As a recent college graduate, I am all too familiar with the rising costs of education. Even between my first year and my last year (year one and year four), my annual tuition had increased by about ten grand. My brother, who will be enrolling in school this fall is choosing between two 
options: a University of California School and a private Ivy League school in the Midwest. The Ivy is his dream school, and the University of California school is a great option – but as you may have heard, California’s budget problems with the UC System. Next year, the tuition is going to increase by more than a third, and the costs of living around campus are very high. Even if he selects the less expensive school, there’s no guarantee that he’ll graduate in four years (a lot of students in the UC system complain that they aren’t able to enroll in the classes that they need to graduate in four years).
I can understand why my brother would want to turn down the UC. I did the same several years ago, deciding that I would thrive in a smaller environment. I wouldn’t change my decision, and I absolutely did thrive. But now that I’m in the real world, I’m certainly paying for my decision with a heavy student loan payment. With the rising costs of education – even with scholarships – my brother will have to pay back more than I did. And in all honesty, even the school that is the cheaper option will be very expensive – even with savings and other financing strategies, he will have to take on loans.
I don’t have kids now, but maybe one day, I will – and if I do, I want to make sure that they receive the best education possible. My education means the world to me and has really made me value who I am. Even though my debt is overwhelming, it makes me remember – on a daily basis – how much my education is worth (In fact, to me, my education is actually worth more). Of course, I’d like to make that debt magically go away, but I know that it won’t, so instead, I focus on the silver lining: I have a great job right out of school in a bad economy, and I work with great people and enjoy what I do. In a few years, I will find even more things to love because my education, above everything, taught me to enjoy learning.
So what does a parent do? What will college costs be several years from now, when your younger children are ready to go to school? How do we empower our children to excel, do their best, and love learning? I read some really interesting tips in an article on the Motherlode: try to save a third, pay for a third with cash flow while the child is in school, and have the child pay for the remaining third through loans. Make sure that you continue to save for your own retirement and goals.
Some additional tips from my own experience:
Teach your child what debt and financing means. To be honest, I really didn’t understand debt and interest rates and repayment terms when I took on my loans. My first year after college was a hardcore crash course in the real world, and it was not fun. After learning things on the fly, I’m exponentially older and wiser, but wow – I wish I knew these things ahead of time.
Work with your child to understand how their education applies to the real world. Don’t tell them what to major in; instead, tell them how different majors fit within market demands. Explain what it means to go to grad school.
Of course, your savings strategy will vary based on your own personal goals and finances. Parents – you’ve heard a graduated student’s perspective – what do you think?
Image Source: flickr.com/photos/pfala/2402698820
About Ritika Puri
