3 Ways to Handle Tuition
Avoiding, saving, and rewards.
The best way to handle tuition is to avoid it. There are two downsides to sending big tuition payments to universities. The obvious one is that you have to pay that big check. The less obvious one is that as long as they get paid, they’re pretty happy with their students getting nonsensical degrees in things that lack any discernible market value. But if a university pays their students, the opposite applies. The first upside is that the students get paid. For example, West Point doesn’t charge for room and board or medical and dental coverage and they pay a salary to cover other cost that typically nets students between $225 and $625 per month. The second upside is that institutions that pay keep at least some track of their return on investment and insist on students getting a top-tier education in applicable subjects.
If you want to see if West Point is a fit, check out their summer leaders program that I discussed in What’s a Young Man to Do? There are also a number of activities on campus that civilians can participate in such as orienteering competitions and their Fallen Comrades half marathon ruck. I’ve competed in it a number of times including with my son. It gives a good sense of both the campus and the esprit.
Physical requirements aren’t too hard, but anyone interested in applying can practice based on their standards. How good is good enough? They stop counting at 18 strict pull-ups, 95 sit-ups, 75 push-ups, and a 5:20 mile. So hit those and you’re more than fine. I’ve told my kids that they don’t have to go, they don’t have to apply, but they have to attempt to qualify. West Point wants individuals who are leaders, athletes, and scholars; whether or not this is the best place for you, it is good to be those things and to hit their standards.
But if you or your kids want to go to a civilian school, then the best way to save for it is with a 529. Max it out along with all other tax-advantaged accounts. The tax advantage is significant and their ability to compound over time is huge; the are worth over $3 million per beneficiary since I first disclosed this idea. Even better: the government is loosening up their use over time, including allowing some unused dollars to get rolled over into retirement accounts.
While I like my 3% cash back card for almost everything, there’s a new credit card specifically for paying tuition. It is worth hopping on their wait list. It is the only card that lets you pay tuition without a fee. There’s no annual fee or transaction fee on tuition. It works with every school. You get points for tuition payments. And it works with payment plans such as 529s.
