College and the American Dream

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In fact, it is almost impossible to achieve the ‘American Dream’ without some college education, and for many, receiving a college education has become a dream in itself.

A college education is an important part of the ‘American Dream’ and recent polls indicate that 90% of parents agree that college is an essential part of the ‘American Dream’.  

Parents are convinced that a college education can make a positive difference in their children’s life. Other poll results demonstrate this belief in education:

• Nearly 80% of people believe it is very important for their children to obtain a college degree
• Over 75% believe that a college degree is necessary to compete in today’s workforce
• About 65% believe that a college education means higher earnings and income over the long run
• 83% believe that the cost of college is worth it

Concern over the increasing cost of college

While most parents believe that the dream of a college education is obtainable they are concerned about the constantly increasing cost of such an education. Unfortunately for students and parents, the cost of college is increasing at a time when obtaining a college degree matters the most. Survey results show that:

• About 9 out of 10 parents agree that if college tuition continues to increase at the current level then a college education will be unaffordable.
• Over half of parents agree that a college education is not as affordable as it once was.
• Among students who plan on attending college, over half say that insufficient funds will limit their ability to attend college rather than their academic abilities.
• Over half of parents believe that their kids will have to borrow money to pay for college

College savings unlikely to be sufficient

Parents would like to minimize the financial burden placed on their children when they attend college. They want to help with college expenses by either paying all or the majority of college tuition. Unfortunately, these aspirations do not match the reality of their savings accounts. A nationwide survey of 1,000 parents of pre-college kids showed the following:

• 77% have saved less than $20,000 for their children's college expenses
• 62% have saved less than $10,000
• 43% have saved less than $5,000
• 12% have saved nothing at all
• 56% think scholarships will pay for a substantial portion of their college education

The cost of a college education is so large that many students can not pay for it entirely themselves and must receive some kind of financial aid. Such financial aid comes in the form of scholarships, grants, or loans. But this aid rarely is enough to cover the entire cost of college. For example the College Board estimates that:

• 2/3 of fulltime undergraduate students receive financial in the form of grants
• These grants average about $3,700 for in-state students at public four-year colleges, which cost on average about $14,333.
• Students at private colleges receive about $10,200 in grants but attend schools that cost about $34,132 per year. 

Obviously, many parents will discover that even with grants their savings is not enough to cover the cost of college. Parents will need to consider many savings options and begin saving for college early.  Despite the difficulties, about 80% of parents also believe that it is financial possible to send their kids to college.