College: No longer your father’s education
Have a look at these two articles, and the related articles that follow, and decide for yourself whether deferring your retirement savings to put Junior through college is worth the risk. College ain’t what it used to be. Ask yourself this: Are you more successful for going to college than, say, Evan Williams, Biz Stone, Jack Dorsey — the founders of Twitter? How about Mark Zuckerberg, Facebook founder? Steve Jobs? Bill Gates? Michael Dell? Thought so.
There are hundreds, thousands of others in a variety of fields of expertise and business whose entrepreneurial “fire in the belly” was stronger than their desire to get a diploma certifying that they had sat through a series of lectures about entrepreneurship. They just went out and did it.
Student loans used to be considered “good” debt, but that assumption is proving false in today’s economy. Just like mortgages have ballooned because of hiked rates, many of today’s college grads are sitting on six figures worth of debt, growing monthly with compounding interest charges.
Parents often co-sign these student loans, meaning they’re responsible if their kid doesn’t pay–a costly ding to credit scores and finances at a time when parents should be preparing for retirement, or might be (financially) be caring for an elderly parent.
And how about that retirement: Are you deferring savings from your retirement nest egg to pay for your kids’ college? That monthly tuition or housing payment you’re forking over to put Junior through college shouldn’t come at the expense of financial security in your golden years. Imagine your son or daughter in the future, having to take out a loan to pay for your expenses.
Too often, parents put their children’s college expenses above saving for retirement–a costly mistake. The best way to ensure your child’s financial security is to make sure your retirement is taken care of, so you’re not a financial burden.
Alternatives to spending $200,000 per kid so they can waste four years of their lives:
- Give them $20,000 to start one to five businesses. Most businesses fail but that’s ok. The education from the process lasts a lifetime and the network you build when you start a business will lead to many future jobs and possibilities.
- Travel the world. That would be an education that pays many dividends and is much cheaper. Your kids can then go to college with a much more mature view of the world.
- Work. They won’t get the best jobs but they can make money, network, get a “hands-on” education, learn the value of money and go to college in their 20s when they can afford it — and make every dollar worth it. Plus your kids will have a more clear idea of what they want to do in the world.
- Volunteer. Let them see a side of life that is harder and where they can add value. An education like that is invaluable.
- Do nothing but read. Get the benefits of a college education without paying the $200,000. I’d be happy to support a child that wants to home school a college education.
- The student loan crisis will dwarf the housing market crash. (mikekarnj.com)
- The higher education bubble (washingtonexaminer.com)
- CHART OF THE DAY: Is College Education The Next Bubble Set To Burst? (businessinsider.com)
- Is Higher Education A Bubble? (powerlineblog.com)
- Fraudulent Tactics Lure Students to For-Profit Colleges (education.change.org)
- Is the Higher Education Bubble Going to Burst? (education.change.org)
- New Report Details How America Pays For College (huffingtonpost.com)
- Is it worth it to go to college? (msnbc.msn.com)
- The Next Bubble to Burst? (powerlineblog.com)
- Glenn Reynolds: Higher education’s bubble is about to burst (washingtonexaminer.com)
- Is The Education Bubble About to Burst? (reason.com)
- Community colleges fighting to cope (msnbc.msn.com)
- SHOCKING NEWS: Colleges Serve the People Who Work There, Not the Students. It’s like there’s some … (pajamasmedia.com)
- Is YouTube bursting higher education’s bubble? Not so fast… (downes.ca)
- HIGHER EDUCATION BUBBLE NOISES? Reader Peter Galamaga writes: I’m a high school teacher and … (pajamasmedia.com)
- For-Profit Colleges Will be Next Bubble to Burst (education.change.org)
- CHARTS OF THE WEEK: Is College Education The Next Bubble Set To Burst? (businessinsider.com)
- Colleges NOT Worth Their Tuition (PHOTOS) (huffingtonpost.com)