Friday, August 16, 2013

College on the Cheap – How the Sardonic Family Does It

The basic premise. Kids that graduate debt free. And pay for 100% of college themselves. That’s right; we don’t help them with tuition, room and board or books. (or cellphones, iPods, cars etc...)

First some history, we have 13 kids and they are all homeschooled through high school. We graduate them from high school at either age 16 or 17. That depends on how much they have worked ahead. The ones that finish 2 years early have skipped 8th grade and done 11th and 12th grade concurrently. Why stay in high school longer than you have to? (In the immortal words of Ferris Bueller - “It's a little childish and stupid, but then, so is high school.”) Plus they can get an early start on college, or whatever else they want to do with their lives. Graduating high school early is also a plus if you need to spread out your college education over 5-6 years due to finances.

During their last year of high school, in January, our kids fill out the FASFA form to get some wealth redistributed their way. Hey if the government is gonna steal…I mean tax…people’s money and give it away for free, my kids might as well get a slice of the pie. The FASFA form will tell you how much Pell Grant (the free stuff) money your kid qualifies for. It will also tell you how much student loan money they can borrow, two kinds, subsidized (lower rate) and standard (regular rates). We avoid the student loans like a prom date with body odor.

You will also want to check with your local politicians for scholarship money. My kids all get $200 per semester from two different state politicians.

While we don’t feel that college is a must, we do encourage them to at least go to community college for 2 years. After that if they want to get a job, go to trade-school, start their own business, be a beach-bum…it’s up to them.

After high school, the kids all go to community college for 2 years. Community college is MUCH cheaper than a 4-year University. We have a great community college about 25 minutes from us. We also have one 15 minutes from us that is even cheaper, but it’s in a not-so-nice neighborhood and has a bad reputation, so we choose to drive a bit further. The one we use is nationally ranked. The community college, in addition to being affordable, is linked into all the public universities in our state. (After CC our kids go to a state university). The community college insures that the courses they take will transfer to the state college they want to attend.
Another plus of community college, if the kid ends up being a dropout, very little money has been wasted.

And yes our kids go to public colleges, not Catholic ones. We don't see what $50,000 per year and a degree in philosophy gets you...other than a job at Starbucks and living in your parent's basement. The public universities our kids have attended have all had Catholic student groups on campus, some better than the others. And some used more by one kid then the other. But all the kids have kept their faith while in school.

Community college costs either $3,000 (in-county) a year or $6,000 (out-of-county) a year depending on which one is attended. The $3,000 one is in the ghetto, so we do the “out of county” $6,000 a year one with the great reputation and the great teachers. If you lived in our area you would understand. My kids all get between $4,000-6,000 in aid and scholarships each year during their community college days (more when attending a university). So the most they have to come up with is $2k per year. And since they have all been working throughout high school, this is not an issue. They have also been encouraged to save their money, it does them no good to work if they are blowing it all.

After 2 years of community college they move on to a 4-year state university. Some go to one close to home and commute; they get free room and board that way but have commuting costs. Others have chosen to go to a school farther away and live there which adds to the expense, obviously. They finance this by: using their savings, summer jobs and on-campus jobs. Plus whatever financial aid they have received, in some cases the aid/scholarship package has been enough to cover the costs.
State Universities in our state are around $8-$10k for tuition and about as much for room and board.
They buy their books used online. From places like Amazon, eBay and They get creative with ways to save money if living on campus. Like finding cheap housing and learning how to make inexpensive meals. Keeping a junker-bike to ride around campus. And other ways to keep costs down.

The results:
  • Child #1 graduated 2 years ago with her Master’s degree at age 21 and debt free. She also had a job upon graduation.
  • Child #2 will be a senior this year and graduating next May. He is 22, but was in seminary for 2 years after high school so he got a later start on college. He will be graduating debt free.
  • Child #3 will be a senior this year and graduating next May. He will be graduating debt free.
  • Child #4 has completed 2 years at community college and starts at her junior year at a State University in a few weeks. No debt as of yet and none planned.
  • Child #5 graduated high school in the spring and is starting community college in a few weeks. So far she has the money to pay for school this year but needs to get her tush in gear and start working more.

So that’s how it has gone for the oldest 5 kids. They are doing great so far and setting a good example for their younger siblings.

Even if we could afford to pay for their college we wouldn't. Kids that pay their own freight party less and study more than kids that have momma and daddy pay for it. I'm proof of that.

***all posts applying to my family only - your results will be different***


Maurisa said...

Wish we had this advice years ago! We've been paying attention tho, and although our oldest will graduate with some debt, it will be interest free and fairly low for someone her age. Unfortunately, we make too much for our kids to qualify for financial aid, but we have encouraged # 2 to move out on his own, after 6 months he will qualify for financial aid on his own. #3 is in a convent school and well on her way to the nunnery (her own vocation). We will e using your plan for the remaining 4. Excellent advice here!

federoff11 said...

I've got to quibble on one minor point... there are "catholic" colleges and then there are CATHOLIC colleges> I won't help pay one red cent for a "catholic" college, but I will do whatever I can if my kidlets want to go to Steubenville, Chrisendom, TAC, UD, Ave Maria, Wyoming Catholic College, or anywhere else they will be surrounded by dynamic orthodoxy, positive peer pressure, and teachers who want to form their souls as well as their heads. My #2 is at FUS right now, and it has been SO GOOD for him. Other than that, yes, 2 years of CC followed up with time to earn a BS/ BA at a Catholic University is AWESOME!

Rob F said...

federoff11 - HAHA my wife told be to take out my smart...bottom comment about Catholic schools. I did it partly as a joke and partly as a knee-jerk offensive reaction to people who give us grief about "how dare we send our kids to a secular school". But even if we wanted to send our kids to Catholic Schools (K-college) we wouldn't, Mainly because of the cost (we will never use debt or forgo savings for schooling), but some other issues that I may blog about someday.
But if people want to make use of the Catholic schools out there, that is certainly their prerogative.

Rob F said...

Maurisa - We had no choice but to do it this way, and thankfully its been working out great so far.
Not sure what will happen when we only have a few kids left, they won't get as much financial aid as their older siblings did. Guess they will have to get 3rd and 4th jobs ;)

Mary Wilkerson said...

This is awesome. My husband and I started off our marriage 86 k in debt due mostly to college decisions (mine). In the past three years, we have worked our butts off to get out of that debt (we finally have) so that I could be at home with our 2.8 children (about to have our third). We have vowed to help our children avoid the same mistakes we have made... :)

Rob F said...

MW-Congrats on paying off all that debt, that is Awesome!
One of my college seniors is applying to Grad school, hopefully he will get into a State school in can commute to. Otherwise he will have to take out loans for at least part of it. :( But at least its a high paying field he is going into. But it still makes me nervous for him.

Also, congrats on #3 baby coming soon!

Anonymous said...

Rob any info on scholarships, i.e. websites etc? - Matt W.

Rob F said...

Matt W-well we start with the website at the first of the year. Then check with the specific school's financial aid dept to see what they have.
Also we get money from our State Delegate and from our State Senator. Each of them has a website that will tell how to apply for that, normally done in the spring.
Also check the local civic organizations; Kiwanis, Lions Club, Elks Club, Knights of Columbus etc...

Michael Hart said...

Hmm, I'm going to play devil's advocate a bit. Why wouldn't your college attendees take out loans, provided they can get the subsidized/interest-free variety? Provided they don't change their behavior, and spend exactly the same as if the loans didn't exist, they could invest the loans, collect interest, and simply pay them off upon graduation, or whenever the government discontinues subsidizing the interest payments.

Rob F said...

Great question Michael.
Sure students good do that. But I can think of a few reasons why I wouldn’t personally:
•They would have to be disciplined enough not to spend the money they are supposed to invest. I have friends who don’t prepay their mortgage because they think they can invest the money and get a higher rate of return. But when you talk them and ask how that is going, they haven’t actually invested the money. It was spent on short-term instant-gratification.
•They would have to make a higher rate of return than the interest they are paying. Current rates are 3.76%, 5.21% and 6.31% from the feds, depending on the type of loan. So it is possible to stick the money in an index fund and beat that rate of return.
•Interest on student loans isn’t deductible on tax returns
•Peace of mind of graduating debt free. They have enough stress finding a job and trying to figure out life.
•Hopefully the loans would be for a degree that you can get a decent paying job with (no History of Northern Estonia degrees).
•My college age kids do invest. They have been opening Roth IRA’s and sticking money in an S&P Index fund. Not a lot but it’s a start.
Since I wrote this article, one of my kids is in grad school (Doctor of Physical Therapy). He has taken out loans for this. They are the higher interest type (5.21% and 6.31$) because the subsidized don’t seem available for Grad school.

Michael Hart said...

Thank you Rob F for the helpful reply! I'm from Ontario, which is slightly different; All loans are interest free until 6 months after graduation (!), at which case interest kicks in (currently at 5.5%, but I think it's a floating rate. Admittedly, that's a bit high; at that rate I'd probably want to destroy the debt as quickly as possible. In the meantime, I would personally have 38 months (Sept 2016 - Nov 2019, if I graduate beginning of May 2019) of interest-free principal to invest.

The non-deductible interest is a good point. I just looked into it; it looks as if I can deduct interest on OSAP loans. (I'm just starting university, again, with 2nd year standing in September, and currently trying to figure out OSAP, which is in the process of change by our lovely Premier...) Though of course the plan is not to have any interest payments to deduct 3 years from now...

The peace of mind is definitely a good argument. However, I'm also of the mind that the gov't will be stealing from me for the rest of my life, so I might as well take advantage of any loophole or opportunity available now to offset that. Any organization (aka government) which funds abortions and immoral sex-ed programs doesn't have a right to any of it, morally speaking.
Of course, the degree to which one "needs" to do this is entirely dependent on the individual and family circumstances.

I'm also beginning to look into investment options (no pun intended), although it may be a little while before I actually start. As a Catholic, I'm a little hesitant to unscrupulously throw my money into an index fund. I wish there was a way to know exactly how, and to what extent, my money would be used to immoral ends.

But anyway, that's another tangent... I could ramble for ever... Thanks for the reply!

Rob F said...

Michael, here in the US I think you have 6 months from graduation to start making payments. But I think the interest is accruing during that time, I could be wrong though.

There are Catholic Based Funds, Ave Maria Funds come to mind. Not sure how their expense ratio and performance compare to other companies.
In my work retirement plan my choices are limited, so i use Index funds. In mine and my wife's IRA's I do it myself (pick my own investments).

And yes your government up there and mine done here will be stealing $$$ from us until we die...and then from our heirs.

Good luck at University.

Anonymous said...

Sounds to me like other people are paying the cost of your kids attending college. That's a fine plan, but remember to show some gratitude.

Anonymous said...

This plan also pre-supposes that you have a good community college system near you. Not all of us do, so community college is not quite as appealing to everyone.