By Po-cheng Huang
For some parents, their children, despite all other wonderful things about them, are black holes for money especially when it comes to paying for college. Ordinary American on average has $40000 of annual income and take home about $35000 in cash. The top colleges in the U.S. cost about $45000 per year all together. So we are looking at about 8 years of take home income without spending anything, not even living expenses. This is serious money that we are talking about and when many suggest investing, just look at those who got hit hard by the financial crisis, even financial products rated AAA can fail proved there are risks associate with whatever you invest in. So what should you do? Just let the child take the loan and carry that debt himself? For you, that will be the best solution for you financially if paying for the child’s college gives you a headache or else, just don’t even let the kids go to college if you can’t afford it or let a child goes to college knowing he can’t finish at the top. The way I look at this is don’t spend beyond your budget, especially not to raise debt, and should only borrow for investing purposes knowing the return will far exceeds the debt.
Reference
http://www.scholarships.com/Why-Students-dont-go-to-college.aspx
http://www.bankrate.com/brm/news/Financial_Literacy/Sept07_college_poll_results_a1.asp?caret=60a
http://www.thatonecaveman.com/2008/08/dont-pay-your-childrens-college-tuition-if-you-want-them-to-succeed.html
This post is right on. Thankfully, there are options for motivated students to complete their degrees for a fraction of the cost of the traditional system.
ReplyDeleteThe first option is online coursework, which can cost half of in-class credit fees. The other is credit by exam, where students study on their own and take a corresponding exam like CLEP or DSST.
Some feel that credit by exam doesn't teach students anything but that is hardly the case. In fact, students actually take ownership of their education to a greater degree when they study on their own as opposed to simply taking assignments and lectures from professors.
You can get a good explanation of cutting college costs and the tests that only cost $80 and are worth between 3 and 12 credits.