Higher Education Costs Could Increase Wealth Gap

Paying for your child higher education has always been a common stress for parents. In prior years, many students have been forced to pay for a significant amount of their higher education costs either by themselves or through student loans. According to a recent news article (http://m.phys.org/news/2016-12-parents-funding-college-contributes-income.html), this trend may be shifting.

 

A recent study that interviewed thousands of college students across the country pointed out that parents today are paying for a larger percentage of their child education. On average, a collegestudent is receiving about $13,000 per year from their parents in education financial support Overall, about 75% of those students are receiving some level of support from their parents while the remaining are receiving no financial support. The reason why parents are suddenly able to provide more financial assistance is related to a variety of factors including a stronger overall economy, a higher stock market, and better long-term planning.

 

While the additional financial support from parents is a great benefit for any college student, there is concern that this will only continue to further expand the wealth gap. Students that do not have significant levels of scholarship or other financial support will be left with the burden of significant student loan debt. Having this debt can make it almost impossible to achieve financial freedom and save for a home, retirement, or other long-term financial goals. Ultimately, from a financial perspective, students with this debt will be far behind their classmates upon graduation.

 

March 1, 2017

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