Salvaging the College Dream
By now, many high school seniors have gotten either thick or thin envelopes from the colleges of their choice, indicating acceptance or otherwise. But the more urgent question for parents these days is not, “Did you get in?” but, “Where will we find the money?” Sending children to college is considered a basic among many families—it is part and parcel of the American Dream, even a source of personal satisfaction. While debt has been part of the college experience for a long time, parents who have seen their 401 (K) accounts drop to new depressing lows are now even more challenged by the competing realities of saving for retirement versus providing their kids with a college education. This week's MONITOR Minute explores the trade-offs that many parents are making to send their kids to college.
A ONE-TWO PUNCH
This recession is a one-two punch to many parents, hitting them not only in their wallets, but in their hearts as well. Having successful kids is a sign of personal success and accomplishment for the majority of parents, and providing a basic college education has long been a part of ensuring children's future success. For certain, tuition bills have never been an easy pill to swallow, especially at private institutions. But according to Fortune Magazine, tuition at private four-year colleges has climbed 7.4% a year in the past 30 years, twice that of the inflation rate.(2) But without a gift from the Tuition Fairy (see “Mystery donor” sidebar), parents today are finding themselves in the agonizing position of having to modify or give up their role as benefactor to keep socking away money for retirement.