College Funds

[deleted account] ( 16 moms have responded )

So, I have been seeing a lot of talk on here about college funds and how important it is to set one up for your children. My question is WHY??? I never had one. My parents made enough to support my siblings and me, but not much else. I WORKED my way through college (and I still am), so yes, it is harder, but still doable. Why must we allow our kids to depend on us to set them up for that time?



Yes, I understand some people want their kids to not have to work throught college, but then what will your new college graduate do for a job? Go into an interview and say "Hi, I'm 24 years old and I am a recent college graduate. No, Sir (or Ma'am), I have never actually had a job in my entire life, but please oh please hire me for this job that I am obviously way underqualified for." I can tell you one thing - that will never be me!!!



Of course my kids have small accounts in their names in case they NEED the money, but my hubby and I will expect them to hold a part time job to help pay for their college expenses. We will also expect them to apply for scholorships and academic awards to help pay for the cost of college. What motivates a child to do exra well in school and get scholorships if they know there is some magic fund out there from Mommy and Daddy that will just bail them out?



Can someone please shine a light on this for me? Am I just not getting it because I had to rely on myself for my educational expenses?

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LaCi - posted on 05/30/2010

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"Hi, I'm 24 years old and I am a recent college graduate. No, Sir (or Ma'am), I have never actually had a job in my entire life, but please oh please hire me for this job that I am obviously way underqualified for." I can tell you one thing - that will never be me!!!



I want my son to work, but I don't want him to have to try to pay for a good university. I want him to have the option of getting out of here, and I don't expect he'll have a job that will pay him well enough to pay his tuition and live. So yeah, he should work to pay for the things he needs, food, entertainment, etc, and I would like to set up his college fund to pay for as much of his tuition as possible to avoid him going into a ridiculous amount of debt getting student loans. If he were going to go the the university I chose in my area, tuition wouldn't be much of a concern as I lived at home because campus was a short distance, and tuition for instate students was nearly as low as community college. However, I want him to have the option of leaving and going anywhere he'd like to attend college. A high school student's salary isn't much when you're looking at NYU and more than $40k per year just to go to school. God forbid you get loans to cover your undergrad work and then want to go to grad school, I would imagine you're pretty much screwed by the time you graduate and have to work to pay off the debt. I feel extremely fortunate that there is a low cost, good quality university near me, and I have nothing against the school, I just want to ensure that he has the means to go to the school he wants to go to and go through with the programs he wants to go through.



Providing opportunity for him to get the education he wants does not mean bailing him out or ensuring that he never has to lift a finger. I absolutely expect my son to have a job. I just don't expect him to work 3 jobs to pay for his education.

Rosie - posted on 05/29/2010

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i feel some what the same as you. i worked my ass of through highschool, and manged just fine. and i thought i could as well in college. i ended up with 2 jobs trying to make ends meet, and then having to repay student loans and what not, i ended up quitting after 1 year.
while my kids won't have their college education paid for them because i do want them to understand the importance of working for things, i will make their college years alot easier than mine were. i will have them live with me if they wish, for a small fee (like a cheap rent) and if they want to live on their own, i will probably help them out, but they WILL have at least a part time job. they all have accounts set up in their names and i add money aevery now and then. my parents didn't do that for me, and i wish i would've had some money to lean on so i didn't have to work 2 jobs and go to school fulltime.

Krista - posted on 05/28/2010

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Yeah, I know a lot of people my age who are tens of thousands of dollars in debt from student loans. I don't want my kid to have to start out with that kind of burden. I'll probably do what my mom did: pay for university and residence, but I'm responsible for paying for my books, and for my own spending money. If I had had to work to pay my entire way through, it would have taken me probably four times as long to finish university, as I would not have qualified for student loans (due to my parents making too much), and my grades, while very good, weren't enough to get anything more than a couple of small scholarships.



One note as well was that I had to keep my grades above a certain level in order to a) keep my scholarships, and b) have my parents keep footing the bill for tuition. I was told very clearly that if my grades fell below that level, that I'd have to pay my own way for the rest of my schooling.



So that was a pretty good incentive right there.

Katie - posted on 05/28/2010

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I think that one of the biggest goals for most parents is to provide their children with "more" then they had. My parents had no college fund for me, and I sometimes wonder if I would have gone farther with my education had there been some money designated for that purpose. That's not to say that I believe in letting your children coast through their teens and early 20's without having to work. I managed a restaurant before my son was born and was often flabbergasted by the number of people (ages 18-25) who would come looking for a job and not only lack any work experience but also any semblance of a work ethic. Post secondary education is certainly extremely valuable, but there are things that I think can't be learned in school. My son will have a small account in his and my (and my husbands) name that will be given to him if and when he decides to attend some sort of post secondary training (be it trade school, college, university, etc...) And if he chooses not to take that route we will save it for him to help out with a down payment on a house when the time comes, or to pay for a wedding, or to travel. I think that often parents are doing their children a disservice by not helping them to discover that in the real world there is seldom someone around to pay your way.

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Krista - posted on 05/30/2010

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Exactly. There's nothing wrong with a student working while in university. But if a student has to work full-time (or more) hours just to pay for their tuition and housing, that tends to discourage a lot of them from continuing with their education. They take a year off school to work some more in order to save up, and wind up getting into that working rut and never go back to school.

Jocelyn - posted on 05/30/2010

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If my parents had had an RESP for me I think I would have gone to university straight out of high school (instead of sleeping around and drinking and getting pregnant). If my parents had an RESP for my sister, she wouldn't have to work FULL time and have student loads worth 10's of thousands of dollars. I started an resp for both my kids, I am hoping that we will be able to safe at least half of whatever their tuition will cost. They will still have jobs, and they will still work while going to school, but the difference will be the money they make while working can go to things like food and shelter, instead of tuition and books. And they won't have to work 6 days a week.

[deleted account]

I'm assuming when you guys say "college" you mean "university" 0r tertiary education of some sort?

When I was finishing school, way back when, I won a scholarship to uni. The living allowance for me was OK, as it was means tested and based on my parents' income, which was low! My siblings chose not to go to uni, but to follow different careers - nursing (back then nursing training was mainly on-the-job, not uni as it is today) and my brothers did various trades courses and apprenticeships.

The system in Australia now is that students can get a special loan from the government and repay it when they finish their degree and get a job. The living away from home allowance is pretty low, so the two of my girls who went to uni had to get part time jobs.

My third daughter has chosen not to go to uni, but is developing a career in retail. They all help themselves, though sometimes we need to help them out a bit when times get too rough.

[deleted account]

Good point about all the debt ladies. Thanks for that insight on it! I never thought of that simply because I did not have to get student loans. I am in California and here we have the BOG Fee Waiver. It pays the entire tution for students who need it and I qualify. I also qualify for a state funded scholorship for displaced housewives (I had to leave school because I was getting married and pregnant), PLUS my great grandmother set up a fund to pay for college books for future generations, so that major expense is taken care of as well (she was one of the first women to graduate from Harvard and she took education very seriously).



I do still have to work (I do all the paperwork for the company my husband and I own - this makes it so he can go out and work more and therefore make more money), but not as much as I used to before I got married.



Once again, thanks for the insight ladies! :)

*Lisa* - posted on 05/28/2010

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Hmm I do see what you mean. I grew up in a very poor environment and still have loans to pay out. I would like to be able to pay for my boy's university not so he can have a free ride, but because I'd like to be able to set him up for his future without entering debt. That being said, I probably won't be able to afford it but we have set up an account for him and add money to it as often as possible. Not a lot, but a little. I think that just because I didn't have that kind of opportunity in life, doesn't mean my children can't. I hope to be able to at least assist him if he wants to go to University, rather than saying 'well no one did that for me, why should I do it for you'.

Amber - posted on 05/28/2010

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I didn't have a college fund and neither did my son's dad. I have 1 year left of mine and he's 2 years away from being done with medical school. It's incredibly expensive. I don't want my child to have the same amount of debt that we already do.

We started a fund before he was born, and at 3 years old it's already up to almost $6,000. If he chooses not to go to school, then he can probably have a portion of the money and we can spend the savings on what we want. (It's a savings account, not a college only account)
If he doesn't get good grades, he doesn't get money. If he gets in trouble, he doesn't get money. But if he is a good student, and has a part time job to pay his personal expenses, then I fully intend to pay his college and living expenses. He will pay for the extras that he wants, but I will provide for his acutally needs provided that he earns it.
I don't want him to have a huge loan payment before he's even gotten his first real job in an actual career.

Lyndsay - posted on 05/28/2010

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Like you, I never had a college fund. Unlike you, I choose not to work to pay for my tuition and so I've taken out student loans. I also have only ever held one job previously, which was at a coffee shop for two weeks. I went to college when my son was only a year old, and I felt like I was missing out on a lot of important time with him already, without the added stress of working. Now I'm over $20 000 in debt and I still have at least one more year to go, more if I choose to pursue my education further (I'm still undecided). Let me tell you, it effing sucks balls. I've set up a Gerber Life grow-up fund for my son because I don't want him to be so much in debt at so young an age.

That being said, I do not plan to hand him everything on a silver platter. I would just like to make things a little easier.

[deleted account]

I wouldn't want to give my kids a 'free ride' to college, but I would love to be able to help them out a little. I've heard that it is much more important to save for your retirement over your kid's college fund though and since I can't even afford that (or to survive on my own) right now.... the only 'college fund' my girls have is the savings account that my mom started for them... w/ $99 in it. ;)

Amanda - posted on 05/28/2010

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What your parents did sounds like a really good idea Sara!! I think that sounds fair. It's like what my husband's parents did for his first car, he had to pay for the car, but they paid for the insurance on it(16 year old boys insurance is apparently pretty pricey i guess).. I plan on setting up a bank account for Gavin, and all other future children, and putting away maybe 5-10 thousand dollars, just to help. Either to match for a first car, or for their first apartment, a semester in school or something along those lines. No way will I give it to them to blow thru, if that's their plans, I'll blow thru it myself haha... but I will definately help out in some way, as long as it's JUST helping, and not enabling lol

[deleted account]

I want to set up a college fund not so that my daughter won't have to work, but so that she can start her life debt free. My husband and I feel like we are not where we want to be financially because of his student loans. We don't want a fancy house, or cars, or vacations or anything. But we'd like to be able have more money available so we aren't stretched each month for groceries, gas and clothes. We make it okay, and there is a light at the end of the tunnel. Currently we are putting close to 1,000 towards student loans (I have an extra very part time job that helps, otherwise I stay at home) so we should be rid of the school by year's end at the latest. Then that extra money would be going towards investments so we can have a comfortable retirement.

About the working thing, I'd expect my daughter to have a job. I'll probably do something similar to what my parents did. I got a job and was responsible for my groceries, utilities, gas, and clothes. They paid for tuition, books, rent, insurance, and cell phone. Maybe I could have taken on a little more of the financial responsibilities, but that is what they could do and they wanted to do it. And they made it clear that they would not be giving me money for the things I was responsible for, so I learned to budget. I graduated debt free because I didn't have to rely on credit cards or student loans to get by. That was so nice, but unfortunately my husband had enough debt for the both of us.

Meghan - posted on 05/28/2010

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my ex's parents are on my ass constinatly about setting up an ESB (think that's what they are called) the only reason I haven't allowed it is because I have to give mine and my sons social insurance numbers to them in order to do this-and I am not comfortable with that. Plus as far as I know he has to pay a huge penilty if he uses the money for anything other than school.

I put money away every month for him and have told them that they can add money to that. I want my son to go to college or university, obviously but I don't want to push it on him. What if he wants to travel the world first or buy a car rather than use mine? Or what if he wants to marry his highschool sweetheart? I don't know, I guess what I am getting at is there is money for him when he turns 18-but if he chooses to spend it on something else he is going to have to work through college (like I am going to do) and I can help out where I can.

Amanda - posted on 05/28/2010

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lol.. I understand what you are saying. I want to be able to help out maybe with college funds, or the kids first car, or something like that, but I expect my kids to either have part time jobs at 16 if they aren't into sports or anything, or atleast as soon as they turn 18. I had to start paying rent to my mom at 16, never got any help with a first car, and didn't go to college(wouldn't have been any help with that either if I had), so I do want to be able to help out so my kids maybe want to go to college a bit more than I did, but I don't expect to be footing the whole bill. I plan on going back to school once I'm done being a stay at home mommy, but myself and my husband will be paying for that lol And I probably would've been more likely to go to college if my mom were atleast willing to help me pay for it, or if half of every check didn't go straight to my mom... Who knows..

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