a whacking chunk of tuition.

I don't know when you went to college, but tuition is bit more expensive now than it used to be. How much could your parents have saved? And at what cost and for what purpose?

This is always a rather un-PC topic for me and I expect to be criticized for my un-pc views. So here it goes:

I said I was a foreign student so our family paid the whole way -- no off-campus job, no financial aid, nothing subsidized. Which means what I used to pay for tuition is about what most are paying now for a public college. And with a much lower income than $56,000. Granted, my brother moved in with my parents, and my parents lived on my brother's income (that's his first job which was a tad more than what my parents made) and my parents used their own income to subsidize my college. But that added up to college tuition + expenses. Of course, that also meant no after-school lessons, no music lessons, no annual vacation, no eating out, etc. etc. etc. Not everyone can live like that.

Stories are already there for the kids to pay their way--what this thread is about. So paying for college is not undoable like most make out to be. They just have to find more creative ways to do it. Longand short is, if you believe ths is your #1 priority in life, then you and the family find some way to make it happen with minimal debt. Just like most things.

At my job we evaluate colleges often, and colleges drive up admin costs like no one does. And their special pet projects that they keep coming back to ask the govt money for. But that's another story.


I think most Americans are completely unrealistic about college in all kinds of ways.

Can't argue with that.