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How we’re helping our kids avoid student loans

how we're saving for college

A little while back, I wrote a post about the things I tell myself when I’m discouraged about our late start on retirement savings.

It probably won’t surprise you to hear that we’re also a little late to the game when it comes to college savings.

(Years of living on a small salary will do that to you!)

We’re doing a bit of catch-up work on that now, and we figure whatever we can manage to save is better than nothing.

So.  Here’s how we’re hoping to help our kids navigate the finances of college while avoiding student loans.

We’re not saving in a 529 plan.

A 529 plan is awesome if you are positive that your kid is going to go to college.  But the fact that the money has to be used for educational expenses makes Mr. FG and me nervous.*

*edit to clarify: 529 money used for non-educational expenses is still eligible for withdrawal. You have to pay taxes on the earnings, plus a 10% withdrawal penalty on the earnings.

What if one of our kids decides not to go to college and needs the money for something else (starting money for a business, for example.)?

My parents set aside some money for me to go to college, and I did go for a year. But then I got married and decided (with my parents’ blessing) that I wanted to use the money to buy a piano so I could continue teaching.  Piano teaching was a great job for me for many years, and it ended up serving me far better than the degree I was pursuing would have.

piano taken apart

So, I’m super grateful the money my parents saved for me didn’t have restrictions on it.

Mr. FG actually doesn’t have a four-year degree either, but he’s doing quite well for himself working in IT.

Anyway, suffice it to say that, given our history, we don’t want to make assumptions about the path our kids’ lives will take.  So, we feel more comfy avoiding the 529.

We’re planning to use the community college.

We have a great community college, and we’re planning to have all of our kids take classes there, starting in the later years of high school.

For those that want to pursue a career requiring a 4-year degree, we hope to have them complete their first two years at the community college and then transfer to a four-year school.

Being able to complete half of their college education at community college rates while living at home will give them a good start on avoiding student loans.

Sub-point: We’re starting them early at the community college, which saves money because if you do dual-enrollment while you’re in high school, tuition is 50% off.

We will encourage our kids to work to help pay for college.

Of course, we don’t want them to hold down a 60-hour-a-week job while they’re in school, but a part-time job is pretty feasible (my siblings and I worked while taking college classes, so I know it can be done).

And the summer is a perfect time to work and save.

We’re open to them living at home for all four years.

How we're saving for college

If an in-state school offers the program of study they want to pursue, we are a-ok with them living at home and commuting to college.  It costs way less for us to house them than it costs to board at a school, and we’ll be happy to provide them with that benefit.

If it makes sense to have them live in a dorm, then we’ll do that, obviously, but we aren’t ruling out the possibility of having them stay here until they graduate.

I know some feel that the dorm experience is essential, but neither Mr. FG nor I feel as though our lives are particularly lacking from not living in a dorm.  And we think skipping the dorm experience to avoid student loans is certainly a valid choice.

We’re going to research scholarships.

That’s an entirely new world to me, but I know they’re out there, and we’re going to see what’s available for when my kids are ready for a four-year school.

We’re automatically saving each month.

You know all those online savings accounts we have?  Four of them are for college expenses for our kids, and every month, money is automatically sent over there from our checking account.

It requires no mental effort from me, which means I can never forget to deposit the money.

I love automation.


I’m positive there are a lot of readers who have more experience with being a college parent (I have right about none.).  So, if you’ve got a great strategy to add to my list, would you share it in the comments?  

I’d love to hear your ideas and my other readers would too.

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Tuesday 12th of April 2016

Your and your husband's experience dramatically changed how I look at my children's education, Kristin. Years ago, you wrote about your college-piano history, and it really made me think. I went to a high school who prided itself on a 95%+ college acceptance rate. There was an enormous amount of pressure to choose a career that required a 4-year degree, and very little discussion about other career paths (electrician, plumber, landscape designer, business owner, hairdresser, etc.). In fact, there was a distinct bias against pursuing any of those "blue collar" jobs. I graduated high school in 2000.

So we all went to college. I was fortunate enough to earn a merit-based scholarship that covered most of my tuition, a few smaller scholarships, and to have parents who managed to scrape together enough funds through their own money and loans to pay for room and board. I worked every summer as an intern in my field (mechanical engineering), and the majority of that went towards school, as I was able to live at home. At the end of it all, I came out with $5,000 in student debt, and my parents paid off some unknown amount (I ran the numbers one time and estimated they paid about $35,000 on top of my scholarship and what I paid from my summer work). My degree did allow me to get a well-paying job in 2004, but ultimately, I'm not sure it was the right field for me.

I am now married, with two kids ages 7 and 4, I worked the first year of my son's life, then stayed home until about a year ago. I started working part-time at Starbucks, then found a part-time engineering job (very rare), but my true passions are gardening, volunteering, and teaching my kids. My job is just that - a job that basically pays for my kids to attend a Montessori school. As I get farther down my life's path, I'm starting to radically reconsider things - like the possibility of going back to school to become a Montessori teacher, that I definitely want to go through the training to become a master gardener, and that I'm starting to look into eco-friendly landscape design.

Although there are features of engineering that I enjoy, I don't feel like I made a well-informed decision about my schooling after high school. I didn't know myself well enough, and I don't think my parents knew me well enough to really help me, either. After I started staying home with my kids, my mom commented that I was the happiest she'd seen me in years. I don't want my kids to have to wait until they're 25-30 before they know themselves well enough to make good, informed choices about their futures.

I think the most critical part of choosing the right education/career path isn't what you choose, but whether the person who has to live that path knows him/herself well enough to have the path fit the traveler.


Tuesday 12th of April 2016

Yes to what you said there at the end. I think it's really important for parents to help kids think about what they enjoy and what they're good at and what they seem happiest doing rather than automatically assuming that a 4-year degree is the correct path.

It's not that 4 year degrees are always the wrong choice, it's that they're not always the RIGHT choice.

I think Joshua's going to get a 4-year degree of some kind, and I think several other of my kids will too, but probably not all of them. And that is a-ok with me. We are way more interested in helping them find a career that's a good fit than we are in making sure they have four years of college under their belts.

(And if some of them end up doing "blue collar" jobs, we are totally ok with that too. The world needs good blue collar workers just like it needs good white collar workers, and there is no shame in doing a job where you work with your hands. Where would we be if no one did that kind of work?)

That's so great that you've found some new passions and interests at this point in your life AND that you're making plans to pursue those. Wonderful!


Sunday 21st of February 2016

On thing I very rarely see mentioned is tuition reimbursement. That is where your employer pays for some of your school. What is available varies widely but many large employers offer this. I went to school for a semester and it wasn't for me so I dropped out and went to work full time. Once I was ready to go back I was able to work full time go to school part time and I have my employers pay for it (I switched jobs in the middle and between both employers they paid almost 25K.) I now have my degree and no student debt. I was able to move up with my employer and save to a down payment on a condo. My employer offers tuition reimbursement at 24 hours a week (I think it is $2,500) or $5,000 for FT.


Sunday 21st of February 2016

This is great when you can get it! Mr. FG's former employer paid partially for college classes, so we took advantage of that for him.

Tiffanie @ SimpleWifeSimpleLife

Friday 5th of February 2016

I couldn't agree more! Using a 529 plan scares the bejeebus out of me in case our children decide to go an alternate route (which is completely fine with my husband and I!). I'm glad to see I'm not the only one, because it hasn't been the most popular train of thought amongst our family and friends.


Thursday 4th of February 2016

You've some great ideas about college and a really welcoming attitude to them living at home until graduation.

We live in the UK. It's hard to even get onto the housing ladder, in the tiniest tiniest abode, without a decent job, which typically requires a degree. It's tough without one, as well as very limiting from a career perspective. So unless one of our kids has a great alternative to college (entrepreneurial flair?), that's basically the assumption for anyone bright enough to go.

Our kids are academically bright, so looking into the top universities when the time comes (next year for eldest!), your equivalent of Ivy League I suppose. The cost doesn't overly concern me: assuming there isn't a major cash flow crisis, the debt is only an issue in relation to future likely income. The ROI on respected degrees from top (expensive) universities is considerably higher than the opposite. So whilst not ideal, a doctor or lawyer should not be unduly stressed repaying student debt.


Wednesday 3rd of February 2016

From the first day my daughter stepped foot into preschool, I told her that what you put into your education will be what you get out of it; set a goal, dedicate yourself, work hard, and perseverance when the going gets tough. The end result could help pay for your education. She is now a freshman at Harvard on a full scholarship. My younger daughter is now a freshman in high school and we hope to follow down the same path!

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