You don’t have to pay for your child’s college education

by Rocket Finance

When I was 8 years old, my parents opened a college fund for me. Actually it was just a savings account – there was no such thing as a college fund in those days – but the money in it was eventually used for college. By the time I was ready to leave for college, I had saved enough  to  pretty much cover my first year of school. After that, my parents encouraged me to use the DCUFM method of paying for school. (Don’t Call Us For Money) I think that my parents would have liked to pay for more of my education, but it was simply impossible for them at the time. I was the oldest of five children and my parents were in full-time Christian ministry where the pay was not very high. You can read more about my family finances in The Cheapest Family in the Nation. Looking back, I am glad that they laid that responsibility at my feet. It helped me to grow up and even helped me stay out of trouble at school. I could not afford to waste time or money if I wanted a college education. I attended a private college in the early 1990’s.

Here is how I paid for college and some suggestions for you (and your child):

  1. Work while at school. I paid for my first year in cash, but I continued to work during the school year. The nice thing was, since my bill was paid, I did not have to work 25+ hours just to break even like some of my classmates. During that year, I was able to save up about half of the expenses required for the following year. I believe that even when parents can pay all college expenses out of pocket, they do their child a disservice by not requiring them to work at least 5 to 10 hours per week.

  2. Eat meals on campus. The cheapest meal available to you is the one for which you have already paid. Furthermore, the charge for on campus meals is based on the assumption that most kids will only eat 12 to 15 meals a week on campus. Therefore the college is able to offer board at a low rate. At some colleges you are being charged less than $2 per meal. Take advantage of this and eat all 21 meals on campus.

  3. Use cash while in college – except when paying your bill. You can rack up some major rewards and cash back if you pay your tuition with a credit card. If you use it for anything else. . . get rid of it. Gather Little By Little has some great suggestions for getting rid of the offending card.

  4. Keep partying to a minimum. I know that in some circles “college” is synonomous with “party”, but if you can use your time more constructively, you will be thankful in the long run. The truth is that popularity at college is a very fleeting thing. Some kids spend their whole college career trying to be the BMOC (Big Man On Campus) or HGOC (Hottest Girl On Campus). What they don’t realize is that the minute they graduate, everyone forgets about them and they are left with a low GPA, debt, an STD or two and sometimes, even a criminal record. (This sounds like it should be a separate post. Can you tell that I have two daughters?)

  5. Ignore the on-campus Starbucks. I love coffee – Starbucks, Caribou, you name it, but premium coffee outlets on campus are criminal.

  6. Work on Thanksgiving break, Christmas break and Spring break, GASP! The best type of job to have on breaks is one that is very different than studying. I always had a construction job. I was happy to go work and outside, physical job when break started and I was always glad to go back to the books when break was over. I was usually able to “bank” and extra $2,000 to $2,500 a year by working during my weeks off. Employers generally love to see the college help show up at Christmastime. Don’t get me started on how most kids spend their Spring Break. . .

  7. Use Friday and Saturday nights wisely:

    • The Mall: +gas+food+purchases+time spent = $60 out of your budget

    • The Library: +time spent = break even

    • The Job: $25 added to your budget (depending on what you make per hour)

  8. Don’t take a car to college. You don’t need it. Bicycles work just as well at college and there is always a way to catch a ride home. Cars are one of the largest drains on your personal finances and many of the costs are hidden – even if your card is paid off. Go as long as possible without purchasing one of the four wheeled money pits.

  9. Take out a school loan. Really. They generally have low rates and a college education is only going to get more expensive the longer you delay. For some people the key is to limit your debt. I was able to graduate with less than $7K in school debt – and I paid off $2,000 in the first year after graduating. I would have paid the rest off in another two years if I had not gotten married or had kids right away.  My monthly payment is $60 a month and I will pay it off in a year and a half from now or less. No sweat. It would have been more expensive to delay my graduation by sitting out of school and working in order to avoid any debt. A college degree is crucial in today’s economy.

The problem with my financial story is while I was better than average at handling finances in college – I flunked family finance. We are slowly getting our financial house in order thanks in large part to personal finance blogs like those at the right.

I can’t imagine how much worse off we would be had I not been a frugal college student.

  1. 31 Responses to “You don’t have to pay for your child’s college education”

  2. By Lynnae @ beingfrugal.net on Jan 3, 2008 | Reply

    I worked my way through college, too. And I’m thinking my children will also. 🙂

  3. By glblguy on Jan 3, 2008 | Reply

    I did as well. Did a full class load at school and worked a 30-40 hour job all at the same time. It was hard work but looking back it was worth it. I came out of college with no student loans and the experience did a lot to build by character and work ethic.

    Great article!

  4. By plonkee on Jan 3, 2008 | Reply

    Nope, I didn’t work my way through college at all. To be fair, it is only now becoming common for Uni students in the UK to have a job in term time. I did have a couple of summer jobs, and one of those I spent on the money I saved in travelling round the States for just under a month.

    My parents paid for most of my education, and student loans covered the rest. I lived in self-catered accomodation and ate very frugally. Overall, I probably did a more conservative reverse to rocketc I’d say I was semi- not doing the right things financially in college, and have since been semi-doing the right things financially in my working life.

  5. By rocketc on Jan 3, 2008 | Reply

    I think that a college education is a valuable commodity, a goal to be prized, a privilege. Not a “right” for the everyman.Sometimes the requirement to work will help your child to be more conscientious about how they approach their studies.

    I think it is great when parents can afford to pay for their child’s education, but they do a disservice to that child if they don’t require some type of work while they are in school.

    Plonkee, what is the government set-up in England? Is there a lot of government aid available for education? Is there such a thing as private and public universities?

  6. By ladygoat on Jan 3, 2008 | Reply

    I worked for two years as a resident advisor in the dorms, which meant I got free room and board, and that helped immensely.

  7. By Anny on Jan 3, 2008 | Reply

    Why not save money from textbook purchasing? I get 2 textbooks from a online bookstore and save me more than $200. All the textbooks are BRAND NEW. That’s great. You may visit the web to see any help.

    http://www.cocomartini.com/

  8. By rocketc on Jan 3, 2008 | Reply

    I did the same thing! Not everyone can supervise a dorm, but usually working on campus is a good idea – even if the hourly rate is less – you have less overhead: travel, food, time, etc.

  9. By Randall on Jan 3, 2008 | Reply

    I’ve decided to pay for my kid’s college, but only if they’re progressing towards the degree. Too much major-hopping, or academic grades go down, and they’re on their own.

    I look at it as an investment, they’ll be better able to support me in my retiring years in the ‘manner I’ve become accustom to’ if they make lots of money. 🙂

  10. By rocketc on Jan 3, 2008 | Reply

    Ha! You sound like my dad: “I had children so they could mow the lawn and shovel the driveway.”

  11. By plonkee on Jan 3, 2008 | Reply

    Most (95%) universities are government funded – certainly all the prestigious ones are.

    In England, for EU/British students fees can be up to £3,000 per year, most charge the maximum. For English students means tested grants are available of up to about £2,800, as are loans with interest rates pegged to inflation (partially means tested, and depending on how expensive your study is) of up to nearly £10,000. Universities also offer bursaries to some students, these range from £500 to £2000.

    It’s different in the other home nations (they get a better deal) and slightly different – higher fees and larger loans – to when I was a student. The idea is that a combination of loans, grants and parental support totalling about £0k-£12k will cover fees and living costs (cost of living is higher here). Bursaries / jobs / savings / parental money covers extras.

  12. By rocketc on Jan 3, 2008 | Reply

    Thanks for the info, I always enjoy finding out how things run across the pond.

  13. By Aaron Stroud on Jan 4, 2008 | Reply

    Great post—I agree with every point, but I have a tip for anyone following numbers 2 and 6. If you’re going to work and eat on campus, you might not want to take a food service job on campus!

  14. By rocketc on Jan 4, 2008 | Reply

    Aaron, this is really good advice in terms of efficiency – sometimes you can eat a meal for free, sometimes you can get free food, sometimes you can get paid to eat, usually food service has a very convenient location.

    Food Service is one of the most underated jobs on campus. Thanks for stopping by!

  15. By DivaJean on Jan 8, 2008 | Reply

    One thing you are failing to take into account is the fact that tuition costs have skyrocketed since you went thru school. Its a very different world now- colleges are charging what the market will bear AT THE HIGH END of the spectrum. Harvard is now realizing its tuition is way more than it really needs to be (!) and is actually crediting some middle class students with money back. A few hours of minimum wage work isn’t going to put a dent in the 5-6 figure per annum cost!

    This being said, I am not going to be in the realm of ability to pay for my kids college completely either. But that doesn’t mean I’m jsut going to make then pay for it themselves either…

    My partner & I parented later than most- I am 42 this year and she will be 45. We have 4 little ones we have adopted (or will finalize the adoption of- in the case of our youngest). The ages are: 8, 5, 2, and 7 months. We live as frugally as possible (I call it lesbian homespunny) on my one income, as she is the stay at home mom & I work outside the home. We qualified this year for Christmas Bureau gifts and such- given 6 people on 1 modest income. But we are richer than that–

    On two of the adoptions, we were awarded monthly stipend thru the state. This is NOT much money- but to our family, this is the college fund. We have been very tight with spending ANY of this- it is not taxed as income for us as it is considered the kids money. Karate for the 5 year old and Girl Scouts for the 8 year old is all that we pay out from this- all the rest gets split 4 ways into college funds accounts.

    There is no way any of the kids will be able to get thru college on just what we are saving- but it will be a sizable enough chunk to offset enough so that doors won’t be closed to them due to finance.

  16. By rocketc on Jan 8, 2008 | Reply

    DivaJean, I think you have the right attitude. I know that college costs have skyrocketed – I work at a college – but the other thing that has also risen is the amount of financial aid available.

    Not everyone will be able to afford any college they want – price will limit your choices. The reason Harvard is expensive is because they don’t want everyone to attend there.

    The idea that I am trying to limit is the thought that parents are fully responsible for their children’s college education. I am all for parental help, but not at the expense of their own retirement and other necessities.

    Four kids is a lot – I think we are going to stay at three for a while.

  17. By Mrs. Micah on Jan 13, 2008 | Reply

    My parents paid for some, but they put a strong emphasis on frugality (no car, for instance) and scholarships. Which worked out well for all of us.

  18. By deepali on Jan 13, 2008 | Reply

    My parents paid for all of college – my first job was in college and it lasted one semester. They wanted me to focus on my education and getting lucrative (hopefully paying) summer internships. In retrospect, the semester I did the best in, was the one in which I worked. 🙂

  19. By rocketc on Jan 13, 2008 | Reply

    Mrs. MicahYes, once again there are other ways to get a college education outside of a college savings plan (not that there is anything wrong with that).

    deepali, a irony of life. . .but I have seen it proven true over and over. If you want something done – ask a busy person to do it.

  20. By Carlos on Jan 29, 2008 | Reply

    Agreed! Not having to work during college is a disservice. A job, a motivation to obtain/keep a scholarship, and judicious use of student loans can get you through.

    My wife and I don’t totally agree on this account, so we’ve reached a compromise (tenative since oldest is 8 years old).

    I plan to offer a 50% matching program. They send me their pay stubs, I’ll send them cash equal to 50% of their net, with a yet to be determined maximum.

  21. By rocketc on Jan 29, 2008 | Reply

    I think that is a great idea. I know a family who was able to pay for their daughter’s education outright, but still required them to pay 50% herself. The girl sent a check to their parents every month, equivalent to half of their tuition.

    What she did not know is that her parents were depositing her check into a CD and presented her with the entire amount upon graduation. It was more than enough to purchase a reliable car.

  22. By Wally on May 26, 2008 | Reply

    If you think sending your kids to college will be an investment for your retirement age, you will be disappointed. That is the thinking of average family in third world countries. Your kids will have their own life to live. Prepare for your own retirement now, so that you will not be disappointed later in your life.

  23. By darlene on Oct 27, 2008 | Reply

    well Im not sure what country most comments are comming from.We are in canada and our son is going to school in the USA…hes received a soccer scholarship which covers 50% ofthe cost.We are middle class,and are very carful with our money we are covering his first year,spendging money comes from him,playing college soccer in USA was his dream,just not the same level in this Country.We are concerned about the US $ VS CAD$ as this will have a huge impact..we already host and intl student for extra income.Because our son ios not going to school in Canada there are lots of grants and such he is not eligable for,and of couse hes not eligable for any in the US,,hes doing really well there and will have 3 more years to go,,,,how else can this happen for him…even with a student loan,,,we also had a parent stay at home for 5 years..so there was no extra money to put away for college

  24. By Mindy on Jan 10, 2009 | Reply

    First, I disagree with the getting a meal plan thing. I was forced to take it for my first semester and it costed over a thousand dollars. I once did the math and it came to be over 3 dollars per meal. (That is 14 meals a week, plus munch money (can get snacks to study or go to one ot the on campus restaurants like pizza hut). Ever hear of the freshman 15? I say meals plans are the reason for that. My roomate, who also had to use the meal plan, gained that freshman 15. I went to the campus dining area about 2 times out of the semester and gained nothing (though the meal plan money was wasted, food tasted gross, not healthy and cold and not worthwhile). Ramen noodles are way cheap. You’d be better off with making your own food, plus it won’t be cold or undercooked either. 2)I had to pay for college on my own, without parental help. Now? I just took out an 1800 dollar “loan” from my father!! (Not enought financial aid. Note to parents, don’t have over three children or the other children, like me, will suffer with lower financial aid. Plus get your taxes in order ASAP so your kids can get the FAFSA in earlier) 3)Not recommended to work over 15 hours a week or grades will suffer, unless you were taking the easy way out and took the well known, slack off easy type classes 4)Don’t even bother applying for online scholarships, I spent several hours and days applying for them and didn’t get even one. 5)taking a car: parking permit can be expensive plus gas and insurance, etc, not to mention having to move your car for snow plows and what not. However though, on campus jobs pay around 8 dollars and are mainly for work study students. You can get an off campus job or work study job for at least 8.50 an hour, often times more, like 12 dollars an hour. Good luck finding a job on campus that pays well and actually finding a postition to fill!!) 6)Work less and volunteer more. A large amount of scholarships and things like becoming an RA or CA look at the community service aspect a lot more than grades. 7)If possible, avoud the unsubsidiezed loans, that’s how you get into debt FAST 8)Work your butt of during the summer. At least that way you have enought to pay for at least half of the first semester 8)In most cases, buy used textbooks and sell the textbooks you don’t need anymore. (Do it over the internet to get more) 9)try not to buy anything at an on campus bookstore, very expensive 10)try not to do laundry often, though make sure laundry doesn’t smell. At my college it costs a dollar to wash and another dollar to dry, plus if a machine is broken and you used it, then you just lost money 11) If you get a dorm room, take your keys with you at all times, even when roomate is in the room. Key ins add up very fast. Plus you never know when roomate will leave; (in my case, roomy and I had same class we were going too and always walked there together. I went to bathroom, she thought I left to class already and she went without me, locking me out of the room. 12)Yes, becoming a CA or an RA (same thing), will save you money (free room an board, room size same size as the two roomates who share one, and they get a 1,000 dollars for their own use on whatever, spread over the semester; however, they cannot hold a job during the first semester, can’t be gone too often, have to be on call, and they have to talk to trouble makers in your dorm and what not) 13) Go to cheaper colleges for your generals, then transfer to a better place after that, even if you rack up a big bill. Getting a degree from a place with a horrible department of what you are majoring will not help you much in the future 14)Don’t expect to come out of college debt free. Most people who do only can because of different circumstances, one including parental help (moneywise). I know people also always say that there are thousands of scholarships that get unused out there, but the fact is most of them have a requirements. I know some that were for left handers, for example, or for some that were for obese people, etc. All you will do when applying or trying to find mroe scholarships = complete waste of time and effort. Lastly, shame on you parents who refuse to help your children pay for college (are you not aware that the FAFSA takes your income into account for a reason? That is another reason why my financial aid was so horrible. (My financial aid, FYI, consisted of 3 loans and work study. 1 subsized loan (I took), 1 unsibsidided loan (did not take, interest will kill you and I would have still had to borrow from my “father” in the end), and a SELF loan (would have helped me a lot but you need a cosigner and that no one would do). Then, of course, work study (my: on campus, 8 dollars an hour, can only work up to 13 hours a week and can only earn max of 1500 dollars a semester (then minus the tax amount). Not to mention, work study does not realy mean part work, part study. I think there was only one day for me where I did absolutely nothing. On the other hand, most days I am doing 100% work and no study) Keep these things in mind.

  25. By rocketc on Feb 19, 2009 | Reply

    Mindy, you need your own blog.

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