Source: Life Inc. – The upside to not saving for your child’s college education.
You may want to help out somewhat, however. In her study, the kids that seemed the most focused on school and the future were actually the ones that were getting no help at all.
I can tell you from personal experiences that the above quote is true. I paid for 100% of my college education and totally understood that I needed to stay totally focused on being a success in my studies. Otherwise all the hard work I put into just being able to be there would be fruitless.
My father wanted to help with the costs but he was spending 100% of his income just trying to live and have a home for himself and my younger brother. My mother, who had abandoned us years before was then married to a man with substantial wealth but didn’t find it necessary to offer any assistance. The very fact that she was married to a rich person was the primary reason I couldn’t qualify for hardship scholarships!
I spent five years living in the same low-cost dormitory and saw so many kids come whose parents paid everything. They for the most part spend much of their time in the lounge playing cards or just watching TV. At least half of them would last about three semesters and then flunk out. Some would go on to join fraternities with their strong social agendas. There was a core group in my dorm unit who were, like me, working many hours per week to pay for their education. They remained while the other came and went.
So, yes even more than forty years ago it was also true that those who were getting no help with college expenses were the most focused on their studies. I paid for 100% of my college expenses with work and a few student loans. But given the ever-increasing costs of a college education that seem almost impossible today. If you want to realize the true value of something it is more meaningful to bare some of the burden of obtaining it than to just have it given to you on a platter. Parents, even the rich ones who can easily afford it, should realize that their kids need to be responsible for at least a portion of the expenses.
This excerpt from a Wall Street Journal article peaked my senses. It seems the rich, who we give massive tax breaks, are aware that their kids will probably blow through their inherited wealth after they are gone. What a bind to be in! I bet they take all this planning and trustees as tax deductions. It seems very ironic that while most of us are just trying to stay out of the poor house, and in any other house at all, there are those who worry about the other end of the spectrum.
Instead of “cleverly written trusts” and “carefully chosen trustees” how about just letting them make their own way in life like the other 98% of us do? Who knows, maybe Paris Hilton would even be a productive member of our society if she had not inherited so much of granddaddy’s wealth. Up until recently (the 1980s that is) the government taxed wealthy estates so that a significant part of the accumulated money could go back for the common good. Our country was even established around the ideas that aristocracies are a drain on society. They thoroughly renounced the European version when we formed our country. In fact it was not long after our revolution that the French also rebelled against their aristocracy in a very bloody fashion. So how is it now that we do so much to retain our version of aristocracy that makes up the top 1% of our population but controls almost 50% of the country’s wealth?
OK, here I go again with the “Walters plan” for accumulated wealth. I know we can’t force the super rich to allow their children to make their own way in the world. But let’s treat the money they pass on to their children as “income” and therefore subject to the usual income taxes. To me income is income no matter where it comes from. If you get money that you didn’t work for and you haven’t paid any taxes on it is considered income to you. Another part of the “Walters Plan” is where we establish a more equitable income tax structure. Don’t tax the billionaires at a lower rate than the people who empty their trash. Let’s set a level of tax free income so that a person can get the basic necessities and then tax everything else at a certain rate and with no tax deductions. These big tax loop holes that congress seems to endlessly write for the rich, and for many others for that matter, are one of the reasons we are in the deficit hole we are in.
But what do I know.