Ep.29 – The College Planning Process Part 1: Cruel Optimism

Podcast

May 20

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Are you concerned about the rising costs of college? What college or university would best fit your kids? Or curious about how critical a mentor for your kids in college could be? In this podcast series, we discuss a college planning process that takes a comprehensive look at how to plan.

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This week I kick off a special three-part series focused on the college planning process. It’s not just about saving, financial aid, or loans. The college process that I am building at TAMMA is a comprehensive look at how to plan, have conversations with your kids, and the right questions to ask students and college administrators, and professors.

What Families are Up Against?

Suppose you are fortunate to have a career that pays well. In that case, most of your retirement savings will probably need to come out of your paycheck via your discipline and good investing luck, not a pension contribution from an employer.
- According to CNN Money, only 14% of workers are covered by a pension plan.
You may be spending a large part of your income on housing. Paying for a family-size dwelling in a good school district has become increasingly expensive.
- According to Zillow, the median average home price has increased from $165k in June 2011 to $279k in April 2021, or 69%. However, this can vary greatly depending upon what part of the country you live in.
Out-of-pocket health care costs continue to grow beyond the rate of inflation, and that’s if you’re lucky enough to have employer-sponsored medical insurance. If you’re buying it on your own without any federal subsidies, the cost has long since risen above $ 20,000 annually for many families (and that’s before the four-figure deductible).
And then you have the rising costs of college, which has outpaced average inflation for decades, but why?
- Costs rise because people expect better or increased salaries,
- States under budget constraints have cut spending to state institutions, and
- Few private colleges and universities have the endowments to subsidize annual costs.

Decide What You Want from College

Before you go looking for any college for your child, everyone in the family needs to be clear on why they are pursuing higher education in the first place.

Learning – to have your mind blown and grown.
Finding your people - a group of people, both peers and older grown-ups, you meet along the way who will stand up for you at your wedding, carry your casket, and be by your side for every other good or bad thing along the way.
A means to an end - a credential that leads to a job, which may enable your child to move a rung higher on the socioeconomic ladder than where you are.

A fourth could be a combination of the three but think of it as a pie chart where specific slices carry more weight than others. If you do care about all three, decide how you will weigh each one against one another?

If what you and your family seek from college is the credential alone, the traditional residential undergraduate experience may not have been a good value for you even before the pandemic.
Schools from Southern New Hampshire University to Arizona State have spent years building digital infrastructure to offer bachelor’s degrees at lower prices.
If you believe—and the schools can persuade you—that employers in your chosen field will hire you based on that degree, you might extract the most possible value from the experience of acquiring it from them.

Six Crucial Factors

Of the six crucial factors that contribute to overall well-being, the three related to mentorship turned out to be the most important.

“Time and again, a single dinner at a professor’s home . . . seemed to have an outsized impact on the student’s success—for minimal effort by the professor.”

The 2014 Gallup-Purdue Index Report, the largest poll of college graduates in history, reported the following: having a good job is a crucial factor in overall well-being.

Specifically, respondents listed six critical aspects of college that contributed to their engagement at work:

Involvement in extracurricular activities,
An internship or job where they could apply what they learned in the classroom,
An academic project at school that had taken at least a semester to complete.

And then came the three things that depend on the human beings that the colleges and universities employ:

Did the graduates have a professor who cared about them personally,
Made them excited about learning, and
Encouraged them to pursue their dreams.

In other words, were they able to find a mentor? It’s a word that means something different from “teacher,” and it may not always be a professor.

Cruel Optimism

What does it mean to have made it in America? Part of the dream is a good education, and parents are supposed to have the money to make that a reality. But what if you don’t?
So much of any given family’s struggle isn’t just for economic survival; it’s also a struggle against shame.
We are not exactly rational when facing some of our biggest fears, and we are not using data to plot the trajectories of our children’s success on blue-lined graph paper.
But once we start contemplating letting them go and sending them off to somewhere unknown, the specter of disaster and fear can tend to take hold.
The new knowledge that a global pandemic can reach our shores and cause enormous damage doesn’t help the matter.
The fear of our children tumbling down the status, salary, and social class ladders that many of us have spent decades climbing or clinging to is a documented phenomenon.
According to the Pew Research Center,
- 58 percent of Americans believe that the children walking around today will be worse off financially when they grow up than their parents are now.
- 37 percent expect them to do better, while the rest figure things won’t change much at all. People over fifty are particularly pessimistic:
- 32 percent of them figure that the next generation will be better off.
Lauren Berlant, an English professor at the University of Chicago, has a cutting phrase for this that turned into a full-length book: Cruel Optimism.