Back to school, back to reality.
According to the National Retail Federation's 2007 Consumer Intentions and Actions Back-to-School survey, families with school-age children are expected to spend $563.49 on back-to-school merchandise, up 6.9 percent from last year's $527.08 average. It's estimated that total back-to-school spending this year will reach $18.4 billion.
And how about those freshmen heading off to college for the first time? Tuition paid? Check. Room and board paid? Check. But there's more--almost $4,000 more.
Recent research by the NRF and the College Board's Annual Survey of Colleges outlines an estimate of "start-up" expenses for college freshmen. Here are a few:
* Textbooks and school supplies: $904
* Clothes: $212.78
* Electronics: $1,727.50
* Dorm furnishings: $344.41
Let's say we get through all of this and our kids finally graduate with a four-year degree. Everybody is all set right? Not exactly. Are today's recent college graduates starting their careers with the big salaries to support their student loans, housing, transportation and living expenses? You know the answer.
A poll conducted by USA TODAY and the National Endowment for Financial Education found that 60 percent of the young adults surveyed feel more financial pressures than previous generations. Of those surveyed, 22 percent say they've taken a job they otherwise wouldn't have because they needed more money to pay off student debt. Many of them are now questioning whether the value of the degree was worth the investment. Translation: debt.
Sure, there's new federal legislation called the Student Debt Relief Act of 2007 that would, among other things, increase Pell Grant awards and reduce interest rates. One additional provision would be to have loans forgiven after 25 years of repayment. What a bargain! How would you like to be almost 50 years old and just paying off your student loans?
When are we going to have a real conversation about education costs?
With all of the attention lately regarding housing and foreclosures, the need for financial education is greater than ever. How are our kids supposed to be able to place a reasonable down-payment on their first mortgage? For a $300,000 home, a 20 percent down payment is $60,000--how are they supposed to come up with this?
When are we going to have a real conversation about housing costs?
Between the cost of higher education and the cost of housing, our kids are faced with the prospect of borrowing their way through life. How can we change the cycle from borrowing to saving if we don't have a serious conversation about costs?
We teach our children to stay away from drugs; we encourage them to get good grades. We pass along our values and beliefs. Let's also teach our children basic financial survival skills: earning, spending, saving and investing. And while we're at it, let's ask the presidential candidates to have a real conversation about the costs of education and housing.
Daniel Hebert is president of the NH JumpStart Coalition for Personal Financial Literacy, a statewide nonprofit that seeks to improve the personal financial literacy of young people.
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|Publication:||New Hampshire Business Review|
|Date:||Aug 17, 2007|
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