A few weeks ago, the proprietor of this establishment (J.D. “The letters in ‘Get Rich Slowly' can be rearranged to spell ‘The Sly Cowgirl'” Roth) asked me to address a reader's question — specifically, how should a parent save for college (perhaps because I once wrote a book on the topic, though it's now outdated). But first, let me say this:
College costs too much, it saddles young people with too much debt, and it forces students to “learn” things they'll soon forget — and it won't matter because it wouldn't help them further their careers anyhow.
As reported by InsideHigherEd.com, a new book (Academically Adrift: Limited Learning on College Campuses) finds that 36% of students “did not demonstrate any significant improvement in learning” over four years of college. The authors (themselves professors) write that, for many undergrads, “drifting through college without a clear sense of purpose is readily apparent.”
Do you want to pay $80,000 to $200,000 for that?
Because that's how much it'll cost, assuming the fruit of your loins graduates in four years (only 53% of students graduate within six years). According to the College Board, it costs an average $20,339 a year for in-state tuition, room, board, textbooks, personal expenses, and transportation. For the average private school, that figure is $41,192. To be fair, some of these costs would still be incurred if kids didn't go to college; they still have to eat, board, transport, and read (I hope). But they could do it much more cheaply on their own. Consider textbooks. The average student spends more than $1,000 on these annually updated tomes, because the student has to pay $50 to $100 for the most recent edition. Only people in college pay that much for a book.
Yes, many students get “aid.” But much of that is in the form of loans. Here's a shocker: The value of all student loans now exceeds all credit card debt. Twenty-somethings are beginning their careers with thousands of dollars of debt that has to be paid back with low-person-on-the-totem-pole salaries (assuming they can even find a job).
Here's the problem: College costs lack the normal market-based price controls. If you're told you need something, and someone is willing to lend you the money to get it, and you're told it's a great “investment,” then you'll do it — regardless of the price. The government wants to help, too, with grants, low-rate loans, and tax benefits. That's all very well-intentioned, but it's another reason why colleges can jack up prices and get away with it.
According to James Altucher (who's passionate and articulate about what a scam college has become):
College costs have historically gone up much faster than inflation. Since 1978, cost of living has gone up three-fold. Medical costs, much to the horror of everyone in Congress, has gone up six-fold. And college education has gone up a whopping tenfold. This is beyond the housing bubble, the stock market bubble, any bubble you can think of.
Altucher also takes on the argument that college is a great investment. Yes, people with college degrees earn more over their lifetimes. But if a person invested the cost of college and stayed away from the Ivory Tower, she might have more than the person with the B.A. or B.S.
Save Anyway
Now that I got that off my chest, the truth is I have a student in college now, and I have 529 savings accounts for my other three children (more on 529s later). Like it or not, many professions require a college degree. Plus, it can be a great experience and all that. So if you've procreated, then you should save for your creation's education. However, first make sure you're saving enough for your own retirement, as I explain in this video I did for LifeTuner (AARP's very hip website for the younger crowd):
(Quick summary: A kid can always find a way to pay for school. However, if you reach your 60s or 70s without enough retirement savings, you won't be able to retire. There's no such thing as a geezer scholarship. Plus, you can use some of the money in your retirement accounts to pay for college.)
Which finally brings us to the reader question:
My wife and I are expecting our first child this summer. In an effort to stay ahead of the game, I'd like to start saving for his or her college education. A 529 plan seems like the obvious choice here, but I know little about them.
What are the pros and cons to this type of account? Are there other options I should consider instead? How do I choose a reasonable amount to save so that I'm unlikely to end up either coming up quite short when it's time for school, or overshooting and having lots of money left over in there? One final question: Can I start such a savings account before the child's actually born?
Indeed, the 529 account is the obvious — and, in my opinion, best — choice. The programs are sponsored by states, who hire financial-services firms to run them. There are two flavors: savings plans and prepaid plans. I won't spend much time on the latter — which allow you to pay for a future education at somewhere close to today's prices — since most states don't offer a prepaid plan, and many have experienced financial difficulties. Choosing a prepaid plan might be a good idea if:
- Your kids will go to a state school in your state, and
- Your state's plan is on solid financial ground.
For more on prepaid plans, read this Smart Money article (which also mentions a private-school option).
The Pros and Cons of the 529
529 savings plans are like any investment account in that you contribute as much as you can, on a monthly or irregular basis (though most plans have modest minimums and all have huge maximums — from $235,000 to $380,000).
Here are the benefits of a 529 savings plan:
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- The money grows tax-free as long as it's used for qualified higher-education expenses at any qualified institution — in your state or elsewhere (that includes the overwhelming majority of schools in the U.S., and many in other countries as well).
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- Some states offer benefits to residents who participate in the state plan. For example, here in the great Commonwealth of Virginia, I can deduct $4,000 per account annually that I contribute to my kids' plans on my state (but not federal) income tax return. Thus, if you're interested in a 529, start by investigating your state's plan. However, you don't have to choose your state's plan, so if it doesn't offer compelling benefits and the plan is subpar (e.g., too expensive), look at the plans offered by other states.
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- The investment choices vary by plan, but most are generally low-cost mutual funds, and most offer age-based portfolios that are more aggressive when kids are in the single digits (owning more stocks than bonds), but gradually get more conservative (all on their own — no rebalancing required!) as the Big Day gets closer.
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- The assets in a 529 are considered property of the account owner (usually a parent or grandparent), and not the student. This helps when it comes to determining financial aid since assets in the student's name have a more negative impact on aid eligibility. Also, the kid can't decide to take the money and blow it all in Amsterdam.
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- When you open an account, you have to name the beneficiary, which is usually the kid who will eventually go to college. However, if she/he/it decides not to, the account can be transferred to another qualified relative. This is actually how you can begin saving in a 529 before your belly of joy is born. Open an account with yourself as both the owner and the beneficiary, and then transfer the account sometime after your offspring is womb-sprung.
Now, the not-as-good stuff:
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- If you use the money for anything other than qualified expenses, you'll pay income taxes and a 10% penalty on any earnings (though not the amount you contributed).
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- You can only change the investment choice once a year. No biggie, really, but disappointing for you market-timers, and nerve-wracking during a crash (as in 2008).
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- You can invest only in mutual funds and, in some plans, exchange-traded funds (ETFs). If you prefer individual stocks (i.e., shares of individual companies), the 529 may not be for you.
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- “529” is a boring name. Boring! It's named after a tax code, just like 401(k) and 403(b). But what would you expect from a country that names the mansion in which the most powerful person in the world lives, the “white house”?
How Much to Save
Determining how much to save is difficult, because it depends on future investment returns and college-cost inflation. However, a place to start would be to find out the current cost of attending a school your future Einstein is likely to attend. Then, fiddle with a few online calculators, such as the ones from the College Board and Savingforcollege.com. If you're asked for investment return and inflation assumptions, choose 6% for both (you can ratchet down the former and/or increase the latter if you want to play it safer).
Finally, the absolute best source of information about 529 plans is Savingforcollege.com. You'll learn plenty about the general rules, but also the particulars about each state's plan. But hurry — you'll need to start saving soon to afford a big, fat, hairy college rip-off.
Kris and J.D., back in the Olden Days when college was cheaper
Author: Robert Brokamp
Robert is a Certified Financial Planner, the author of The Motley Fool's Guide to Paying for School, and is the editor of the Motley Fool Rule Your Retirement newsletter service.
College is quite the double-edged sword. Without it, you’ll have a tough time finding a job and will get paid less than anyone else in the field that has their degree. But, with it, you’ll most likely carry that student loan debt and start your career in the hole!
My wife and I both went to college and amassed $18,000 in school loans when we graduated (not that much debt compared to most coming out of school). Everyone said it was ok though, because we would get great jobs and quickly pay off that debt.
Well, my job is pretty mediocre, and so is my wife’s. In fact, my friend and his wife did not complete college, and they seem worlds ahead of us because of it! They have a house that they plan to have paid off in 4 years, a very large Roth IRA, and some nice paid-for vehicles.
If you are good at a trade, sometimes it’s still beneficial to skip that degree.
But, if you want to get a job at a corporate headquarters somewhere, you’ll definitely need that peice of paper to even get you in for the interview.
“If you are good at a trade, sometimes it’s still beneficial to skip that degree.”
Well said, @MyLifeandMyFinances! I would actually modify your statement to say that a vocational education (whether you feel you’re good at a trade or not) is often-dollar for dollar-the best money spent on an education.
If you can apprentice for a self-employed tradesman, you can learn the trade and the business and eventually start your own business.
There are cheaper, effective and more practical alternatives to college/university degrees. Sadly, few tout them as viable options to high school seniors.
Most real education in both life and career takes place post schooling anyway.
I am starting to see the whole “Waste of Money” bit. I graduate in 2 weeks with my BS in accounting (Summa Cum Laude, thank you very much) So where is the reward for all my hard work? I’m quite sure my current boss is not going to give me a huge raise just because I have a degree now. And the option of changing job for more money looks pretty bleak. I’ve spent a fortune and now have very little to show for it.
Note that a college degree is more beneficial (necessary) for women than for men these days. That’s probably why more women than men are getting college degrees. (Why? Discrimination in labor and training markets for which a college degree is not necessary.)
Even if 35% of kids learn nothing in college, that is not a reason to recommend kids not go to college. It’s a good reason to recommend that unmotivated kids not go to college *yet.* Nobody should be forced to go to college and some people would be better off working for a few years (or trying to find work for a few years…) and finding direction before making the plunge. It’s easier on those of us who would have to fail them otherwise for not showing up to class too.
Health care fields, particularly nursing, and jobs that require associate degrees, are still scheduled to have better growth than average and not have enough graduates for the jobs needed. (Though in some states, regulations make LPNs less attractive and RNs more attractive.)
I’m surprised that this article only talked about 529s rather than explaining the other methods and when one might use one over the other. We decided against a Coverdell.
@3 Pat– Bring it up during your next performance review and ask for a raise.
Or your could go to Brigham Univeristy. Become a Mormon, live by the honor code, pay 5k a year for tuition. Or get about a 3.8 GPA a get a full tuition scholarship. 300 month in rent. And work on campus which is what the ENTIRE school does. Food service workers – all students. Secretaries for departments – students. Custodians- students. And they have the #1 accounting undergrad program in the nation. And you can’t sleep with your girlfriend until you marry her. But the girls are pretty hot at BYU.
http://home.byu.edu/webapp/finserve/content/page/Tuition.html
I’m 50,000 in debt (after working 40/week all 5 years). I earned degrees in biophysics and chemistry, but honestly could have learned everything to get into medical school in 2 years. And all the extra cultural stuff that was required cost thousands. I don’t remember half the liberal arts stuff and honestly won’t use 90% of the science stuff as it isn’t really medicine related. College has become a money grab for schools proliferated by the professional culture that values a paper degree more than experience and ingenuity. Many graduates will be saddled with crippling debt and be slaves to creditors for decades.
And don’t have more than one kid! True story: friends of mine have diligently saved since the births of their two daughters to pay for college. Now that their daughters are of college age, they are terribly dismayed to discover that the elder girl has turned out to be a very difficult child, who keeps switching majors/schools at the drop of a hat. Unfortunately the younger daughter, who is very clever and ambitious, is going to have an inferior education as a result … because her elder sibling has sucked up most of the money. Moral of the story? One child policy.
@Nicole: There are some places where the opposite is true of nurses as well. Hospitals and especially clinics would rather hire LPN’s because they cost less.
“A lot of fellows nowadays have a B.A., M.D., or Ph.D. Unfortunately, they don’t have a J.O.B.” — Fats Domino
Caveat: I’m a college professor. I’d question the “kids don’t learn anything in college” from “Adrift”. The measure they learned was based on reading an essay and thinking critially about it. Liberal arts students showed the most improvement (fr to senior); science and engineering students showed the least. But look at the measuring stick that was used: an out of context passage with no relevance to the science majors. I’d happily give the exit exam we give the students (which includes reading and analyzing scientific literature and a laboratory experiment, as well as tests over the content areas in chemistry) to a student walking in the door–I bet you’d see a HUGE change in what they had learned over four years (and yes, I teach at a college where 75% of the students graduate in four years–it’s a private liberal arts school. Sometimes you get what you pay for.)
@7 In most parts of the country, LPNs are in huge demand. An RN will still get a big wage premium over an LPN, that will make up for the additional year to two of work if they got a 2-3 year degree.
However, for example, in CA there have been some legislative changes at nursing homes that have messed up with that general equilibrium. So if you go on nursing boards and people are complaining about not being able to find jobs, it is important to figure out what state they’re in and what the regulations causing this problem are and who is benefiting from those regulation changes. What is true in most of the US is not necessarily true in your local market, even in health care.
I have a 529 for my son. However, someone recently told me their accountant suggested closing the 529 for their kids and opening Roth IRA’s in your childrens names. The reasoning: A 529 counts toward your childs financial aid, a Roth IRA does not, also not all children end up going to college. Anyone else ever heard of this?
Related: 100 reasons not to go to graduate school:
http://100rsns.blogspot.com/
The U.S. academic system confuses me ;)
What surprised me when I was teaching high school was how few students consider taking a year off to work or travel. Everyone assumes that going to college or university (they’re different here) right out of high school is THE thing to do. It’s what their parents expect, and it’s what their friends are doing.
I think many kids would benefit from a year off to earn some money and figure out what it is they really want to do. A lot of students here end up getting a university degree and then going on to college for a diploma so they can get a job. There’s still some stigma attached to getting a diploma versus a degree too.
I think people need to be more open minded and sit down and really look at the costs and the benefits.
@Jasmine:
It sounds like the parents should’ve kept the money for each child separate, rather than mixing them into a single pool and letting the elder child take more than her fair share.
“One child policy?” I prefer the no child policy. It results in even less of a drain on the budget. We also get more sleep.
First off, there is never a guarantee your child will go to or benefit from college. The best you can offer is the opportunity for them to take a shot at it. That said, my kids grew up knowing that whether it was college, trade school, culinary school, etc. they were expected to get some kind of education or training post high school. To that aim I only promised the equivalent of two years community college and two years at a local four year college. They have to make up the difference. Currently both my first two kids decided to go to state universities all four years, and are taking loans and working to cover the difference. Note that in each case they had private schools that also offered aid bringing their costs close to the state school amount, so don’t necessarily discount private schools. As I told them, you can graduate with no payment, a car payment, or a house payment. You can likely pay off the car payment in six years, house payments are more like 30 years. They’re supposed to make an adult decision, but I made sure they saw their options and potential consequences. They’ve opted for car payment equivalents.
With respect to how much to save, you can run projections or just save what you consistantly can, but no matter what, schooling your children in what to expect may be the best tool. If you asked my kids at eight years old what Daddy could afford they responded “two years community college and two years at a state school”. Then you asked them what Daddy got and they would say “ten percent” (You need to make sure the little buggers understand they owe you :-). Train them early, make it fun, but in the back of their heads they know they’ve got to come up with some creative ways to make up the difference. I’ve seen too many kids thinking they’re going to some great private college, and the parents telling me out of earshot they don’t have the heart to tell the kid they can’t afford it or they didn’t save enough, etc. Don’t do that to either of you.
I’m a PhD student and have taught undergrads as both a Teaching Assistant and a Course Director. I would say that there are many students who just shouldn’t be in university. They are either not academically prepared or they are not motivated enough. Granted I teach in a university where you can get in with a B average, so I’m sure things would be different at an Ivy League school. Many would benefit from taking time off before attending university
Most students would also probably benefit from going to community college first. And I’m speaking from my own experience here. I was able to take classes just for the enjoyment of learning something new, and also was able to explore and figure out what I wanted to do, without it being too costly. The classes are smaller, and there is less inclination to waste your time partying because most of your classmates are 30+ and have partners/families.
And I’m also a bit ambivalent on whether parents should pay for education at all. My parents payed for school when I lived at home to go to community college, but when I transferred to a 4 year school and moved away they did not have the money to help me. My grandmother would send me 250/month (this was in 2002-2005) to help pay for living expenses, but I had to borrow as much as I could to pay tuition and the rest of living expenses. I could have worked but chose instead to focus on school. Paid off, because with the scholarships in grad school, I will have my 28k student loan debt paid off before I finish my PhD. My sister on the other hand, has far more student loan debts than me, but is also not as careful with her money or proactive about paying it off.
However, even though my sister and I both had to borrow a lot, I don’t feel mad at my parents for never saving anything for us. Neither of them went to university and so didn’t think about preparing for it when it came to us. And they are struggling financially themselves and so it would be silly for them to struggle more just to pay for our schooling, when we are both capable of working.
@Kevin, the reputable fee-only adviser who created my financial plan strongly advised MrP and I to put most of our money into the 529 for our older child. That way, if she decided college wasn’t her thing, we could transfer it to our younger child. If #1 did go to college, we could still xfer some money plus pay out of current cash flow. (By then our mortgage will be paid off.)
First, Anonymous, a 529 plan counts as the parent’s asset in financial aid, not as the child’s. A Roth doesn’t count for the FAFSA (federal aid) but most private schools you’ve heard of do take it into consideration in their aid formula.
Second, I think a Coverdell is well worthwhile, especially if you start early. For many people, saving that $2,000 a year would already be a struggle, but, like the “Debt Snowball”, could give a feeling of something actually accomplished. The other advantage of a Coverdell is that it can be invested in anything a brokerage might handle. If you have a 529, it can be invested in a core portfolio with a good mix of mutual funds, while the Coverdell might be invested in a little more risk–emerging markets, some small cap value fund, or even individual stocks for more astute or confident investors. The Coverdell then has the possibility to generate more return. And if it’s lost, well, the kid can look at working and loans. Depends on what risk you’re comfortable with, and your time horizon.
As to the kid that takes 6 years, changes majors, yadda yadda: when I work with clients on college planning (I’m a financial planner), I strongly recommend that (if they can afford it), they plan to pay 1/3 of college costs out of savings, 1/3 from current income, and the child pays 1/3. The child’s share can come from work, scholarships they’ve landed, loans or whatever but the child has to have some skin in the game. And I urge the parents to provide the bankrolling for 4 years, and 4 years alone.
I think this is generous but not idiotic and really helps to focus the child’s attention in a mature way, teaching how to make effective choices about time and money, a great lesson for adulthood.
@Marilyn,
I’d rather pay the money and have a life at another school. ;)
I feel like the education system in the US is totally screwed up. Costs to much, matters too little and the entire philosophical approach to what were teaching young minds is backwards.
I’m a recent grad, I’m also $100k+ in debt. If I paid that debt according to the lovely payment plan that Sallie Mae laid out, I’d end up paying over $300k. $300,000. Three hundred thousand dollars.
I’m now three years out of college and have worked my ass off and am nearly making six figures. However, if a parent hadn’t been helping me out, I would still have to live at home. My payments are over $1000 a month and it’s ONLY TO INTEREST! Loans are absolutely crippling for young people and they should do everything in their power to stay away from them, especially for unacceptably high tuition of out-of-state/private colleges.
I’m sorry, but for $300,000 I can live the rest of my life on an island and could have started when I was 16…
Here’s what the accountant is thinking: You can always and anytime withdraw the CONTRIBUTIONS to a Roth IRA, tax- and penalty-free. As for the earnings, you’ll pay taxes and a 10% penalty if withdrawn before age 59 1/2. However, the penalty is waived if the money is used for qualified expenses (though you’ll still pay taxes).
As for the financial aid impact, I hear mixed things. But the acknowledged expert on 529s (and college saving in general) is Joe Hurley, operator of Savingforcollege.com. And here’s what he says:
http://www.bankrate.com/brm/news/529/20051024a1.asp
http://www.savingforcollege.com/bankrate_articles/article.php?article_id=96
http://www.savingforcollege.com/bankrate_articles/article.php?article_id=68
WOW do I disagree… My BS in Mechanical Engineering was reasonably priced at a well-regarded state school and has served me really well for the last 9 years! I made great friends (whom I still see often), enjoyed almost every minute of it, graduated with no debt (working and internships), and have a job that is challenging, rewarding, and even sometimes fun! I could not be doing any of this without my college experience. My school’s Engineering Career Services department even put me in touch with my first employer and launched a career path I had not previously considered! For some people, college is still a great option!
@Annoymous in comment 12
The child can only open a Roth IRA if the child is earning income. How much is their infant or little kid making? Except in special cases (e.g. child actor) this makes no sense for early on, and in the teenage years where they may be earning some money and that earned income equivalent could be put in, but as already mentioned there may be penalties associated with this and it doesn’t make sense for the child to have the Roth IRA and you can’t transfer money from a parents account to a childs Roth IRA anyway without penalty or hitting the yearly $5K max anyway. So this makes no sense to me.
Besides 529’s don’t count in the childs account on the FAFSA, where it would be 100% against the child, but on the parents, which is a much lower percentage (I want to say 5-10% but don’t quote me on that) of the parents overall assets. Note though, that some privage colleges do take into consideration 529s when looking at aid.
Now if you, as the parent, want to put your money in a Roth IRA in *your* name, you could do that and that way if your kid didn’t go to college, then you aren’t trapped into using the 529 money for education expenses for yourself or someone else (like another child). So since you can always take back your principal from the Roth that could be $10K a year for two parents put away for 18 years yields $180K you could tap without penalty for college. So that is a viable stategy provided you have other retirement savings you are planning on using for yourself. That may be what the accountant was talking about and makes more sense than putting the money into an Roth IRA for the child.
Like “Young Professional” up above, I too recently graduated with $100k+ in debt. It was worth it to me, because my engineering degree from an Ivy league university impressed my boss enough for him to hire me a month after the economy started tanking in Fall 2008. Also, I met my husband at college and would not have met him otherwise, so I wouldn’t trade my time there for anything.
That said, I’ve been smart/lucky with the way my payments have worked out, and despite making payments of $1200/month, I only paid about $1800 total in interest last year. My private loan rates are hovering around 3%. I’m going to grad school part time for free (my husband works for a university) and that in-school status has kept many of my federal loans in deferment, not accumulating interest. I’ve also worked full time since a few months after graduation, and started paying off my loans as soon as I had a job, rather than waiting for my grace period to end.
In short, college can be a rip off, but it can also be 100% worth the time and money. I’d rather be in the situation I’m in now – stable engineering job, married to my awesome husband, learning to live well below our income – than never having gone to college. I still wish costs wouldn’t go up so quickly though!
And on a side note, I just paid off my smallest student loan last week! Woohoo!
I go back and forth on this. My college experience was great – I went to a state school and graduated in three years, so I didn’t take on a ton of debt to do it (and my parents didn’t take on any). I enjoyed my classes and definitely found that it opened up my worldview and exposed me to new ideas.
But I don’t work in a field close to my major and I don’t plan to any time in the future. In fact, my BA was only enough to land me a secretarial position upon graduation, so in terms of financial payoff, it was definitely a bad deal.
The one thing I hate is all the pressure that’s on younger students today to go to college, even if it’s clearly not the right path for them.
Robert,
Don’t forget that in Virginia, even though there is a $4,000 maximum to the annual deduction you can take on your state income taxes, excess contributions that could not be deducted can carry forward to be deducted in subsequent years for as long as necessary.
I became a 529 expert a few years ago as a young father, and I was talking about this to an older co-worker whose kids were entering college. He didn’t think the 529 was worth it, since he was spending the money now. I explained that he should pass EVERY single tuition payment through the 529 in order that he could eventually take the state tax deduction on it. It’s like a 6% coupon for college.
As for personal experiences, I was fortunate enough to let Uncle Sam pay for B.S. and M.S. To show my appreciation, I took a commission in the military for five years, then we parted ways. Early-30’s, never had any student loans, parents didn’t have to pay anything, comfortable six-figure income, healthy retirement savings, and just about finished with the mortgage. All in all, not so bad.
We’re saving in 529’s for the kids. If they don’t use it, I can always transfer it to possible grandkids. Or maybe I’ll get another degree in retirement, just for fun.
We’re going with the Roths, which for us are for college tuition as our retirement is well funded through other means. I’m not certain we’ll qualify for financial aid, almost certainly not at the state schools.
So, we’ll have some savings and the rest we plan to cashflow. The one thing we’re making clear to our children is that we will not pay more than state school tuition. If they want to go to a private college, they’ll need a scholarship. That rules out the Harvards of the world as they don’t give academic scholarships.
We just don’t see the return. Go to any street in the country and you’ll find the Ivy League grad living next door to the state school grad living next door to the college dropout.
We just had our first (and only) child and I was able to contribute to the 529 for 2010. I think it’s great to have another tax write off. Although 4k x 20 = $80,000 doesn’t sound like it will be enough for college in 20 years.
Hopefully the stock market will perform well in this coming 20 years. I know the last 10 years was pretty horrible.
Hilarious article, and yes, college (in America anyway) has become a kind of extended summer camp or day care for overgrown children. Do some kids (that’s a funny world to call a 19 year old) profit from it? Sure. Some even learn useful skills. But by and large it’s a big scam. I know first hand.
I like the Israeli system: turn 18, go to the army, endure some tough discipline AND get all your partying done for 3 years (they do party hard); then go to college at 21 when you know what you want out of life and graduate quickly. They don’t attend school for the fraternities or the athletic programs. In spite of this delay (or maybe because of it?) Israel has incredible development in science and technology for a country of 7 million people.
I’m not saying “army” is necessarily the thing to do, but a little life experience outside of the college hothouse would do a lot to turn “kids” into young adults with a sense of the real world and what they really want out of life. And college courses rarely train you for the real world: like all self-perpetuating systems, they train you to be an academic. Most of us don’t live as academics though.
I’d put my money in adult education. It’s more focused, skills-oriented, and serves a highly motivated population: people who have a real stake in their own success– they are spending their own money and know the price of things.
#12 anonymous, I can’t remember where I read this, but the bad thing about using Roth IRA to fund college is the year that you take out that money, it will count towards your “income” which then is used in the following year’s financial aid calculations. It may make the child less eligible for financial aid. From what I hear, in general using 529’s for funding college is less punitive than using Roth IRA money for how financial aid is calculated. However I’m 10 years away from using it so I don’t know from personal experience. The rub I have, only being middle class there is no way to fund both retirement and even 1/3 of college costs. It used to be affordable, but at this time the middle class can’t afford both reitirement and paying their children’s college costs.
I absolutely agree with this article. College is a huge rip off. The costs are overinflated, but students think they “have” to go and employers think their employees must have college degrees. Now that college degrees are a dime a dozen they really don’t even guarantee anything eithe
If this post were titled: “Your Car is a Big, Fat Hairy Rip-Off…”, or “Your Hobby…”, “Your Eating Out…”, etc. – then it would be a good bet the post would be a point-by-point analysis of everything wrong with cars, hobbies, or dining out. Then we would get details on why these things probably should be eliminated completely. But because the subject is “college”, our culture demands that we somehow defend this “big, fat, hairy rip-off”.
A quick glance (I could be wrong) over the previous posts seems to indicate that slightly more posters regret what they’ve “not learned” in college, along with the debt they’ve gained, vs. those that would go back to college again.
While I fault Mr. Brokamp’s somewhat questionable defense of our society’s latest “big, fat, hairy rip-off”, he gets credit for calling out today’s university culture for what it is. I hope more and more people start questioning the value of a “college education” with a cold and analytical view. The obsolete university model of our past needs an immediate overhaul.
I graduated from a state school with my BS 10 years ago. I spent $20K on my entire education – that was for tuition, books, fees, parking and the like.
I did not take out loans. I worked my way through – I started at the community college and then transferred to the university state school for the final 4 semesters.
Bottom line: Before I got my degree, I was making $11 an hour – no chance to do anything else or make any more.
After I got my degree, I now make over $50 an hour.
It wasn’t just my degree, but hard work that paid off AFTER the degree! College was not a waste to me, it opened doors I would have never had the opportunity to open.
Get your degree. Do it smart. Pay cash. You’ll never regret it!
I’m Canadian, and while I DO have a boatload of debt from my master’s degree, I don’t think it’s near what American students I know have. However, I’m wondering if it’s just going without saying that education is a good in itself, even if it doesn’t necessarily translate into a better paying job, or if no one posting here believes that education is valuable because it helps us to become more articulate writers, critical thinkers, and informed consumers of information.
Yes, you probably will make more money over time without a degree, and it’s true that no student has ever remembered more than 30% of the specific facts they learned in school. However, I think that university is not about teaching us what to think, but how to think, and I don’t imagine that most people get jobs that meet this need or are inherently self-motivated enough to pursue this on their own. This mean that, for me, the cost of education has to be weighed against not only the debt load, but the societal cost of a nation of people who can’t think critically, have no grasp of grammar, and don’t have the experience of having been exposed to subject matter that they wouldn’t necessarily have sought out on their own, or have even known seek out. That said, most Canadians I know are outraged that our education system isn’t entirely free, as it is in much of Europe, so I’m guessing there might be some cultural difference at work here. Maybe it’s not the same in the US.
Excellent article! It is wonnderful to read about serious and relevant PF topics as seen through the clever and incisive humor that Robert exposes them through.
College is too expensive in the US. I came to Costa Rica and am getting world class medical education for about an eighth of the price it would have cost up north. and that is even considering that foreign students are charged higher tuition fees and that cost of living expenses is much lower over here.
If one is willing to save for a top education, why not consider investing the money where you will get a much better dollar for dollar return and take advantage of a globalized tendency in education standards while providing for a great experience that will enrich the independence of the person while excercising the cosmopolite world view that we should all have as citizens of the world?
There are programs like Kaplan that will aid students here get board certified and be able to practice in the US properly should they choose to. It is the case for med students, but I know from acquaintances that the same principle applies to many other carreer choices.
“JD ‘The Sly Cowgirl’ Roth” that has been the funniest rearrangement of letters I have ever read. The people at the coffeeshop are starting to look at me funny, but I just can’t help it. Thanks JD and Rob!
As a college professor at a large state school, I see a lot of students who shouldn’t be in college, and many more who shouldn’t be in college yet. I am teaching remedial skills at the college level, which is maddening. Stuff they should have gotten in junior high. But heaven forfend anyone tell these precious snowflakes that, or their parents. But there are not many good opportunities left for those who don’t have a solid trade or other skills. There are some flaws with the premise and argument in “Academically Adrift”, but it does point to a bigger problem – all of the “group work” and “team building” and “soft skills” that college professors are being told to teach because employers want those skills don’t seem to mean as much as old fashioned reading and writing.
We did a study on 529 plans and they are not all created equal in terms of the returns you can expect. With the worst ones, you are better off saving in a good taxable account and paying the tax. You also have more flexibility if the kid decides College is not for them and wants to start a business or….
http://portfolioist.com/2010/12/21/ranking-the-investment-options-in-529-education-savings-plans/
I don’t know that I would take the leap and declare college a big fat hairy rip-off. I think it depends on how it’s done. Most of my education was funded with scholarships and I ended with about $12k in student loans. I did not do the completely money-draining stupid thing of moving out of my parents’ home and rooming on-site. I did not go to a pricey, expensive college. I went to the local state univeristy, took a break in between, went back and finished (through two pregnancies). Personally, I didn’t feel there was much of a choice. Basically, most jobs wouldn’t even look at my application because I wasn’t a college grad.
Now, as for funding the college education of my THREE children, I’m doing a few things. First, I got a job at the local private university which gives its employees the wonderful benefit of footing the entire bill of their dependents once the employee reaches ten years of service with the school. Before that, the school gives substantial discounts that make attending the private university more affordable than the public. Second of all, I’m working on my kids’ educations as they go through grade school, and later middle, and high school. Being a scholarship recipient myself, I know what it takes to get your hands on some and it’s seriously NOT that hard. I completely expect my kids to work hard to not just get into a school but to also get money for it. Lastly, I plan on saving money once my remaining debt is gone. There is a tiny 529 for the kids which I hope to contribute to a bit further, but most likely I will be saving money in something like CD’s or whatever. Why? Because I understand two things: One, every child needs the experience of living away from home. Before, I used to think the best way to do this would be to ship them out to college. Now, I’m leaning more towards them doing some traveling preferably with a charity organization. Secondly, I am convinced at least half of our high school’s graduates are not mature enough for college. If they’re going to go, they should at least do so when they’re ready to not just experience it but truly appreciate.
As for myself, I’m not done. Working at the University means I get 100% tuition on my Masters. I plan on taking major advantage of this as soon as my youngest is a couple years older. Why? Not to earn more money or further my career but because I love learning.
My standing question is whether a 529 actually works out better than a taxable account. Yes, your money grows “tax-free,” but then you don’t get to deduct the college expenses when you pay them. So it’s really tax-deferred, where you’re effectively delaying the income into the year where you can deduct it.
In exchange, you’re taking that phantom deduction against money that would have been capital gains, rather than being able to claim it against taxable income.
Once you factor in tax benefits lost, I’m questioning whether a 529 actually wins out…. It may just be a hedge against the college tax incentives disappearing in the future.
Can someone explain what I’m missing here?
College (and grad school) is such an individual thing. I’m wary of anyone who says “Everyone should get a college degree!” just as I’m wary of anyone trying to convince me that it’s a total waste.
1 – You don’t have to pay the “average” price for your degree: For undergrad, I managed to get through without debt by having scholarships, working 30 hours/week to pay my rent and expenses, and having parents that were willing and able to pay the remaining tuition (about $4000/year for 3 years). The total cost was $12,000, less than even a cheap new car. I studied liberal arts and I’d agree I didn’t learn any huge marketable skill, but none of the jobs I’ve ever had would have hired someone without a degree.
2 – A lot of times you DO need a degree: My current profession (social worker) requires a master’s degree, period. You can’t be one without one.
3 – There’s more to life than money: I chose to go to a very expensive, very good grad school. Financially it wasn’t a smart investment because social workers aren’t known for making the big bucks. The extra $50k I spent isn’t going to come back to me in higher lifetime salaries.
So why did I do it? There are other benefits besides making more money. My quality of life is better because I’m better at what I do. I feel more confident, I’m in more of a leadership position where I work, and I get less frustrated than a lot of my coworkers who went to a less rigorous program and weren’t prepared for some of the difficulties we face.
The cost of my grad school education translates to a $300/month payment for 25 years (of course I’m paying it faster) which is how much some people I know spend on other things like cable. I think JD spends about that on his gym, and argues that it’s worth it to him. The same amount of money was worth it to me to get the education I wanted – it wasn’t a “waste” to me.
On the other hand, my brother is ridiculously good with computers and had a good job at a networking firm since he was in high school. The one semester he spent at college was a total waste of time and money since he isn’t a good book learner and was far too young and irresponsible to benefit from it. He dropped out and went back to his job making probably more than I make with a master’s.
i graduated from a 4 yr private university in ’05, thanks to very generous fund (not sure what type) started by my grandparents when i was born. i knew from day one i was able to go to a nice school without having to work or graduate with debt, and every time i count my blessings that is in the top three. i should add my parents aren’t rich, grams just hooked it up.
college itself was great. my industry doesn’t require a degree but it’s highly recommended, and the stuff i learned and contacts i made are still serving me well today.
i went into a very competitive and low paying industry (i said i was blessed, not smart). having all of the training under my belt and no student loan payments to worry about has allowed me to continue on my career path without defecting to a starbucks job- another thing i am desperately thankful for!
moral of the story: save for your kids education, they will thank you for it mightily one day!
From above: That rules out the Harvards of the world as they don’t give academic scholarships.
Actually, they do give out a lot of aid — and honestly, when everyone you’re accepting is at the top of the scale academically, it would be hard to choose out the scholarship students based on academic merit.
Since 2006, students from families with incomes less than $60,000 who are accepted to Harvard under our regular admissions policies have no expected parent contribution for their education. Additionally, families with incomes between $60,000 and $80,000 have seen their expected parent contributions significantly reduced. Financial aid is available to all students based on assessed need. Families with incomes up to $180,000 have an average expected parent contribution of 10 percent or less of their income and, as we continue to take individual circumstances into consideration in our assessment of financial need, many families in even higher income brackets also receive substantive financial aid.
http://www.admissions.college.harvard.edu/financial_aid/hfai/index.html
It’s a pretty nice deal, all around. There are a couple of other Ivies that do the same (the ones with the huge endowments).
@Jasmine –
The moral you found from that story is to have only one child? How about “when paying for a child’s tuition, outline expectations and enforce boudaries.”
Well, I went to two years of Community College and two years at a small state tech university, and got a rare degree that I loved getting that put me into a fantastic job (land surveying), and all with no debt. It’s definitely possible, because lots of my friends are doing the same. Just combine scholarships, have a definite purpose and aim before you go, and it all kind of falls together.
With college you get what you put in. If you know exactly what you want to do, and make use of the opportunities available (like getting to know the leaders in your field, getting research experience, etc.) you can get a lot of bang for you buck. The problem is that most students don’t do it. Many don’t know what they want to do, and for those who do know there’s pressure from the drifters to party on the weekends instead of putting in a few extra hours in the lab or writing another chapter of their novel.
I think if parents really want to give their kids an advantage in the workplace, the best they can do is help them figure out what they want to do before they go to college. If your high-schooler is thinking about being a teacher, help them clarify why they want to be a teacher, get them in touch with local teachers, encourage them to tutor on the side. If they resist doing these things figure out why. Etc. Help them dabble cheaply.
Preparing kids like this is at least as helpful as putting away money in a 529. A focused 18-year-old will stand out from her peers, and when she graduates she’ll be in the best position to start the career she wants.
We let our three kids know that they had to go to the college where we teach for the first two years (free tuition) and that after that we would help them as we could if they chose to transfer. 1st child: two years here, transferred to art school, responsible for $ 18,000 debt herself, we are paying the rest. 2nd child: SO NOT READY FOR COLLEGE at 18, joined the army, started college at 26 on the GI bill, won’t let us help at all aside from babysitting the granddaughter. 3rd child: 1 1/2 years here, semester off, transfered out of state, hated it, transfered back, two more semesters here, who knows what next, lives at home because of dog, changes majors every semester, responsible for $ 18,000 college loans. At least she can go to school for free, live with us for free, and work. All I am saying is this: whatever you plan, your children are all different and it is almost impossible to be equitable. And free tuition usually expires for children at age 24, so they can’t stay in school forever.
@Jasmine:
That’s an obvious moral to that story. Only have a second child. Skip the first one. Great idea.
I disagree. College was the best thing that happened to me. I think it just takes a bit more these days. I have a master’s degree, in engineering, and I have a great job.
@Pat (#3): You are worth more to any prospective employer, so your boss should pay you more. You should not wait until your performance review. Tell them now.
Not that this disproves the OP: but I somehow made it through 10 years of education with 0 dollars in debt.
Public Universities can be quite a good bargain.
After putting $ in a 529 for the past 6 yrs we’ve stopped and put the $ to the mortgage instead. My reasoning is if we do that we can have the house paid off by the time they go to college (and be able to pay a significant portion – if not all from the $ we used to pay the mortgage with). Also thinking about aid – the 529 is counted (as a parental asset) but house equity is not counted at all. Our other plan is to meet with financial aid people when our oldest starts high-school to see if there are any other changes we should make.
#40 Jen
I remember those FAF’s from way back in the 80’s when I went to college. My parents expected contribution one year was a whopping 32 dollars, which even then was far less than 10 percent of the tuition. That didn’t mean my college didn’t expect me to take out lots of loans to supplement the financial aid grants.
I have heard that some 50k schools like Princeton are aiming to have their students graduate without loans and that’s wonderful, but we’re still not going to pay 30k or 40k just because some financial aid guy thinks we could afford it.
If our kids don’t want to go to state school then they’ll need to work hard and get a scholarship to a school that does like Villanova or Drexel. We have told our children we are maxing out our contribution to their college educations at whatever state school tuition happens to be the years they’re attending college.
Could we retitle the first half of the post “Kids need to work harder to get their money’s worth out of college?” My undergrad was extremely expensive and I’ll be paying for that for a couple more years still. But I got a TREMENDOUS amount out of it – I am an excellent writer, analytical thinker, researcher and well-versed in several of the fields I studied, which contributed directly to my current career. If 36% of students don’t demonstrate advancement in learning, that is 1000% their fault and I feel not even a little bad for them.
I also disagree that there are no market price controls for college. They’re distorted by subsidies and loan structures, sure, but at the end of the day, a lot of people line up down the block to pay full price at expensive schools. The demand is there.
I realize this is primarily about the 529 and savings, but college is a financial AND mental investment. You need to put in both to get the full result, and a lot of people don’t bother with the latter half.
I went into the military straight out of highschool. It was `peacetime’, so there was no GI bill, but I fully contributed to a matching education fund that gave me $2 for every $1 I saved.
After my service, I took those health care admin skills (my military work) and worked 24-32 hours a week in that field while I went to a full time Health Info Technician program for 2 years at a community college. I worked my butt off, had the VA education benefit dollars to help, and graduated with my A.A.S./Certification without a nickel of debt. I paid cash for everything, and had no credit card.
After graduation, I moved upward in my career, and finished my B.S. using employee tuition assistance. I didn’t finish my B.S. until my mid 30s, but that didn’t matter because I had a lot of experience in the field and had that crucial vocational education and certification. Again, no debt, no student loans.
My husband has no college, but does have extensive OTJ training & certifications, and he now has many years of experience. He is regularly contacted by head hunters, and just accepted a fantastic new position with a company that is experiencing explosive growth. This is in the high tech telecomm field, which is experiencing a crucial shortage of experienced engineers & technicians. New company is paying for even more certification & training for my hubby.
You CAN find good work, good pay, and a great career without getting sucked into crippling debt. If you’re smart and willing to work hard, there are lots of options out there.
I think it’s fantastic if you can help your kids with school, but think outside the box – the 4-5 year university plan isn’t the only way to go.
Well, college was great for my husband and I, and we are fairly recent grads. I earned a BS in chemistry from a well-regarded state school. My first job out of college paid 50k per year. My husband earned his PhD in theoretical physics, and he makes 80k per year. I realize that personal anecdotes are not statistics (stats class was useful!), but hey, that’s what the comments section is for.
Needless to say, we could not have done our college labs in our garage! Particle accelerators aren’t exactly DIY. Organic lab would have looked like a meth lab! We both very much enjoyed the liberal arts portion of our degrees, but you get out what you put in.
We both paid for our entire education, room, board, and textbooks ourselves. We worked part time during the school year, over full-time in the summer, donated plasma, etc. I graduated with 16k in debt, my husband with 40k. Not too bad!
I’m not sure parents are doing their kids a favor by paying for college. When you don’t have to work for something, you take it for granted. My personal experience with people whose parents paid for school wasn’t positive. They were for the most part quite spoiled, and weren’t taking full advantage of the experience.
Private, out-of-state college is a big fat, hairy rip-off however your local public college and community colleges are expensive but worth it.
“Can someone explain what I’m missing here?”
This is regarding the question of whether it’s better to save for college in a taxable account and take a tax deduction on any tuition paid.
I think that’s a great question, and one I hadn’t really considered. I do know that, in our situation, my wife and I earn more than the maximum income for deducting educational expenses. Assuming that wasn’t the case in your situation, I’d wonder if there is a maximum allowed deduction in a given year, and whether or not un-deducted expenses can be carried forward. I might also be concerned that, considering the current economic and political climate, if educational deductions will be less generous in the future than they are now. Rules for 529’s, of course, could always become more stringent (income limits on contributions, perhaps), but it’s probably a safer bet that the balances already in them would be effectively “grandfathered” in some way.
Finally, it depends on your state, but like Robert pointed out, many states allow deductions on contributions. In this case, the 529 becomes a clear winner over other tax-advantaged vehicles (Roth, 401k) because state taxes are paid neither on the contributions nor on the distributions.
Wow, this is an excellent post. You really lay out the hard truth of the matter. I’m on the verge of finishing a Ph.D., but I’m still paying for the first semester of college! This post reminds me to get serious about planning ahead for my younger kids, but also thinking through alternatives to traditional 4-year colleges for seeking out an enjoyable, viable career. Thanks for the eye-opening post.
How about college here in Mexico? My husband goes to one of the top public universities in the country, which has tons of internships, business building programs and great resources… and palm trees haha
Cost? $200 a semester.
Not for everybody (obviously), but you’ll come out of it with tons of experience in your field and fluent Spanish.
I went to a well-known private university here in Mexico for about $6000 a year in tuition. Not sure how a degree here is seen in the rest of the world, but I’ve interned at several large luxury resorts (thanks to contacts at my school), I got a job right out of college at the largest travel agency in the country, and I have fluent, almost native Spanish thanks to all-Spanish classes… can’t beat that for a resume :)
Again, obviously not for everybody, but for me it has opened many, many doors.
I agree with the commenters who say that some students shouldn’t be in college — they’re immature, or indecisive, or simply not interested but there anyway because they’re SUPPOSED to be.
I had one year at age 18 and things went very wrong, but eventually and went on to have a newspaper journalism career. About 30 years later, after things went very wrong again, I went back to school. Didn’t pay a dime thanks to work-study, grants and scholarships.
Right now I’m choosing NOT to work a square job. But here’s the difference I would see were I to be applying: I got decent jobs in my 20s without a degree but were I to have looked for work in my late 40s (or now) without a degree I’d likely be in a world of hurt.
Incidentally, I myself saw students who were just goofing off. But I saw plenty who were working hard both at their studies and part- or full-time jobs.
And: I wrote about this subject for MSN Money, “Finish college with zero debt”:
http://articles.moneycentral.msn.com/CollegeAndFamily/CutCollegeCosts/finish-college-with-zero-debt.aspx
To the future medical student who was complaining about the “irrelevant” classes they had to take for their undergrad degree:
Those liberal arts classes and science are absolutely critical for you to be a decent medical doctor. I’m a prof at a med school and we don’t want tech-heads for doctors who can’t think their way out of an ethical conundrum, contribute to biomedical research, or communicate. If all you want a good paying job as payback for your hard work, please take your “useless degree” and go into some other profession.
Just like everything else in the world college is what you make it to be. At 18 I was sure I wanted to be a teacher. 3 years later I realized teachers what teachers made and that I did not want to teach! A year later I decided I mat like nursing. I went for a one year degree as an Lpn and loved it. Now at 28 I will graduate with my Bsn in July 2011! I went from an Lpn to Rn and now Bsn. I think an educatation is a valuable tool but must be customized to each person. Because I switched majors big time I have $15,000 in student loans current licked in at 4%. We just paid off our credit cards and now plan to attack the student loans. I currently reside in Florida and work for a nonprofit making $60,000 before taxes. After my Bsn I will get maybe $2000 more at my job, but more doors will open for different positions elsewhere. Now my husband has his class a commercial truck driving license, class was a month long and $5,000. After 4 years doing it he makes the same amount I do. So college can work for some and may not work for others.
Side note I have a friend with $60,000 in student loans and she now has a bachelors degree in arceology which she has yet to find employment with
I am astounded at how much some people are saying they went into debt to get their undergrad degrees. I know lots of young adults who recently finished college with only a little debt.
There’s lots you can do to minimize college costs. State Univ’s offer great value. 2 years of community college, working part time during the school year and full time during the summer, and/or living at home, does a huge amount to keep your costs down. Also, “study abroad” quarter/year is a pricey luxury, and is not by any means a necessity.
I wish people would stop bashing college in general, when what they really want to say is they overspent for their degree.
I agree with Life and My Finances. It is a double edged sword. The thing is, professional companies like to hire professionals. What I don’t think is right is how much you Americans have to pay for education. It is like 4x the cost Canadians have to pay which makes it so hard to afford.
My oldest is in Grade 11, so this is a hot topic in our house these days. This is what I tell both our kids about higher education: There are two reasons to go to college/university – because you want to take something you love, or in anticipation of going into a specific career that requires it. Runner up reason – making contacts in your chosen field. Reasons that don’t cut it – the elusive and mysterious degree that guarantees a good job, or because you don’t know what else to do.
Otherwise, I advise them to learn a trade and/or the family business (which would enable them to run their own small business).
FWIW, my biggest regret is not finishing college, although I did listen to Good Will Hunting and learned a hell of a lot as an adult about business, investing, and real estate, and it only cost me a dollar fifty in late charges at the public library.
To #51–be careful with the house payoff. True, it’s not considered on the FAFSA, but house equity is most definitely considered by private colleges. Uh, they’re probably on to the fact that some of their applicants come from families with multi-millions in house equity, don’t ya think?
The FAFSA only determines eligibility for federal aid, and is only the “last word” when applying to state schools. Otherwise, the forms and formulae from the College Board are used for private financial aid.
I think it’s worth voicing that it IS still possible to graduate from school without loans. I went to a private 4-year college and graduated (in 2007)with no debt and without my parents picking up the bill. It takes a lot of work but there are scholarships out there if you’re willing to work hard and write a lot of essays!
I’ve often wondered what I would advise my kids to do (if I had them). I don’t know if I would encourage them to take on extreme debt in the name of a college education, but I also feel that college is a very important and formative stage of life. I hope if I ever have kids I’ll be able to foot at least the majority of their college bills, but they need to earn that, too. I saw a lot of my classmates taking advantage of mom and dad’s generosity, and I think those are often the kids that don’t get much out of college.
I agree with some previous commenters – I wouldn’t trade my college years for anything. Even some debt.
One way that I saved half a year’s worth of tuition costs was to take Advanced Placement classes in high school (math, chemistry, english), and my local community college gave me college credit for them. I was able to transfer them to the private university I started attending sophomore year, and that combined with a couple inexpensive online courses I took over the summer allowed me to graduate a semester early.
Also, my husband’s sister has discovered a great way to go to college for free (although this would probably only work if you’re homeschooled). She’s sixteen, and her local community college allows kids under 18 to take classes for free, as long as they take a qualifying test. Because she finished high school so quickly, she’ll now get almost a year and a half of free college education.
@Coley, 57:
Thanks — I hadn’t considered the income cutoffs (we were nowhere close when we were still paying for my wife’s grad school tuition). I’d love to be above those cutoffs, and might well be by the time our kids are in college. Also, given the economic climate, they might tighten.
Also, I hadn’t considered the limits on the deduction (first $4k of expenses). It probably makes sense to save the majority in a 529 plan and hope that the balance is deductible at that time.
I do not agree that college is a “rip off”.
Saying college is a rip off is like saying houses are rip offs. Depends where you bought, how much you paid and what you do with it.
For myself and many other people the time and money put into college is very well worth it. My degree was a bargain considering what it got me.
For some people college is not a good financial choice. That doesn’t mean its a rip off in general.
Some colleges are certainly not worth paying full sticker price. Some college degrees are not going to pay off well financially. (Bachelors in Psychology comes to mind) Some people would do better starting a business or pursuing a skilled trade. Some people don’t graduate or take 6-7 years to graduate but thats because of their own actions.
Colleges offer different educational experiences and most of us do not know how to shop for a a college. I got lucky. I know many people today that did not get lucky.
For example, I attended a community college. My classes were small, my instructors knew my name, instructors taught, and the college provided multiple learning labs for support. I then transferred to a small private liberal arts college. My instructors were once again required to focus on teaching. Classes were small, student learning was a focus and I received a great education. For my instructors, research and publishing came after teaching.
Today I teach at a community college that is a feeder school for a state university. When students transfer to the university, they are often one of three or four hundred students in class – and the class is being taught by graduate students! One of the disadvantages of state schools is that much of their focus and mission is on research (not a bad thing) but teaching students is often a secondary notion and students can be seen as revenue stream.
This article asks us to question the value of a college education – I wonder if there is a follow-up article that would help folks determine how to chose a college?
Yeah, I gotta disagree with this author. GRS has always been about how to pursue your goals, not preaching about what those goals should be.
Getting the most out of continuing education is a matter of career choice and self-discipline. If anything, you have far more control over the ROI than you would over a faceless mutual fund. There are certainly other educational options that people should be aware of, but I wouldn’t rule out college just because some people screw it up.
Just in case anyone was wondering: My own position is that in general college is a great investment. I realize this isn’t true for everyone. But college graduates tend to make more than those who never go. So, while I know college is expensive, I don’t think it’s a rip off. (Plus, I’m a huge advocate of pursuing scholarships, which is one way to make college more affordable. Both Kris and I managed to pay for most of our schooling through scholarships. If your kids work hard when they’re young, college can be less expensive.)
My husband joined the military and started his college degree while he was enlisted. He worked in the IT field while he was enlisted and got a job as a contractor doing the same type of work once he was out of the military. He was able to finish his degree in IT Management while he was a contractor using his GI BIll and tuition reimbursement through work. He didn’t have to take out any student loans and we are grateful for that. Paying for college would have been a burden if it weren’t for my husband’s military service.
I didn’t finish my four year degree, but while I was enrolled, I worked full time and got as many scholarships as I could. I left school with less than 5K in student loans.
Our son is almost 2.5 years old and we have another baby on the way. We aren’t saving any thing for their college years and don’t plan to, and we honestly do not feel bad about it. Saving for our retirement takes priority over college savings. There will always be ways for our children to get scholarships, grants, or loans, but we will all suffer if we haven’t saved enough for retirement. We do plan to help them pay for school as much as we can once they are enrolled, but we don’t have any specific funds set aside to do so. They will also have the option of joining the military and starting college and a career that way.
@ Christy;
Ha ha, I was a graduate student instructor– I was officially a teaching assistant, though the students called me “professor” because they had no contact with anybody else. I taught on my own, wrote the exams, dealt with their personal problems during office hours, all with no support–there was supervision, but only to make sure I did things according to plan and the department’s methodoogy. I’d like to think I did a nice job, but juggling teaching and my own classes and research was very rough.
Anyway, while involved in negotiations to raise TA salaries, I was told candidly by the Provost (a very nice man, and a straight shooter) that the majority of graduate students in the humanities were admitted to the university so they could teach all the low-level courses. Yeah.
That reminds me of The Profzi Scheme
Ha ha ha ha… yes, that’s academia today.
I teach at a hideously expensive private liberal arts college, and I can say that I too see a number of students every year who are wasting their parents’ (or their student loan) money. Kudos to Elizabeth (#14) who suggested taking a year off, and to the poster who suggested a couple of years in the army, before college. If you come in knowing what you want to get out of it, focused, and disciplined, it can be worth every penny. If you think you are just there to drink and mess around, you are wasting EVERYBODY’S time and money. And thanks to the doctor who wrote in in favor of critical thinking skills. They are crucial.
Oh, goodness, people think about what you want and how you are going to get it.
Hubby has degree at 22, engineering, makes six figure income, retires at 57, pension, health care, you name it, he gets it.
I goof around, don’t get degree, do get culinary certification, make 22 thousand tops (in the 1980s) Flash forward, back to school complete degree, double income immediately and get retirement and other benefits.
Two kids, wonderful kids, smart with scholarships galore, both go to state university, stay home first year, then into dorms and both graduate without debt, having worked wonderful jobs on campus plus resume shining internships. We saved for both, putting away close to seventeen thousand dollars for each and my son will graduate with ten thousand still in savings. Daughter going for her associates degree in accounting technology, which will open up management positions at her work.
Save for it, test and see what skills they have in high school, promote moving towards independence and teach them from day one that everyone has a purpose in life and you are meant to find it and polish it and make your world a better place.
Why is it, that every time paying for college or university comes up in a discussion, people immediately talk about how they payed for it, and anyone who got help from their parents just wasted it all away?
There’s this weird mentality that those who worked for it must have benefited much more than those who had help. That they worked harder and deserve their degrees more.
I’m not sure why this is, or why people keep insisting on it. I’ll admit, I had some help from my parents during my undergrad. But I also had many scholarships. I did work part-time as well as a couple of semesters of co-op. I graduated with no debt.
I’m working on my PhD right now (I did a Masters first – I’m in Canada, so a masters is a little different then in the states). I haven’t had a single bit of help from my parents since I started grad school. And I’m still debt free. And I have savings and an RRSP.
I don’t think I valued my education any less than someone who had no help from their parents or any more than someone who has never worked. I have a friend who had no help, and still got through debt free and got a great education. I have other friends whose parents helped and they all did super well. I have friends who got student loans, took out the minimum and were careful and graduated with as little debt as possible. And I have friends who wasted every single cent of their education – whether it was the student loan or their parents paying. I believe attitude matters more than the source of funding.
I fully agree with the comments before me that say university is not for everyone. I wish people would realize that going for a job in trades, or diplomas are just as good alternatives. If you hate what you’re studying, it’s not likely you’ll do well and want to do it for the rest of your life.
But, if you’re eager to learn, university can be an awesome place. And as long as your eager, where the funding comes from should not effect how well or what you can learn. The most it should do, unfortunately, is limit some of the opportunities you will have.
bwt, really cute pic of JD and Kris!
Sorry if this has already been asked or addressed previously, but….Can the beneficiary pay for school via loans, and then AFTER graduation, use the 529 money to pay off the loans???
The reason I’m asking is because I know several coworkers who have saved for their kids education, and their kids take it for granted…not thinking twice about the fact that they will now be able to save & buy for a home at least 10 years sooner than their debt-laden peers. Wouldn’t it be nice to secretly save for your kids education, make them think they’re going to have to pay off loans themselves (so they do all the loan calculations/repayment plan/etc etc themselves, and budget for payments once they land the job, and realize it will take forever to have money for a house downpayment), then *surprise!* you can pay it all off for them, and they will have a sense of appreciation & gratitude for what you have done for them?
“belly of joy”? LOL!
I would have made a great electrician. However, my M.A. degree and I also make a pretty good secretary. And I don’t have to crawl under anybody’s house or up any power poles.
This is one of those debates that, even in my own head, never ends; the control freak in me says that degrees should be priced according to the average first-year salary that the average graduate is offered. The socialist says that the first two years of college should be free, because hardly anybody knows what they want to do for a career at age 18 and at least society will benefit by having a lowest common denominator of education that is not *abysmally* low. The free-marketer keeps her mouth shut because capitalism, in the case of higher education, has clearly run amok. The skeptic says that the system should be left alone and it will either collapse under its own weight or be reformed from within.
In any event, I agree with Robert. If you plan to have kids, plan to save for their college education … but not before you save for your own life after work.
I didn’t have the luxury of having parents to pay for my college education. I paid for it myself using a GI bill. So forgive me if I find it odd that the majority of parents today feel like they are obligated to pay for their kids college education. Is it a guilt thing? I made out just fine with no college debt.
Graduating debt free from college can be done. My siblings and I all managed to graduated debt free with minimal financial support (but lots of encouragement) from our parents. It was not easy, however I think we are all grateful that we don’t have any college debt.
#1- Lived at home at went to community college for 3 years and worked to save money. Transferred to small private school with some scholarships and worked part-time. Did extensive language training abroad. Graduated in 6.5 yrs.
#2- Attended good state school on full-ride scholarships. Worked part-time during college for expenses and had also worked 20-30 hrs per week in HS to save money for college. Took classes at community college in the summer. Traveled abroad for 6 months. Graduated in 4.5 years.
#3- Attended good state school on a combo of scholarships, grants, and working 30 hrs per week. Graduated in 4 yrs.
#4-Went to good state school but lived at home. Worked 30 hrs per week (also saved up money by working 20-30 hrs per week in HS). Graduated early in 3.5 years from AP classes taken in HS. Was able to land a job just before the economy tanked.
My advice to future college students:
1) Take as many AP classes as possible.
2) Take community college classes in summer.
3) Work to save up money in HS.
4) Apply for all the scholarships and grants you can find.
5) Don’t be afraid to go to a good state school, but make sure your program has a good reputation and hiring rate of graduates.
4) Work part-time job during college.
5) Choose a degree with tangible skills in a job market that is currently hiring (I think this one may be the most important).
6) Do internships in your field (even if you have to work for free).
6) Live at home during college if needed (or at least for a couple years to cut costs). This may mean living at home during the summer and taking a few community college classes so that you can graduated early.
It may seem tough to balance work and tough course load. It is. However, balancing a difficult schedule during college instills invaluable skills for life.
@Jen re: Harvard’s “financial aid”
It is important to remember “financial aid” does not mean “you don’t pay it” it often means “student loans”. I just graduated and I got “financial aid” each semester and that simply meant “sign here for a loan”. Scholarships happen, it is true, but they are their own thing, often separate from your financial aid application.
My brother is a Junior now majoring in Mechanical Engineering. So far it has been affordable because:
1. He took as many classes as he could in the local community college. (He is now attending university)
2. He continued to live at home with my parents and eats at home.
3. He bough used books, calculators, and other required materials.
4. He continues to applies for grants and scholarships.
5. He drives a reliable low mileage car.
I personally cannot imagine anyone spending more than an entry-level salary for college.
I was blessed as my parents paid for mine 100% but it was outside the US.
Well we are doing things a little different. We are paying for the last two years of our son’s college education. Even though we had no reason to believe he may not put forth his all, my husband & I decided to take no chances. This way we feel he will definately graduate with a degree. We have seen too many of our friends children start college & drop out for various reasons.
That said our son is attending a private college, where he received a very nice academic scholarship. He does play a sport for them and if one of his grades drop to a C he is required to get a tutor to continue playing. There is no way the local university within 20 minutes of our house would have cared about his grades like this. When people hear our son attends a school two hours away when we have a very reputable state university in our backyard they are in shock. However, because of the scholarship our son will graduate from a well known private college with student loans way less than one year’s tuition at that local university.
YES, with college as with so many other things in life YOU GET WHAT YOU PAY FOR.
My husband did not attend college, but has a trade. I entered the work force after high school, worked for same company for 14 years
making my way from front desk entry clerk to marketing management, but still was laid off in September 2008. I returned to school & received an Associates degree & have been able to enter the work force at the same pay level that I left it. Sooooo lucky.
We have always taught our son good money making skills, it will be interesting to see how he makes out in his life.
I’m still paying off my student loan debt. It is some of the last of my debt, and carries a fairly low interest rate. Although it is burdensome, and one of my top priorities to pay off, I would not have my current job without having gone to college. For me, it’s been worth it. But for others, the expense has not provided a good return on invested (and leveraged)capital.
The BLS did a study recently of average salaries and unemployment rates for Americans with different levels of education. It makes it clear that education is extremely important.
But there are ways to soften the blow. Online courses, trade schools, junior colleges, and state schools can save students a bundle. Not to mention little things like working while in school and renting your text books. If you control costs in college (like in life) you can do it on a budget, and reap the benefits.
Pat
http://compoundingreturns.com
Son- Four years at military school. Took every classes he could and graduated in the bottom part of his class with many, many hours. Now he is flying with people who did high school to flight school. Making good money, not in debt – will return for a Phd in Physics or a certificate to teach high school if he is “downsized”.
Daughter- Four years of college- paid for mostly by moi. Thirty credits. Amazing at home mom after a stint in the Air Force. Maybe will use her GI BILL- probably not.
Son in law- linguist for the Marines. Working as a contractor making more than any of us in the family ever made. No college. But what a brain.
BTW- Government would never hire him to do the job he does now(for the government) without a degree- which is downright silly! They trained him. He wants to work- even for the lower salary- but they won’t hire until he has that famous BS. It is really BS:>)
College- not a total waste if you go into a “hard science”. Otherwise….just necessary if you are in a women’s profession (social Work, teaching) or high paying one (law.medicine). Total waste for most others. Finding a good mentor is much more important in most fields.
BTW- @80- my future daughter in law’s parents did exactly what you said. They paid off all her loans last week! It was a wonderful gift. She was frugal throughout college because she was taking out all the loans and tracking the debt.
I would agree with most of this article that college is a rip off, but a bachelor’s degree is required for most jobs. Our current unemployment rate is around 9% with it being 4-5% for college grads. If costs are an issue, why not consider an in-state junior or community college. You can have lower tuition, be in smaller classes, and not have teaching assistants teaching your 100-200 level classes. And unlike BYU once in a while we take a tour group into a student show room who is shacking up with his boyfriend/girlfriend(I don’t think those visitors ended up attending). (Author bias: I am Dean of Enrollment Management for a junior college in Colorado so I am a little biased in my view)
As much as I hated my parents for pressuring me to study subjects that would be useful in developing a career, they were so right to do. Don’t let your kid major in comparative lit or something unless they have a concrete, feasible plan on how to support themselves upon graduation. They have the rest of their lives to compare lit or study women on their own time/dime.
If I had a child, I would be encouraging him/her to go into health care or a skilled trade.
@80 Flipping through the internet, if it is correct, the 529 can only be used for education expenses within one year. So no old loans.
I’m one of those kids who resents their college education. I had a great time in college, and met my husband. I worked hard through school, didn’t slack off or party, and held a job all four years. But I went in with the idea “You get through high school with good grades, you get into a good school, and you get a good job when you get out. That’s just how it works.” That’s … not at all how it works, and I really wish I knew that before wasting my time on a History degree. I love history, and I love what I learned, but I don’t love the fact that I’m now working at Walmart trying to figure out how the heck to get myself into a career without a complete do-over of college and adding to my already huge debt (which I was told wasn’t a big deal, student loans are ‘good’ debt).
I went into college with a complete lack of understanding of how college worked, how the real world worked, and what signing my name on all of those loans meant. Sure I’m kicking myself now, but I had no idea there was anything wrong when I was in school.
So all of you who got through college with no debt and it lead directly into a good career – I’m jealous.
Those of you who are saving for your kids – Please make sure they have a realistic view of college, and a plan. Even if they tell you “Yeah, there’s lots I can do with that degree, it’ll be fine.”
Laura said:
“@Jen re: Harvard’s “financial aid”
It is important to remember “financial aid” does not mean “you don’t pay it” it often means “student loans” ”
I think Laura is right for many private schools that a lot of the financial aid can often be loans. But I don’t think that is the case with Harvard specifically. Harvard is an exception. Harvards web site says “students are not expected to take out loans”. Harvard’s endowment (pile of money) is so large that they can afford to let the poor / middle class kids go virtually free.
But Harvard is an exception. Most other Ivy’s are very generous with aid and many also waive tuition for low income folks. But many other private schools pile on the loans a lot more.
I had the choice between a private school and the state university and the private school would have ran me $4k a year more in loans just for the 1st year and that was a couple decades ago. I chose wisely and went to the state school and got a better education too.
I think college is needed for most professions these days but people have to be smart consumers. I’ll admit, I wasn’t that smart of a consumer when I went into college. I actually had loans my first year and when I got a check in the mail from the college for more then the loans, a financial aid person told me it was “free money” and I could do whatever I want with it.
Luckily I wasn’t that stupid and paid the loans off right away. After my first semester though I was able to figure out the system. After my first year I was able to max out my roth ira, buy a flat panel tv and xbox 360, with only a summer job and no debt. I didn’t even put much effort into it, just applied for the “low hanging fruit” scholarships and grants.
Also my sister did well enough in high school to get into an Ivy League school and they just gave her a full ride, she’ll have no debt when she graduates.
If I had to take out loans(especially six figures worth!) I would not have went to college until I could find a way to pay for it or find a cheaper alternative.
@ Valerie –
Hello, fellow Humanities refugee! The easy way out of WalMart would be getting a teaching certification, but if you don’t like working with brats, forget about it. Still– some school districts will help you pay for your certification credits or employ you while you work towards them. You might have to relocate, but hey, might be worth the trip and you get to see another part of the country.
Or you could go to gradschool on a pile of scholarships and study library science– good job prospects as I understand. I have a friend who is an archivist. You won’t live like a Hollywood star but you’ll probably get a middle-class paycheck.
Non-schooling alternatives: become a freelance writer. Your knowledge of history will give you good perspective for all sort of things. Again not guaranteed millions, and you’ll have to hustle a lot, but it’s doable.
If you like more extroverted environments, you could hire a bunch of actors and run a Renaissance Fair, ha ha ha. OK, maybe not, but the trick is to think creatively about the possible application of your studies.
I have an MA in “Latin American Literature”, which qualifies me to be a Spanish teacher at school (“hola, mi nombre es paco. ¿dónde está la biblioteca?). I hate that stuff so first I applied my research expertise to do freelance research for documentary filmmakers. The pay was no good (most people don’t value research), so I used another skilled I had picked up along the way and started making websites. I grew to the point that I needed to hire people and become a manager, and I stopped enjoying that (I’m not a people person), so I took the video side of the website operation and grew it into videography, then filmmaking, where finally things are starting to happen. The literature part comes back to me when trying to construct a good story– in a screenplay instead of a video, or with pictures instead of words when editing. PHew! Long story, but if you keep looking, you’ll find it.
@El Nerdo – Thanks for the words of encouragement! It helps :)
I am thankful that while I am working at WalMart, I’m working at WalMart as a cake decorator, getting experience and practice at something that I wouldn’t mind turning into a career. I’m actively looking at ways to get myself into the ‘real world’ of bakeries.
I also love research, and tend to do it in my free time, so I wouldn’t mind going down that road either.
Someone said that liberal arts majors are better thinkers from the comments in the first page. I disagree that liberal arts graduates are much more intelligent and well prepared than those who major in professional studies (accounting, programming, nursing, medicine, law, etc.)
I respect the liberal arts, I think they’re important, however many of those majors can be learned by reading books at the city library such as art history. You should learn how to think critically before you go to college. That’s something my parents taught me. Its not an institutions responsibility to make people into critical thinkers.
From talking to people, to watching the news, I’ve learned that it doesn’t pay to be a liberal arts major. Its up to you to become a strong thinker no matter your major.
Grad school is filled with dozens of students, and while the grads from graduate schools are numerous, the jobs are very few. For the most part you should major in something practical and specialized.
Its very difficult to market a liberal arts degree, I also want to say that the liberal arts degree is based on the 17th century college model.
Which is fine, we should be well-rounded, we live in a very complex world, its important to know about various things but also come out of college with practical and applicable skills.
We live in the 21st century. No one in the real world cares if I know the difference between the Gothic Art and Greek Art or what happened to Alexander the Great’s empire after he died.
People in the real world want to know how you can help their business, how you can make money for their clients. They want to know if you have the skills to be a CNA, a nurse, a doctor, they want to know if you have the skills to defend them from a lawsuit. They want you to solve a real problem that they have.
They want to know if they can save for their kids college and pay off their mortgage at the same time. I’m paying my way through college, I’ve sent my application out there, I’ve interviewed for jobs, I know what employers want.
I think kids that have to work for their own college education are less sheltered and more realistic about the realities of the world and what employers want. I also think its partly the colleges fault for telling kids that any degree is fine.
Please understand I’m not saying that liberal arts degrees are useless, an education is NEVER useless. And yes liberal arts majors can make a living with their degrees but it seems to take them longer, either that or they have to pursue some other marketable skill on the side until they can work in the field they want.
But a professional study degree does put you to work immediately especially if you need money right away, and people do both. Sometimes people work as nurses or accountants until they can work as a history professor or until their artsy business picks up.
However I still disagree that liberal arts majors are intelligent than professional studies majors. There’s a certain perception among academic types that they’re somehow better than people that work outside of academia and that’s not fair.
That’s not a fair thing to judge another human being on.
btw J.D. One day you should cover CLEP testing, they’re standardized tests given out by the college board, available at most community colleges and state schools, if you pass the test, you get credit for the class. Its less expensive, and mostly available for general courses English, Sociology, College Algebra, etc.
Its more affordable and might help you graduate a semester early.
http://www.collegeboard.com/student/testing/clep/about.html
@ Valerie– You remind me of a friend/intern we had here a year ago. She worked at decorating cakes while studying history! Now I’m not sure exactly what she’s doing (I’m not a facebook person) but she’s more artist than academic– she’s great at drawing, sketching, etc.
If you like research, it’s a lot of fun when you find an interesting subject, but there is not a lot of money or jobs– highly competitive field in academia/museums/etc. if you pursue a graduate degree, make sure you get fully funded or else you’ll be inviting doom. I know a person who is over 60 and still paying student loans for 2 Master’s degrees– yikes!
Anyway best wishes & keep looking. Speaking of design (cakes) and history, here’s a woman who makes history-inspired jewelry:
http://www.washingtonpost.com/wp-dyn/content/video/2010/06/23/VI2010062302783.html (might require registration and what not)
@Jaime– yes, excellent points. And you are really are going to enjoy this video:
http://www.ted.com/talks/ken_robinson_says_schools_kill_creativity.html
I meant to edit my post above but I got locked out. I meant to add that I do care what happened to Alexander’s empire after his death. Life without that kind of knowledge would be extremely dull to me– almost worthless. If all we had in life was practical knowledge, I would have died of boredom long ago. Anyway, my point is that I’d rather earn less but enjoy life. There are things that money can’t buy and the delights of knowledge are priceless when you treasure them. Much better than a stupid new car. But I agree with you, most of the world uses the humanities as a snotrag, won’t pay a dime for it, and would rather watch Dancing with the Stars than read about Greek art (they are missing out on a great pleasure, I think, but that’s their business).
The important thing is to choose the right degree. I got an engineering degree from a school with great co-ops (paid internship). I got 1.5 years working experience in a 5 year program and came out with my M.S. My parents and co-ops (some paid over $20/hr)helped me out with 4 out of the 5 years of school so I only had to take loans out for year 5. That will be paid off next year (getting married this year so we made the decision to enjoy that instead of paying off the loans).
There is a reality here that is ignored. Not all “college” is created equal.Perceived quality of institution matters.
A Harvard JD equals lots of debt, but also 160K a year in big law. A third tier law school equals lots of debt and no job prospects in a saturated field.
This is the same for Liberal Arts. Investment banks and consulting firms line up to hire top tier (Harvard, MIT, etc) college grads, regardless of Major. It is accepted that these kids are intelligent and hardworking, and assumption that can no longer be made about most college graduates, esp in the humanities.
Either attend an elite institution or learn a real skill in college like engineering, IT, Accounting…the options are endless. No one cares about your Masters degree in Sociology that you got from University of South Florida.
It is just reality.
“The reason I’m asking is because I know several coworkers who have saved for their kids education, and their kids take it for granted…not thinking twice about the fact that they will now be able to save & buy for a home at least 10 years sooner than their debt-laden peers. Wouldn’t it be nice to secretly save for your kids education, make them think they’re going to have to pay off loans themselves (so they do all the loan calculations/repayment plan/etc etc themselves, and budget for payments once they land the job, and realize it will take forever to have money for a house downpayment), then *surprise!* you can pay it all off for them, and they will have a sense of appreciation & gratitude for what you have done for them?”
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I think this whole concept is a little bit extreme. I think there are many people who have considerable resources and still manage to teach their children to appreciate the good fortune of their situation. In the end, that’s probably better than lying to them about how poor you are.
My kids live in a nice, comfortable house. It’s warm in the winter and cool in the summer. The refrigerator and pantry are always stocked. Many kids in the world don’t enjoy this standard of living, so it’s fair to say that mine, at their young ages, take it for granted.
I’m not sure I should pretend that I can’t afford to feed them dinner for the next couple of nights, so they can go through the process of thinking about what garbage cans they should scrounge through, or what neighbors they should beg for food; and then suddenly POOF, have a few hot pizzas delivered as a nice surprise and say “Eat up, and at least now you have some gratitude for what I’ve done for you.”
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“I paid for it myself using a GI bill. So forgive me if I find it odd that the majority of parents today feel like they are obligated to pay for their kids college education. Is it a guilt thing? I made out just fine with no college debt.
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Like you, I paid for my education myself through the military, and from the experience I know that the service is not for everyone.
As hard as it is to believe, some of these modern-day, crazy, over-indulgent, helicopter parents of spoiled kids seem to have this guilt-induced feeling of wanting more opportunities for their children than what they enjoyed themselves. We’ve certainly never seen this before, so I shudder to think what the world is coming to with this next generation.
I find it pretty amusing that the person who wrote this article and made sure to emphasize that college is a rip-off with BIG CAPITAL LETTERS still has multiple kids in/planning to go to college. Perhaps that’s the best evidence that “college” isn’t actually the rip-off he says it is? Someone who is giving investment advice probably wouldn’t make an argument for a completely worthless investment, would they? If they did, could you trust their advice in the first place?
El Nerdo-Yep I’ve seen that video on Ted, it was awesome.
LEARNING comes from within the individual.
Seeing no increase in education/learning amongst college students after 4 year education is pretty expected because only some people actually have the desire to learn something and be useful.
I am taking a Spanish class after work, and have the most annoying classmate (she is very young) and seems like her attitude is
“Okay I’m paying you Money, now MAKE me SPEAK SPANISH”..
That’s a learning FAIL.
I’m glad we’re starting to see articles like these questioning the “default” assumption that you must go to college and get into tons of debt. I have mixed feelings about college, but I was lucky enough to have parents who saved for me and forced me to work the summers for my spending money.
Isn’t it amazing that whatever the government seems to push and subsidize doesn’t end up being all it’s cracked up to be? We had the mortgage bubble and now it seems the college degree bubble is upon us.
I would have loved nothing more than to take a year off out of high school. As it is, medical insurance required me to stay in school FULL TIME in order to pay for my twice-a-month visits to the doctors offices. I worked, went to school full time, and couldn’t get time off to recover from Mononucleosis, lest I lose the health insurance that I needed to cover said mono and a few other things. IT’S RIDICULOUS.
(I haven’t read all the replies, so someone else might’ve already made this point.)
Harvard, Princeton, and similarly endowed Ivy League schools are REALLY fantastic deals. They give pretty generous grants, not loans, so students *do not graduate with debt* (at least debt from college). I love this. The fact that they don’t give academic/athletic scholarships (as #28 complained) is kind of moot, because they give an enormous amount of need-based aid, and their aid (last I checked) was better than what at least one state school was offering. In addition, I think they’re pretty good deals for college in general–I went to Princeton, and the ‘networking’ opportunities are huge.
I hate running into the stereotype that the Ivies are expensive. At least several of them are shockingly meritocratic and affordable (hooray alumni donations…)–at the end, they’re almost always cheaper than state schools, and the education/experience is arguably better.
Also, Princeton at least encourages students to take a year off to travel and gain some world experience before starting college. Princeton also has a lot of ‘bridge’ employment and internship programs to help students find interesting and socially beneficial jobs after graduation.
I did my PhD at a big, famous state school and was really sad to find out how expensive it was and how few opportunities there were, especially for the smart/ambitious kids. It seemed really easy to get lost in enormous, dumbed-down classes, and there wasn’t enough interaction with alumni and professors to get a leg up in post-college life (or even explore the options).
Last point: Isn’t there a nice loan forgiveness program for people with direct federal loans? My sig other is using it to pay his med school and undergrad loans for 10 years, after which the balance is forgiven. The only rule is you have to work at a nonprofit, which isn’t necessarily hard.
I just wonder if more people would be better off getting 2 year associate degrees or going into trades. Remember the trades can never be outsourced.
Since college is getting more expensive, will students and their parents choose these options more? I do wonder if articles like these are part of the problem.
If people are willing to pay for outrageously expensive college tuition then that sends a message to colleges that says that the public is fine with paying these high expensive prices and they try to keep raising tuition to see how much higher they can push tuition each year.
I think journalists and bloggers need to start exploring other options besides college.