Saturday, February 9, 2013

Financial Degrees

My oldest is doing a college visit this weekend.  Within a year, the odds are good that she will have chosen a school, applied to that school and she will have been accepted to that school.  We can ignore the inevitable no longer.  After a grueling application process, some institution out there is going to be accepting my money real soon.  When it finally leaves home, I will give it a hug and shed some tears, but it is for the best, or so I will be told.  I fear that the money won’t ever come home to visit on the holidays.  I will have to learn to let go.

I attended an orientation for parents of children nearing the end of high school and considering college.  Of course, ‘considering college’ is a misnomer, since a child who does not attend college in America  is statistically bound to earn less and struggle more in life than a child who graduates college.  Yes, a child may choose to skip college, but that is a dangerous roll of the dice in the 21st century.  College ‘choice’ is only an illusion.  It’s a necessity.

This orientation turned out to be our high school’s version of Scared Straight for first time parents.  They provided experts to walk us through the process, but the majority of the time, that meant walking us through the economic reality.  College costs a sh*tload of money and it doesn’t take long to multiply the one year price tag by 4 years, and by 3 kids.  Since I went to college, I could do that math in my head.  It's not business, Sonny - it's personal when it's your kid who is going to school. 

At the core of this financial extortion is the FSFSA.  As those with college age children are probably aware, this is the standard federal form that parents complete in order to apply for college financial aid.  According to the presenter, all the colleges use the information on this form to make decisions regarding grant eligibility and favored loan eligibility.  Beginning this year, you can have your IRS records populate directly into the form.  How convenient.

Based on this discussion of paying for college, I received quite an education.  If you were responsible, saved some money to send your kids to college, bought only what you could afford, and did not overextend yourself with a large mortgage, you are screwed when it comes to grant money and favorable loans.  If you were irresponsible, saved no money, bought a house that was above your means to pay, you are all set with grant money eligibility and excellent loan repayment options.  Makers, say hello to the Takers.

Lest you think that only the unwashed are winning the college financing game, the mega wealthy are also in line for grants.  They have tax shelters and other tricks at their disposal to reduce their income on the FSFSA and thereby qualify for grant money.  Apparently it’s the meaty part of the curve that’s taking it on the chin, or in other parts.  It’s the ultimate Catch-22: without college, my kids will be poor; with college, I’ll be poor.  Ramen noodles are no longer just for the college crowd but I need to lose a few pounds of flesh, and some college out there will be happy to help me out. 

There is an upside to my impending poverty.  A new study finds that parents who are footing more of the college tuition bill for their children give them a better chance of graduating.   That’s good.  But let no good deed go unpunished.  That same study finds that generous financial support appears to lead to lower grades for the little ones.  Lower grades are bad.

The study, published in the American Sociological Review, suggests students with some of their own "skin in the game" may work harder, and that students with parents picking up more of the tab are free to take on a more active social and extracurricular life. That may be fun and even worthwhile, but comes at a cost to GPA.

Given these facts, I expect my children to graduate from college, each blessed with a tireless work ethic, honors-worthy grades, and no friends.  Their skin will be in the game and that’s no game.  That’s just the way it will be.  It’s for their own good, I will tell them, and late in life they might actually believe that. 

So my loving children, start saving those birthday checks and $2 bills from your aunts.  There is a college in Virginia patiently waiting for my money to enroll, but my money will need a roommate - your money.

Is it too late for a sports scholarship?

Is this what I will be paying for?  If she comes home with Frank the Tank, I will withhold all financial support...

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