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Paul Andersen: Fair Game

Paul Andersen
The Aspen Times
Aspen, CO Colorado

A college financial advisor jokes that divorce is a boon for couples trying to send a child off to college because a broken home merits higher financial aid than a whole home. Some joke. I offered the suggestion to my wife, and she didn’t think it was so funny.

Our son is a high school junior, which is the time to ramp up the college search while grappling with the economics of college tuition. I used to think the subprime mortgage morass was confusing, but it’s nothing compared to strategizing the best financial position for college. For this you need a CPA and a Ouija Board.

My wife and I have been under the illusion that saving money scrupulously is the most prudent approach to personal finances, that frugality is a measure of responsible living. Now we learn that college admission boards look askance at these achievements in regards to financial aid. And woe to those families whose children have diligently accumulated college savings accounts. That’s the first place colleges go to reap their tuition.

For most families, college is a huge financial burden, something to keep you awake nights. We all want our children to attend good schools that will give them opportunities and academic challenges, but the price tag brings on sticker shock.

There are more and more students vying for a smaller and smaller piece of the financial aid pie, a direct result of the Great Recession. Incomes are down, and college endowments are stretched. Families struggle to lower tuition costs while colleges extract everything they can. For most families, the advent of college is a tumultuous time for planning their long-term futures.

Positioning financially for college becomes an engrossing challenge. Hiding assets and income is unethical and easily revealed, so the best you can do is to establish a base year that honestly reflects your financial needs. There are books written about how to do this, with many conflicting notions.

Some advocate making large expenditures before the “base year” – the senior year of high school – so a family’s financial outlook is low at the time of application. Buying a new car so you can send your kid to college seems like a strange tithing, and yet that’s what we’re hearing. Draining one’s savings is not a prudent strategy during times of economic uncertainty, and it’s counterintuitive for responsible parents.

It is important to remember that many colleges are in the business of education, balancing budgets against operating costs. Students are often seen more as short-term customers than as long-term prospects for America’s future.

This is sobering if you’re looking at expensive private schools, so there is an upswing in applications for public colleges, which means more competition among those applicants. Many state colleges are strapped for funds, for which they depend on alumni contributions, which decrease during economic downturns, so financial aid is diminished.

It makes me wonder about the way our federal government spends billions of our tax dollars on absurd pork barrel projects and inflated defense contracts. It seems that education would be a better long-term investment for the nation. Easing family finances would spur the economy and educate our kids to cope with a fluctuating and uncertain future.

Providing quality higher education bears directly on the nation’s health and wealth. Encouraging families through generous federal tuition support would be a better approach than burdening them with financial strain, especially since parents of college-age kids are aging and planning for retirement. We need incentives, not disincentives.

Is college an elective privilege or should it be considered a national priority? To my thinking, college is tied directly to national security by positioning our children with the best tools they can get in a volatile global marketplace. A boost in tuition aid would be a sound investment for the nation and should become a centerpiece for future stimulus packages.


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