We will have four kids in college at the same time. How we are saving and paying cash for college

 A little over two years ago, I opened up an incredibly interesting can of worms on my facebook page with the status updated, “Why we won’t let our graduating senior go to college in the fall, unless things change.”

As you can imagine, it opened up discussion with 150 fascinating responses from people still trying to pay off student loan debt to 20-somethings who mentioned partying their first two years of school away and regretting all the wasted money, to parents who think their kids shouldn’t have to be worried about money in college. I enjoyed every comment and view point. We can all learn from each other.

Since I’m all about iron sharpening iron, I want to challenge you in your thought process about paying college, and explore alternatives by which many have not thought. 

Let me state up front, so there’s no doubt, I believe in higher education. Both my husband and I have college degrees, and my husband continued on with an MBA, but I also believe there are many creative options that parents haven’t looked into prior to making college choices.

Somewhere along the way, many high school students have assumed that continuing on with college is an entitled right of passage. Yes, an opportunity to expand their social standings, experience new realms of thought and attend classes all on their parent’s dime is the next obvious step, right?

The kids dictate where they want to attend school regardless of the cost and most parents assume that’s their duty.

I tend to disagree.

Paying for college without going into debt

On the average, students are graduating with a minimum of $30,000 in debt with no guarantee of job security when they leave. There has to be a better way to avoid years of digging out of debt.

What if parents decided early on to set some ground rules?

That’s what my husband and I did, and while there were a few touchy moments at times, we do not regret our decision. Ever since our first period of unemployment and corporate debt over ten years ago, we determined that we never wanted to feel that desperation again. After barely scraping by our second period of unemployment, we knew then that we wouldn’t go into debt for our children’s education, so we had better become quickly informed.

One of the first books I read during that time was Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents. I highly recommend it.

Shortly after, I gave our teens, Dave Ramsey’s The Graduate’s Survival Guide (Book & DVD).
Since our kids are very familiar with the Financial Peace information, much of this was review, but it zeroed in on financial issues college students face.

If your children are younger, begin with Smart Money Smart Kids: Raising the Next Generation to Win with Money
It’s a quick read, packed with critical information to starting kids on the right financial road.

Please know that the following thoughts work for our family, but it’s a personal choice. I’m oversimplifying the information because this could be an entire book. Philosophically, every family lands somewhere different, but hopefully, this will give you some new avenues of discussion.

Our five childrens’ ages are 20. 19, ,17, 15 and 11. If you do the math, you will see that we will have four college age students within five years. That’s a huge investment of resources and something we don’t take lightly.

 Five Ways We are Saving and Paying Cash for College

1. Kids should have some skin in the game

Yes, this is one of my husband’s favorite sayings and applies perfectly to eliminating the “entitlement mentality” many kids have about school.

The main ground rule we set for our children is that we will pay for half of their college education and they need to pay the other half.

Now, before you think that’s hard nosed, we set this expectation early on. It didn’t come as a surprise and they had plenty of time to work towards this goal. Most parents underestimate what kids can do and we believe that our kids will appreciate this education so much more if they have worked towards it and have skin in the game. Also, and this is a key point, any scholarships or grants they receive goes towards the half they owe. Yes, that’s a huge incentive for them to begin working hard before college hits.

2. Alternative Educational Strategies

In my opinion, a masters degree today is more in line with the prestige of a college degree 25 years ago. The playing fields have changed and while a four year degree definitely opens doors, statistically, that does not guarantee job security.

Begin to find ways to cut down on college costs before you step foot on campus. While many parents know that passing the AP exams will give their child equivalent college credit, most do not realize that children can take college level classes while still in school. Check with your guidance counselor about dual enrollment at the local community college or consider having your child take online college credit classes that will transfer to their school of choice. They can also earn credits through the Clep College Board program which is an amazing resource.

Many students enter their freshman year of college with a sophomore standing by doing this and you can master these credits during summer break.

3. Scholarships

Treat receiving scholarship money as if it is your part time job. Do the math; put aside 50 hours of time and receive $2K in scholarships. That’s $40/hour non taxed, no interest. I will take that any day.

One of the biggest myths of scholarships is that they only go to the top scholars and athletes. That is not true. There are billions of dollars in scholarship awarded annually and many do not take grades or athleticism into consideration at all.  There are hidden jewels waiting to be found, and it’s worth the time commitment.

When our #2 son was attempting to get a full ride football scholarship, we considered it his job. We invested time and resources to ensure he had the best possible opportunity. It’s the same for all scholarships. They take research and time, but it’s so worth it. A friend from church decided to put aside hours each week researching scholarships for her son. He ended up getting over 20 different small scholarship totalling nearly all of his tuition. These are not scholarships that anyone had heard of and therefore, there were not many applicants. It’s been fascinating to learn from her. A interesting read on this is Confessions of a Scholarship Winner.

4. Proactive investing for educational fund

This is one of the most important pieces of advice. Start saving now!!! While we had our huge unemployment hiccup during our eldest son’s high school year and used our savings to stay afloat, we resolved to start again. Once employed, we still lived like we were unemployed. We put everything into our emergency fund and savings.

Get professional advice now. I always recommend Dave Ramsey’s Endorsed Local providers who have the heart of a teacher. There are so many options for college savings and it’s important to have someone walk you through it. Many states offer prepaid tuition locking in today’s rates on tomorrow’s prices. A great option is to set up a 529 college savings account, which grows money tax free, or even a brokerage account designated to their education, but it’s critical to use someone who is an expert in the field to understand how best to invest your money. Whether it’s $100 a month or $1000, it’s never to early to seek professional investment advice.

5. Community College First

One of the benefits of homeschooling is the option to dual enroll at the local community college during the high school years. This enables college credits to transfer in at a fraction of the cost. Like I mentioned above, most parents don’t realize this is available to all high school students, but I want to take that a step further. In the past, community college has had a a negative stigma,  but times are changing. Unless a child is thinking ahead to medical school, law school or something highly specialized, general education requirements are very similar across the country.

Most 18 year old teens haven’t decided on a major or occupation and giving your child a gap year to work or a chance to get inexpensive college credits out of the way and then transfer to a four year school is a wonderful option. Make sure you work hand and hand with the guidance counselor of the college  in which you will ultimately attend to ensure a smooth transition. Knowing a trade is always a great option. My husband’s company hires welders straight out of trade school making a very good income for a two year degree. Skilled trades will always be needed and there’s always the option of returning for a four year degree at any time. Do you know one of my greatest regrets is not getting my cosmetology license immediately after high school? It would have been a wonderful trade to have and I wish I would have taken nine months to get it right before going to college.

Where are our kids NOW in this process?

I wish everything was as simple as on paper, don’t you? Are you wondering how the facebook statement, “Why we won’t let our graduating senior go to college in the fall, unless things change, ” turned out? We are living this and have our share of challenges, so stay tuned for part two on the reality of what this looks like in our family.

I’d love to hear how the rest of you view saving and paying for college.

Remember, there is no right or wrong answer here. Let’s learn from each other.

Saving money and paying cash for college tuition

I trust Dave Ramsey’s Endorsed Local Provider program and am thankful to them for allowing me to share our financial journey through this sponsored post.