Saturday, November 19, 2005

Should You Move To Kalamazoo?

Why would you want to consider moving to Kalamazoo? A free college education is a big reason. If you have a child who is pre high school, a move to Kalamazoo could make financial sense in a lot of ways. The more children that you have, the more appealing the offer is. Not all kids get 100% tuition with the exact amount being determined by the number of years the child is in the school system. According to the Kalamazoo public school website:

All students who graduate from Kalamazoo Public Schools and are Kalamazoo residents can get up to 100% of their tuition paid to any Michigan public university or community college. Students must take 12 credit hours or more each semester, unless interrupted for military service, and maintain at least a 2.0 grade-point average.

The percent of tuition paid by the plan depends on the years of attendance in the district, using the following formula:

K-12...100%
1-12...95%
2-12...95%
3-12...95%
4-12...90%
5-12...85%
6-12...80%
7-12...75%
8-12...70%
9-12...65%
10-12...None


If you have a child entering the 9th grade next year (assuming tuition of $10,000 a year for ease), a move to Kalamazoo would be worth $26,000 in saved tuition. If you have three children with one going into kindergarten, one into 3rd grade and one into 6th grade, the move would be worth $110,000 in college tuition. To further increase the worth of the tuition payments, they will be to the kids and not the parents meaning that the taxes owed on the gifts will be much less.

In fact, the grant of free tuition will probably be worth a lot more than merely the tuition. Since the announcement, colleges in Michigan have been tumbling over one another trying to lure the students that are receiving the free tuition by offering discounted to free room and board and other incentives to attend their college. They are able to do this because most students receive financial aid of some type when they go to college. Since those from Kalamazoo have their tuition already paid, there is no reason to offer those students financial aid. Therefore the colleges are taking the financial aid portion and moving it toward other benefits increasing the worth of the free tuition offer.

Then all the savings for college made thus far for your children could be earmarked for retirement savings giving you a huge boost in your personal net worth and outlook for retirement. This means that you could start maxing out your retirement funds (401K or IRA) if you haven't been doing so up to this point further increasing your retirement money.

The offer is especially appealing to middle income families that would have a difficult time paying for college, but earn enough that scholarships and grants would be limited for their child.

Of course, there are a lot of other factors involved that come into play when determining whether a move is even feasible. It is, however, certainly worth careful consideration to see if a move makes financial sense.

It also makes sense to keep your eyes on this type of offer. Since the announcement a lot of other small towns have expressed interest in creating a similar system for their school children. While Kalamazoo may not be possible today, another offer in a different town in the future may be.

7 comments:

Kate said...

I would suggest that anyone cosidering this look at it long and hard. First of all Kalamazoo is not the only place offering free tuition. California and Nevada have some similar plans. Depending on your income moving to Michigan, a relatively high tax state with not exactly a booming economy in the long run could cost you thousands of dollars in lost income and increased income taxes. Also remember that tuition is a relatively small part of the total cost of education and many community colleges offer all sorts of scholarships to worthy students.

C r a i g said...

Relatively small part? Besides room & board what else could be a large portion? At least 2 Michigan universitys have offered free R&B. All you have left then is basically books. High tax state? Income tax is a flat 3.9%, 6% sales tax (unprepared food exempt). The real variable is what kind of income can you make while living in Kalamazoo compared to your current residence. If your job isn't closely tied to your residence and you have multiple kids then start packing.

Anonymous said...

Also homes in Kalamazoo are one of the cheapest in the country. You can buy a huge luxury house for about 250,000. Your middle end house in nice neighborhood for about 130,000 and a cheap house, 3 bed, 2 bath home with fenced yard for about 90,000 or a lot lower. You can't find prices like these. I'd also say that Kalamazoo is a multicultural community and with the 4 colleges here it brings in culture you can't find in other cities of this size.

Anonymous said...

I have lived in Kalamazoo for 10 years. I bought a house while I was going to college. I am 35 now and still live in the vine neighborhood. I would'nt even think of leaving. Kalamazoo is on the rise....

Anonymous said...

Free tuition is a really good incentive, but consider these startling facts: Kalamazoo Public Schools are the worst in the area. Average scores for standardized tests are around 30% for math and 40% for reading. Interestingly, Portage, Mattawan, and Schoolcraft (all suburbs of Kalamazoo) consistently score in the 90% range.

Michigan's economy is really going through the ringer right now. There are NO jobs available. So if you move here, you have to make sure that you already have a job secure, because you WILL NOT find one here--especially if you're blue collar or are middle management-type.

However, if you don't mind the abysmal education for your kids, and if you have secure employment lined up, then come on over! You will get a steal of a deal on a house because everyone's trying to leave the state for better opportunities.

Anonymous said...

I'm hopefully moving to Kalamazoo next month for medical research... I find the rent to be very reasonable and maybe cheap. I'm only concerned about the crime in Kalamazoo. A fellow physician was mugged, with both his laptop and wallet stolen last week. How bad is it?

Anonymous said...

Be careful about bashing the quality of Kalamazoo schools. Middle class white kids in Kalamazoo perform better in reading than Portage Northern - which is all white. Socio-economic backgrounds of children play a large part in whether a child succeeds or not. The richer, whiter suburbs like Portage also have a serious herion problem. They have money to spend on the drugs. Kalamazoo will give your child a more balanced perspective by exposing him to diverse students as well as a great education (not to mention free college education).