Comments on Poor Grades for Saving

• The culprit indeed
• Posted by Duncan on October 16, 2006 at 8:46am EDT

• Well. I think this is the real problem. I am a beliver of lead by example. I think what this shown is the lack of judgement and control on parent's part which will influence their child in the long run.

  I think a lot of us have been loving our kids in the wrong way. The game, the fashion clothes, the cool things... etc. We love our children but did not recognize the influence of TV ads and the skin deep human nature of showing off.

  I read my kid's social study text book which talked about the proper way of spending money. But without living example, I wondered how effective is it.

• Misunderstanding Entitlements
• Posted by Bill , Professor at UTB/TSC on October 16, 2006 at 11:00am EDT

• I am flabbergasted by continued studies predicated on an outdated upper middle class model that persists in assuming that parents should take responsibility for their offsprings' (by no means "children" when they venture off to college) educational funding. We need to do everything possible to encourage young people to take full responsibility for their own economic decisions (including college). If someone wants to help out and can afford it (an endangered species), fine, but we need to move away from any assumption that parents in the beseiged middle class are going to foot the bill by default. That model goes back to better days for the middle class in this country, and those days are long past.

• Right on the Nail
• Posted by Tina Milano at National College Access Network on October 16, 2006 at 11:00am EDT

• This survey confirms what many of us have suspected for years. What is needed is a shift in real family values.

• Posted by S.D. on October 16, 2006 at 11:00am EDT

• First, let me say that as a child I thought I would receive more scholarships. I took all the advanced classes, graduated with high honors, 7th in a class of 300. I received a $500 scholarship - big deal. Much later in life (too late) I realized you have to pro-actively go after scholarships. Wish I'd known that then.

  Secondly, and I'm sure few people will agree with me and that's alright, why is it a parent's job to pay for their children's college education? Why can't they get a loan (like I had to), go to school, graduate, find a job obtained with their degree, and then pay for their degree. That's what I had to do. My parents didn't pay a dime. And no, I'm not bitter. I appreciate the resourcefullnes and independence they have instilled in me. I have no intention of paying fully for three children's college education! I have a small investment plan in which I contribute a minimal amount monthly for their college. It might pay for the first two years at a community college. After that, they are on their own. Sorry.

• Posted by Tim on October 16, 2006 at 11:40am EDT

• I agree that parents should not fully foot the bill of the cost of education. I was very fortunate that my mother and father paid for my tuition and books (and some other miscellaneous items). But because I had to work to pay my rent, utilities, car insurance, etc., I appreciate the value of my education much more. Kids should not be given a blank check but I do think it is the parents' responsibility to help as much as possible. I have four children and, without sacrificing my retirement, I will help them as much as I possibly can.

• Posted by Larry on October 16, 2006 at 12:50pm EDT

• What no one want to acknowledge is that our system of financial aid penalizes families that save for higher education. As financial aid becomes increasingly "need based", the number of scholarships for academic or athletic achievement is shrinking. If parents want their children to qualify for financial aid they are better off not establishing college funds in the child's name. I would argue that this notion is flawed -- perhaps a system of matching grants for families who save would encourage greater parental involvement.

• Parents pay anyway
• Posted by mdg on October 16, 2006 at 12:55pm EDT

• I am saddened by the ignorance shown here. If a middle class parent saves money for college, the saved amount reduces the college's obligation before it reduces the parents'. The result is, if you save 20,000, the finanical aid package is reduced by 5,000 per year, and the parent must still pay the "EFC." Why save when the money does not benefit the saver? The only hope is that you save enough to pay the entire amount. Want a top flight liberal arts education, then save 180,000 total per child. That would be ten grand a year per child from birth. At 30,000 for three children, that is more than half of the after-tax income for the middle class.

• Poor Grades for Saving
• Posted by D , Mrs. on October 16, 2006 at 9:05pm EDT

• First of all, what are you defining as low income besides $49,000? Before you start your families, you need to take a closer look of how many kids that you can afford. Whether married or single, in today's world, both parents must work. I don't think it is fair to a child to get child support benefits and never see any. If they mother stop abusing their children's money to go out and party, buy fine cars, casinos, bingo, drugs, or what ever is not priority, and get a job, they would be able to at least help their child go to college. Also they should be trying to help teach their children so that they earn academic scholarships. It is not society's fault that you chose to bring a child into this world and can't provide for them. You knew first hand that you can't take care of yourself, why would you make a child suffer? Why should you get any special treatment because you choose not to work, and have children for the state to take care. My mother and father both worked, even though had ten children and was very poor, they were never elgible for any free progams, we were not elgible for free lunch, nor free education. We were taught to do our best and work hard and maybe someday it will pay off. I think that most of us working people don't stand a chance as far as our children getting tuition assistance because we may make slightly above that amount, and about 75% of our income is used for paying for where we live. Even though we recieve no breaks or tax cuts, we still must pay for education for our children to be financially responsible for our children. I think that the free tuition should be give only to those who can demonstrate who can make the grades, rather than income--Most of these so call low income parents is low income because of the poor choice they made in life!!-Majority of the parents collect child support for their kids and other benefits for 18 years. More than half of them use the child's money for their own personal use and the child never sees any of it. I'm not talking to the other parents who also work and contribute money to help their children succeed. I really think that the free education should be earned. If you can graduate from high school with honors or just do your best and have your parents contrinute something--even if it's thie time-- they should get the free tuition. If you can pay for education, you should, but both parents Must contribute to their child's success--that means getting a job to help out. We all have to contibute if we can.
  Nothing in life comes Free.

  Thank you

• Taxes
• Posted by kgotthardt on October 16, 2006 at 11:10pm EDT

• Create a College Tax. Make Community Colleges part of the public education system. Subsidize state colleges. Then everyone gets a chance to earn at least at an Associate's degree. Mom and Dad won't go broke, and the kids won't have to borrow themselves into indentured servitude for the remainder of their living years. I'd rather lose $5.00 a paycheck throughout my life than owe Sallie Mae interest!!

• Saving for College
• Posted by Michael Lopata , CPA, CCPS at The Education Path on October 17, 2006 at 10:50am EDT

• This article brings to light many things parents don't want to hear. We're in a society where everyone is expecting a quick fix to solve the problem. Many parents and students are looking for the school that will provide the solution by giving the highest amount of grants and/or scholarships. The reality is the planning process for college needs to start early and begin with the end as to how will the college bill be paid. The approach one has to take in planning has to be all-encompassing and not exclude key pieces such as budgeting, financing, and student positioning.

• Posted by steve , Full-time Dad on October 19, 2006 at 6:45pm EDT

• with the rising cost of education, and obviously many of you feel that the parents should not be 100% responsible for their kid's education, are those saving for college companies like Little Grad and Upromsie worth participating in?

• Impact of College Savings
• Posted by Mark Kantrowitz , Publisher at FinAid.org on October 20, 2006 at 8:20pm EDT

• The comments have some incorrect information about the impact of saving for college on financial aid.

  Money in 529 College Savings Plans, Prepaid Tuition Plans, and Coverdell Education Savings Accounts are treated as a parent asset for need analysis purposes. Parent assets are assessed at a maximum rate of 5.64%. So on $20,000 in savings, the maximum reduction in aid is $1,128. But less than 10% of parents of dependent students have any contribution from assets, given the asset protection allowance.

  Also, nobody says you have to spend the $20,000 evenly across all four years. If the $20,000 were impacting aid eligibility, it would make sense to spend it on college expenses sooner rather than later, so that it doesn't stick around to hurt aid eligibility in the later years. Front load the savings in the early years, reserving unsubsidized education loans for the later years.

  Of course, money in the child's name has a big impact on aid eligibility, since it is assessed at a rate of 35% (dropping to 20% starting July 1, 2007). But if the parent saved in the child's name, they can always invest the money in a custodial 529 college savings plan, which will either eliminate it entirely from need analysis (due to a legislative drafting error) or treat it as a parent asset (after Congress fixes the error).

  The bottom line is the penalties for savings are minimal, and families are better off if they save.