Why Our Daughter Does Not Have a College Fund

For a lot of parents, the second they find out they are pregnant, they start thinking about saving for college for their little one. And it makes sense. College is expensive, and if we can help our kids start off their adult life with as little debt as possible, that would be great.

Because the truth is, while student loan debt is often considered “good” debt, kind of like a mortgage, in that you are getting something for it, it has its negatives, too – especially if the student needs more than the federally guaranteed loans and gets some from private lenders. After all, if our kids get in major trouble with credit card debt one day, that can be negotiated down or, worst case, discharged in bankruptcy. The same cannot be said of student loan debt. If our kids get stuck with that, they are stuck with it.

529 plans are all the rage for college savings. In general, they let you lock in “today’s tuition rates” for tomorrow’s tuition. And the way tuition has gone up over the last few years, that does not seem like a bad idea. Plus, it is a nice way for friends and family (read grandparents) to help grow your child’s savings. In addition, you do not have to use your state’s 529 plan. You can pick the 529 plan of any state. Sure, if your kid does not go to school in that state, you lose some of the benefits, but you get the dollars no matter what.

Given all of that, you might think that from the moment we knew we were adopting our daughter, we started a college savings fund for her. I mean, we only have 9 years to save, compared to the usual 18+. We needed to be on that from the beginning.

Except, we were not. We are not. Our daughter does not have a college savings account.

And this has nothing to do with the fact that the two Democratic candidates for President have been floating universal college, or at least free community college. While I would love it if that happens sometime in the next 6 years, we have never planned on it.

You see, one of the differences between having a baby and adopting an older child is that when the older child comes into your life, they are already a person; they already have thoughts and plans and ideas about their future.

Often as a parent, no matter how you become a parent, you have to let go of dreams you may have had for your child when you realize those are your dreams for them, not their dreams for themselves. Sometimes that comes later and sometimes that comes sooner. It came pretty quickly for us.

Do not get me wrong. I would love it if somewhere over the next 6 years, Pop Tart’s attitudes about school and her willingness to do “hard” things changed, but for the moment, they are what they are. So instead of a college fund, we started a generic savings account for her. Our goal is that it will have $10,000 in it by the time she graduates high school.

$10,000 will not get you very far in a four year university right now, not even a state school. But the purpose of this money is not school. If she does change her mind, I suspect we will be able to cash flow tuition for her. We managed to cash flow the three years of my husband finishing up his degree, even without him working, so I imagine that in 6 years, when he most likely will be working again, cash flowing tuition will be something we can do.

But again, I am not counting on it. Instead, we refer to the money we wish to have saved for our daughter as her launch fund. It might go toward a good car, or first/last/deposit on an apartment. Maybe it will go toward tuition at a technical school. (Right now she does love the idea of becoming a veterinary technician.) No matter what, we want to help her launch, give her a boost to start her adult life.

We will always be there for her and support her in any reasonable way we can. But having a pot of money dedicated to launching her adult life, no matter what direction she chooses to take, seems like a better plan to us than having money tied up where it can only be used for college.

And who knows, maybe we will be lucky and in six years, all undergraduate college education will be free.