START LOOKING FOR BARGAINS – AT 10:59 A.M. ET: As you head out for shopping today, maybe you'd better consider putting yourselves on a spaghetti and dog-food diet, especially if you have young kids. Contemplate this, from CNBC:
It's not just the nation heading for a fiscal cliff.
Soaring education costs could end up rupturing your nest egg -- and bring your child to the brink of bankruptcy before he even gets his first job.
Even the top 1% may get a panic attack from the latest projected tuition rates.
Campus Consultants Founder and President Kal Chany figured out what college will likely cost by 2030 based on inflation rates. He wrote the book, "Paying for College Without Going Broke."
The findings? In 18 years, the average sticker price for a private university could be as much as $130,428 a year The situation isn't much better if you go the public route. Sending your child to a state university could set you back at least $41,228 a year.
Seuk Kim, who works in public relations in the Washington, D.C., area and is in his 30s, knows what he's up against. He has three kids under the age of 3.
"I am very concerned. I make a decent living to provide for my family, but we are a one-income household," said Kim. "We will likely have to rely on some financial aid or hope they can qualify for a scholarship. I would hate for them to have to take out a huge loan in order to pay for their education like I did."
He calculates he'd have to save about $3,300 per month if he sends his children to the University of Virginia located near his home. It's a figure Kim says he can't afford.
Kim adds, "The kids are the greatest thing that's ever happened to me, but they are one of the worst things that happened to my retirement plan . . . . Now that I've experienced a double whammy of the bear market and having to split my savings up four ways, I'm not sure I'll ever be able to retire."
COMMENT: There is great danger here. Many of our best students may be cut out of our leading colleges. The wealthy schools will continue to build their endowments and provide scholarships. But to whom will they provide this help? To the worthiest, most accomplished students? Or to students who fit a pre-conceived model of the way the elite faculties want society to look?
There is plenty of potential for serious social conflict in the ridiculously rising cost of education. One alternative: start demanding that colleges cut costs by cutting out frills, and going to modern, online technology. Also, freeze federal and state aid, or even reduce it. (As aid flows in, colleges raise their prices.) Or, better still, restrict taxpayer-funded aid to those subject areas that actually meet public needs, like the sciences.
College costs have risen far faster than the rate of inflation. And colleges have often escaped the scrutiny given to other institutions by a compliant, degree-waving press. It's time for that party to end.
August 25, 2012