Monday, March 14, 2016

A tale of two college graduates

and thoughts for funding their daughters' future education.

I'm the oldest of four children and my parents made it known early on that I was expected to graduate from college with a useful degree.  They wanted to usher their children into a debt-free adulthood but with my father's job as a teacher, money was tight.  Their solution to this issue was for my mom to find a job at a college with the benefit of free tuition for dependents.  So when I was in junior high school, my mom secured a job as an administrative assistant at Northeastern University.  Why so many years in advance?  She needed to be a full time employee for five years before that benefit kicked in.  NU was the only college I applied to, which irked my guidance counselor to no end.  "What if you aren't accepted?"  I was accepted.

While I hadn't been overly concerned with my grades in high school, I took college much more seriously.  My brothers and I were used to having a stay at home mom and we all made sacrifices when she went back to work.  My mom dealt with the same draining train commute that I have now.  I wanted my parents to be proud of me and I knew that my grades would directly impact my future career.

When I was a junior in high school, my mom found me a full time summer job in an office on campus.  I worked that same job again the summer before I started college classes.  Once classes began, I worked part-time in the Bursar's Office.  I held that job my entire freshman year and returned to my full time summer job at the end of June.

NU has a large commuting population, which I was a member of.  I had a really hard time adjusting during my freshman year because I felt so disconnected from everyone.  I was literally alone on this huge college campus.  I was so miserable after that first year that I considered attempting to transfer to Boston College, with a safer campus.

Sophomore year was a game changer.  I finally made some friends and two of them kept inviting me to stay over their place.  They had a third roommate who paid rent and had a bed in their apartment but who was never, ever there.  It was all for show because her parents wouldn't allow her to live with her boyfriend, but she really was living with her boyfriend.  As part of NU's cooperative education program, I ended up with job in the tax department of Coopers & Lybrand, one of the big 6 public accounting firms at the time.  Each year, they accepted four sophomore students into their program and the majority of those students returned to work for them each cycle, and were eventually offered full time positions during their senior year.  One of those friends who kept inviting me to stay over was included in that group of four students.  For the next several years, I would work January through June at Coopers and then return to classes for the summer and fall quarters.  I was 19 years old when I started working at C&L and my paychecks were insane to me.  We were paid time and a half for overtime work (double time for Sundays) and because this was public accounting during tax season, we often worked 70-80 hours a week.  I eventually quit my between classes job at the Bursar's Office as I was making more than enough money at my co-op job to cover my expenses for the entire year.  I actually took a pay cut when I became a full time, salaried employee after graduation.

After my freshman year, I thoroughly enjoyed my college experience.  I lived all over the place for a few years, either commuting from my parents' home or sleeping on friends' couches over the weekends.  One quarter, I paid my friend's share of rent when she went to work in NYC and had a bed to sleep on instead of a couch.  I eventually ended up in the suburbs in the in-law apartment of my childhood home.  (That's a long story right there.)  But I mention all this to highlight that I wasn't set up in a swanky apartment on Gainsborough Street.  Attending college in the middle of the city added an extra dimension to the experience.  My parents were obviously concerned with my safety.  Almost everyone I knew who lived in the city was a victim of theft.  Either their apartments were robbed or their cars had been broken into.  I had friends who lived on the other side of the tracks (and that's not just an expression, they were on the other side of the train tracks) in a new condo, with low rent because of the location.  One night walking back to their apartment, they were robbed and beaten to the point where they had to be hospitalized.  Every week, the university's crime log would list multiple thefts of backpacks from the library.  If you aren't street-smart, hopefully you learn to be.

Rich is number ten in a line up of thirteen children.  Growing up within city limits, he and his siblings attended Boston Public Schools.  To the extent that his parents could afford to send them to private schools, they did so.  For example, Rich and several of his brothers graduated from Catholic Memorial.  Once you graduated from high school, you were on your own with respect to college.  If you wanted to attend, you needed to pay your own way.  Rich worked a full time job at UPS while paying his way at UMass/Boston.

I've heard the stereotype that if you pay for your own college education, you're bound to be more focused and have better grades.  Rich thoroughly disagrees with this.  His priorities were different and he says that because he was working full time, he was less focused on studying.  There's also the opposite stereotype that if your tuition is paid for by someone else (outside of a scholarship) than it won't be as important to you to achieve high grades.  In addition to consistently maintaining a spot within the top 5% of students in the College of Business, I graduated with a 3.69 GPA.  Admittedly, it was fantastic not having to worry about paying for tuition and not having a student loan to pay off after graduation but that didn't mean that it wasn't going to try my hardest.

Rich and I both agree that if our girls decide to attend college, we would like to be able to pay for their tuition.  Unfortunately, we could potentially have three attending at the same time and with the cost of tuition skyrocketing, our contribution may not be what we would like it to be.  We've taken the approach that we'll do the best we can.  The future is too difficult to predict and preparing is all you really can do.  I do believe that there's no right or wrong way to handle your child's higher education.  It's a parenting decision and we all parent differently.  The world would be somewhat boring if we all experienced life in the same manner.  


Tracey's Life said...

I think you are correct, in that every family has to make their own decision as to what feels comfortable for them. College is crazy expensive right now, and I could not imagine paying three full tuitions. Unfortunately (and this is only my opinion) that when the government went into the student loan business, the cost of higher education skyrocketed. My entire college cost was about $6k for a 4 yr degree from a state college way back when. Today it is costing approximately $68k a year for my son to attend Lehigh University. Unfortunately we have learned the hard way, that preparing for education with a 529 or a trust actually hurts one's ability to receive merit or need based money.

There are ways to get a good education without it costing a small fortune. As the time gets closer, you are clearly smart enough to figure out ways to make it work. I wish you luck.

Sarah said...

Tracey - interesting that you mention the 529 plan. I attended a seminar for CPEs for my CPA license years before I had kids and the instructor had so many arguments against 529s. That always stuck with me and we haven't gone that route.

Katching Kismet said...

My college was $50k/year.. I graduated in 3 years due to financial issues.. I've never made over $15/hr.
Me and SO are very open to our children attending trade/tech schools... if college is what they want to do, we will help, but only to a certain extent

DaddyBites said...

I think all cases are different. I've seen people who had school paid for work really hard and people who pay for it themselves fail out.

I would like to help pay for my kids. Completely paying for it is out of the question for us. We are single income (due to my husband's health problems). We are in Canada, so slightly different but many of the same considerations here as in US.

We have an education savings plan but it's been growing on its own with no money going in for a long time. We don't have triplets, but we do have 3 kids every 2 years. We could be helping to pay for a loooong time.

Anyway, this was fun reading! :)


Teej said...

I would love to know more about the problems/concerns with the 529, as we have one for our son. Does it really discourage merit-based awards as well as financial aid? That seems...wrong.

Jenna said...

I'd love to know the more about the problems/concerns about the 529 as well. We have thought about this for our two girls but do not have one yet. *They are 18 months and 5 months, so we have a bit of time*

Tracey's Life said...

I can only offer you my experience with having 529's, but I am sure that you can find more information online from other people. You must fill out a form that is called the FAFSA in order to qualify for loans and grants. What I can tell you is that if your family income is greater than $37k per year (currently) you will not qualify for any federal or state need based grants. You will be offered secured and unsecured Stafford loans. The colleges require that you fill these forms out as well for them to make any decisions about money that they will offer. You are required to disclose your entire financial picture including 529's or trusts.

Because of the amount of money that I had put away for educational purposes covered three years of tuition/room &board in full, we were told that he was welcome to spend it down and try to see what he could get in his Senior year, but until it was depleted there would be no money forthcoming from the school.

Basically they look at each and every last dime that you have before the schools offer anything need based. Some schools also take that in to consideration when they look to make merit offers. We found it really depended on the school. His sister is graduating this year, and she was given about $15k a year in scholarship money from her school based on her grades and community involvement.

Now, that being said he was offered some merit money from other schools (UConn for example offered him $13k a year because he qualified for the Honors program)

Honestly speaking, I almost felt as though we would have been better off if the money stuffed in a sock, but then of course it would never have had the chance to grow.

I have no financial background, so I would suggest if you are looking into ways to pay for higher education, that you speak to someone qualified to help you.

There are some states that provide no cost tuition at the community college level to the top 5 or 10% of students. Community college is also a great way to go as far as taking the core courses that they are generally all required to take, and then transfer to a four year university or college. I hope this helps

Sarah said...

Agree with Tracey on 529s. A 529 can hurt financial assistance. Also, if the funds aren't use for school, you are hit with a 10% penalty for withdrawing. There's the argument that if you have more than 1 kid, at least 1 will go to college and use that money, but you never know. If you Google search, you can find arguments for and against 529s. Also, someone pointed out on an earlier post how saving for retirement should take priority over college and I agree - as do others.

Unknown said...

Question about the savings plans--how is just saving the money different from putting it in a 529? Don't you have to declare all of your income/savings?