College tuition has gotten more expensive over the years, causing parents to save up for universities well before their children even get into middle school. However, not every parent is saving the same amount of money, and high earners debated on Reddit how much you actually have to save.
For most parents, saving $260,000 is more than enough, but some parents have their sights on higher goals. Part of it depends on which types of universities you're targeting for your children.
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Look At State Universities
The top comment came from a Redditor who recommended state universities. These institutions are competitive, but they are also more affordable for people who live in the state. That way, the student can land high-paying jobs after graduating, and tuition won't cost as much as at a private university.
"In-state tuition for four years [with] dorm housing planned for the first year," one commenter said. "If they want to go out of state or private, the extra cost is on them."
"In my spreadsheet, I update the estimated cost of our in-state flagship university yearly and will stop contributing when my estimated future value matches that cost," another Redditor said.
This option can save a lot of money and result in a high-quality education. However, some Redditors said that the opportunities vary for each state, with Pennsylvania and Nevada mentioned as two states with expensive in-state universities. Some state universities are also getting flooded with more applications, making it difficult to be accepted.
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College Costs Shouldn't Continue To Boom Higher
One high earner suggested saving up $200,000 for each kid, and that's sufficient for most colleges. However, a key point made its way into the responses that hint at how college tuition can change over time.
"Demographic factors are not on the side of college costs continuing to boom indefinitely (much the opposite, as a matter of fact)."
Low birth rates have created an enrollment crisis that is starting to take shape in universities. As the pool of potential students gets smaller and more people veer away from college in favor of other routes to high-paying jobs, tuition prices may eventually remain steady before pulling back.
Many high earners are still vigilant about their savings despite seeing a demographic cliff on the rise. That way, they're prepared in case college tuition remains at its current level or even manages to increase over the next decade.
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Superfunding And Overfunding
Superfunding and overfunding were two terms that came up when high earners discussed their college savings plans. Superfunding involves frontloading the college investments and letting them grow undisturbed for more than a decade before the children are ready. Putting a lot of money into college tuition investments right now means you have to put less money into those accounts when your children are in high school.
Overfunding was another theme, which involves putting more money than necessary into college investment accounts. One high earner explained this model as giving their child unlimited options.
"I want to fund whatever college they choose," one commenter said. "I don’t want to limit them on where they can go. I am not concerned about overfunding as they can use it for graduate school or pass it to their kids."
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