Monday, April 20, 2009
what to do about college tuition
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.