While financial matters are not a common topic here at Average Married Dad, I’m equal opportunity when the subject is applicable to my key foundational topics of parenting, marriage and health/wellness.
With LoudBoy finally in elementary school, we essentially got a nearly $300 a week “raise” compared wtih summer day care/camp costs for the kids. While we’ve started a college account for the kids, I think the current balances are pretty low for how old they are as we’ve been focusing on maxing out retirement savings first. With this extra money, which we’ve been dealing without for awhile, we plan to bump back up the kids auto-savings plan for post-secondary education in anticipation of the continued rise of college tuition.
Before I get into the cost projections, I wanted to get into a little bit about how we plan to advise our children on navigating educational waters. I believe that expanding knowledge in all arts and science is important for making a well rounded adult. When the college experience was more fully supported by state funds, and tuition were much less compared to the average U.S. salary, you could graduate with a degree in some non-marketable major with less long-term damage if you had to “settle” for a job that didn’t fit your educational skills. Today, with college cost rising faster than salaries, college has changed so that you must obtain an education with a direct connection to a future vocation. Music, art and other “soft” liberal arts majors such as History are just not that marketable for finding a job and making a living. While learning about these subjects are still important, the onus should be on the individual to pursue these avenues on primarily their own time in the interest of spending their time and energy in College on learning traits that will lead to jobs. Choose the wrong major and you could end up living back with your parents for the foreseeable future, working at Starbucks wondering how you’re going to pay off $120,000 in student loans for that Fine Arts degree hanging on the wall.
One of my favorite bloggers on this issue is Captain Capitalism. He has various posts on manosphere items but tends to stick with ragging on economic issues. One he’s taken major issue with, and it’s one I’ve agreed with since I was in college, is choosing crappy college majors. Now obviously, you can make it work out, but is not the high-percentage play to a successful and economically stronger life. A better play is finding the major with better options: actuarial science, engineering, science, technology, computers, etc. I’m sure the Captain’s book describes just that. Anyways, that is what I hope to impart on my children. Not the dreamer’s view of the world that “follow your heart” but the realists view that college is a vocational school. Better yet, we’re going to make sure they view actual vocational schools as an option (skilled trade, mechanic technician) though that’s usually a little tougher on the body, you can make a damn fine living being a master electrician or HVAC specialist.
I know some of my readers have children near or in college pursuing degrees that follow their hearts. Hopefully your children have the aptitude to excel in their chosen major and the intelligence to minor in something marketable if that line doesn’t work out. Having the conversation with a child that puts a wet blanket on their dream to be a concert pianist is never going to be pleasant, and most likely heart breaking. Being a parent means shooting straight and providing wisdom to your children since they don’t have the life experience to draw upon. It’s bitter, I know, and they can still choose to ignore your advice, but you’ve done your duty to educate, inform and advise. It’s not your duty to pay good money to pursue a long-shot of a life plan though, but that’s your call.
The website Get Rich Slowly had a post last week with nearly the identical situation here: A mom (Karen) wisely saved for their daughter’s college, daughter did great in High School, wants to major in movie making (!!). Should the parents pay for this? Here’s the author’s response which is pretty even handed:
If she’s scrimped and saved for years and honestly feels that her daughter is dumping money down the drain, there is no reason to passively accept that fate. Karen could explain her concerns about the choice of major and insist that her daughter augment her education with coursework that Karen feels is appropriate. She might offer to pay for tuition, books, fees and living expenses in proportion to the practical courses studied each semester. The student would be expected to work and/or borrow to cover the proportion of expenses related to studies disapproved by Karen.
Ideally, Karen and her daughter will come to an agreement on a major that Karen doesn’t mind financing. Whether that involves her daughter convincing her mother of the value of a film studies major, or both parties agreeing on some other course of study, doesn’t matter.
I thought the comments from readers following the article were interesting. I liked this one:
Let your son or daughter work his or her way through college. He or she will get much, much more out of the experience that way. As a college professor, I notice a huge difference in motivation and discipline between students who are paying for college themselves (even partially) and know why they want to major in X or Y, and students who are just going to college because it’s expected of them and whose parents are paying for it.
Some people commenting said not letting her “follow her dream” would jeopardize their relationship, others felt it was valuable to shoot straight and they weren’t obligated to pay for college [Holly and I put ourselves through college]. I certainly acknowledge this isn’t a black-or-white issue and as one who’s college experience did directly lead to my chosen field, I have a vantage point different than some.
Anyways, back on point. Here’s the typical tuition inflation vs. CPI and homes.
I ran across this article on the SmartMoney blog that described the net tuition typically paid vs. the “sticker” price. Pretty interesting in that only 1/3 of students pay full sticker price, with the rest getting grants and scholarships to reduce those costs.
For a public 4-year college, the annual net price after grants increased from $13,000 to $15,200 between 1999 and 2007 (in 2007 dollars), which is 2.0% annualized. For a private nonprofit 4-year college, the annual net price after grants increased from $21,300 to $25,500 between 1999 and 2007 (in 2007 dollars), which is 2.3% annualized. The CPI inflation rate from 1999-2007 was 2.7% annualized.
Not as bad as we’re led to believe, but if you aren’t eligible for grants or scholarships you could still be in a world of hurt. Also, the article notes that after these extra grants and scholarships, many private schools end up being less expensive than their public counterparts. That I can believe, as I was paying out of state tuition at a public school for awhile which was more expensive than other options.
For those out there trying to balance enjoying life now, socking away for retirement, and saving for your children’s future, we’re right there with you and feel your pain. I’m not sure where we’ll end up, but at least we’ve started.