A four-year degree at the most expensive institutions will cost more than $60,000 a year and, based on cost trends, probably much more in the future. For middle-class American parents who want "the best" for their kids, college can wreak havoc on their retirement plans.
"College costs have risen so much and there's so much uncertainty about where they'll be in the future," said financial advisor Jude Boudreaux, CFP and head of Upperline Financial Planning. "Parents want to help their kids, but they're feeling squeezed."
Many of Boudreaux's clients are what he calls "emerging affluents" — couples with good incomes and children approaching college age. Increasingly, he is having conversations about how those clients can support their kids without hobbling their own retirement savings objectives.
"It's not my place to as a financial advisor to tell them they can't do this," Boudreaux said. "We have conversations that are realistic and practical, and I show them what the financial consequences of their choices are."
Lazetta Braxton, a CFP with a large number of middle-income clients, is also spending more time laying out the options and consequences of family education decisions for her clients. It's usually an emotionally charged situation, and everyone's perspective has to be considered.
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"Everything has to be on the table," said Braxton, founder and CEO of Financial Fountains. That includes the parents who may "want better for their kids than they had, grandparents and other family members who might be enlisted to help with costs, and the children who may be forced into career paths they don't want — in which case, a lot of money can go to waste."
The key, said Braxton, is to control emotions.
"Parents have to determine what they want for their kids and what they're able to provide," she said. "You have to control the parental guilt.
"It's for the health of the generations and families."
Despite the growing importance of these decisions, Maurer at The BAM Alliance sees a disturbing lack of practical consideration of the issues. "I'm not seeing a trend towards better planning for this," he said. "Well-meaning parents are not sure how to frame the decision."
Maurer said that a shaming culture that puts the responsibility for education costs on parents can lead to disastrous decisions.
"There's a social competitiveness people need to be aware of," he said. "Don't just write the proverbial check for education costs."
And absolutely do not take out a loan from your 401(k) plan to pay for them. "Could there be a worse example of sacrificing your future than taking out a loan from your 401(k) plan to pay college costs?"