Yesterday I setup another college fund; this time for my 4th grandchild. What better way to waste a tax refund? Even with the automatic monthly contributions I doubt it will make a dent in her college costs 18 years from now. I am limited on what I can contribute. Spreading it over four kids makes it even less.

When I went after a ‘higher education’ in the early 60s college was still affordable, even at a private college. Things started to go to hell about a decade later and have not stopped since. Why is a good question? I believe the numbers I read recently suggest the average private is $41k/year and state about half that. It’s hard to believe how any kid from a middle-income family can attend any place beyond community college.

Is it really worth all that outlay? When I graduated I had no doubt that the degree gave me the entitlement to a better life. That certainly is not the case today.

Do you think college will ever be affordable again?

Why isn't there more competition for lower cost schools?

Why do we have the mind-set that the more you spend the better education you get?

Do you think it's really worth it given the debt most end up with?

Is there a better alternative?

 

All good questions, Dave. College should not be so unaffordable for so many. I have no idea how my grandkids will be able to attend college with the $$$$ it now costs. We aren't in a position to fund it, that's for sure, and their parents aren't in a position to be socking away the $$ for it either.

My nephew left school with about 50K in college loans, that's considered a small amount of debt these days. His wife had a fairy godmother (aunt) who paid her 4 year education. She was on her own for her master's degree.

As to if it's worth it, it may depend on what the student majors in.

 

I graduated with a degree in Mechanical Engineering from a major college in spring of 2013, and was fortunate enough to get a job right out of the gate. However, an unfortunate amount of the people I graduated with are still looking for jobs almost a year later. Colleges, in my opinion, have simply become a racket. Not only am I working with people in the same position as me who didn't even complete a 4 year degree, but many major colleges are creating an environment that can make it difficult to complete a degree within the anticipated amount of time. It's not always the schools fault though, there are so many people who have it in their heads that if they go to college, they'll have a better life, but the fact of the matter is college is not for everyone. For some people, they get in, realize they don't have either the motivation or the ability to complete they're degree, maybe change majors a couple times, and finally drop out. During that time, they (or they're parents) have accrued thousands in debt.

Not that this pertains exactly to what you mentioned, but now you got me ranting. How many hundreds of thousands of dollars do you think colleges spend on scholarships for either athletes, or special interest groups for the soul purposes of meeting a diversity quota? The only purpose of which is to make the university's overall stats look good on paper. Meanwhile, people like myself who aren't athletes or minorities, but are good students pursuing meaningful degrees, struggle to get financial aid to finish their major. Schools are no longer in the primary business of educating. Education and development of the youth has become secondary to simply increasing profits.

If I could go back and do it over, I would have found a smaller school or community college that offered my degree, and relied more on the experience I got while co-oping to build my resume. Then again, until more employers put more emphasis on the individual and their experience than they do on the name of the school on the resume, that might not be the best course of action.

Side note: I wish I had relatives like you who were generous enough to help with my education, but being 1 of 5 children and 1 of 25 (or so) grandchildren, I guess that just isn't in the cards. Haha

 

Dave, your post pretty much outlines the problem. Society believes the diploma is needed to get ahead so people do whatever is needed to get one. In my opinion, there is little chance of a low price competitor coming in and undercutting the rest of them. The assets needed for accreditation are significant. Non acredited schools are shunned. The whole thing is a club and you can't get in. There are some on-line schools. You'd think they would be cheap, but they are not. There are a few ways to save, but few want to follow the advice.

1. Go to a community college for two years and then transfer to the four year school.

2. Find the few scjhools that let you test out of classes and get the credit for what you know. It might save you a semester of tuition, IF you know the subjects.

3. Move out of the parents house, get married and or have a kid, or just wait until you reach the age where parent's income doesn't count, and then sign up for financial aid. http://studentaid.ed.gov/fafsa/filli...or-independent

I have a Fidelity credit card that puts 2% of all my purchases into a grand-kids 529 plan. If you try to buy EVERYTHING with the card, you can contribute a good amount over 18 years without paying anything out of pocket.

 

Excellent points. Personally, I knew I wasn't ready for college after high school. I joined the Air Force and as they say... saw the world and grew up... before going back to school. I watched dozen of kids younger than I fail for the reasons you mentioned. I do not see that ever changing. Many are too immature to handle the freedom of leaving home so young.

Wow, your point about athletics hits a nerve with me too. Everyone loves a winner. The alumni, the facility, the students, the city and winners at a national level just keep feeding the school with larger enrollments which means tuitions can be raised without risks.

 

Bill, I'll look into the Fidelity card. We seldom use a credit card but maybe I can talk my own kids into using them - they charge everything. Too bad I didn't know about that earlier. I've got an ex-daughter in law who could have put one of my grandkids through college on her own. She ran up the equivalent of 2+ years salary in CC debt.

 

Well, it is an American Express card, so if you don't pay it off every month it gets turned off.

I guess i forgot the two other ways to reduce the cost; whatever they call the current version of the GI bill and employer reimbursement if you can find a job that still has that benefit. BUT, now you have to be willing to worka nd go to school at the same time.

Bottom line is, there are ways to do it. But most don't want to try any of them.

 

To expand on Bill's point #2, I'd add taking a couple of AP classes in high school, then take the tests the courses prepared you for. Scoring well on the tests will get you credit for the appropriate courses at just about any college.

 

Both my nieces did this. I think they each cut a semester off of college. They also had the advantage of being from a rural community that gave them loans that don't have to be paid back if they come back and work in the area for a period of time.

 

Case in point, comparing two friends A & B who grew up and became Eagle Scouts together:

A was not a college prospect and attended a voc-tech school, went on the CIA (best culinary school in USA), got a job at Philly Four Seasons and is still there...working hard; married with two little kids and has bought a house nearby in suburbs. Age 31 and no college debt.


B did well in high school, attended a top college in Maine, graduated in 4.5 years, got a Fulbright to Germany, went on the get a MA in Int'l Relations from Georgetown, could not get a job in his field; did a good job of networking and got a decent job, but is overqualified. Now is has been accepted in a PhD program near Boston....likely will return to the poverty of student life for 3-5 years. Not married and owns almost nothing, except a and a '93 Chevy Age 31 and $40k of student loans.

As you might guess, B is our son. He's a great kid and intelligent; eventually he'll find his way. Two expensive colleges have not provided a good career, so we're hoping the "third time is a charm" Of course, Mom and Dad will be helping out a little bit... :

Just saying the colleges and universities are not the only way to a decent career and standard of living.

Top colleges set their tuition and fees according to their peer group....not what it costs for student; the lower half of students with real financial need will get a decent aid package. It's another form of income distribution