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Posted

Got my first college student starting in the fall.  I have the cash side of the equation with different securities, CDs, and investments maturing on a schedule to withdraw as we go so this isn’t a saving for college question but how to best pay for it.

I want to know thoughts on how to go about maximizing the transaction between taking loans, paying with credit cards, etc.  I remember when I was a student my dad had a GMAC rewards card and with 4 boys in college at one time he earned enough to get a new truck.

I have one starting in fall 2025 and the next one in fall 2027.

How do I maximize the opportunity for things like airline miles, cash back, new cars or just floating the cash with a low interest loan and bank the spread on a higher interest CD?

 

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Posted

Are you paying any of the school with education savings accounts like a 529?  If so, you'll get a 1099-Q which you'll want to match-up with the 1098-T tuition statement from the school.  Otherwise, you might risk having to pay taxes on the growth in the 529.  I try to minimize audit risks, so I distributed the 529 payments to the kids and they paid tuition.  All of that ran through their tax returns.  If not, disregard.

 

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Posted

No. I put some in a Roth IRA but don’t think I will need to tap that. Most is coming from taxable investments like EESP or retail brokerage accounts. 

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Posted (edited)
2 hours ago, UTPhil2006 said:

There's a guy on here buying a 2/1 condo for his kid. Not the worst idea I've ever heard. And then sell or keep renting after 4-5 years 

If both kids go to the same college I might do that.

I've also thought of that when I retire.  Rent my huge house to my kids and buy a new one for me to downsize.  

Right now I have a 1% unlimited cashback card I plan to use but there has to be a better payout.

Different Capitol one cards have things like 75,000 bonus miles after spending $4000 in the first 3 months, 1.5% on all purchases and other offers.

Edited by TexasEd
Posted
6 hours ago, mchookem said:

if you're looking for travel rewards, i believe Chase Sapphire is still the most recommended. 

Yeah I think there's a thread maybe on the food forum about rewards cards. 

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Posted
14 minutes ago, Larry T. Spider said:

You would probably be spending enough to take advantage of the big sign up bonus and minimum spend requirements on 2 or 3 cards. 

Yeah, I realized this yesterday but need to do the math.  Some of the cards I saw had annual fees.  I would want to make sure of the redemption rate and cost per mile after any annual fees and figure out if I keep or shut down and cycle through a different card.  I could do 3 cards, Me, my wife and my college age kid.  Is there a restriction or can you do them all under one name?  

One of the goals is to get to Europe next summer.

I'll check food and travel again.

Posted

We use Chase Sapphire Preferred which has a $95 fee but has been well worth it. The signup bonus plus our normal spending quickly got us 2 round trip tickets to Spain with only a little additional money from us. 

Using multiple cards and getting the bonus should be easy for one person as long as they are with different companies.

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Posted

Most if not all will charge a %-based transaction fee on any credit card payment.  Unless you can make the value of the rewards exceed that cost, it might not be enough juice to warrant the squeeze - or even worse you could be hustling backward.

UT = 2.3%.  TAMU = 2.25%. TCU = 2.85%

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Posted
3 hours ago, Reagan1k said:

Most if not all will charge a %-based transaction fee on any credit card payment.  Unless you can make the value of the rewards exceed that cost, it might not be enough juice to warrant the squeeze - or even worse you could be hustling backward.

UT = 2.3%.  TAMU = 2.25%. TCU = 2.85%

my experience too. Same deal with Property Tax payment in January.

the percentage charge kills it.

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Posted
On 6/25/2025 at 1:06 PM, TexasEd said:

Got my first college student starting in the fall.  I have the cash side of the equation with different securities, CDs, and investments maturing on a schedule to withdraw as we go so this isn’t a saving for college question but how to best pay for it.

I want to know thoughts on how to go about maximizing the transaction between taking loans, paying with credit cards, etc.  I remember when I was a student my dad had a GMAC rewards card and with 4 boys in college at one time he earned enough to get a new truck.

I have one starting in fall 2025 and the next one in fall 2027.

How do I maximize the opportunity for things like airline miles, cash back, new cars or just floating the cash with a low interest loan and bank the spread on a higher interest CD?

 

Might look into Yieldmax funds like MSTY or PLTY if you have a short term horizon. They pay a high monthly dividend

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Posted
4 hours ago, Reagan1k said:

Most if not all will charge a %-based transaction fee on any credit card payment.  Unless you can make the value of the rewards exceed that cost, it might not be enough juice to warrant the squeeze - or even worse you could be hustling backward.

UT = 2.3%.  TAMU = 2.25%. TCU = 2.85%

Dealing with Texas State (Yay Pac 12?)  and I don't have that information yet but is something I was concerned about.

Posted

Usually not worth using cards on transactions that effectively force you to cover the vendors credit card fees. Sign up bonuses strategies excluded, in my experience these types of transactions usually reward you 1-2% max.  I have a BoA card that I can get 1.75% on random categories but that doesn’t cover the credit card fee on my prop tax bill.  Spending 2.2% to earn 1.75% is bad math.

credit card companies got wise to some of the creative strategies used 20+ years ago. I remember when they allowed cash advances with a capped fee and an extended 0% interest. In the early 2000s, I withdrew $40k for something like a $500 fee. No interest for ~2 years. I stuck it in a 18 month CD earning about 4%. I just had to muscle up the monthly payments. The good old days of using my credit score to earn passive income.

 

Posted

Yes, realizing I will need to use it for normal purchases now.

We do about 3K per month so no issue other than moving subscriptions and autopayments for things like cell service.

Posted

So the next big thing is probably the rewards partners.  I see Chase has BA, Iberian, SouthWest and others on the web site but I cannot find the partner list for Capital One.  Are they hiding it?

Posted
23 hours ago, Reagan1k said:

Most if not all will charge a %-based transaction fee on any credit card payment.  Unless you can make the value of the rewards exceed that cost, it might not be enough juice to warrant the squeeze - or even worse you could be hustling backward.

UT = 2.3%.  TAMU = 2.25%. TCU = 2.85%

This has been my experience putting two through on a 529 and the third about to start. I am always looking for credit card points, but the universities charge CC transaction fees that undermine any reward. I just do a bank draft type of payment. 

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Posted
On 6/27/2025 at 7:22 AM, squib said:

This has been my experience putting two through on a 529 and the third about to start. I am always looking for credit card points, but the universities charge CC transaction fees that undermine any reward. I just do a bank draft type of payment. 

Same at UC system schools.  Just pay via echeck without fee.  In the case of UC it's still like a 50 cent fee but for a 15k payment whatever.

 

There isn't a way to game tuition payments that I found to work to be honest.  I tried all the different alternatives.

Posted

Seems Noteworthy here:

Wealthy families are buying homes to get in-state tuition at Texas universities

https://www.kut.org/education/2025-07-01/university-of-texas-austin-in-state-tuition-real-estate

 

Spoiler

Wealthy families are buying homes to get in-state tuition at Texas universities

Michael Minasi
/
KUT News

Texas allows out of state families to buy property to get in-state tuition.

This was not a luxury apartment. The place had popcorn ceilings, laminate countertops and faux marble bathroom sinks. The vinyl flooring was warped in places.

Two recent graduates from the University of Texas at Austin had moved out weeks before. Hired cleaners hadn’t come yet, so there was a layer of scum on the bathroom mirror and a damp smell the realtor blamed on old ventilation, but which he later deemed West Campus’ signature scent: beer, vomit and shoddy attempts to clean up both.

“You’ll smell it,” said Miller Gill, the realtor tasked with selling the 750-square-foot campus condo last month.

But Gill wasn’t worried about his bottom line. The week before, a family from New Jersey agreed to buy the place. To them, and to many others across the country, this 1980s condo was worth more than its parts; it was a ticket to a cheaper college education.

Texas lets out-of-state students buy homes to get in-state tuition. The law has fed a niche but growing industry of real estate agents, like Gill, who specialize not only in buying homes but also helping primarily California, Illinois and New York-bred students use these homes to save tens of thousands of dollars on a degree from a public university.

“It’s the tuition savings that is the big seller here,” said Ryan Gomillion, another realtor who has helped families use property to secure in-state tuition.

 
Lorianne Willett
/
KUT News

Miller Gill opens a lockbox outside of a condo he's selling in North Campus.

KUT News spoke with realtors, former and current students and parents, and sifted through property and university records to understand how wealthy families use homeownership to save on college tuition.

Here’s how it works: Incoming freshmen buy condos with the help of their parents, either by paying in cash or co-signing a mortgage. Students only have to own the homes for a year before they can use them to apply for in-state tuition for the remaining semesters — a discount of upwards of $100,000 over three years.

Nearly half a dozen realtors, some who’ve been doing this for more than a decade, told KUT News they collectively sell about 200 condos a year to UT Austin students whose families use these homes to get in-state tuition.

Many opt to sell the homes after two years, often to other out-of-state families.

The arrangement is legal. Realtors said it has been accepted by large public universities for years.

But some, including those benefiting from the practice, question if it’s fair.

“This whole thing is a smart, rich person thing,” said Jake Silver, who started a consulting business helping out-of-staters qualify for in-state tuition after his brother got in-state tuition at UT Austin by owning a condo. "But the people who actually need to save the money are boxed out.”

Buy, get, sell

Across the country, public universities offer discounted tuition to students who grew up in that state.

This coming school year, a UT Austin student from San Antonio will pay about $10,000 a year in tuition and fees. A student from San Francisco will pay about $40,000. Over four years, someone from out of state could end up owing $120,000 more than a Texan for the same degree.

This means there’s good business in helping families save.

Real estate agents like Gill advertise a one-stop shop: residency and real estate. One company, Tower Realty, has a clock on its website which counts down to the deadline to buy a home for in-state tuition. Others outline the steps from property deed to tuition rebate on YouTube.

“We need to find a way to make sure that you and your family are not overpaying for the same thing Texas residents get to enjoy for a far discounted rate,” realtor Eduardo Duran said in one video from 2023. In a phone call, Duran said he learned about the tactic as a student at UT Austin.

 
Lorianne Willett
/
KUT News

A flier for a unit in Tom Green Condominiums, a building in North Campus popular with out-of-state students.

Like other states, Texas does not assume someone who moved here to study intends to stay. In fact, state law says “an individual whose initial purpose for moving to Texas is to attend an institution of higher education as a full-time student will be presumed not to have the required intent to make Texas his or her domicile.”

But Texas lets students submit evidence proving otherwise. Students must first live in the state for a year. During that time, they must also establish a financial or personal tie to the state by doing one of four things: marrying a Texan, owning a business, working 20 hours a week at a non-student job or buying property.

Buying a house comes with financial risk and big upfront costs. But, compared with the other ways to get residency, realtors said these rules are the simplest to follow.

“Real estate is obviously the easiest way: Write a check,” said Jesse Mamuhewa, a realtor who said he has helped about 500 out-of-state families buy property to get in-state tuition. Realtors like him defend the practice by noting that these families contribute to the state by paying property taxes.

It’s impossible to determine how many families have accessed in-state tuition using this tactic. Federal privacy laws restrict universities from sharing what a student paid for school. The agency overseeing higher education, the Higher Education Coordinating Board, does not keep data on what rules students use to get in-state tuition.

To better understand how families use this law, KUT News searched Travis County property records and UT Austin enrollment data to identify out-of-state students who bought homes around the time they entered school and who, if they’ve since graduated, sold these same homes before or close to leaving school.

More than 150 students who have bought condos since 2019 fit this profile. There are likely thousands more. On average, students owned these condos for two years. Of those who have since sold the homes, one in three sold after fewer than 500 days. Because of privacy laws it’s unclear if all of the owners identified used their property to get in-state tuition.

 
Leila Saidane
/
KUT News

People walk past Escala at San Gabriel. The condo building in West Campus is popular with out-of-state students who can get in-state tuition by owning a home.

KUT News called dozens of current and former students and parents on this list. Most did not respond to voicemails or emails; others hung up, said they weren’t the right person to speak to, they weren’t familiar with the practice.

In total, eight out-of-state families contacted confirmed they purchased condos to get in-state tuition.

Only one denied using property to get in-state tuition. None agreed to have their names used in a story.

Who gets to be a Texan?

In 2001, then-Governor Rick Perry signed into law a bill giving undocumented students living in Texas the right to in-state tuition.

Nearly overnight, thousands of people, some who had lived in the state for most of their lives, now had a cheaper path to a college degree.

But some argued the law was unconstitutional because it gave more rights to people in the country illegally than it did to U.S. citizens. So, in 2005, lawmakers came back to “clean up” the law, making sure the right to be a Texan in the eyes of higher education officials was applied equally.

As part of this work, the bill asked state officials to better define what actions someone could take to get in-state tuition, calling the rules at the time “confusing.” The Higher Education Coordinating Board, along with universities, began drafting the rules in place today, including the right to use marriage and part-time work as a claim for resident tuition.

But there was one point of contention: property ownership.

At the time, the University of Texas System, which oversees all UT schools, considered expanding in-state tuition to students who had lived as renters in the state for a year. But it worried doing so would give more students the chance to pay discounted rates.

The Texas Higher Education Coordinating Board weighed in. In a public journal, officials said renters should be able to access in-state tuition or risk creating a system where only wealthy families can easily get in-state tuition simply by buying property.

 
Lorianne Willett
/
KUT News

Gill said a family from New Jersey has offered to buy a two-bedroom condo in this building. The family, Gill said, plans to use the property to get in-state tuition.

Today, even people who directly benefit from families buying homes for in-state tuition acknowledge the practice favors people with means — those who are more able to afford the hefty out-of-state tuition price tag to begin with.

But the rental provision proposed two decades ago was never adopted. State officials concluded that leasing a home was not an immediate qualifier for in-state tuition.

Recently, state leaders revisited the question of who gets to be a Texan for the purposes of college costs. In response to a federal lawsuit, officials in June agreed to end the ability of undocumented students to get in-state tuition.

“Ending this discriminatory and un-American provision is a major victory for Texas,” Attorney General Ken Paxton said in a statement.

At the heart of the lawsuit is fairness; Paxton argued if students who are U.S. citizens are not eligible for in-state tuition, regardless of residency, then undocumented students should not have that right.

 
Lorianne Willett
/
KUT News

Gill said he and his colleagues have been selling property to out-of-state families looking for in-state tuition for about seven years.

Those opposing this decision argue that families without legal status who have lived in the state for decades have more of a right to a state-subsidized education than someone who, until recently, spent their entire life in California.

“They can just pay a fee and they get benefits that Texas residents who have been here for years — contribute to our state budget, pay taxes — will no longer be able to have,” said Ofelia Alonso, a program director with Texas Rising, a group that helps college students organize around social justice issues.

$90,000 in tuition savings

One father of a UT Austin graduate from California agreed to speak to KUT News, as long as he was not identified. He said he worried the law could be overturned and he could face retribution.

The dad said his son wanted to attend a big football school, but was waitlisted by universities in California. Then, he got into UT Austin.

Texas limits how many out-of-state students UT Austin can accept to no more than 10% of students offered admission freshman year. But that hasn’t discouraged out-of-staters from applying. In fact, the opposite has happened; last year, the number of applicants from outside the state grew by 48%.

Once his son was accepted, the dad from California got a letter in the mail from a realtor explaining he could buy property to get in-state tuition.

The dad said the scheme seemed “questionable.” There was never any guarantee that buying a home would lead to discounted tuition, so, he said, “we were taking a bit of a risk on the whole thing.”

 
Michael Minasi
/
KUT News

UT Austin said it has started asking students for evidence they have lived in the property they own and are using to apply for in-state tuition.

Regardless, as his son readied to move nearly 2,000 miles away in 2019, the family used cash to buy a one-bedroom condo in West Campus. Paying in cash is common, realtors said. Few 18- or 19-year-olds have enough credit or earn adequate income to qualify for a mortgage.

When everything was signed, the California family put the West Campus condo in their son’s name. State law requires that students own the property they use to prove residency. It also requires them to say they’re financially independent on tax forms, declaring that they, on their own, pay for at least half of their living expenses.

On top of that, realtors also tell students to register to vote in the state and get a Texas driver’s license.

After owning the condo for a year, the student from California successfully applied to get in-state tuition at UT Austin, his dad said.

He estimates this decision saved the family $90,000 in tuition for a four-year degree. The family paid no more than $15,000 in property taxes on the home, according to county tax records.

The student from California never lived in the condo, his dad said. This is not unusual. For at least half a decade, UT Austin did not require students to ever live in the homes they owned, realtors said.

“You just had to own property in Texas and then separately live in Texas,” Gill said.

That changed last year. UT Austin said it now asks to see proof that students lived in the property they own for at least a year.

But for those who bought homes under the assumption their child could live elsewhere — and many want to, realtors said, preferring to live in the dorms freshman year — there’s a workaround: Students can create a business and rent the home to someone else. They can use this business to get in-state tuition.

 
Michael Minasi
/
KUT News

For families who don't pay for condos in cash, they can use so-called "kiddie condo loans." These loans enable young people to get approved for mortgages as long as they have a relative to co-sign the loan.

After graduating in 2023, the student from California stayed in Texas for a bit, his dad said, but has since returned to his home state.

Of the eight people who confirmed they used property to get in-state tuition, half are still in Texas after graduating, according to parents and LinkedIn profiles. Two left the state within months of graduating from UT Austin to take jobs in Los Angeles and New York City.

“Huge chunk” of the market

Before an out-of-state family offered to buy it this summer, the condo with warped vinyl floors and the West Campus smell was last sold in 2023 to a UT Austin student from New Jersey. That student, according to Gill, used the property to get in-state tuition.

KUT News contacted this student but did not hear back.

Realtors said it’s common for condos near campus to move between out-of-state families every few years. Some families transfer ownership between siblings, using the same condo to get in-state tuition for more than one student, according to realtors and as evidenced in property records.

“I’ve had clients where all three of their kids went to UT in two-year gaps,” Mamuhewa said. “They all got in-state tuition.”

Out-of-state property ownership for the sake of cheaper tuition is so common, realtors said, that it has created its own real estate submarket in the campus area. One in four condos in a three-story building on Leon St. in West Campus are currently owned by UT Austin students who hail from New Jersey, Maryland, California, New York and Tennessee, according to property and other public records.

Real estate agents said that if the law changed and suddenly out-of-state families had fewer reasons to buy property, like the ability to save tens of thousands on a college degree, prices in this part of town might nose dive.

“It’s a huge chunk of the real estate market,” Mamuhewa said.

And it’s growing. Less than three miles from that West Campus condo is the historic Austin enclave of Hyde Park, where in May the owner of a building started the process of converting 450-square foot apartments into condos.

A tall, navy blue sign planted outside the stone building advertises the benefits of buying one of these 1970s homes: low HOA fees, cheap energy bills, the ability to rent it on AirBnB.

The fourth and last benefit on the sign? Get in-state tuition at UT.

 

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