we're thinking on buying college credits for my daughter now at say penn state. i'm starting to do some research and have heard pros and cons on prepaid college.
how many credits are needed for a four year degree ? give or take.
a lawyer buddy told me what he would do is this and it makes the most sense to me so far: DON'T put it into a 529 plan if you have the money, still make her get all the loans and everything and then come graduation, pay off all her loans as a graduation present per say and she gets a good start on a good credit rating as she sets out on her own. thats the short version. not to pre pay for anything. thats if you have the money to do that. more or less, stick this chunk of doe away now let it grow and do it that way as opposed to buying credits at a college now for 16- 17 years from now.
ahh ... i'm not explaining it very good , but you get the picture.
what are some of your thoughts on how to go about this?
how many credits are needed for a four year degree ? give or take.
a lawyer buddy told me what he would do is this and it makes the most sense to me so far: DON'T put it into a 529 plan if you have the money, still make her get all the loans and everything and then come graduation, pay off all her loans as a graduation present per say and she gets a good start on a good credit rating as she sets out on her own. thats the short version. not to pre pay for anything. thats if you have the money to do that. more or less, stick this chunk of doe away now let it grow and do it that way as opposed to buying credits at a college now for 16- 17 years from now.
Lawyer friend's giving you good advice...except.. put money in a 401 K retirement fund for yourself to avoid taxes and if worse comes to worse and she doesn't go to college you have $$ for retirement... if she does go to college paying for a childs college tuition is a valid penalty free withdrawl from a 401K
That way she'll qualify for all the $$ available during college as $$ you have in a 401K is not included in the FAFSHA form but it's available for you to spend on her tuition if you want to... it's a win win situation...
plus an associate is about 60 credits, bachelors 125ish, masters an additional 35-60ish and Ph.D. another 35ish
I have 249 Penn State credits on my transcripts, but sadly their not in the same program so I'm still 8 classes and a thesis away from my Ph.D.
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I am just finishing a degree at PSU and was going over some of my student aid paper work yesterday, so I have some numbers for you...
At PSU University Park:
B.S. in Industrial Engineering requires a minimum of 129 credits
The new figures for 08 and 09 come out this month but for last year the total estimated cost of attendance including tuition, cost of living, housing, etc... for PA residents was $23,560 for the Fall and Spring semesters combined and $10,609 for the Summer. Actual tuition for full time course load (At least 12 credits) is somewhere around $7000 per semester and ALWAYS goes up.
As a rough estimate, including the fact that tuition has almost doubled since I started my degree, it cost me approx $75,000 for a degree and I am a working adult student... If you are planning to help your kids out (which it looks like you are since you are already planning their education costs) I would estimate that it would take about $100,000 per kid... just an estimate.
The student aid office is pretty good here and has always helped me out when I needed it... you can find their website on the main psu page at www.psu.edu
As far as the actual financial planning and investing, there are people here way more knowledgable about that than I am. Here are a few points, though, to consider when planning.
- As has been stated, a BA or BS generally is 120 or so credits. These are credits that must A). Fulfill general education requirements and B). Fulfill core cirriculum requirements. In other words, I can take a bunch of courses that are not part of my general or core education and other than meeting my elective requirements, they aren't going to help me graduate even if they help give me 120 credits. You're probably saying, "duh," but my point is to keep this in mind if your daughter decides to change her major during her college career.
- In Pennsylvania, State System schools are going to be the most affordable. I come from a blue-collar background, and having the State System helped put college education within my reach. Penn State is a state school, but it's affiliated with a different collegiate body. State System schools are Slippery Rock, Indiana University of Pennsylvania, Bloomsburg, Lock Haven, Cheney, California University of Pennsylvania, etc. Don't buy into the private college hype. There are some great private colleges, but just because a college is private, doesn't mean that it's somehow better than a state school. I got accepted to a Master's program at a private college in which I had already completed many of the courses already during my undergraduate years.
- Once you reach the age of 23, you are considered independent in the world of financial aid, even if you are still living with your parents. This is great news when completeting the FAFSA, because your parents' income will not be counted against you in computing your award amount. Obviously, I assume your daughter is going to college straight out of high school, so barring any foreseeable circumstance, she's going to graduate before 23. Still, this may benefit her if she doesn't go to college directly after high school (and I believe many people shouldn't go directly after) or if she goes to graduate school and decides to still live at home.
- Encourage academic achievement during the undergraduate years, because the rewards may be monumental if she decides to go to graduate school. If your daughter has a competitive undergraduate background, she will be able to pick and choose a graduate program more easily. There are many things to consider when choosing a graduate program, including program fit with professional and/or research goals, program prestige, faculty background, geographic location, and perhaps most importantly for many a po' student, availability of assistanceships. Assistanceships are employement opportunities granted by college departments to graduate students. Students usually assist in teaching or research and usually are given a full tuition waiver plus a monetary stipend for their work. Many PhD programs automatically give you an assistanceship when you are accepted, but Master's programs often only offer a couple positions to a number of students. Because I did very well during my undergraduate, the department offered me an assistanceship while I work for my Master's. I know that I'm kinda getting ahead of things here by talking about grad school, but in this day and age, you almost have to go to be competitive in many fields. I guarantee by the time your daughter reaches college, it will be even more competitive.
Hope some of this helps.
"He's the electric horseman, you better back off!" - old sKool making a reference to the culturally relevant 1979 film.
I was a single mom when my kids were younger and could not manage to save for my children's college fund...so what I did was get a job at the University and provide them the tuition discount. Some colleges offer free tuition for employees and their families...and sometimes if they are in a group of schools, you get it for any one of those schools. Big Ten was suppose to be that way when they first joined the big ten but it never worked out.
If I could have, I would have went the IRA route though. The pre-pay credits have a lot more limitations.
damn paul, i thought i said keep it simple, i ment keep it short.
just kiddin, thanks for the info.
we are thinkin psu cuz we (my wifes family) are huge penn staters. but who knows? thats why i don't really car for the pre-paid idea. i'm more or less really trying to figure the best route and how much. credits only. it's kind of lookin like about 80,000 now for 4 years. so it probobly would be 100k in 17 years.
what amount would i have to put away today in order for it to grow to 100k in 17 years? anyone? i know theres alot of variables to consider.
thats a kind of a tough question i know, but if anybody can help, throw a number out there. i'm going to be seeking some professional advice here shortly but i'm just kind of looking for a rough number for now.
