Great to see teens think they should help pay for college
BY TERRY SAVAGE SUN-TIMES COLUMNIST Jul 14, 2006
Updated: May 3, 2013 12:14PM
Originally published: September 2, 2004
Here’s what surprised me most about all the suggestions I received from financial planners for back-to-school columns. It wasn’t the suggestions that you take your child shopping for clothes and school supplies to “teach them the value of the dollar.” It wasn’t the “this is a good time to teach the dangers of credit-card debt” pitches.
It was a survey from Fidelity Investments that caught my eye. The “Surprise! Research Shows Teenagers Feel a Strong Obligation to Help Parents Meet Skyrocketing Cost of College Education!” That last exclamation point is mine. Whose kids did they survey? Do only the unspoiled, thoughtful kids of parents who have done the best job of teaching real values answer those surveys? The footnote says the study talked with “477 college-bound teens ages 14-to-17 years old,” and their parents, with household incomes of $35,000 or more.
Here’s what they found when they talked to the teens:
**The vast majority of teenagers (95 percent) feel obligated to shoulder some of the financial burden of their college education.
**Three-quarters (74 percent) think their parents should pay only half or less of their college expenses.
As for the parents:
**Under ideal circumstances, half of parents surveyed (50 percent) would be willing to pay for all or most of the cost. However ...
**Two-thirds (67 percent) of parents don’t anticipate being able to contribute as much toward the cost of their teen’s college education as they would like.
No surprise that the parents are worried about paying for college. There don’t seem to be any free market checks and balances on college tuition. You’d think that as fewer parents can afford to pay, there might be some limits on price increases. But not so far.
Of course, Fidelity commissioned this survey to remind parents to use its 529 College Savings Plan -- a good idea if you have time to build a college fund.
But I’m still smiling at the idea of high school students being willing to work their way through school.
Maybe it’s a new trend. In fact, maybe they’ll teach their parents a few things -- like the concept of working your way through retirement! I’m proud of those teens -- and any of your children who would answer similarly. Why don’t you bring it up over the dinner table tonight and find out?
College tuition tax credit
Speaking of the cost of college, a fine organization called College Parents of America has created an online petition drive to get Congress to preserve and expand the tax deduction for college tuition. If you’re a parent, or grandparent, or just concerned about the cost of educating the next generation, go to www.CollegeParent.org, and you’ll see a box on the home page. You can “sign” the petition with just a click of your mouse.
Here’s College Parents of America’s agenda:
* Eliminate the sunset on tuition tax deductibility.
* Raise the annual tax deduction for college tuition and related expenses to $10,600 from $4,000.
**Allow all tuition-paying taxpayers to claim a tuition tax deduction.
Currently, joint filers with an income of up to $130,000 can deduct up to $4,000 for tuition and related expenses. But this provision will expire on Dec. 31, 2005 -- unless Congress acts.
It seems like a sensible idea to me. After all, we allow a complete deduction of mortgage interest to help expand home ownership. Why not allow deductions to make our children more educated, so they can earn bigger salaries to afford those ever-appreciating homes?
**According to the 2000 Census, college graduates took home an average of $45,678 per year compared to the $24,572 average salary of those who only completed high school.
* In today’s dollars, a bachelor’s degree is worth more than $2.1 million over 40 years, says the Princeton Review.
* The Department of Labor reports that employment for those with bachelor’s degrees grew by 1.8 million during the past 10 years, compared to a loss of nearly 700,000 jobs for those armed with a high school diploma.
So if students have to work to get a degree, and parents can get a deduction for the money they contribute, it’s a good investment. It means we’ll all have a brighter future. And that’s the Savage Truth.
Terry Savage is a registered investment adviser, and appears weekly on WMAQ-Channel 5’s 4:30 p.m. newscast. Distributed by Creators Syndicate.