Most people greatly underestimate the costs for their children attending college. Some of the major components are tuition and fees, books, supplies, lab & other charges, room and board, and the most expensive…..miscellaneous expenses. (Mom, I need money for a new dress to go to this party, or, money for tickets to the football game, and for pizza and beer…oops, I mean coke, no beer, after the game). More often than not, the miscellaneous expenses are more than tuition. In many cases, books also cost more than tuition.
Folks, don’t fool yourself, simply because the kids are staying at home instead of at a dorm, does NOT lower your expenses. Heat and air conditioning are going to explode as well as your grocery bill. At home, actual room and board expenses are usually higher than at college.
The fatal statement I hear from parents is that these college expenses can NOT keep up like this in the future. Oh No? Costs for college are tied in to what average incomes are. Back when I went to college (yes, there were colleges back then), my undergraduate costs were $3,500/year when average incomes were $5,000/year; about 70% of incomes. Today, my alma mater states that the total student costs run about $35,000/year when average household incomes are at $50,000/year. So, it is the same 70%. I choose not to discuss the costs at Harvard, Yale, MIT or Stanford, etc.!
The College Board just issued a report that “A child born in 2010 that begins kindergarten in the fall of 2015 would attend college between the years of 2028 and 2032. If that child attended an average private 4-year college and if the annual price increases for private colleges experienced over the last 30 years continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) will total $506,423 or nearly $127,000 per year.”
So, when do you begin to save for the kid’s college….when you hear 2 sounds…”slap” and “waaah”. Just think, for the first year of college, $127,000, 18 years from now in an 8% return investment requires a $283/mo. to be set aside immediately after hearing those two sounds. Remember, that is for year 1 only. Multiply that times 4 years and times 3 kids…and the kids say… what have you done for me lately, mom and dad”.
May I suggest you have the kids borrow from your Family Empowered Bank and not just give them the money. Make them repay the loan with interest. Since the U.S. Government recently took over control of all student loans, your child probably won’t qualify for a student loan because they do not meet the agenda (quota) of the Government. Also, too many parents think their kids will get all their money from scholarships. Fat chance! Why not interview 10 parents in your local community or church and find out how much their kids actually got in scholarships. I asked one man who said his son got a full football scholarship. So, I asked, you mean you pay for nothing for him to go to college. He confessed he pays $18,000 per year. So, it depends on what the word “is” – is!
Funny, isn’t it, once you graduate, your college calls yearly for more money from you for the annual fund raising. Hmmmm…these colleges are starting to act like the IRS – They want money every year from you.