Well I am 62 and wife is 56. I am the only working person in the family. Looking at retirement in just over two years. We have about $600K in two 401 K plans. Do not own a house so there is no second mortgage possibility. We have cash reserves to write a check for the first year of her school fees with some left over. She has been offered a $14,000 a year scholarship for 4 years. Still looking at least $23,000 out of pocket per year. She is going to try to work on the campus to help with dorm costs which should help.

Wife and I pretty much said we would cut a check for the first year and then look into student loans or whatever else there may be. We have never been to upper schooling ourselves and do not have any close relatives to ask for guidance on how to do this and afford it. Any help and insight appreciated.

Thanks
Roy


Update:
She has been studying engineering Mechanical and Chemistry. She liked Chemistry. She currently is in pre-Calculus and doing well. She is seeking either a Mechanical Engineering Field or Environmental Chemistry. She has interest in both currently. Wants to talk to departments heads to help finalize her choice.

Honestly? New plan.

State college/university and pick a useful major. Consider part time status and pay-as-you-go (which may not be a viable option for her scholarship).

More info may help, though. Is she pursuing something that will allow her to readily pay back $92K in debt without grad school (and more debt)?

What’s her current situation?

-Rob

ETA: I see reloader is giving you similar advice in your other thread. We’re not wrong.

ROTC an option?

I don’t know what her major is but I would encourage her to look at a community college. If my math is correct you’re saying her college will cost $37k per year. That is insane. I went to a community college for 2 years and finished up at a private Christian school. I applied for any financial aid and scholarships I could plus worked 3 jobs. I graduated with about $9k in student loan debt.

Without knowing her major and career plans it sounds like graduating with over $90,000 in student loan debt is setting her up for disaster.

Student loans are the best thing my parents ever did for me. Once I knew I had to pay, I went to a more economical school choice and then took class very seriously. I now am doing quite well for myself and paid off my student loans in 5 years after I got out of school. Have her get loans and help her as you can afford to.

Two year college for first two years. Much cheaper than big time 4 year university. After 2 years, transfer to big name school for 4 year degree in two years.
For those with student in high school and living near a 2 year state school, look into independent study to complete high school while accumulating college credits at the same time. Work part time the whole way.

quote:

Originally posted by BurtonRW:
Honestly? New plan.

State college/university and pick a useful major. Consider part time status and pay-as-you-go (which may not be a viable option for her scholarship).

More info may help, though. Is she pursuing something that will allow her to readily pay back $92K in debt without grad school (and more debt)?

What’s her current situation?

-Rob

ETA: I see reloader is giving you similar advice in your other thread. We’re not wrong.

Good advice here. My oldest just graduated with her B.S. in nursing this past May. She went to Kent Stark which is a satellite campus of Kent State. It was quite a bit less than the main campus and she was able stay home while working. While she would have liked to go somewhere different she had no issues landing a great job and had several offers.

You asked for it:

See that big ole balance in your 491k's? Start taking some out to pay for it.

You can't take it with you. What else are you going to spend it on?

You're not living forever. Use the money!!!

CA has a phenomenal community college system that tells you upfront which classes are guaranteed to transfer to CS/UC schools. They are much cheaper than UC schools. Are you a veteran? What is she planning to major in? What school is she looking at? Is she really ready for college? College debt is only good when they earn a degree in an employable field that pays enough for them to repay their loans and support themselves.

I teach HS and the reality is that less than 1/3 of the students are ready to go to college. Look up the attrition rate of college freshman, it's staggering.

My daughter went to UC Berkeley and amassed $100k in debt earning two (classics and Slavic Languages) degrees.(We were out of state just long enough for her to loose residence). She and her husband were able to secure jobs that paid well enough to pay off that debt in three years, which was how long she spent in University. I paid for the first year, she was on the hook for the rest. I hope that helps.

quote:

ou asked for it:

See that big ole balance in your 491k's? Start taking some out to pay for it.

You can't take it with you. What else are you going to spend it on?

You're not living forever. Use the money!!!

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Are you insane??? That is the worst advice I have heard. The amount that he has in his retirement account combined with social security is unlikely to provide for a comfortable retirement. The average American at 62 can be expected to live into their 80s during which time there will be plenty of medical expenses.
At this point in time, the focus should be upon his daughter getting student loans and working to pay for a college education.

It is a basic principle of investing that you provide for your own retirement first.

Have her borrow it. You can always help her pay back the loans, but you can never borrow for your retirement. Also, if she borrows the money, she will feel a responsibility to the debt, and the education.

quote:

Originally posted by craigcpa:
You asked for it:

See that big ole balance in your 491k's? Start taking some out to pay for it.

You can't take it with you. What else are you going to spend it on?

You're not living forever. Use the money!!!

You can't take it with you? This is bad advice. You can't borrow for retirement either.

quote:

Originally posted by ontmark:
Well I am 62 and wife is 56. I am the only working person in the family. Looking at retirement in just over two years. We have about $600K in two 401 K plans. Do not own a house so there is no second mortgage possibility. We have cash reserves to write a check for the first year of her school fees with some left over. She has been offered a $14,000 a year scholarship for 4 years. Still looking at least $23,000 out of pocket per year. She is going to try to work on the campus to help with dorm costs which should help.

Wife and I pretty much said we would cut a check for the first year and then look into student loans or whatever else there may be. We have never been to upper schooling ourselves and do not have any close relatives to ask for guidance on how to do this and afford it. Any help and insight appreciated.

Thanks
Roy


Update:
She has been studying engineering Mechanical and Chemistry. She liked Chemistry. She currently is in pre-Calculus and doing well. She is seeking either a Mechanical Engineering Field or Environmental Chemistry. She has interest in both currently. Wants to talk to departments heads to help finalize her choice.

Roy --

If your goal is to avoid debt

I agree with what others are saying about her starting at a local community college, then transferring to a state school later. In the mean time she can work, pile up money, and you can be in a better position to pay for the last two years out of pocket. This probably will not be an easy conversation.


I think if she graduates with a decent GPA (>2.8) with an ME or ChemE degree from a state school she will be fine. I hire plenty of newly graduated engineers, and I don't care if they started at a community college then transferred to a university. I tend to look for what they did while in school, what their interests are, how they solve problems, any internships, and how they interview/carry themselves. In other words, many other things rather than graduating from School XYZ. New engineers I hire with EE, ME, or CHEN degrees are starting in the 70s with decent benefits from a megacorp.


If I were in your shoes, I would not take anything out of my 401k/retirement to fund her education, but that is up to you. May not be a bad idea to make sure all options for Financial Aid/Scholarships have been exhausted.


--K

quote:

Originally posted by ZSMICHAEL:

quote:

ou asked for it:

See that big ole balance in your 491k's? Start taking some out to pay for it.

You can't take it with you. What else are you going to spend it on?

You're not living forever. Use the money!!!

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Are you insane??? That is the worst advice I have heard. The amount that he has in his retirement account combined with social security is unlikely to provide for a comfortable retirement. The average American at 62 can be expected to live into their 80s during which time there will be plenty of medical expenses.
At this point in time, the focus should be upon his daughter getting student loans and working to pay for a college education.

It is a basic principle of investing that you provide for your own retirement first.

This.

Honestly you are in no position to be paying for someone's college. It would be nice if that is how life worked out. $600k is not enough for retirement, let alone paying for her school.

As others have suggested, community college -> transfer to preferred college (hopefully with scholarships/grants). She needs to pay for school if she wants to go to an elite school.

I'd suggest you tell her you have x dollars saved (whatever cash you mentioned). She can use it however she chooses. Option one, stay at home. You pay for first two years at community college and first (junior) year at preferred school, she gets loan for fourth year. Option two, you pay year one, she borrows years 2, 3, & 4.

Also suggest growing that 401 nest egg a bit more before retiring if you guys don't have any defined benefit retirement plans.

Rather than stroke a check for the first year, having her on easy street, why not split some of the expenses with her? Maybe stretching out the cash on hand will help her appreciate the cost of her education while also encouraging her to work or live well within her means.

Have her pay for it, you're not in any position to pay for her college education. You need to concentrate on you and your wifes retirement.

quote:

Originally posted by nasig:
Two year college for first two years. Much cheaper than big time 4 year university. After 2 years, transfer to big name school for 4 year degree in two years.

I did this. It worked out well for me.

They have student loans and scholarships for school.

They don't have loans or scholarships for retirement.

Her full time job starting today needs to be applying for scholarships and other free money. There are thousands of scholarships that go un-applied for. Even if it’s 500$ That and 2 year school for the first few years. Nobody in the real world that i went to a JC as long as my resume trutgfully says my degree is from a 4 year college. And I went to a local public university

I’ve earned 3 college degrees, one from an Ivy League and the other two from institutions that are very highly ranked. Hold biochemistry and engineering degrees, in addition to a top-10 MBA. Except for the first year of undergrad, I worked full-time through all of my years of higher education. Now that I have that out of the way so you know that I know what I’m talking about, let’s start with priority one: Graduating From College Isn’t The Goal. The first goal is to get trained on a profession that makes a liveable income pursuant to her needs and desires. You know your daughter and living situation better than anyone on this great forum, as does she, so I’m assuming you both know what that equation should equal. There’s a huge income difference between Mech Engr (ME) and Environmental Chem. I’m going to be blunt - many kids fail out of engineering and I’ve known dozens of them who use Enviro Chem as a preconceived fallback. Not a good idea given demand isn’t spectacular in that field, reflected in the pay... again no one on this board can answer what pay is truly sufficient.

The second goal, if it’s possible and I believe it is given the plethora of positions out there that can make for a lucrative career, is she likes what she will be doing for the next several years (not an eternity). College teaches you how to problem solve more than anything (if one doesn’t decide to simply party) and a professional career will come with advancements if she continues working hard after college; more advancement at least versus a trade school in what an individual’s daily job is like. Unfortunately few people know themselves well enough at 18, let alone 28 given how ignorant some people are these days, to understand what it is they immediately want to do. With time comes maturity. Fortunately most gals are ahead of us blokes in that regard.

Once goals 1 & 2 are recognized, school planning kicks in. Hopefully the college/university of her choice (hopefully also the one offering the scholarship) has several majors that she might meet those goals; there’s a big difference in studies between ME and Enviro Chem. Once a list is made, the financials should dictate whether the institutions remain or are crossed off. It sounds like the school choice may have already been decided on, but I’m starting with no assumptions.

Here’s the really hard part for you & your daughter - assume the worst based on what info you have at the moment. In other words, assume Enviro Chem is where she’ll land. Investigate the starting salary and build a post-college budget, assuming she won’t be living at home (b/c of the scarcity of jobs, but mobility is one gift the young have). Based on the potential costs of the institutions she is considering, plus living expenses during AND AFTER, decide whether she can afford to pay off any student loans over X # of years; preferably the loans have a fixed interest rate. Now that you’ve built this “model” walk through it with your daughter and wife. Next, take it to the instituons’ financial aid officers and be honest about how much you can afford. Under no circumstance bring up what’s in your retirement funds with said persons. That capital is for retirement or an emergency and you have options when it comes to your daughter’s education so it doesn’t qualify as such. Ask them about additional scholarships related to majors your daughter is considering and those specific to the school/area. Lots of research and applyling for those may pay off handsomely in the future.

Best of luck with the college planning!