Posted on 06/23/2014 8:40:28 AM PDT by SeekAndFind
With high school graduation season out of the way, countless families are facing the hefty price tag of sending their children to college. Over the past five years, tuition rates for private four-year colleges have risen 14 percent, while rates for public colleges have risen 27 percent. If you look back thirty years, tuition has risen a shocking 1200 percent. There is plenty of speculation about the reasons for these rising costs, which have outpaced inflation for decades. But far more important to millions of parents is how to minimize and manage them.
According to the National Center for Education Statistics, more parents are going into larger amounts of debt in order to finance their children’s education. Since 1999, the number of parents taking out loans for their children’s college has grown 60 percent, while the amount of debt they are incurring (adjusted for inflation) has increased 40 percent. For students who take out their own loans, about 10 percent will default the first year after graduation, according to the Department of Education. According to the Institute for College Access and Success, the class of 2012 owes and average of more than $29,000.
Entering adulthood with this kind of financial burden has caused many young adults to delay important stabilizing milestones like marriage and home ownership. To address this growing crisis, President Obama has asked Congress to pass a bill intended to bring relief to borrowers. Unfortunately, members of the Senate’s education committee report that the bill would raise income taxes more than $72 billion dollars while providing an average savings of less than $40 a month.
Regardless of what happens with the legislation, parents of new college students are faced with some formidable dilemmas. Should they pay upwards of $60,000 a year for their child to attend an elite university, or should they pursue a more affordable option? Should they borrow the money themselves, or should they send their children into the world loaded with debt?
These questions have no easy answers. For instance, children whose parents finance all or part of their college costs have much higher graduation rates than those who must shoulder the burden entirely on their own. A 2009 Public Agenda survey of recent graduates and dropouts found that 63 percent of graduates had gotten at least some financial help from parents or other family members, while just 42 percent of those who paid for everything themselves actually completed their degrees.
But there is another side to the story. According to research conducted by Professor Linda Hamilton at the University of California, Merced, larger financial contributions from parents are actually associated with lower grades. The short explanation is that students whose parents pay all their bills socialize and party more. Hamilton noted that this has a disparate effect on the students’ long term outcomes, depending on their socioeconomic status. Wealthier students with mediocre academic records are able to find jobs based on their parents’ personal connections, while lower income students—whose parents have sacrificed much more to send them through school—find themselves struggling to find employment.
Interestingly, Hamilton found that the negative effect of parent-financing on student performance does not carry over to the Ivies or other elite institutions. In a greatly discussed paper, however, economists Stacy Berg Dale and Alan B. Krueger concluded that in most cases there is not a definitive income advantage to attending a highly selective college. For example students with identical SAT scores who attend Penn and Penn State will likely have similar professional outcomes. The greatest gain in earnings is seen for lower income students and racial minorities who attend elite universities, most likely because they stand to benefit more from the professional connections and credibility such institutions confer.
So what should parents take from all this? We all want to give our children the best possible start in life, while hopefully not bankrupting ourselves in the process. My own father sacrificed a great deal to send me to both a private preparatory academy and an elite college. However, he made it exceedingly clear that I was not to spend my time socializing. I understood that the education he was purchasing for me was an investment in my future and that it represented a huge responsibility. I impressed the same thoughts on my own daughters when I sent them to private high school and a top tier college.
College is not a birthright, but an investment with serious conditions. Realistically, it may make sense to have students take core courses at a community college before transferring to a larger university and perhaps shoulder at least some portion of their own expenses. And as with any investment, parents should monitor their students’ performance to ensure they will get the best possible return.
Now I realize what a wise decision it was on their part. They didn't really do it out of any conscious decision to help me build character, they did it because they wanted to pay off their house and buy his and hers Harleys, but the end result was the same. I left home, joined the military, and became self-sufficient.
A Declining Dollar PING.
Unless you're among the wealthiest families, why is that even a question on the table?
May I recommend to fellow FReepers that they send their kids to the local community college for a couple of years, then transfer.
Cheaper, I think you get into a better school, and they can see if they are cut out for full time college work.
I didn’t even have the prospect of my parents paying for my college (they were too poor for it to be even a consideration), so I went into the Army upon high school graduation, saved enough money to pay for the first year, then, using a combination of part-time work and a small amount of loans ($650 per semester!! This was the early ‘60s), I made it through.
Sometimes, one is just incredibly lucky. I made a poor choice of parents but everything else fell into place.
I know the answer!
We can have government absorb the education industry along with healthcare, banking, automotive, energy, etc.!
Then our leaders can decide what career is suitable for each worker and plan their life for them!
Of course, such a government will need to have absolute control over every aspect of everyone’s life.
But its in the name of EQUALITY, right?
Why doesn’t someone (anyone) speak the simple fact:
“Colleges and universities have raised tuition to confiscatory rates simply because THEY CAN!!!”
BIG OIL hasn’t skyrocketed their prices because the world would come down on them. Gas goes up $.03 per gallon and they hysteria moves the clouds in the sky.
Is there ANY cost of anything that has inflated even a fraction of the confiscatory rise in tuitions?
I am going to college to finish my degree using my employer’s tuition assistance program. It is slow going because of the amount of that reimbursement and the cost of the classes. However, by the end of 2017, I will have finished my degree. I will have spent less than $2000 for my college degree.
My two daughters are going to local community college and are able to work a job in addtion to their college. While I am sure that they will have some debt after two years, they will have completed their Associates and have less than $10,000 in loans. After their two years, they will transfer to local state colleges to finish their degree.
All of this without a single dime from dad for their college. However, I am letting them continue to live a home so I am footing some of the bill on the backend.
What they are not doing is going to some swanky “student experience” oriented college at $40,000 per year for tuition, room and board. By the time my girls graduate college, they will have a small student loan that they can actually pay off.
The swanky student experience prepares students for a real letdown after graduation. Many will have lived a lifestyle they will not be able to afford again for 30 years. Cancun was fun. Paying off the loan that paid for it isn’t. It used to be HARD to get student loans. Your or your parents credit had to be good and there were strict limits on what you could borrow.
Have no fear, odumbo will let their debts slide, he needs the votes and support when he runs for this third term.
I second your recommendation. Community college is schooling and socialization without the dorm/party zone and the expense and distraction that come with that.
PING
Smart move. These students typically excel beyond the crowd in 4-yr schools as well. Get in—get out fast, is the ticket to prevent scalping the middle class with college debt.
It’s the federal dollars which have inflated tuition.
School don’t compete for consumer dollars...they compete for.govt dollars. They don’t have to keep prices low because the liberals spend more and more on grants.
My coffee tastes best mixed with tears of regret and shame from a liberal arts degreed barista that owes $100,000.
Does anyone really need 4 years of college to learn anything?
A doctor, an engineer would and more but any other profession?
Big Education is the perfect scam to fund Democrats.
Of course with the MSM never mentioning what’s actually happening, a lot of folks never realize it.
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