dapperdobbs wrote:

- quote -

I think this brings up some good points on choosing a college.

1) major
2) types of jobs you want after graduating
3) paying for #1
4) paying for #2 (in some professions)
5) is a graduate degree needed for this field?

Examples of where money might be best spent-

a) if going into a field where a master degree/ more than 4 years is
needed (physical therapy, education, psychologist, MD, Lawyer etc...),
I might suggest minimizing the cost of the undergraduate (meaning state
school would be good).

b) if going into a field where the first job might be difficult to get,
choose a college where they have ways to help. I have a degree in
Mechanical Enginneering, and was co-oping with help of school my
freshman year. This offset $13,000 each year of expenses, and by my
senior year, this was closer to $20,000. In addition my first job
started me at a higher salary because I had more then 4 years
experience added up from my co-ops, all that experience in my field. I
had my pick of post graduate jobs, as did all of my fraternity brothers
and classmates. I am sure other professionals with Business, IT, or
Engineering backgrounds could make similar scenarios. In a case like
this, it might make sense to pay more for the undergrad, so the job
coming out of school is better.

c) if the job market is bad for a given major, you may want to minimize
the expense of the undergrad degree. I have a brother who majored in
Marine Bilogy, went to an expensive Long Island school, and has yet to
find a job remotely close to his degree or interests. The jobs he does
find do not pay his loans.

d) My personal opinion is schools like Harvard, Yale etc... make lots
of money off their reputation for graduate programs. Meaning the
undergrad programs might not be up to par with the graduate programs.
I am sure the culture of the school is something I am not as familiar
with and is also part of what is being paid for too.

meaning I think the following resume "on paper" looks better:

BS from State U
MBA from Harvard

than

BS from Harvard
MBA from state U

Same issue with PHD and Masters degree- in my field (Engineering), the
school a person had their masters or phd from stands out more than
where they did their undergrad.

zxcvbob wrote:

- quote -

(Way to go!) I think that says more than anything else. (Not to
disparage your work in financing and availing yourself of alternatives.
I like your plan to pay off her loan, if she ends up going that way.
I'm not good at government plans - whatever their form, but this topic
got broad and I kind of wanted to throw my two cents in.)

There's a question on my mind about how much you are estimating as her
annual total expenses, and about what colleges or universities are in
your immediate area. If you want her at Haavaad, I guess you have about
one year covered, but if you have a good in-state U that is strong in
her major, depending a lot on her personal expenses, you might be close
to having the whole thing covered. Also, some State U's have a
guaranteed acceptance program for graduates of two year CC's. (Hey ...
years ago I was studying assembly language and called all the "Names" -
none offered courses in it. Guess who did? Santa Monica Community
College - PC and mainframe. More recently, names in architecture didn't
get to CAD until Junior year. Guess who offered it frosh and soph?
Right - a CC. You shop for a car, you shop for a fridge; shop for a
college, too.) Times change, but if you look over proxy statements, you
find a lot of board members who went to "un-famous" universities -
BA's, BS's. The graduate schools are, in general, more recognizable
names - but with a good salary and no debts to pay, DD can save for
three years, and some companies may pick up part of the Grad tab.

This distinction between "life" and "classroom" puzzles me. All of it
is life.

"jIM" <noreplysoccer[at]hotmail.com> wrote
- quote -

I think people generally do not agree on what the most
important things one learns in life are. So I think it's a
bad idea to force upon a poster one's own priority of "what
is important to learn in life," because ISTM the poster may
have a very different priority. Call it sexist or classist,
but I would not want my history and literature-loving
daughter going to a community college where much of the
population is vocational minded and cannot speak a sentence
absent a declension or conjugation of the vulgar variation
of "to fornicate." She won't thrive among such folks.

Different income classes and different cultures in
particular tend to have a different view of what is
important in life.


======================================= MODERATOR'S COMMENT:
Please relate future comments in this thread to financial planning.

woessner[at]gmail.com wrote:
- quote -

FYI- I was using this as a point for not having so much "cash savings",
meaning the cash being set aside could be IRA type money if the SEW
provision is used.

This was an aside from the topic of education expenses/ funding.

- quote -

college students need to be reminded of.

The most important things you learn in life are learned outside the
classroom. College is no exception. If you learn too much outside the
classroom, it's possible you will not need the classroom ever again, or
get kicked out of the classroom and not allowed to return.

"zxcvbob" <zxcvbob[at]charter.net> wrote
- quote -

I can understand the point of view of some parents who say
that they feel responsible for their children's college
educations, because they brought the children into the world
in the first place. (Not sure if you're in that camp.)
Particularly parents whose own parents paid for their
college educations could very much understandably feel
obliged to do the same for their children, IMO.

Many half-baked colleges exist and from what I see, paying
for one that has a superior reputation (even if it's only
paying for one where the student body was well-educated
before it ever set foot on campus) can be a sound
investment; a source of pride and happy memories for a young
person for years to come. (Hopefully not elitist pride.)

As long as there are good communications between parent and
child about financing college and what the goal of college
is (plus maybe grade expectations), then I applaud parents
who choose to foot the bill. Your planning for these four
years of your daughter's education is admirable.

jIM wrote:
- quote -


I started saving for DD's college expenses 15 years ago with a UTMA
account at Fidelity. So the money is in her name. The good news :-/ is
that the fund has performed so pitifully, there's only $25000 in the
account -- basically my principal plus dividends and almost no
appreciation. Also about $8000 in US savings bonds in her name and
another $10000 in my name. (I wish I had just bought EE and I savings
bonds, all in my name with her as beneficiary, and skipped the UTMA.)
The other part of my plan back then was to have my finances in order so
I could afford to "pay-as-you-go" for college expenses. If education
expenses had grown at just the inflation rate rather than several times
faster than inflation, that would have worked.

I just figured out yesterday in this discussion that I need to start
withdrawing that UTMA money and hiding it in her Roth IRA (too bad she
doesn't have a lot of earned income yet) so it won't hurt her so much on
the financial aid calcs. I have a year or two to shift money around
(mine and hers) to make the numbers work out best.

I told her "You can borrow money for college, but you can't borrow money
for retirement" and that she will have to pay for a good bit of her
college education. If I'm still gainfully employed 6 or 8 years from
now, I should be in a good position to pay off most of her student
loans, but I haven't told her that part yet. I want her to at least
think she is spending her own money rather than partying with "Daddy's
credit card"

Bob

jIM wrote:
- quote -

This is unnecessary. According to IRS Pub 590, early withdrawals from
traditional IRAs for qualified education expenses are exempt from the
10% penalty. Qualified expenses for you, your spouse, your children
and your grandchildren are eligible.

The situation isn't so sweet with a Roth IRA. You're still exempt from
the 10% penalty, but you have to pay income tax on any earnings you
withdraw. Of course, you're free to withdraw your Roth contributions
as you wish.

There is no such exemption for 401k plans.

--Bill

zxcvbob wrote:
- quote -

I read a great smart money magaizine article on this a few years after
I graduated. Look around 1998-2000- it was the cover article of that
issue. Here is what I remember:

The most important tax return is the one you file when your child is a
sophomore. You are filling out forms when child is a junior in many
cases, so plan far enough ahead that the spring of the sophomore year
and fall of junior year have a lower than normal tax return.
savings in kids names count against aid more than savings in parents
names
better for kids to take on debt than parents

Here are some ideas-

Have you considered the "substantially equal withdraws" from an IRA for
early retirement? This may lessen the need for money in the taxable
investment account.

Find local organizations which offer scholarships. My soccer club
budgets $5000 per year for scholarships and we often do not spend all
of this money. I am sure other organizations have similar programs.
Look in April-May papers for which organizations awarded scholarships-
we post ours in local paper each spring with pictures.

Think community college for two years to make sure kid is serious about
higher education. Many 2 year schools have pre-arranged agreements
with 4 year schools so all credits transfer. If child fails the burden
is less (I know plenty of people from my graduating class which had
better grades than me that did not finish).

There is no shame in state schools. This tuition might be lower.

- quote -

I agree- much of the personal finance lessons I learned started when I
need to pay off federal student loans. Agreed on all above points.

"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
newsbmhd2l0ibgguscvm27d9h683b9n94aafb[at]4ax.com...
- quote -

I gotta chime in here.

I'm from the LetTheKidsPayForItThemselves school of thought.

(a) It's what I did. I hated my parents for it at the time (but ...
in hindsight, they were right.) I respected it a lot more and took
it far more seriously than peers who's parents paid for it. Far
too many of them just kicked back, screwed off, and didn't
put in any effort -- 'cause they had nothing to lose. " It's
Daddy'sDime anyway ... I'll go blow off this exam and
smoke the bong. No worries here." You'd be amazed how
many kids have this attitude.

(b) And I think this one's more important: Your kids have
the rest of their lives to pay for their educations. Just when
you need to start seriously thinking about retirement funding
is no time to take on loan/debt obligations that you'll be paying
long after you want to retire. My parents were late 40's early
50's when I went off to the University. No way could they
have both saved for a decent retirement *and* put three
kids through school.

Now ... almost 2 decades later -- I've got a much greater
sense of "I've done something with my life, and I've done
it on my own!" (Mommy and Daddy didn't finance it (although
they did teach me the dedication and determination necessary
to make it on my own <thanks!> ))

zxcvbob wrote:
- quote -

The form your daughter is going to fill out is called a FAFSA. You can
find it on the web. It's a standardized federal form used for student
aid applications across the country. Different states have different
due dates for FAFSAs, but they're all between March and October. For
any given academic year, you'll have to provide income information from
your latest tax return. For example, for the 2006-2007 academic year,
you'll fill out the FAFSA in 2006 and you'll have to provide
information from your 2005 tax return.

On the FAFSA, you will have to report your investments. IRAs and 401ks
are exempt from this reporting. However, you will have to report your
deductions and exemptions for the year. So you are not able to lower
your apparent income by stashing more money in your 401k or IRA.

- quote -

Don't give up all hope. There are a LOT of merit-based scholarships
out there. I went to school on one. The important thing is to get
your daughter to start aggressively pursuing these scholarships.
They're not going to come find her. Bonus if she goes in to a
traditionally male-dominated field (engineering, math, physics,
computer science). There are tons of scholarships out there for girls
going in to these fields.

--Bill

In article <4js01iF9cuprU1[at]individual.net> , zxcvbob <zxcvbob[at]charter.net> wrote:
- quote -

The calculations are based on your tax return for the year prior to the
student's graduation (in your case 2007, assuming a spring 2008 graduation).
You have to complete the FASFA forms in the spring of 2008. Full details at
http://www.fafsa.ed.gov/. www.collegeboard.com also has good info.

On Tue, 8 Aug 2006 13:04:07 -0500, BreadWithSpam[at]fractious.net wrote:


- quote -

In the midst of so much reference to "financial aid" this deserves
repeating. Darned if I see much wisdom in arranging one's affairs now
so that later we can look forward to being in debt.


-HW "Skip" Weldon
Columbia, SC

BreadWithSpam[at]fractious.net wrote:
- quote -

I have enough regular savings to live for several years without income
-- and that's what it's for (or to pay medical expenses). I work in an
industry where I will probably lose my job to "offshoring" and age
discrimination long before I'm eligible for Medicare or to start taking
401(k) distributions. I have been ratcheting up my 401k contributions
starting this year anyway, but I wasn't planning to get to $15000 this year.

I have also started stashing money in DD's Roth IRA. I hope that is
sufficiently insulated from financial aid calculations that it won't
bite us. I told DD that I want her to leave that money alone for 50
years before she takes any out. (I might should be drawing down her
UTMA account to fund her Roth. I just thought of that.)

Bob

zxcvbob <zxcvbob[at]charter.net> writes:

- quote -

Unless you have very little nonqualified savings (ie. regular
taxable savings), or unless you already have a huge heap in
the 401k, I'd generally suggest maxing out that 401k to the
extent that you can anyway. Even if you are dipping into your
taxable savings to do so, again, as long as you have enough
of it, then crank it. Consider it a means of shifting assets
from taxable to 401k account and consider the benefits:
(a) assets in the 401k are generally not counted as available
parental assets for financial aid calculations.
(b) better protection from lawsuits (not really hugely important
for most folks, but still)
(c) tax-deferred growth

In your case, you might be just as interested in (a) above
as you are in lowering your current taxable income.

- quote -

Or, the problem is that you've got too much taxable savings
rather than 401k/IRA savings?

Max out that 401k both to lower your taxable income *and*,
if it lowers your taxable income below what you need to
live on, effectively shift assets from taxable to qualified
in the process.

Third warning, though - do this only if you really do have
comfortably adequate taxable assets. Do not convert *all*
your taxable assets into that 401k, and do not go into debt
in order to max out that 401k.

Bear in mind that these days, most financial aid is in the
form of loans anyway.



--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

DD is gonna be a high school junior this fall, and I believe one's
junior year is the important one for applying for scholarships, etc. So
is 2006 the year where it's really important to stash $15000 in my 401k
plan (to reduce my reported income) even if I have to cut back a little
on nonqualified savings to do it? Or is it next year? I'm not sure
when colleges and scholarship boards are going to want to see my tax
returns.

I think she's pretty much SOL for most scholarships even though she has
a 3.9+ GPA and several hours of college credits already; the problem is
I'm not up to my eyeballs in debt like I'm supposed to be.

I still have my fingers crossed for a National Merit scholarship.

Thanks, regards,
Bob