I received a tweet from Forbes magazine today that says the United States is now $1.2 trillion in tuition debt. People are taking out college loans for students at an alarming rate.
In light of these startling stats, I think it’s time we got off of the “gotta go to college at 18” train for a moment and start seriously considering alternative ideas .
Parents in Debt
Parents are going into serious debt to help fund their kids’ college education. Many of them still have this debt at age 50, 60, 70 and beyond. Some of them are literally *dying* burdened with this debt.
Then the cycle continues with their children, who also find themselves in debt with private and public loans. When their kids’ kids reach 18 they will also feel the pressure to take out tuition loans. Then those kids will have to go through life with this great burden. And so on and so forth.
I believe the main source of this grief is colleges, who keep increasing their tuition costs year after year because they know how easy it is for parents and students to get these college loans. They should be ashamed at how they are sucking families dry, but as corporations they are mostly concerned with making their shareholders as wealthy as possible, so they’re not ashamed one bit.
The only real answer is for the general public to get off that merry-go-round ride that tells us we have to do whatever possible to send kids to college at the age of 18.
A New Idea (“Crazy” Talk)
So here’s a new “crazy” idea for parents to consider for their 18-year olds:
– Save as much money as you can from the time your child is a baby if possible. Even if you put just $30 per month into a savings fund earning 6% per year your child can have at least $12,000 saved in an account by the time she’s 18.
– Enroll your 14-year-old child into a local or nearby entrepreneur school or take him to an SBDC center to learn about entrepreneurship. Ensure that the child attends classes at least once every month up until he is 18 and starts running a business by 16.
– At age 18 give the child a choice: 1) take the money you have saved to put toward a college education 2) put it toward his business or 3) put half toward starting a small business and the other half toward going to college in the near future.
– Encourage, promote and fund self-education for your child (books, audiobooks, courses) while she’s in high school about her industry of interest, marketing, sales and general self-improvement concepts.
– If the child chooses option 2 or 3, encourage and assist her with growing her small business so that in 2-3 years she is making enough income from it (still living with you) to afford to pay for her college education. Every dollar of profit she earns from running her business should go toward a fund to help pay for her education.
– After 3 years has passed, the child can still enroll in college if she chooses. She may even decide at that point that college isn’t that important because of the success of her small business, which she can run and maintain for as long as she wishes.
Here are the benefits of this “crazy” idea:
– You teach your child from a young age about entrepreneurship. You also teach her from age 14 that going to college at 18 doesn’t have to be her only choice for success.
– You teach your child from a young age that she doesn’t have to go along with the “crowd” (all you have to do is show her what the “crowd” is doing when they’re 40,50, and 60 years old and still knee-deep in debt).
– Your child still has the option to go to college if he wants, if only for having a chance to live the “college experience.”
– You jump-start your child’s future, giving her a real shot at becoming a millionaire instead of limiting her mind to being happy with a $35,000 per year 40 hour, 9-5 job for the rest of her life.
– You give your child the opportunity to avoid being burdened by large amounts of debt at a young age
– YOU avoid being in debt with college loans for your child until you’re 100
Also, if enough people were to take this or a similar route for educating 18-year-old kids, colleges would eventually be forced to reduce or plateau their tuition costs just to stay in business.
College Loans for Students – Something to Think About
This may not be a perfect alternative for every case, but it’s something to think about, right?
Remember that high school education is a necessity but a college education is not (unless your child is determined to become a doctor, lawyer or engineer). Ask Bill Gates and most of the country’s self-made millionaires.
Parents of today who have already taken out college loans for students may have to deal with this great tuition crisis, but we can start making changes today so that young children don’t have to go through the same situation. Giving your child an education in how to be financially independent and run his own business is just as valuable if not more than a basic college education.
Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.