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College or Bust? Maybe Both!

Few things cost more than unexamined assumptions.

Never is this more true than when parents begin thinking about sending their first child to college.

Where will Junior go to college? And why? And who is driving this decision?

I remember a meeting with two parents who wanted to send their child to their alma mater, which was now a very expensive private school  much more expensive than when they went. They would have had to borrow the money, so I simply asked them, Why are you doing this?

For one, the college they attended no longer exists  they left it back in the 80s when they graduated.

Second, I asked them what the goal of their childs attendance at this particular college was? Was it to get an education? Have certain life experience? Join a network?

Much more is caught than taught. Too many parents are inadvertently teaching their children that education is free (to them!), that money grows on a mysterious parent tree somewhere in the back yard and that the best time to think about massive purchases is after youve made them.

Could any of this be more ludicrous?

Here are a few suggestions for any parent of a potential college student to consider:

1. Set limits beforehand. Determine what you will spend on college before you or your child sets foot on any campus.

2. Involve your child now. Communicate this spending limit to your child while she is in high school so that she knows her actions in high school will determine her future opportunities.

3. No debt for at least two years. If your child does not have the grades or test scores to earn a scholarship to an expensive private school, why are you spending money you do not have to send them there? State schools or community colleges are wonderful alternatives for many students. After two years of school, if your child has proven herself

as a student and has solid direction, some borrowing may be permissible. But what I like even better is&

4. Work as education and motivation. If you dont have the money to send them to school, what should they do? J-O-B. Allow them to work. What if your high school graduate worked 40 hours a week, earning $8 an hour, between June and December? They could have around $8000 in the bank. This along with a part time job in the spring will get them through one semester. Repeat this work / study formula to get through school in six to eight years with zero debt and excellent grades (working students are usually much more motivated). You think this wont be impressive to an employer reviewing a resume?

Student debt is disastrously high in America. The average student graduates with over $12,000 in student loans and $3,000 in credit card debt. Many are much, much higher.

Just because every other parent is allowing their child to flunk their first class in Real Life 101 doesnt mean you have to make this same mistake.

Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
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