16 October 2006

Picking Up the Tab

I have rarely run across a college bound high school student who had a solid plan for paying for his or her post-secondary education. Most of them believed that scholarship money would carry them through. Even if high school was a bit late in the game to be thinking about funding things, there was still no shift in thinking. Good grades = money, right? Sometimes it does. Most of the time, it isn't enough.

A recent article by Eileen Powell confirms what I've noticed over the years: Parents low ball college costs. A study referenced in the article found that "87 percent of parents believe scholarships and grants will cover at least part of their children's undergraduate expenses, and nearly three-quarters think their children are 'special or unique' enough to win a scholarship. Financial aid administrators said 92 percent of parents overestimate the amount of scholarship money their children will receive. Meanwhile, parents are not saving much on their own for their kids' educations."

So, if scholarship money is few and far between in terms of abundance and families aren't saving or doing much financial planning---how are expenses covered? Loans. Both parents and students are taking out loans, burdening the student when s/he graduates and sapping future plans for parents.

We seem to be doing a good job in helping families see the value in attaining higher education. We emphasize that the foundations are placed all along the k-12 path. We tell kids that good grades are a ticket to success. How do we help families understand the financial aspects to all of this?

1 comment:

Anonymous said...

Well, this goes back to personal accountability. Until we stop acting like subsidized student loans are an entitlement for those who didn't save for their childrens' college ed, there's no reason for parents to save for said childrens' college ed.

The two solutions are to either teach as a value that parents SHOULD pay for their kids' college out of pocket, or to teach them to teach their kids that the kids will be paying their own way. Either way, you have to stop the thinking that it's someone else's problem.