Young parents, many of whom are still paying off their
own student loans, are planning to pay their children’s college tuition. A report from Fidelity shared that this is much more prevalent today than it was with
previous generations. After struggling to pay for their own education,
millennial parents do not want their children to shoulder the same burden. The report
stated that close to half of all parents in their early thirties plan to pay
their children’s full tuition, compared to 16% in 2007. Furthermore, they have
$1,500 saved on average, compared to $500 previously. However, $1,500 seems
insignificant compared to the average cost of tuition. Last year, tuition, fees
and room and board cost approximately $18,943 and $42,419 at a four-year state
and private college respectively. In fact, it’s difficult to even determine
exactly how much parents should be saving for their children – years spent in
college, public or private schools, and two-year or four-year schools are all
variables which alter the price paid for education. Even though receiving
financial aid means that students generally don’t pay the full amount in
practice, the average price paid for tuition was still $12,833 and $23,549 at
state schools and private colleges respectively, according to The College
Board. Given these numbers, how realistic do you think it is that young parents
pay their children’s full college tuition?
http://money.cnn.com/2015/09/24/pf/college/millennials-saving-for-college/index.html
It's great news to hear that people are moving towards being more financially responsible, and considering the costs of putting their children through a college education. Given that people are more conscious about their financial commitments, it seems pretty realistic to me that more and more young parents will be able to pay their children's full tuition. Additionally, I hope that this pushes for people to not have kids if they cannot afford them. This article is also interesting because it kind of addresses a question brought up in a previous blog post about the possibility of student loans sparking another recession. These numbers suggest that such a situation is (hopefully) unlikely.
ReplyDeleteAlso, it would be great if student loans go down because it is quite appalling how the student loans have become a way for people to make profit.
I don't think it is realistic that millennials will be able to pay the full tuition for the kids. As is said in the article it is hard to say how far ahead (if they are actually) they are with saving, as we cannot predict the price of colleges in the future. Additionally, there has been discussion by Trump to reduce federal loans so even if millennials have started saving, this increase may cause the full payment out of savings to be difficult.
ReplyDeleteAs the article states, there is much more an effort for millennial parents to pay their children's tuition. However, if their effort is to pay the full tuition, the saving must start much earlier than their early 30s. We did a project in our Investments class about planning our life budget, and if parents want to realistically pay for their children's education, they must start before the child is even born. Tuition payments are only going to go up as the years go on. If we, and millennial parents, want to be able to pay for our children's education, it must start now and not wait till later as it would be way too difficult to save enough to pay for it.
ReplyDeleteI agree with Chris in that I don't think it's very realistic that millennials will be able to pay the full tuition for kids. Millennials will have to pay off their debts from college, try to live comfortably, and save money for their children's future education is very hard to do because the cost of education is going up every year. A good example of price increases is K. In the past 4 years, the tuition has gone up and at the rate that its going at, sooner or later it will be very hard to pay for a college education itself. I think there needs to be solutions to help us millennials pay for our education as well as future students or we will be in never ending debt.
ReplyDeleteI think that even if the millennials were not able to pay the full tuition for their kids, it still worth trying it which at least lessen/reduce the burden on their kids. I guess it's just my cultural background that lead me view this issue differently, like in China, parents normally pay the tuition for their kids until they are done with college. In turn, in the future, when parents get old, their kids need to take care of them. I just feel the cultural difference contributes largely to various views on the same issue.
ReplyDeleteBranden makes a great point about the sustainability of an affordable college education, but this is not the only thing people of this generation have to deal with in terms of an increased price. Not only has there been a drastic increase in educational prices but if you've looked at all at buying a home or a car in the current economic climate you know that there is almost no way someone working minimum wage(or someone just out of college) will be able to purchase them without financing, and even then the monthly expenses and other associated costs can quickly become overwhelming. While i'm not saying its impossible it certainly a stark difference compared to our parents generation in that the wages have not increased with the prices of "necessities" over the past many years.
ReplyDeleteI think it's great to know millennials are really saving their money in hopes of putting their kids through college. However, I don't know that I would want to pay my kids complete tuition. I would definitely help out, no doubt about that. But, I think it's a good learning experience for a college kid to take on some debt of their own & work to pay off a loan. Obviously I wouldn't allow my child to struggle if it came to that but I think like I said it makes for a great learning experience.
ReplyDelete