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We bought the "new" TTPF in 2012 (paid at 2012 tuition rates) which buys 120 hrs for 3 of our grand children (Type II units, which is what A&M is). Of course, they are transferrable, and can be cash-converted, if go OOS or a pvt. school (in those cases there is no guarantee that it will cover all the tuition and required fee costs, as it does with a Texas state university/college). Also, you need other funds for housing, books, food, etc.

If I were starting over today, I might just save with a 529 or other, given the declining value of college education as well as all the talk about "free" higher education. With our kids we "paid as we went"- but costs were a bit more reasonable 25 years ago.

ChoppinDs40 said:

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529 with vanguard. Start funding $300/month and you'll have about 80-95k in todays' dollars when they turn 18.

Should be enough for a decent school.

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This is what we did. We also front loaded a few grand per kid when opening the accounts.

Grandparent/family gifts for the kids went into the 529's, as well as cash birthday/Christmas gifts to the kids when they were little.

College is essentially covered at this point and the kids aren't in high school. Now looking to take advantage of using some for private school tuition, as well as moving some to Roth's if there is any left over.

Can anyone point to all the options you have if you contributed to a 529 and then your kid decides not to go to college?

ChoppinDs40 said:

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529 with vanguard. Start funding $300/month and you'll have about 80-95k in todays' dollars when they turn 18.

Should be enough for a decent school.

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This x1000!!

Got my kids 529 setup the same month I received their social security card. Contribute $350-400 a month. Kid has enough $ saved for first 2 years of college already, and they are only 8 years old. It's so simple and easy. Utah 529 is virtually "set it and forget it".

Off the top of my head:

1. Change the beneficiary.
2. Cash out and pay a penalty.
3. Pay for private high school.
4. Move up to 35k into a Roth.
5. Save it for grandkids.

Also, it seems like every few years Congress adds a few more options for 529s. 3 and 4 above did not exist when we opened our accounts.

DannyDuberstein said:

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The old TTF was fantastic. My oldest was born the last year it was open and thankfully i bought the whole thing (128 hours). She's a junior at A&M this year, and with AP and summer juco hours, we'll have close to 40 hours left over to help with grad school as well. That said, with my youngest, I evaluated the "new" plan and a 529 simply seemed to be the better, more flexible option.

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We are in the same situation. We won't have 40 hours to use towards Grad School - more like 24 or so. I love getting no tuition(and fees) bills each semester.

We were fortunate in that we were able to make a one-time payment of $17,480 the week after she was born.

For all you financial guru's out there, what would that amount have been worth 18 years later if it had been invested probably somewhat conservatively? 2003-2021. Looks like we would have had to make a little over 6%/year to get the actual value we will receive.

We made the decision knowing we might have made more investing that amount, but that there was no cost certainty on what college would cost 18 years later. It will end up being worth $50-$60k in college costs.

.

Another option is to open a Roth IRA for your kids.Find some tangible value these kids create for you and slap that as cause for earning income that is put in a Roth IRA.

Pros: Full control over investment portfolio.
Can withdraw contributions in 18 years tax and penalty free to pay for college.
Can withdraw 10k for a down payment on a house tax and penalty free.
Can withdraw earnings for college penalty free and only pay income taxes (which are nothing for kids incomes)

Cons: The younger the kid, the more evidence you're gonna need to prove value in case of an audit.

AggieT said:

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Wouldn't the 18 year old have full control over that account? And you'd have none?

I barely survived college being broke. I can't imagine having access to $100k+. It would have been a hell of a ride!

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Technically you don't have to tell the kid they've got a Roth IRA. If they're a dependent they're not filling out taxes until after college. Non the wiser about where their college money came from. Even if you want to tell them that money has been set aside for their college by you, they don't have to know it's in a Roth IRA.

SomeRandomAg#2580 said:

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https://www.officialdata.org/us/stocks/s-p-500/2003?amount=17480&endYear=2021

Final amount, nominal
($17480 base)
$128,769.73

Final amount, inflation-adjusted
($17480 base)
$87,440.0

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I don't know whether to Thank You or cry for not doing that!

I guess I can stick by my original thought about not knowing what college would cost 18 years later and take some solace in the fact that stock market returns are not guaranteed. But, looking back now - ouch!