Financing the College Experience

Andy and his wife can afford to send their son to a state college, but it's $10,000. Andy is having a hard time justifying room and board when he can commute. His wife doesn't have a problem with it.

QUESTION: Andy and his wife live in New Jersey, and they can afford to send their son to a state college, but it’s $10,000. They have another child who will be headed to college, and Andy is having a hard time justifying room and board when he can commute. His wife doesn’t have a problem with it. Dave talks it through with Andy.

ANSWER: I’m with you. If you had an extra $40,000 lying around . . . but we’re not borrowing money for his college education. We’re borrowing money for him to live in the dorm. I’m confused. I don’t know why that is needed. Borrow money for a college experience? No, thank you.

Here’s an idea. If Junior wants a college experience, Junior can get a job and pay for it. That’d be a good experience because you can make $10,000 a year delivering pizza while you’re in college. I might spot him a little bit to get him in there and get him going as long as he works to pay for it. In other words, he could start right now if he wants to live in the dorm.

I worked 40–60 hours a week while I was in college and graduated in four years. I worked like a maniac. I went nuts because I didn’t have any money, and the only way I knew how to get money was work.

You need to have an emergency fund of three to six months of expenses, and I would want to cash flow college. Let’s wait just a little bit and make sure these kids get into school and you’ve got that all worked out. If you’ve got school completely worked out and figured out, then you can write a check and pay off the house. I don’t want you to get so tight that you end up borrowing money for their school because you paid off your house. We don’t want to just swap dollars around here.

My kids have been in the dorm. My son has a place he rents now. He’s in college. He has a house that he shares with some buddies. Of course, it’s not commutable. He’s 200 miles away. I’m not against a kid doing that, but you’ve got to be able to pay for it. If you’ve got the option of a kid driving 20 minutes or you spend $10,000 for them to live in the dorm to have an experience . . . really? Why don’t you pay $10,000 to send them on a cruise and let them have an experience? That’s an experience—around the freaking world for $10,000. Most college dorms I know look somewhat similar to prisons. It’s a concrete block, very small room with steel windows. This is not exactly the Ritz. This is an experience you want to go into debt for? Really? Isn’t that interesting?