This weekend I had a lot more free time, and enjoyed long conversations with my sister and brother, both of whom have school-aged children. We talked about other things, but the cost of school popped up with both.
Picking the right college goes a long way
My eldest nephew is still young, just 13, and applying to college is still a few years away.
I have been putting money aside for him in a 529 since he was born. I don’t contribute tons, but I received the year-end summary for 2020, and it has grown to a decent amount.
My sister and I chatted for a long time about college and how far this might take him.
Our parents sent us to private college, back when tuition was only high, and not yet exorbitant. If my nephew wants to go to his mom’s alma mater, I can fund one trimester. I’m sure that’s a help, but it won’t make a big dent in what he and his parents have to pay.
His state schools, though, offer very inexpensive in-state tuition. If he attends his state university, my 529 will probably cover all 4 years. His parents would still have to pay for room and board–and considering how much an 18 year old boy can eat, they might get the short end of the stick with this deal.
However, he has been talking about wanting to go to school in Canada. My sister wasn’t sure if 529 money could be used for that, and I skipped over to Saving For College to look at their searchable list of 529 eligible institutions. Quite a few Canadian colleges and universities were listed. Even though the international tuition rates are significantly higher, many are still cheaper than private schools in the US. For example:
- The University of Calgary lists international tuition at 17, 433 CAD/13701 USD.
- The University of Alberta lists international tuition at 29,500 CAD/23185 USD.
- The University of Toronto lists international tuition at 59232 CAD/46552 USD.
If he goes to Toronto, I don’t know that my 529 account for him will be sufficient, but if he goes to the inland schools, his aunt-and-uncle scholarship will take a financial load off of him and his parents. His parents will still have to feed the growing boy, though.
This is still all wild speculation right now. I hear he needs to work on his math grades, and who knows where he will want to go and where he will get in. Ideally, he should go to the best school that meets his needs, but it is interesting to see the financial range of options available.
When public school isn’t free
After talking to my sister, I spoke to my brother, who is the proud papa of 3 small children. The eldest is in second grade, the middle one in kindergarten, and the youngest is still in preschool.
Mom and Dad both work full time, and, until recently, they had an au pair living with them. She helped get the kids to school, and now that the public school is entirely virtual, supposedly helped them stay attentive. The youngest was enrolled in the neighborhood preschool, and was gone for a good part of the day, except when he had to stay home because of potential exposures (it sure seems his teachers were getting sick a lot).
With one thing and another, when the au pair‘s stay was up at the end of the year, they did not work on getting another.
In theory, that should have saved my brother and his wife a chunk of change.
However, they couldn’t manage having two to three kids at home while they were also supposedly working full time.
I adore their kids, and think they are extremely good natured, but I must admit they sometimes need referees. Or bouncers to break up their squabbles.
Instead, all three kids are going to the daycare now, which has expanded their offerings to supervise kids “going” to school virtually. The house is quiet during the day, which is great for the parents who are working; and the older kids are much happier to have classmates to play with again. But the tuition they are paying is eye watering. I think it would be cheaper to send them to college now.
I have been funding 529s for all three of these children as well, but given their ages, the 529s haven’t grown nearly as much as for their cousin. In theory, we could use their funds to pay private school tuition for elementary school; however, it isn’t clear to me that their program even qualifies. It’s for daycare/childcare, not tuition. Anyway, their accounts aren’t big enough to cover more than a few months, and then they wouldn’t grow over the next decade or so to help with college.
My brother is pretty sure school will have in-person instruction in the fall, but he could really benefit from having them go back to in-person classes soon. I think this extra cost may make the difference for him between saving a little money every month and going into the red.
He is really in a catch-22: if the kids stay at home, neither parent can work properly. Each parent makes a bit more than the tuition, so quitting work to watch the kids isn’t a good option. They live in a high cost-of-living area, and they do need both paychecks to manage their monthly bills.
I don’t know what the best answer is, but I do see that we are failing to support parents and kids during this pandemic.