Question about financing college for a kid who's now in kindergarten.

[Nay]

I know about the state programs to which you can contribute a set amount to an account and get a free college education at a state school. Unfortunately, none of us relatives can reliably afford to send that money in each month, every month.

My grandson looks like he's going to be quite the scholar, and I dread thinking about him or his parents going into hideous debt -- obviously, the higher education landscape is going to look vastly different 13 years from now, but what could we attempt to plan for him? I truly hope he's smart enough to get at least partial scholarships, but what else should we be thinking about?

[Kalidurga]

1. A couple of things...

First off consider community college for the first couple of years or three. It doesn't sound like your grandson is going to need any remedial work at all, but for those that do it's much cheaper to do that at a community college if working on their own doesn't fix the problem. So, your grandson won't need that, but credits at community college are much cheaper. Sometimes the classes are actually better than at universities. If you get those two years out of the way it will be a lot lighter on the wallet. I just got my two year degree myself and I am transferring to the U of M in the fall.

An option you can use in conjunction with this or separately is find a job where they will match your college funds. That comes with a couple of catches or three or four though. First catch, you usually have to work there for a year before you can qualify. Second, the classes have to be something that can contribute to your job, so if you go to Target for example classes in accounting will qualify, but Forestry classes not so much. Third, you have to pay out of pocket and you are reimbursed after completing the classes. Forth you have to remain employed at the company while taking classes.

Another option which is difficult to pull off is to become employed at a university, many offer free classes to their employees.

Hope this helps.

[enough]

2. If he can get into a "need-blind" and "full need" school, the school will pay.

From Wikipedia

U.S. institutions that are need-blind and full-need for U.S. applicants

A number of U.S. institutions of higher learning state that they offer both need-blind admissions and full-need for U.S. students. The following schools state they are need-blind and full-need:

Barnard College (need-aware for transfer students)[11]
Beloit College
Boston College
Bowdoin College (need-aware for transfer students)[12]
Brandeis University(need-aware for transfer students)[13]
Brown University (need-aware for international and transfer students)
California Institute of Technology
Claremont McKenna College
College of the Holy Cross
Columbia University (does not meet full-need for transfer students) [14]
Cooper Union
Cornell University
Davidson College
Deep Springs College
Duke University[15]
Emory University
Georgetown University
Grinnell College
Hamilton College[16]
Harvard College[17]
Haverford College
Harvey Mudd College[18]
Johns Hopkins University[19]
Knox College
Lawrence University
Middlebury College
Northwestern University
Olin College[20]
Pomona College
Rice University[21]
Stanford University
Swarthmore College
University of Chicago
University of Miami
University of Michigan
University of North Carolina at Chapel Hill [22]
University of Notre Dame
University of Pennsylvania
University of Richmond
University of Rochester
University of Southern California[23]
University of Virginia[24]
Vanderbilt University
Vassar College[25]
Wake Forest University
Wellesley College
Williams College

http://en.wikipedia.org/wiki/Need-blind_admission#U.S._institutions_that_are_need-blind_and_full-need_for_all_applicants

[OutNow]

3. 529 plan

My grandson is 6 and in first grade. I opened a 529 plan for him in Oregon where we live on his first birthday.

I suggest you look into the 529 plan where you live. It is a good idea, as a grandparent, to get the 529 plan in your name with the grandson as the beneficiary because the money in the account will NOT be used to determine how much college aid he and his parents are eligible for. If the 529 is in the parents name then it is used when college aid is calculated. The 529 plan I'm in does not require a set amount every month. You can put in as much as you want whenever you want. And, the contributions are a tax credit on my state income tax bill.

Check into what the minimum contribution is for the 529. Whenever you or any of your grandson's family has a few bucks put in into the 529. That way you can take advantage of tax deferred compounding until he reaches college age. Whatever you can save for him will help. The worst thing to do is put this off until his teen years when the amount he needs will seem insurmountable.

It's great you are thinking about your grandson's education.

[Nay]

4. This is the sort of plan I looked into, but because I have retired, I am unable to start or

keep up such payments. Other relatives are in the same boat. I will check into our state's 529 and see if I can contribute money when I can, rather than on a payment plan. Thanks for that suggestion.

[AnneD]

5. This is how this single mom did it......

Save for you retirement first. That will not be counted on a means test and some 403 B's let you borrow against it...but this is a last resort.

Make your child scholarship worthy. When my daughter expressed an interest in band, I encouraged it because many instruments are 'scholarship' instruments. Kids don't take them up an so top flight universities are anxious to get kids that play these instruments. The kids don't have to major in music, just perform in x number of chamber groups and the university band or orchestra. My daughter played the oboe (sax, keyboard, and several others). Her musical ability got her into the best high school in the city (audition admission). This in turn lead to a top notch university on the West coast. They under wrote much of the cost. she still has some to pay, but not as burdensome as most. There are scholarships in swimming that go unused while many fight over the few football scholarships available.

Treat the search for money like a part-time job. Fill out forms and write essays until you get cramps in your fingers. The money is out there.

[Nay]

6. Thank you! The music thing is a good point. Right now, it might be worth grandma's while

to start him off with music lessons or swimming lessons, or lesser-known sports. He's just turned 6, so his interests are still developing. He does love music, but he's still very much a little gadfly who likes lots of things, and gets antsy if you sit him down to do just one thing for a while (like a music lesson).

We have our whole retirement already funded, and do not plan to borrow from any retirement money to send him to college. All our son needs is a kid in college and broke parents moving in with him (LOL).

AFAIK, colleges don't count grandparents' cash when they look at scholarships, do they? Just the kid and the parents, right?