Friday, March 4, 2011

Grants & Scholarships & Loans, Oh My!

Baby Makin' Mama raised this issue on her blog the other day, and it really got me fired up, so I thought I'd raise the same issue with you today.

How do you plan to pay for your child's education?

These days, college is essential. Whereas a college degree used to make you stand out from the crowd, now it's as perfunctory as a high school diploma, and - thanks to our shocking economic downturn years back - it's not uncommon to compete with 500 other college grads for an administrative position. In short, the job market sucks.

As you know, I have been completely self-sufficient since the age of 16, and paying for my education was no exception. Though I received the occasional grant and scholarship, I was a first-generation college student whose parents had no idea what needed to be done in terms of applying for scholarships, and I graduated in December from high school, leaving me without the added bonus of a college guidance counselor. Where I should've had scholarship coming out the wazoo (I graduated fourth in my class at 16), I was lucky to get my application in and essays completed on my own.

My parents did not put even a dime towards my education. When I left for college I had 21-month-old and 3-month-old sisters, so a big part of it was an inability to afford it, but seeing as how I was once told that if they won the lottery, they still wouldn't buy me a car (in all seriousness!), I'm pretty sure that with their particular values, they wouldn't have contributed anyways.

D's parents were also not in a position to help, though for other reasons that irritate the crap out of me, so I'll abstain from writing about them here. In sum, though, he wasn't even planning to go to a big school so as not to have to incur much debt, but got into UT and couldn't pass the opportunity up. They carry a bit of his loan burden now, which we're thankful for, but between us, we have over $100K in school loans.


So when it comes to pondering Ava's future educational expenses, I feel strongly. I will NOT be allowing her to go into debt for her education. I also am not one who feels that a college education is optional (the life experience alone is irreplaceable), and so while we will more than prepare her with her applications for scholarships and grant and other federal aid, I also have a realistic view of our nation's (and therefore FAFSA's) financial future, and it's grim. As such, we put aside money into an account for her, and all monetary gifts and extra income we get (tax returns, etc) head straight into there. When it gets to a certain point, we'll put the money into a high-interest CD to help it to grow even more.

But could I live with her graduating from college in $40-50K of debt? Absolutely not. Do I want my grandchildren to someday be affected by my inability to save and plan ahead for Ava's inevitable education? Hell no.

Where do you stand? What are your plans for paying for your child's education?

(Note: I'm still away, enjoying my grandma and watching Ava get to know her nana, but I'm very interested in hearing your comments about this issue!)


  1. DH and I came from two different sides of the coin. His parents saved enough for he and his sister to go to state schools and pay for all 4 years free and clear. They gave them the choice of out of state too but they had to pay the difference. The smart kids they were, they both picked great state institutions and have awesome educations.

    Me on the other hand, my parents and I shared the cost for me to go to a private, out of state college. I still have a small loan but have worked my butt off to pay it off asap (we paid triple on it when we first got jobs so that we could pair back once he had a house and kids and stil get it out of the way before I turn 35). My parents on the other hand still have a great deal of debt for both my brother and I but hope to have it paid off by the time they retire in about 8 years (!).

    For DH and I, we want to be able to help our children as much as possible so going the route that his parents did - saving enough to pay for instate tuition to a state school (VA has a bunch of great state schools) and if they want to go more than 4 years or want to go to a private college, they'll fund the difference.

    So, our next step is to talk to a financial advisor to help us plan the best way to do this. We have our retirement funds and a few mutual funds for general savings but Noah's savings account just isn't doing anything...we need to put it into a better investment vehicle.

  2. We're starting an NC 529 college savings plan for Anne. (

    Honestly, I'm more concerned about her early education than college. If the public schools aren't top-notch where we live (and don't teach art, music, or Latin adequately), I need to be able to afford her to get her the best early education I can. That's what my parents did for me, and I was ultimately able to attend college and even grad school on mostly scholarship money. I doubt that would have happened if I'd gone to public school in my town, where the academic standards were much lower and most of the kids weren't planning to go to college.

    I honestly don't think a college education is necessary, as I know and work with many people who have decent jobs but never finished college. (And most of them have far less debt than I do, so I often wonder who's really better off). But I do think rigorous early education (particularly 1st through 8th grade) is vital.

  3. We are going to put money away to help with our son's college but I don't believe it's a parent's responsibility to pay for a college education. I attended a private women's college on scholarships & grants. I didn't have to take out loans and was only short about $1200 my junior year, which my dad (thankfully) was able to cover. I also worked my sophomore-senior years. I will not cosign on a loan for any reason, education included. Hopefully, our lifestyle of living below our means will set our son up to make good financial decisions as he becomes an adult. You don't have to go to an expensive private college to get a good education.

    I don't think a college education is necessary for everyone.


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