Guest post and Giveaway: Affordable Strategies for College–Day 1

This week is a unique week! My friend, Ellie Kay–a mother of seven–wrote a great article on how to afford college for your kids without relying primarily on school loans.  Her article is lengthy so I’ve split it into five guest posts that I’m going to run Monday through Friday of this week.

If your kids are young, believe it or not, it’s time for you to start thinking about college strategies!  At the very least you and your husband should agree on what your financial strategies for your kid’s college education will be.  If your kids are older, it’s really time to educate yourself.

Hopefully Ellie’s guest posts will be helpful for you to understand the options out there! Mark and I share openly in our Living With Less book that we have regrets about how we led our older kids through the college process.  We’re leading our younger kids very differently than our older ones.  We’re focusing on two primary options: either secure a full-ride academic scholarship or do your first two years of college at a community college then finishing your degree at a traditional university.

In addition to the guest posts this week, Ellie Kay is also giving away 2 copies of her Living Rich for Less book and 2 copies of her Little Book of Big Savings book!  But that’s not all! Since we’re talking about a “living with less” mindset for affording college, I’m going to be giving away 2 copies of our Living With Less So Your Family Has More book this week! To enter just comment on one or more posts this week. Each comment will give you an additional entry into the book drawings!

College Crunches  © 2011 Ellie Kay

     One of the biggest reactions I get from people is when I tell them I’m a mother of seven. They usually ask, “What? You have SEVEN children?” To which I reply, “yes, five by birth, two by marriage and all by love.” Being financially responsible for all those kids has been a challenge, especially when it comes to college.

    When people ask me how we are putting our kids through college debt free, the answer is multifold. First, we train our children from a young age that going to school, doing your homework and getting good grades is their primary “job.” By teaching them a good work ethic, we are laying the groundwork for scholarships and more. Secondly, we send them to schools that we can afford or where they get the best scholarship offers to cover the most expenses. Thirdly, we have saved a modest amount of college money to help them pay their room and board and partial tuition in some cases. Lastly, but certainly not leastly J, we require that they work part time in the summers or during the school year (through a work/study program or a regular job) in order to do their part in paying for college.

By implementing these four disciplines, the Kays kids are set to graduate debt free. Of the two that are going to college now, we have over one million in scholarships and if the last one stays true to his goals, then he won’t have any student loan debt either.

 First Things First

    In any discussion of college costs, it’s important to keep priorities straight:

     You’ve got to leave yourself some fun money for retirement. How else can you afford that mechanical bull riding lesson and those parasailing flights (been there, done that, LOVE it)?

     I really believe that you, as a parent, should try to avoid borrowing on your future in order to pay for your child’s future. After all that information we had earlier in this chapter about investments for retirement, why would you want to take one of your greatest investments and leverage it for college expenses? Yet millions of parents make that devastating financial choice every year. I’m talking about avoiding any college funding plan that includes a home equity loan, a HELOC (home equity line of credit) or refinancing of an existing home mortgage. These options reduce the amount of equity in your home, increasing the risk of possible foreclosure and you incur costs in interest charges that may cost you more if the term on the new mortgage is greater than the remaining term on the existing mortgage. For example, if there is ten years left on the mortgage and parents get a new 30 year loan. Furthermore, if parents choose to pull out enough money in equity for the first year of for four years of college all at once, then parents paying interest on money that won’t be needed until the upcoming sophomore, junior and senior years. Instead, look at the following options to pay for college.

 The College Mantra

     When I was a young adult, got married and began having kids (in that order) I was first exposed to the whole idea of “the college my child gets accepted to.” As a mom of many who has already launched a few college bound kiddos, I’m still hearing, “What college did they get accepted into?” The part of that question that amazes me is that the answer that is most impressive are also the most expensive (Columbia, Harvard, Stanford, Yale, etc). These schools have averages four year costs of $188,000 (Columbia); $240,000 (Harvard); $186,000 (Stanford) $193,000 (Yale). While an average of 40% of the students who attend either get financial aid, grants or scholarships, they only average out to assistance of $9600 per year. This leaves a boatload that the student and mom/dad owe for college. Most of this is usually in loans of some kind.  So then the average student graduating from some of the most prestigious colleges have student loans upwards to $100,000.

    So why is the question: What college did they get accepted into?

    The question should be: What college did they get accepted into that they can afford?

   Why do you want to leverage your future (through HELOCS or loans) or leverage their future (through massive consumer debt) when it will take many years of earning power, for them to pay back those loans? One of the most common problems I hear of have to do with the burden of dual student loans in a marriage. Sometimes, parents have to play hard ball and refuse to sign a student loan for a college that their kids cannot afford. We’ve had to do this in the past as well and it’s not easy, but it’s the right thing to do for everyone involved. You can’t control what your child will do if you say “no” but you can control the financial decisions that you think are best for your family. Remember my mantra – “Our love for you is unconditional, but our money is conditional.”

   The new mantra should be: I will go to the school where I can get the best education possible for the least amount of student loan debt.

    One of the best things you can do for your college fund is to teach your kids a good work ethic at home and school. Ride the homework train on them in the afternoons. Teach them that getting good grades, pursuing passions in sports, academics and the arts and working hard are their main “jobs” in high school.  Plus, be sure to let them know you expect the to not only get scholarships, but to participate in work study programs, have jobs in the summer between college semesters, and actually earn part of their way through school! 

It’s OK if your child has to take a year off between their sophomore and junior years to work (one of ours did that and finished well at Columbia) or if they have to sell their car to pay for school (who can afford to keep a car in NYC anyway?). Sometimes decisions that keep mom and dad debt-free are difficult, but they are well worth it in the long run.

Want to win one of the six books we’ll be giving away on Monday, July 30? Leave a comment below sharing about your experience with college debt! (If you receive my posts by email, click here to leave a comment and enter the giveaway!)

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52 Responses to Guest post and Giveaway: Affordable Strategies for College–Day 1

  1. Stephenie says:

    While I did not finish my college degree, I had the loans that at the time I thought were acceptable debt. I now know better. My husband and I are in the midst of parenting two tweens. We are guiding them toward either full ride scholarships or beginning/finishing their degrees at the state university regional campus in our town. Thanks for sharing this information.

  2. Mindy says:

    My husband and I just had a discussion on future college expenses for our son (he is 7 months old). We want three children so are planning now for their futures. This post could not br more timely!! Thank you and looking forward to the rest of the week.

  3. SageAlum says:

    My parents encouraged high grades and saved money in order to put my sister and I through college. We did work both during the school year and over the summer, and were expected to use that money to pay for books and any misc spending we wanted to do during the school year. We graduated debt free, and it was the best gift my parents ever gave me. I am now beginning to save for my own son, and I love the concept of good grades and learning as his “job”.

  4. SageAlum says:

    I see the monetary value behind starting at a community college, but I’m not sure socially or academically it’s that easy to transfer to another school junior year – I’d love to hear some comments from former students who have done that.
    Did all your credits transfer? Was it hard to find new friends? Did you need to take an extra semester because your major had different requirements? Did you feel “behind” in any of your classes?

    • Daisy says:

      Hi SageAlum,
      my husband and I both took courses at a community college during the summers and our credits transfered well. we always spoke to a counselor before taking classes somewhere else and they help you figure out which courses transfer completely. We made great friends at the college that we later found out also attended the same university we did! I had friends who are now doctors that did most if not all of their Pre-med courses at a community college!

      • SageAlum says:

        Thanks Daisy, I hadn’t thought about summer classes, that’s a great way to get a few credits in too.

    • Susan T says:

      Our Community College has transfer programs set up w/many state & regional colleges & universities: private, Big 10, and state, so students know up-front which pre-reqs are needed & accepted and 4 yr colleges know these students are coming their way.

      Two of our three kids have earned their associates degrees at CC and have successfully transferred everything: one to state and the other to private, both well known schools. The one who transferred to private college had also CLEPed @ 24 credit hours and the college accepted all those as well (she was not interested in attending a school that would not accept her CLEPs; not all will… nor do they all accept the AP) Additionally, she was an A student and was invited to join Phi Theta Kappa, the international honor society for CCs; PTK has online helps to find great colleges which give $ for transfer scholarships and many schools offer additional transfer scholarships to PTK students. Combined w/her other efforts to earn the max. amount of scholarships, she will have attended just 3 semesters for half price when she earns her BA in December. This is debt free because we were able to afford it as this private school has a strong endowment & has kept tuition costs down.

      Another approach which our oldest used was to earn her RN degree in two years at the CC, pass the NClex boards, immediately start working f/t as a hospital nurse at the age of 20, continue p/t at CC to finish other gen-eds and enroll in online BSRN completion program at state college, w/some tuition reimbursement from hospital. She could have had it all reimbursed but didn’t want to be too tied down in case another opportunity arose. Now age 23, no college debt, RN BSN, w/3 yrs experience.

      The bottom line is that every student should consider whether there is ANY professional or technical program available locally, to complete in a year or two, with good employment outlook, which could be a good fit for them and which they are willing to do at least for long enough to pay for their education. Around here, Nursing, other medical options, welding, and various mechanical programs are all winners. I have had Caterpillar managers tell me they cannot find enough qualified workers, or enrollees in their training program at the CC. (this is in central IL. I bet other manufacturers around the country have the same issue… Check it out)

      • JillSavage says:

        Susan, is that Heartland Community College that you are referring to about the Caterpillar training program?

        • Susan T says:

          Illinois Central CC in East Peoria. Not sure if Heartland has a specific program yet…

  5. Laura says:

    My grandfather, the oldest of five boys, paid for his youngest brother to go to college so when my sister and I graduated with debt, my uncle generously paid it off. I am still blown away.

  6. Susan S says:

    We are currently discussing the financial outline for the college student we will have in a few years. She is definitely a student who will obtain scholarships. That being said, while we don’t want her starting out her adult life with student loans hanging over her head, we do intend that she will work and save for college and be required to foot part of the bill. It will mean more to her if she has to work for what she achieves.

  7. Heather Finnegan says:

    My awesome parents took out home equity lines of credit to pay what was left of my tuition at at small Christian University. I got scholarships to pay nearly 1/2. I had to work and pay for everything that wasn’t tuition. I also lived at home….They helped my brothers to a point as well. My husband’s parents could afford to pay his entire undergrad tuition. He paid for 1/2 of his master’s outright as it was before we were married, once we were married he took out student loans to finish paying for it, which we paid off with some inheritance money. My super wonderful in-laws (now just my mother in law) have saved enough to put both of my kids through the school of their choice. It helps that my father in law was a doctor, my husband a music teacher in small Christian schools….quite a difference in pay scale…

  8. Carolyn Conboy says:

    I was fortunate enough to have my college paid for by my parents. I have five kids now ages 6-11, and have a modest amount saved for them, but I love the 4 points that Ellie made above. Part of having a big family means being required to contribute more, which I think will serve them well through life. It’s so refreshing to know there are other big families out there to learn from! Thank you! Carolyn Conboy

  9. Hollie S. says:

    Thank you for this series of blog posts! Our children are 4 and 3, but college will be here before we know it! I agree that it’s important to try to minimize or eliminate the need to have student loans. Speaking from experience, it’s discouraging to start off your adult life in debt. Luckily I made extra payments and paid it off early, but if I hadn’t, I would have been paying on that debt for 10 years. Yikes!

  10. Daisy says:

    Love these points and although our little guy is only 2 we are already thinking about what we need to do! My husband went through college debt free but even though I had scholarships and financial aide, I finished school with debt. Unfortunately I did not always manage my money well, and remember being embarrassed when my husband and I were merging our finances, because of the debt I had. after working through financial peace university we are on our way to financial freedom!

  11. Felicia says:

    This is great information for starting to save and putting values on an education. I did graduate from college with debt. I wish I would have been more educated about accepting loans for college, but I know I don’t want my kids to go through what we are going through now. Paying back students loan. My husband in in school now and we are determined not to take out student loans for him. It’s hard many days but we know it will be worth it in the end. Thanks for the information that is needed.

  12. Lisa M says:

    With 2 in high school and 2 younger kids, we are definitely thinking of college. And, following some of the same principles as Ellie. We also have 529 plans for the 3 older, and will soon be opening one up for our youngest. The books sound awesome!
    Thank you Jill for posting this series.

  13. Karen says:

    I’m a stay at home mom of a two yr old & one on the way. We know we need to start a college savings fund for both but don’t have any extra room in our very tight budget (part of the reason being a large student loan payment! I was able to graduate debt free and my husband only had to take out a loan for one year but even that payment is a lot). Look forward to finding out ways to start saving for our children’s college so they don’t have this debt!

  14. Amy P. says:

    Thanks so much for this series! I am helping my son register for classes tomorrow and I have not prepared as much as I thought I had to be able to get this done inexpensively. Having been a single mother for much of his life, I have some savings for college, but not enough to pay for all of it. Your ideas of making them responsible for some are wonderful. I can speak from experience that some “ownership” of their education makes it much more real and prepares them for life after school. Thanks again so much for the help for this “better-late-than-never” mom. Blessings to you.

  15. Dawn T says:

    I really like the option of going to a community college for the first two years then transferring. College prices these days are crazy! Thanks for the advice.

  16. Susan says:

    We have a rising freshman and junior in high school and I am so looking forward to learning from this week’s posts. I don’t have alot of answers, but we have a few rules we live by. We have been living debt-free for a few years now and are committed to maintaining this. There will be no loans for anything. I’ve been a stay-at-home mom. I may need to go back to work. Our kids are bright and hard-working. We are hoping for possible scholarships. We do have an excellent college close to home, so living at home is an option. We could down-size and move to a different house. I guess the bottom line is we are fully trusting God to direct our steps. That being said, I really appreciate this article today. Thank you.

  17. Julianne Brimner says:

    My oldest son is very bright but didn’t apply himself during high school. So we told him the spring of his senior year that he did not have to go to school the next year. He would however have to work and figure out his next step…he did work and enlisted in the Navy. He said that he needed money for school, he wanted to travel and learn some useful skills. He is in his second week of boot camp. After that he will go immediately to his A school to be a Seabee which is the construction battalion. May not be the plan for everyone but he is very proud of his choice.

  18. Teri C says:

    As a mother of 5 born in 4 years, the cost of college has been a major concern. I am a part time mammographer (which I LOVE) and really enjoy the moments I have with my patients. If I am not sharing breasts concerns, they are often sharing pearls of wisdom that I greatly value. One of my patients gave me the best advice. She told her children that they would be responsible for their own tuition and as parents, they would pay for their living expenses. Sounds harsh, huh. But not really. It puts the responsibility of getting a scholarship on them. Making sure that they get good grades, applying for scholarships, financial aide and work study programs. Her daughter was literally going to graduate from BYU in Hawaii with no loans. They rented a room in a local families home for $500/mo. The family treated their daughter like family – easing the worries of having their daughter so far from home. So many kids today expect their parents to take all the financial and red tape responsiblities. In this way, the child is more invested in doing their part.

  19. Ashten says:

    O my…this is SO timely! My husband and I are pregnant with our second child (our first is almost 16 months old). We were discussing family size this afternoon. I would like to have a larger family…I think he does also, but he has a lot of concerns about financially caring for a large family…college expenses was one of the topics we discussed. He didn’t go to college (he’s a farmer, he opted for an opportunity to work on the Harvest Crew out west for a summer after he graduated). I went to a community college that was very affordable. I only got an associates degree…though for my life goals, this was appropriate. Had I wanted to get something further, I would have done as Jill mentioned and started at community college and finished at another (also affordable) university. In my opinion, the name of the school you attend is not as important as the work you put into your education. Going to a school based on a name, seems to me, the same as buying a piece of clothing just because of the name. It’s not necessarily better quality (though it might be)…either way…being a good steward of it (your education or your clothing :D) is what makes it worth the investment…not the name that is tagged on it.
    My parents did not save anything for my college education. I had to work during high school and college to earn the money to fund my tuition, my books, and the money to pay for my car insurance/gas money/etc…there were some moments that it was pretty tight…but I will tell you that God was in the details. The job I held while in college was also a place I could use for practicum hours and my employer allowed me to do this during work hours. There is always a way if you want it badly enough…I am so grateful for my experience. My parents and grandparents helped out in small ways as they could. I hope to prepare as best as I can to aid my children…but I am so on board with having them earn their own way and teaching them to make frugal and wise choices. I really and truly believe this is an imperitave character-building step as they make that first step of transition out from under the wings of Dad and Mom.
    Goodness…sorry to be so windy!

  20. Jane says:

    Unfortunately, college wasn’t an option for me when I was younger. But I want to make sure it is an option for my own children.

    I loved this post. I feel grateful to have a chance to win in this great giveaway. I’m the mother of 8 (awesome) kids and have been struggling with the “how to pay for college” issue for a while now. I love Ellie’s down-to-earth advice and would love to read more of what she has to say. And of course, I love reading anything Jill writes!

    Thanks so much!

  21. joanne S says:

    Such a great post! I would love to read more in your books!

  22. Sarah B. says:

    I took a semester off during college and worked. When I returned to college I only went part time, but worked full time so that I could pay for my classes. I still ended up graduating with a fair amount of student loan debt. My husband also has many school loans as he just finished his masters degree a few years ago. We recently finished going through a study called “Financial Peace University” by Dave Ramsey. This study really opened our eyes to college for our children (ages 4, 2 and one due in Sept). I liked Ellie’s points on teaching your kids the importance of good grades, working hard and getting a job to help pay for their college.

  23. Rebecca Morris says:

    I am so grateful for this eye-opening post. My husband and I set up college funds for our girls shortly after they were born. They are only in preschool now but this article has changed our strategy in the way we will prepare them and our finances for their college years. Thank you, I can’t wait to read more!

  24. Michelle D says:

    I have one of ellie kays books. And she just has so much wisdom. I do worry about my kids going to college and how its going to get paid.

  25. Kelley says:

    I got scholarships and grants for most of my college, and student loans for a portion. My mom was not in the position to pay for any of my college, and I did not mind paying back the student loans.

    We have NOT started a college plan for our son yet. We are firm believers in paying off debt and funding our retirement first (thanks to Dave Ramsey, he’s the best!). Our son is 9, and does great in school so far. We will put together a plan as well, using scholarships, part time jobs, and matching money for him. I know a lot can happen between now and then. And we certainly thank Jill and Ellie for giving us ideas and keeping us abreast of things!

    Kelley

  26. Kari says:

    We have a sophomore and have heard many times how parents wished they would have started earlier about college decisions. Thanks for the insights and wisdom! I am looking forward to more this week!

  27. Anne says:

    I am on a thirty year repayment plan for my student loans. While they train me for the job that I currently have (I wouldn’t have gotten it without my degrees), it is still a lot of money hanging over my head. We are trying to save up for our kid’s college so that they don’t have to deal with massive college debt. I would love to read the books listed!

  28. Karen says:

    Thanks for sharing this article! We have a daughter who will be a senior this year and although we have money saved up for college for her, we are also looking at other options. I love your idea about requiring either a full academic scholarship or the first 2 years at a community college. I think more and more students are going the community college route and there is absolutely nothing wrong with that. It also gives the kids more of a chance to mature before going away.

    I also loved the quote “Our love for you is unconditional, but our money is conditional.” I think we are going to be using that one!

    Thanks for sharing your experience, your regrets, your wisdom and your suggestions!

  29. Robin SChick says:

    I wished I had this wisdom when I was planning on going to college, but I didn’t. I did have student loans, grants and I worked through the summers and during school part time. I did find a way that where I worked also provided my housing and it was an apartment setting so I was able to cook my own food rather than a meal plan- which are expensive! But I was able to pay off all of my school debt in 8 years after being out of school. But I know that I will be leading my children in a different direction with their finances.

  30. Ronda says:

    Thank you for a great reminder about raising students!

  31. Stephanie says:

    I followed the plan described–worked hard, good grades, lots of scholarships, accepted into honors program (which provided scholarship), financial aid, no loans, no financial help from my parents. I am so grateful to have finished four years of college at a private university of my choice and did not have a financial burden awaiting me at the end. Scholarships were the reason.

  32. Amber Jones says:

    Thank you so much for this info! We are also working on the steps in Financial Peace University which speaks to this very topic. Thank you Jill for all your wonderful blog posts!

  33. Connie Koenig says:

    My husband’s family lived pretty much like her words in her book. Now that we have three children with one entering college, it’s crucial that we instill this way of life to our children. My son is going to a Jr. College and saved enough money to buy a used car to get there. He told us he is paying for college this year!! I’ve never been so proud of him!!! I would love to read her book and learn further things she and her husband has done. Giving our kids everything will not make them into better people. This I have learned first hand with my husband’s family. Refreshing!

  34. Jennie says:

    my husband and I have discussed this a few times, have started saving a little money, but I really like the first two points: “First, we train our children from a young age that going to school, doing your homework and getting good grades is their primary “job.” By teaching them a good work ethic, we are laying the groundwork for scholarships and more. Secondly, we send them to schools that we can afford or where they get the best scholarship offers to cover the most expenses. “

  35. Jaylene says:

    I came from a family of seven and am a mother of seven, our oldest is a sophmore this upcoming year and we have explained to the two oldest that doing a good job in school and getting good grades can take you anywhere you want to go if you put your heart and mind to it. Explaining that there are ways to go to the school you want even if you don’t have the money, God will provide what you need if it is the right place for you to go. I love the post. It is just hard in this day and age to get kids to understand it is more important to be honest, trusworthy and a hard worker and will benefit you more in the future than all the gadgets you can get to play with. I loved the post.

  36. I was very fortunate to graduate from college debt free due to a variety of circumstances. My husband, however carried a lot of student debt into our marriage. 7.5 years in we’ve tackled a huge portion of it, but we still have thousands hanging over our heads. We hope to teach our children from our mistakes!

  37. Beth Lee says:

    My parents worked hard and smart to allow my sister and I to graduate with a bachelors level degree debt free. So grateful the both my husband and I were without debt when we started our marriage.

  38. amanda rempe says:

    I like the point that was made about homework being a job! This way they are not only making sure their grades stay up to par but they are getting a good work ethic in early! Hopefully they will have more respect for others with jobs and so forth

  39. Annette says:

    Love this post! I have read some of Ellie’s books in the past … but not the two mentioned. I will have to check them out.

  40. SageAlum says:

    I can’t see that the name of the college is that important, although maybe in some fields (doctor?) it would be. I went to a small women’s college that almost no one has heard of, but I got a great education, and have a career I love, and a great paycheck to go with it. The classes I took and the grades I earned were more important on my resume than the name of the school.

  41. RaeAnne says:

    I love that you are having your kids take an active role in their education. Paying for much of college myself, I had such a greater appreciation for my education than a lot of the other students I went to college with. Lucas is almost two and we are putting away what we can, but he will definitely be expected to contribute as well. Good things to be thinking about and planning for!

  42. Chris says:

    When my husband and I got married right out of college, we took on his college debt together. It was not a large amount of money, especially considering what it could have been. Because the amount of debt was fairly small, we paid off the debt within 1-2 years. However, I have to admit that I didn’t understand why his parents could not have helped him more with paying for college. Most of what my husband used for paying for college was his own paycheck, subsidized loans, and reduced fees due to his job. I have honestly not thought about it much since we paid off the debt (over 10 years ago), but this post was very helpful because it helped me understand why his parents did what they did. They decided not to leverage their own future and investments to put my husband through college. Now I understand that his parents really did a great job taking care of everybody involved. Thank you for helping me see that. ☺

  43. Karie says:

    Great information. Thanks for the post.

  44. Din T says:

    I took 2 years to pay off my small debt.

  45. Terri Baumann says:

    Our oldest will be a college junior this fall, and although she’s received scholarships and we’ve saved, SHE will have some debt upon graduation. The second child will go to community college for the first two years unless she receives a full scholarship. That would allow her to have no debt upon graduation.
    We’ve learned alot through the experience of our first child. I’m so thankful that my husband has managed our finances so well, and refuses to go into debt for our kids.

  46. Erin says:

    My own college debt is something that I’m still paying for. Debt in general is a heavy burden. There is much that I need to learn! Thanks for this series.

  47. I am SO thankful that my parents worked hard and saved to put me through college, without being a huge burden on them while I was in college. I hope to do the same for my kids, and teach them to work hard at school. They will have the rest of their lives to work!