First Person: Our Kids Not Going to College Could Be a Win/Win for Everyone

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According to the National Center for Education Statistics, the average cost for 4-year institutions for things like tuition, room and board for the school year 2010-11 was about $32,000. I can only imagine what these costs might be by the time our children hit college age in 10 or 15 years.

The other day, as my wife and I were discussing the pros and cons of a third child, the topic of college costs of course entered the conversation. It made me realize just how much these costs can affect the planning for and raising of a child. And at this point, while I'm not saying my kids will or won't go to college, since it will largely be up to them and the current job environment at that time, their not going to college could be a significant financial win/win for all parties involved.

Debt savings for them

While we'd like to help our children with the costs of their schooling, if they decide to go to college, I don't think we'll be covering the whole bill. So let's say we split that average 4-year cost average mentioned by the National Center for Education Statistics with each of our two children. Even in today's dollars that would be $64,000 per child over the four-year term.

Using a simple loan repayment calculator like the one at, we find that at a 6.5 percent interest rate compounded annually, and paid off over 20 years that would equate to a payment of about $480 a month for our children, and an additional amount of over $50,000 in interest they would have to pay over time. Not having to start off life with this debt burden could provide them with a nice financial head start.

Retirement savings for us

And what about us as parents? While we might be able to cover our share of the school cost burden, it could put a significant dent in our overall financial and retirement planning. By not having to sink a total of $128,000 into our kids' schooling, we might put that money to work in other ways. Should we invest that money at 6 percent compounded interest for another 15 years before we retire, we'd have over $300,000 by the time we hit our golden years, more than doubling our money and adding substantially to our retirement fund.

Possibly better pay?

While I might not be a big Mike Bloomberg fan, feeling that he often meddles in things that should be left to people to decide for themselves, I did think he made an interesting point in a recent MSN Money article.

He comments, "The people who are going to have the biggest problem are college graduates who aren't rocket scientists, if you will, not at the top of their class," Bloomberg said. "Compare a plumber to going to Harvard College -- being a plumber, actually for the average person, probably would be a better deal."

The article goes on to say, "Bloomberg, himself a graduate of Johns Hopkins University and Harvard Business School, pointed out that plumbers make a good living and don't have to deal with paying off huge college loans.

Bloomberg may have a point. The 2010 median pay for plumbers, pipefitters and steamfitters was almost $47,000, the Bureau of Labor Statistics reports. The median pay for all occupations was slightly more than $33,000.

But the top 10% of plumbers, pipefitters and steamfitters earned more than $79,000, the agency said. Even better, the job segment is projected to grow 26% through 2020, with new construction and a wave of retirements among older plumbers spurring employment."

Being a college grad myself, I can see both the benefits and downsides to the college education experience. Sometimes I actually find myself wishing that I'd become a tradesman or entered the military rather than going to college. Therefore, I want to ensure that my children know their options and understand the benefits to both paths.

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The author is not a licensed financial or educational professional. Calculations have not been verified by a professional. The information provided in this article is for informational purposes only and does not constitute legal, financial or educational advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


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