Hey Mom and Dad! Guess What? I'm going to Harvard!!!

A generation ago, the above statement uttered by a young seventeen year-old son or daughter would have been greeted by his/her parents with astonishment, hugs and kissses, and a generous dose of puffery and bravado as they announced to their neighbors (The "Joneses") that their child was one of the few annointed, chosen ones----a Haaavard student.  Even better would have been if the Joneses would have responded, "Wow....that's...that's really great.  My son hasn't heard back from Upper Eastern Montana State yet.  But, hey, he's gotten into The U of Tijuana---and no, it's not a party school like everyone says!"  Yes, twenty to thirty years ago, even the middle class seemed to be advancing, college costs were steep, but relatively reasonable---and since most parents had their kids while they were in their twenties, they still had many years until retirement to recover from the potential financial hangover.

Flash forward to today.  That same excited statement might be greeted with initial astonishment----followed by confusion, if not outright terror.  As middle (even upper middle) classes wages have stagnated since the late seventies, college costs have taken a turn for the stratosphere.  Not to mention the fact that most parents have had their kids later these days (in their thirties, if not early forties), and the savings rate compared to yesteryear has plummeted below sea level.  Yes, now that enthusiastic announcement from their youngster creates visions of a "luxurious" retirement of nightly dinners of mashed potato sandwiches, eaten on a "beutiful" veranda just outside their tenement apartment, overlooking an alleyway with a drifter below looking up and saying, "Hey Grandma, nice legs!"  But wait!  The Harvard grad will graduate Summa Cum Laude and become a top executive!  He or she will bankroll his parents wonderful retirement!  Nice try.  The odds are far greater he or she will be saddled with over 100 grand in debt and spend the first five years out of college shacking up with good ol Mom and Dad!  And The Joneses?  Odds are good that sending your kids anywhere in the state of Montana will leave them with surplus cash enough to travel the world several times over.

Seriously, if you're a parent, or ever think of becoming one, you will soon be greeted with the painful financial burden of paying for college.  And this financial burden is real----even parents who earn household incomes two, three, even four times the national average, will ever be able to save enough to pay the entire bill.  The situation becomes even more daunting with every additional child.  So, what's a parent to do?  We'll, my good friend Dave Kuenstle has already introduced you (see his blog entries below) to an incredible new program from financial expert, Kelvin Boston.  In his all-new program, The Confident Millionaire, he will give you an assortment of financial strategies to start or accelerate your college savings plan.  But, here's one key idea from Kelvin that is worth the entire price of the program:  Due to our modern financial realities, every family should only plan to cover 50% of college expenses.  The rest should be covered by the child and/or financial aid.  Kelvin explains that this is a realistic, achievable plan that serves both the parent and the child.  In fact, for the vast majority of the population, it is the only realistic plan.  What's more, it will force your child to establish positive financial habits early on, preparing him/her for the increased financial responsibility and entrepreneurial skill that will be required in the 21st Century. 

And, who knows, with this plan, even that potential Harvard child might long for that beautiful countryside in Montana!

PS----An additional resource for your college savings options is http://www.savingforcollege.com/.

Comments

[Robert C. Worstell]

Sending kids to Community College is far cheaper for the first couple of years. In many cases, they don't even need to leave home, which gets them over the "party" scene years.

The rest can be done via online, which in many cases is far cheaper than brick-and-mortar schools. Again, they can save money by staying local - and even have part-time jobs to earn their college and/or contribute to their stay. (Certainly it wouldn't relieve them of household chores.)

With a little research, one can find colleges such as Charter Oaks (COSC.edu) who accept up to 90 hours of community college credit - which would stretch funding. Get a couple of associate degrees at the local community college, then another 30 hours all online - you can get three degrees in three years and meanwhile save up for a career. (Meanwhile, your laundry is free...)

Another point is to consider skipping the "big name" schools. Unless you want the "networking" these schools provide, you can make your fortune without having to have a prestigious name on the initials behind your own name.

Far cheaper ways to get the same result.

[George]

Just like health care in the United States, the cost of a college education is sky high.

I thought it was expensive when I went to college 45 years ago. I was lucky. I received a full tuition scholarship from Northwestern. That helped a great deal. My widowed mother sold our home to pay for my living and other expenses. I will always be grateful to her for what she did to help me.

I am now 66. I truly believe that both health care and college education should be paid for by the federal government.

[Pessi Foer]

I wonder about you Carson Conant. I wonder.

[Sea Life Play Cube]

As a freshman college student, this post hits close to home. I wasn't able to go to my top choice because it was too expensive- and my less expensive second choice? $33,000 a year.