Who pays for your Education?
This article discusses the fact that more and more college students find themselves rather than their parents footing the bill for their higher education. Since very few eighteen-year-olds have enough money to pay the tens, perhaps even thousands, of dollars to pay for a college education, they turn to government financial aid and private loans. As young adults, they do not have very good credit ratings and are therefore stuck with higher interest rates on their loans than their parents would get on the same loans. Before they even finish undergrad, many students today have tens, perhaps even hundreds, of thousands of dollars in loans to pay back. If they choose to go to graduate school, these loans only multiply even more.
According to the article, parents today tend to have saved less for retirement than their parents, and worry that if they pay for their children's education, they will not be financially secure later on. What do you think is the reason for today's parents being less willing to foot the bill for our generation's education?
2 comments:
There are several reasons why parents are now putting the child in a position to pay for their own college education. One reason is that the parents are trying to teach these students about money and responsibility, showing them that it costs money, but in the end it is worth it. Another reason might be, because the parents themselves just can’t afford the tuition. Today less than half of the working public invest their money in some sort of fund. If one would invest money in a fund of some sort when they are say 22 then when their children are old enough to go to college they will not have any problem with helping and paying for their child to go to college, the problem to me is that very few individuals actually invest their money for the long run. Although I don’t believe this is a very good subject to be talking about on the economic level it is a very big topic on the finance level. Even though another reason these parents might not want to pay for their students education is the opportunity costs of doing so!! :)
There are definately two credible arguments for either side of this debate. By the student taking the initiative to pay for their own college education, as posted above, does indeed teach them money saviness, responsiblity, and weighing out important options by themselves. Whereas, on the other hand, the parents take it upon themselves to pay for their child's education. I feel that economically, if the parents were to provide for the student's education and academic needs this would give the student the opportunity to work a job and save up his/her money and build credit. This way when the student graduates they will be able to start off with a clean slate and not have to worry about immediately being in debt.
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