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Postsecondary education questions: What if money is no object?

Here's a question:

Suppose you were filthy, stinkin' rich. You have so much money that you don't even have to think about saving for retirement. So much that you can, effectively, pay cash for all of your children to take as long as they want to go to school anywhere they want, and to major in what they want.

The question is... Should you?

Should you write each of them a blank check?

Should you put conditions on the money?

Should you pay for some educations, but not others?

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Granted, this is a highly rare hypothetical. But maybe we can use it to get at some general principles.

What's the stereotype of the rich kid whose parents paid for everything they wanted? Not so positive, is it?

But at the same time, isn't there a stereotype against "stingy" wealthy parents who don't help their kids out with college? We all understand that not everyone can afford to pay a lot towards college, but when parents can pay for it, is there an assumption that they should?

Well, let's think about it. Is there ever a time when a parent (who can pay)...should NOT pay?

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Off the top of my head, a parent shouldn't pay for university if he expected the young person would harm himself with the money or the opportunity. Suppose we're talking about a young adult who has a problem with alcohol or drugs, or a history of dangerously impulsive behavior. Unless the parent has the means to keep tight control of the purse strings (so that money intended for college expenses can't be diverted), putting that much money in the hands of someone so irresponsible could be a grave error.

But suppose it isn't so clear-cut...

Since money isn't an object, should the wealthy parent steer adult children to more prestigious universities? To religious ones? Should the parent steer the adult offspring to a college where most of the peer group will also be wealthy, or of the same religion? To a place where the peer group will be more diverse? Should the young person be allowed to choose whatever he or she wants? Is it necessary to have a concrete plan before beginning, since the family is wealthy enough to cover any contingencies?

Should the wealthy young person be made to come up with some of the money on his own, on the grounds that he needs to learn self-sufficiency and a work ethic? Should he learn how to make his own way in the world, at least somewhat? Or is that a pointless exercise for a kid who can afford anything, and ought he instead learn how to be a model rich person, busy with civic engagement and philanthropy, and passing down values to the next generation?

What do you think? What would you do?

 

Ground rules.

"All right, everybody."  I took a sip of my beer, set it down firmly and pounded my fist once on the table.  "I call this meeting to order."

My friend C. put down his herbal tea and said "We're having a meeting?  This is a meeting?"

I looked over at M., his wife.  M. and C. are the parents of two boys and two girls; their daughters, age 14 and 10, co-school with H. and me twice a week.  Their 14-year-old is the one who just had a five-week stint in a local charter school but recently returned to homeschooling. "You didn't tell him this was a meeting?"

"Uh, no."

"Okay then.  I'll fill you in." 

Dinner was over and the brownies hadn't been served yet; we had sent all the children away upstairs to play Wii or cards.  Throughout the evening they would keep poking their heads down to ask if it was time for brownies, and we would send them up with a terse, "No.  Go away."

This was somewhat unusual for us, but today we were talking about the kids.  Two of them, anyway.

 

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"Okay, C., do you remember a long time ago when our oldest kids were very little, and we were sitting around having tea in the evening, the four of us?  And we were sitting around talking about theology?  Do you remember the Mutual Anti-Evangelization Clause?"

He raised an eyebrow.  "I remember."

 

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C. and M. are members of the LDS Church, i.e., they're Mormons.  And C. and M. are kind of Mormon nerds in the way that Mark and I are Catholic nerds.   We used to have a lot of fun talking about the differences and similarities between our two faiths, late into the evening, when the kids were younger.  As we've gotten busier and busier, and our children's antics more complicated, we haven't had much opportunity to sit down and have long-ranging conversations, although from time to time we've fielded brief questions from one another, sometimes through email.

 

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"Do you remember how we used to say, 'One of these days our kids are going to grow up and start arguing with each other and then we'll have to have a talk about all this?'"

He grinned.  "Is that time now?"

 

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Last Monday was the 14-year-old girl's first day of seminary, which in the LDS church refers to an organized, four-year religious education program for high schoolers.  It's typically run on weekday mornings before the kids go to their "regular" schools; she'll be getting up at 5:30 AM for the foreseeable future.  I picked her and her sister up from her parents' house not long after her dad C. brought her back, and we headed to H.'s house for a day of history and Latin and Spanish and English, all the subjects that H. and I co-school.

She was really excited, and chattered about it all the way.  I nodded and listened:  it is a beautiful thing to see a young woman totally on fire for her faith.  And I'm charmed because she's a budding theology nerd too.  As well as the regular kind of nerd.  Did I mention I'll get to teach her geometry next year?

During lunch, while H. and I were eating and chatting in the kitchen, we overheard a lively discussion in the dining room where all nine kids were having their salmon loaf and apples.  I touched my ear and gestured to H. to listen.

"But it just doesn't make sense that God created everything out of nothing," the 14-year-old was saying.  "That's why we think of God as the Creator in the sense of an organizer."

My 12-year-old was saying, "No, God has to make everything out of nothing, because otherwise where did everything come from?"

"Here, let me try to find what it says in the Scriptures..."  I could hear the sound of rummaging in an overfull backpack.

H.'s almost-13-year-old was saying, "Guys.  Guys.  Maybe you're both right.  Maybe we should talk about something else."

We listened to them debating while we cleaned up, more than a little entertained -- at least we listened to the 14-year-old and my 12-year-old debating, and H's son going "Hey, I have an idea, let's play cards" -- and eventually I had to go put a stop to it because lunch was over and they had to work on their world history homework.

And then I had to put a stop to it again.

And again.  

I could tell they were trying to figure out a way to come to some point of agreement, but I knew darn well they weren't going to find one.  The LDS doctrine of creation is not reconcilable with the Catholic one.  Besides, they had work to do, and they were making the other boy feel very stressed out.

[H. told me subsequently that when their family sat down a couple of days later to watch the first televised debate between President Obama and Mr. Romney, their son asked exasperatedly, "Why do they have to sound so much like my friends?"]

Anyway, I figured I was going to have to talk to my son about the reality of having good friends of a faith different from his own, and I might as well start by talking to... my good friends of a faith different from ours.

 

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I told the story at the table, strenuously urging C. and M. not to apologize for their daughter.  It was a two-way thing, really, even though her excitement about her new seminary class was the trigger.  "What I'd really like to do," I explained, "is use this as a teaching opportunity.  We have a chance to model to our kids how -- well, how we can enjoy taking an interest in each other.  How we can sit around and talk together in a spirit of honest curiosity, you know?"  

"It's very useful to have a clear understanding of what we all believe."

"I know I've enjoyed being able to call upon explanations that come from 'my good Catholic friends' when I teach Sunday school," said C.  "I use you guys all the time."

"And it's interesting," I said.  "And talking about it and identifying the differences helps us understand our own beliefs.  I mean, I'd like to see them enjoy the same kind of attitude that we can have, sitting around and talking over a cup of tea."  I adopted a mock conversational tone. "'This is what we believe.' 'Oh, isn't that interesting, this is what we believe.'  'Oh, how very interesting. Is it like this?' 'No, it's not at all like this, it's like this.'"

"But trying to convince each other is kind of off the table."

"Well, yes, it's not necessary.  It's obvious that you are happy where you are and that we are happy where we are, and that we each understand our own faith really well.  But we can still explain because it's interesting, and neither one of us wants the other to have an inaccurate picture of each other.  And it helps us know each other better, too."

Mark interrupted with a sly smile, "Of course, it's not like we wouldn't be happy if you decided to become Catholics.  But our friendship isn't predicated on that.  We know perfectly well that if you have any questions about what we believe, you'll ask us.  And if we have any questions about you, we'll ask you."

"Yes," I said, "it's like 'Preach the Gospel, and we mutually agree that words aren't necessary.'"

 

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We knew we needed to lay down some ground rules for the teens and soon-to-be-teens. "Plus," I explained, "I want the grownups to get our story straight before we turn around and have this conversation with our kids."  After much discussion we decided on four points.

1.  Both of our families believe that it's the right and responsibility of parents to form their own children in faith.  That means that we can confidently say to our own teen, "It's fine for you and your friend to explain your faith to each other and answer questions.  But you need to know that your friend's parent doesn't want you to work hard to try to convince your friend that you're right and they're wrong.  We respect our friends' wishes when it comes to raising their children, and we aren't going to undermine their parental authority."  Bottom line:  explaining and answering questions is fine ("Catholics believe this because...") but attempts to prove to a teenage friend that his/her mother and father are teaching error are not permitted.  

2.  In answering each other's questions, they are not allowed to speculate and make up answers.  My son is particularly prone to this:  imagining how he thinks things ought to be, and then explaining them authoritatively as if that is really how things are.  I could easily see him saying, "Well, Catholics believe such-and-such..." when he's really only talking about his own opinion.  

So:  The teens are only allowed to answer questions that they are confident they can answer accurately.  We do not want them teaching each other inaccuracies.  And we do not want them being reinforced in inaccuracies about their own faiths.  And we certainly don't want them to think they've found points of agreement that don't actually exist.  We agreed to make the kids practice saying, "I don't know the answer to that.  I will ask my parents."  It's good practice anyway, to admit when you don't know the answers, and to go to a reliable source to find them.

 3.  They need to take note of the emotions of people around them.  It was unfair of my son and C. & M.'s daughter to keep debating -- even though they really were being polite to each other -- when it was clearly making H's son so uncomfortable.  (He didn't have the option to leave -- they were all supposed to be working on a project together.)  We will let them know that if their discussion is upsetting other people in the room, they should charitably discontinue it and pick it up at another time. 

4.  We don't give them permission to discuss eternal consequences.  Both families agree that kids of their age and level of catechesis aren't yet mature enough to fully grasp concepts of heaven and hell and purgatory and the like.  Speaking from the Catholic point of view, the concept of "no salvation outside the Church" has a certain subtlety that I'm not at all confident a twelve-year-old can grasp and accurately convey.  And discussions of damnation or salvation tend to have an emotional effect on many people -- not usually a positive one.

Obviously, if you believe in the immortality of the soul, it follows that there's nothing more important than their friend's salvation.  But they also need to trust that it's God, not them, who is in charge of that.  And they need lots more catechesis (and maturity) before they can discuss what their churches teach about "the last things" with confidence and accuracy.    So:  Ix-nay on the ell-hay, at least for now.

 

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That was Sunday night.  The next morning, on my way to pick up the girls, I had my 12-year-old in the front seat, and I had a chance to talk about it all with him.  I think it all sank in and made sense. 

Also, he spent several minutes describing with interest the differences between the doctrine of Creation as he understood it, and as the 14-year-old had explained that she understood it.  It sounds to me like he was paying attention.  

They're reaching the age when they start taking possession of the things they've been taught, trying to re-formulate them in their own words if they can, trying to make sense of it from within themselves.  They're going to talk to each other, and they're going to try to make sense of a world in which people they love have very different thoughts.  We have an opportunity, as friends who are parents of friends, to help show them how to set the tone.  It would be irresponsible not to do so with some deliberateness.

A few postsecondary education links to tide you over.

Man, I've been using up all my energy in the comments here and at Darwin's and Jennifer's.  No post yet.  So here are some links that are rolling around.

Here is a paper with an interesting premise:

Many students in four-year-degree institutions do not graduate within the stipulated time period. In this paper, we address a growing student explanation for this phenomenon: A “conspiracy” by university administrators to deliberately delay graduation by implementing poor academic advising in order to profiteer from student haplessness. It draws upon findings from a larger study exploring undergraduates’ usage and perceptions of as well as satisfaction with academic advising. The study was conducted in 2011 at a rapidly expanding mid-size public university in the Northeast. 

 

Here's a different educational system:

Who Needs College?  The Swiss Opt for Vocational School

As young Americans contemplate the immense cost (and considerable indebtedness) involved in a college education, it may be worthwhile to consider the options available to the Swiss—and whether they are worth importing into the U.S. In Switzerland, even though university education is free, the vast majority of students opt for a vocational training instead.

 

And here's an article about parents taking out student loans for their kids' education which they can't afford, encouraged by the colleges, bien sûr:

[Aurora] Almendral had been accepted to New York University in 1998, but even after adding up scholarships, grants, and the max she could take out in federal student loans, the private university—among nation’s costliest—still seemed out of reach.

One program filled the gap: Aurora’s mother, Gemma Nemenzo, was eligible for a different federal loan meant to help parents finance their children’s college costs. Despite her mother’s modest income at the time—about $25,000 a year as a freelance writer, she estimates—the government quickly approved her for the loan. There was a simple credit check, but no check of income or whether Ms. Nemenzo, a single mom, could afford to repay the loans.

Ms. Nemenzo took out $17,000 in federal parent loans for the first two years her daughter attended NYU. But the burden soon became too much....Today, a dozen years on, Ms. Nemenzo’s debt not only remains, it’s also nearly doubled, with fees and interest, to $33,000. Though Ms. Almendral is repaying the loans herself, her mother continues to pay the price for loans she couldn’t afford: Falling into delinquency on the loans had damaged her credit, making her ineligible to borrow more when it came time for Ms. Almendral’s sister to go to college.

 

Maybe I'll catch up this weekend...

 

Darwin writes about college debt.

Darwin, sparked by a discussion in the comments at Jennifer Fitz's blog, uses some debt data as a jumping off point.

Suffice it to say: A lot of people borrow a lot of money to go to college. More and more people are doing so, and they're borrowing more and more. Should we advise people not to do this?

On the one hand, it is clearly possible to get yourself into a lot of trouble with college debt....So if you're contemplating taking out debt to pay for college, you need to think about what the payments are going to add up to. Look at the financial offer letter you get from your college, see how much borrowing they expect you to do in your first year, then multiply that by 5 (to hedge and deal with the possibility they may change your grant to loan ratio in later years) and run that number through a loan calculator.

For the last 11 years, MrsDarwin and I have been paying ~$250/mo towards paying off her college loans...I certainly would not consider it too high a price to pay for the education we got. Even though MrsDarwin hasn't worked for the last 10 years, I would not remotely consider that money a bad investment. That said, if your situation is such that you're looking at very high monthly loan payments to service your student debt, you need to do some serious thinking.

...Another important thing to consider in this regard is why you're going to college. If, like me and MrsDarwin, you're going to college for the purpose of deepening and broadening your education, you need to think about how much getting that education is worth to you.

If you are going in order to get some kind of professional degree or certification, it becomes a much more straightforward and monetary task: You need to ... decide whether this professional education represents a good return on investment. Since you're not pursing a professional degree or certification simply for the joy of learning or for the experience, it makes sense to be very hard nosed about the analysis involved and determine whether the risks and costs involved are worth it.

Handily, he compares average debt at my and Mark's alma mater with his and MrsD's.

(Mark and I didn't have to take on any student loans at all, so our distaste for nondischargeable debt is in part borne of not experiencing it much).

I can't argue with what Darwin has to say, except to add that I wonder -- if you surveyed people who went to college hoping for a broadened, deepened education -- how many of them would agree 15-20 years later that they were still happy to be paying it off at hundreds of dollars a month. I suppose it depends on what they think they got for their money.

Because the other side of the value question is -- do people who go into debt for their education usually get the quality education they were expecting?

 

 

Serial numbers.

This is a moving piece about young people, the descendants of Holocaust survivors, having themselves tattooed with their grandparents' concentration camp numbers.

When Eli Sagir showed her grandfather, Yosef Diamant, the new tattoo on her left forearm, he bent his head to kiss it.

Mr. Diamant had the same tattoo, the number 157622, permanently inked on his own arm by the Nazis at Auschwitz. Nearly 70 years later, Ms. Sagir got hers at a hip tattoo parlor downtown after a high school trip to Poland. The next week, her mother and brother also had the six digits inscribed onto their forearms. This month, her uncle followed suit.

“All my generation knows nothing about the Holocaust,” said Ms. Sagir, 21, who has had the tattoo for four years. “You talk with people and they think it’s like the Exodus from Egypt, ancient history. I decided to do it to remind my generation: I want to tell them my grandfather’s story and the Holocaust story.”

This may sound like a strange association, but the first thing I thought on reading this was: it's like they're retweeting the tattoos, into the future.

 

Postsecondary education questions: Merit for the moneyed?

(This post is part of the series on postsecondary education.)

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I spent a number of previous posts in this series discussing the purpose and scope of postsecondary education, the responsibilities that parents and their young-adult children have toward each other, and alternatives to going the "traditional" route.

Now I want to turn to exploring the price, value, and cost of an education.

They aren't the same, of course.

• "Price" is a measure of dollars paid to an institution -- either a total, or a per-year or per-credit-hour rate.
  
• "Value" is a measure of benefits gained.
• "Cost" includes price as well as expenditures of time and effort, and other benefits that are foregone in order to obtain the education.

I am particularly interested in the distribution of the cost among all the people who have an interest in a student's education. So that begins today.

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I first thought I would consider the case of families who are wealthy enough that they could easily pay for just about any education that a student could want -- so stinkin' rich that all the kids could languish in private schools for years and still never come close to making a dent in the retirement nest egg or affecting anyone's lifestyle.

Of course, these folks are rare, and I doubt any of my readers are among them. So why start there? Simple -- it lets me remove one constraint, a very constraining one. Removing constraints by fiat (or at least by "what if?" is a fun way to see a new side of a problem. And even if what results is a Very Special Problem, you still might find a principle in there that can be generalized. It is sort of like assuming a frictionless surface in your physics class.

The first thing I did is go Googling around to look for opinions about whether rich people ought to pay for their children's college educations, or whether they ought to make the young person work for some of the money. I was particularly interested in whether the answer varies with household income.

But I was immediately sidetracked by an extraordinary large volume of discussion about P. Diddy and his son. It seems that back in June -- well, let's let the LA Times tell the tale:

UCLA scholarship for Sean 'Diddy' Combs' son raises eyebrows

When Justin Combs turned 16, his father, hip-hop mogul Sean "Diddy" Combs, gave him a $360,000 silver Maybach.

When Justin Combs decided to play football in college, UCLA gave him a $54,000 scholarship.

As UCLA confirmed this week that the recent graduate of New York's New Rochelle Iona Prep would enroll on a full athletic scholarship, some questioned if the cash-strapped school should pay for the education of the son of a man worth an estimated $475 million — and whether the 18-year-old should have accepted the offer.

Google is full of titles like "Should rich kids get scholarships??" and "Should kids of the ultra-rich be ineligible for college scholarships?" and just as many answers ranging from "He earned it, he deserves it" to "HELL NO not as long as there is a poor kid who needs the money more."

For the purposes of the discussion, it doesn't matter whether we're talking about academic scholarships handed out to kids with good grades and test scores, or whether we're talking about athletic scholarships handed out to kids with skill and grace and confidence on court or field. Let's call both kinds "merit" scholarships to distinguish them from "need-based" scholarships.

I do not think many people get the purpose that these merit scholarships serve.

Universities do not offer merit scholarships in order to reward hardworking or smart high school students for being hardworking and smart.

Neither do universities hand them out because they are good institutions and they wish to recognize deserving good people.

(If that was the point of merit scholarships -- to reward merit -- why not give away no-strings-attached cash awards, instead of tuition at their own institutions?)

Full disclosure: I fell for that line back in 1992 when I was a high school senior weighing multiple scholarship offers. I really didn't think to question why someone wanted to give me a pile of money! All the adults around me were saying "Congratulations! You earned it!" and I believed them. This was not a belief that turned out to be good for me overall (although the money was sure nice).

But even if the age of print advertising failed to get it across way back then, the age of Internet media and the like should have rammed it home: when someone wants to provide you a service for free, chances are good that his real product is YOU and his real service is selling YOU to someone else for money.

We get to use Facebook for free because the owners are rewarding us for all our wonderful attributes, right? Heck no: the owners are selling our eyeballs to advertisers. And smart kids and good football players go to college for free because they've worked hard and earned it, right? Heck no: football players put butts in the seats and sell licensed merchandising, and the smart kids look good in the glossy charts describing the statistics of the student body population. Colleges routinely brag about how many National Merit scholars they capture, and test scores/GPA of the entering classes are a big part of the U.S. News college rankings which exert so much power over a school's admissions policies.

Few people "earn" scholarships. "Win" is a better word; but "earn" is reserved for things you have a right to, like your wages. Universities have to distribute merit scholarships with some appearance of fairness, but otherwise they don't have to offer them to anyone. If you are number 20 on the list at Big State U, whether you get a scholarship depends on whether Big State U decides to hand out more than 19 this year -- it is out of your hands -- so it can't be something you "earned" because they don't have to give it to you. You have given them nothing in return. They offer it up front in the hopes that, having been enticed to attend the school, you will improve their bottom line somehow (whether it be by rankings, or by football wins, or by demonstrating compliance with Title IX, or by enhancing their student body diversity, or some other measure the University cares about).

Universities offer scholarships because it suits them, and because they are competing with other universities for the high school seniors who will make their numbers look good. What will happen if the university takes away a rich high-scoring kid's scholarship and gives it to a low-income, slightly-lower-scoring kid because he needs the money more, or because a low-income kid with a good score has demonstrated more "merit" than a rich kid with a good score? It will only result in the high-scoring kid going somewhere else and the school's average admissions score going down ever so slightly. This does not help the university's ranking, nor the bottom line. That will not change until U.S. News and World Report starts boosting universities' rankings based on the number of low-income kids who go there and succeed.

Organizations do exist to give scholarships to aspiring postsecondary students who are at risk because they lack funds to attend school, or to provide incentives and rewards that recognize academic achievement or encourage study in particular fields. Most of these organizations are small ones, offering small amounts. (I help operate a very, very small one: a yearly scholarship offered in memory of my mother in the school district where she taught kindergarten for many years. The money literally comes out of the pockets of Mom's family and friends. It's about enough to pay for textbooks and supplies for one semester.)

Local and state governments also offer scholarships to promote the interests of their communities: to stop a brain drain, or to create positive incentives for at-risk youth, or to encourage study in some industry that is economically important to the area.

Both of these are fine things. But let's not pretend that the universities have the same motives.

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More on the "But what if you were really really rich?" question next time.