This Maryland mom who went to Yale, makes $200K isn’t saving for her son’s college — hopes he gets a scholarship or loan
If you make a decent salary, should you put some of that aside for your child’s education? For one Maryland mom with a $200K income, the answer is no — she’s expecting her son to make his own way in life and get a scholarship or loan instead.
“I want him to fight for the things that he wants,” Cristina Tello-Trillo told CNBC Make It.
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Born in the U.S. and raised in Peru, with some time spent in Nicaragua, Tello-Trillo earned her PhD at Yale University on a full scholarship. She now works as a senior economist at the U.S. Census Bureau and adjunct professor at the University of Maryland, while also running three rental properties.
Tello-Trillo told Make It that she sees money as “a thing that you work really hard for,” and that she doesn’t plan to pay for her son, Leo, to go to college. Rather, she expects him to pay for it himself through a scholarship or loan. Nor does she expect to leave him a large inheritance.
At five years old, Leo still has a few years left before he has to worry about any of that, but his mom and dad are already teaching him about the value of money, and Tello-Trillo says she doesn’t want her kid to “feel that he has enough of a safety net so he doesn’t make an effort to succeed in the world.”
She wouldn’t be the only person to feel that way. Even some of the world’s wealthiest people want their kids to make it on their own — from Warren Buffett to Michael Bloomberg to Bill Gates — and will give away much of their wealth to philanthropic causes.
The rising cost of college
Unless he gets a scholarship, Leo could end up with a boatload of student debt. For one thing, the cost of post-secondary education has risen dramatically in recent years. When adjusted for inflation, tuition and fees at private national universities have increased about 41% over the past two decades, according to U.S. News Best Colleges 2025.
The average cost of attending a post-secondary institution in the U.S. is $38,270 per student per year, including books, supplies and living expenses, according to the Education Data Initiative. An in-state student living on campus spends on average $27,146 per academic year, while a student attending a private, nonprofit university living on campus spends $58,628 per academic year.
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“Considering student loan interest and loss of income, investing in a bachelor’s degree can ultimately cost in excess of $500,000,” according to the Education Data Initiative.
Leo is five years old, so by the time he’s old enough to go to college, these costs could potentially be much higher (considering the aforementioned 41% increase in tuition and fees over the past 20 years).
Read more: Cost-of-living in America is still out of control — use these 3 ‘real assets’ to protect your wealth today, no matter what the US Fed does or says
Scholarships, loans and 529 plans
There are different types of federal student loans available, including direct subsidized and direct unsubsidized loans. Direct subsidized loans are available to undergraduate students who demonstrate financial need. The U.S. Department of Education pays the interest while you’re in school, for six months after you graduate and during any period of deferment.
So, for Leo, that may not be an option. However, direct unsubsidized loans don’t come with a requirement to demonstrate financial need, though you will have to start paying interest immediately — even while you’re attending school (otherwise it’s added to the principal of your loan). Private loans are another option, but they typically come with higher interest rates.
Scholarships typically cover tuition and don’t need to be repaid. They can be awarded for any number of reasons, from academic merit to athletic performance to financial need, though there’s a high level of competition for scholarships, so it’s important to have a Plan B. Plus, scholarships typically don’t cover living expenses, so Leo will still need money for that.
If Tello-Trillo changes her mind, she could consider opening a 529 plan, a tax-advantaged account used to qualifying education costs (each plan differs by state). She could deduct those contributions from her income tax, and when the money is withdrawn to pay for qualifying education costs, that money won’t be taxed.
Even if Leo gets a scholarship, a Maryland529 would allow him to use his 529 plan to pay for room and board, books and course-specific fees.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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Publish date : 2024-10-15 02:34:00
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