Whenever I start these kinds of articles, I stop to ask, “Is this subject really relevant to the process of divorce?” Separation and divorce are realities of modern day life. Education of the children who come into this world through marriage is not just a major expense. For any caring parent, it is also a major responsibility.
Unfortunately higher education is also an increasingly troublesome responsibility. I graduated from George Washington University in 1977. My expenses were roughly $5,000 a year, all in. Today, alma mater projects $55,000 in costs and $15,000 for housing and food. The $55,000 tuition expense is calculated by someone to be $35,000 after grants and subsidies. That’s better, but it is still $50,000 after tax dollars. That means $75,000 pre-tax dollars if you get the typical grant package, or as much as $100,000 pre-tax dollars if you don’t. Since the late 1980s the cost of college has grown at four times the rate of inflation and eight times that of household incomes according to an article published on September 9, 2019 in The New Yorker reviewing anthropologist Caitlin Zaloom’s new study “Indebted: How Families Make College Work at Any Cost.”
Those numbers are staggering. Admittedly, there are many lower cost options than private universities. However, parents who are separated or divorced face some special challenges. The first is that they are no longer “sharing” costs of a single household. Even affluent intact families do not typically have $75,000 to $100,000 dollars of unallocated annual income to cast about. So today, parents embark on a process that seems more closely associated with a minefield than an education choice. As divorce lawyers, even we are mystified by a process where a child not only has the challenge of admission but then “graduates” to a process of making the selected college financially achievable.
The Saturday August 22, 2019 edition of the Wall Street Journal discusses the latest trend: college failure. The article is titled “Is Your Child Emotionally Ready for College?” It reports studies reflecting the fact that 85% of college students feel “overwhelmed” and a majority reporting that at some time the process of completing an undergraduate degree seemed “hopeless.” The data indicate that their concerns are not without basis. George Washington accepts 40% of those who apply. 72% graduate in four years. 80% have completed their degree in six years. This still leaves 20% unaccounted for. Compare this with Arizona State University where the same numbers for 4/6 year graduation are 43% and 63% respectively. Admittedly, the out of state cost of ASU is much less than GWU (at $44,000), but, if you factor in the graduation data, I submit the costs may be similar.
The authors of the article note that kids today face not only huge costs, but also a very fickle labor market at the back end. It is a market where entry-level salaries vary wildly and where employment stability is viewed by both the employer and the employee as something of a crap shoot. In the 1970s, despite a rather serious recession, an engineering student who succeeded in getting a job offer at Ford or GM could reasonably expect a lifetime of employment. Today, in a full employment economy, GM is closing four plants and Ford has announced that it is leaving the sedan business.
The article also notes that younger people today seem to lack resiliency and maturity. Many are also the product of parents who were over involved in their children’s lives such that both parent and child have problems separating. The authors quote Anna Freud (Sigmund’s daughter) who aptly observed; “Your job [as parent] is to be there to be left.” Amen.
Nevertheless, there are some other issues involved here which merit some attention. First, as noted, the cost of college has skyrocketed well beyond almost any other cost of living measure aside from healthcare. Second, despite the evolution of 529 plans, college savings have not kept pace with inflating college costs. Third, intuitively, kids know this because they can see the anguish on their parents’ faces when letters of admission and financial aid packages arrive. Meanwhile, parents often send some very mixed messages. Most parents want to tell their children that they can go wherever they are admitted. They want to do that because that is what their parents told them. Some parents feel guilty in limiting their child’s college placement because they feel that the child’s life was marred by a separation or divorce. They think they owe their kids. Unfortunately, as lawyers, we also see parents who run in the opposite direction, and “run” is the apt term. They tell their kids they don’t have any money for this enterprise and the kid will have to figure it out alone. These parents, often they console themselves by telling their child that college is not a good investment given the costs, the graduation rate and the job placement rate of many recent college graduates.
Is there any reason to wonder why recent matriculates are stressed? They commonly see one parent take a second job and forsake personal indulgences like a vacation to support them in college. They may see their other parent abdicate any responsibility to help, leaving one parent effectively holding the bag. They know that four-year graduation rates are declining while costs are rising. They have friends and classmates who have graduated with enormous debt and few job prospects. Part of this is attributable to our new data driven economy. But, it’s not just the economy, stupid.
So what is the solution? As suggested by Drs. Anthony Rostain and Janet Hibbs, it is not to ignore these issues but to address them with the child’s involvement in a problem-solving atmosphere, and to do that at the beginning of the application process. High School is not too early to discuss in practical terms what you can and cannot afford to contribute to an undergraduate degree. It is also a perfect time to discuss with a child what it means to incur debt, and how student debt comes infected with problems that make it more difficult to manage. Many parents who read this article are almost as ignorant of these issues (affordability & cash management) as are their kids. A parent needs to do his/her homework first. As lawyers, we have seen far too many parents sign or guarantee hundreds of thousands of dollars in student loans while blissfully hoping that their children will have lucrative jobs waiting for them in eight short semesters. Others have borrowed against or liquidated significant portions of their own retirements so their child can pursue a dream. The pursuit of dreams is fraught with peril.
Children in college in 2019 are confronted with far greater and more complex stresses than those of us who attended college a generation ago. This is not an unexpected crisis. College costs have been steadily rising and four-year graduation rates have been steadily declining. Separation and divorce statistics have added to the problem because dual households are more expensive to maintain than one. Yet, these problems are manageable and both you and your child will benefit from learning to manage in contrast to wishing for a positive outcome and enduring the four + year stress of seeing how it turns out. As a parent, you cannot insulate your child from the academic stress of measuring elasticity of demand in a freshman econ course. You can try to help that child understand what is realistic, in terms of which college expenses are affordable and which are not. In so doing you will not only be alleviating your own stress but that of your family as well.