Sharing College Costs with Children

mdpmdp
Mon, 03 Jun 2019 21:46:04 +0000

My oldest is only a rising high school freshman, but I’ve heard and read about enough painful college finance situations that a few years ago my wife and I came up with a plan for our kids. It’s not set in stone, but I’m gratified that it’s similar to what some of you in this thread have come up with.

Basically:

We're saving enough money for our state flagship (UIUC) -- probably $150k or so by the time my S23 would enroll. Whatever UG college they want to go to for that amount, we'll cover it.

They can't take out UG loans other than the $23k that's federally subsidized. If that makes a college too expensive, it's out. (This cuts most OOS and private schools without merit aid. I'm fine with that.)

If they spend less than $150k on UG, they can use anything left on grad school.

If they have anything left after grad school (or they don't go to grad school), we'll give them half of what's left...but only for an IRA, a down payment on a house, or something else suitably boring to a college-choosing 17-year-old as not to give them the wrong incentive.

I’ll keep reading this thread to see if there are ideas I can steal to improve on this plan.