Hemorrhaging tuition money

Marketplace Staff Jun 13, 2006
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Hemorrhaging tuition money

Marketplace Staff Jun 13, 2006
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TEXT OF COMMENTARY

SCOTT JAGOW: Thousands of college students are expected to consolidate their federal loans by the end of this month. That’s because July 1st the government is jacking up the interest rates. College has gotten so expensive that students can’t just count on what their parents may have saved up for them. Commentator Jonathan Hobbs gives us a good laugh over that one.


JONATHAN HOBBS: Now that two of my three children have entered the lofty, musty halls of higher learning they are requiring college tuition. So, what’s the best way to describe my cash flow situation? Hemorrhaging. That’s it! I’m now hemorrhaging cash like an armored truck swerving down a gusty interstate with no back door.

Beware parents. If you think purchasing Huggies and Gerber’s was expensive, wait until they go to college. You’ll need your own set of “Pull-Ups” when you receive that first tuition bill and by the time they graduate, a dainty jar of Gerber’s pureed chicken might be considered a night out.

In my case, I decided to pay a professional to formulate a tuition savings plan. I sat across the table from a renowned financial planner whom I shall refer to as Ralph in order to protect his surviving relatives. I should have done a little more research on Ralph and whoever labeled him “renowned.”

But it was the mid-’80s, I had 20 years to invest and as long as Ralph knew more about tuition planning than Reagan knew about arms sales, I was going to be in the money.

Ralph eyeballed me from over his glasses. “Are you familiar with the term inflation? Are you sure you want to see this?”

The Carter years were over. Inflation was under control. It couldn’t be that bad. I had 20 years to plan. Then again, so did the engineers on the Titanic.

“Don’t sugar coat it, Ralph.”

He flipped the paper full of numbers across the desk.

“Well, that’s not so bad.”

“It’s upside down. Those aren’t sixes, they’re nines. The figure includes my projection for in-state tuition, room, meal plan, lab fees, and books. Now, if he decides to enroll in a private university . . .”

Ralph paused in mid-sentence, looking me over, “never mind. I doubt you’ll have to worry about your descendants attending private school.”

I looked at the paper. Sure it was a shock, but it was doable. If I started that day, saving $70 a month, per child, for 18 years, including compound interest, I would have enough for in-state tuition, housing, and a meal plan.

I set up the account, and for the past two decades my wife and I have diligently squirreled away the funds.

What Ralph failed to mention was that tuition inflation in this country would rival that of the Zimbabwean dollar. It turns out we’ve barely saved enough for a mediocre meal plan and a box of number two pencils.

Worse yet, Ralph passed away and I’ll never be able to cause him bodily harm.

My son was recently accepted into an excellent state university. After much deliberation I found a solution. I took the money we accumulated, added state scholarships and other various federal grants provided to half-wit parents and have now strategically positioned myself that once in retirement, my wife and I will only have to work part-time at Wal-Mart.

The other day several letters addressed to my son arrived from the admissions offices of three Ivy League private universities. You might say my garbage can is hemorrhaging unopened mail.


Jonathan Hobbs is a freelance writer and airline pilot who lives in South Carolina.

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