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High tuition a burden for the rich, too

Many affluent parents have no intention of paying the full freight for their children's college education, a survey says.

By MSN Money Partner Aug 12, 2011 10:26AM

This post comes from Matt Brownell at partner site MainStreet.

 

Just because you have a trust fund doesn't mean you're getting a free ride to college.

 

The latest Merrill Lynch Affluent Insights Survey (.pdf file), which tracks the financial views and habits of affluent Americans, finds plenty of concern among the affluent class with the rising cost of a college education. A solid 46% of affluent Americans say they are concerned with the cost of higher education, but that number jumps to 99% when looking solely at affluent Americans age 18-34. As such, one in three of all those surveyed had already started a college fund by their child's first birthday.

 

The data is drawn from a phone survey of approximately 1,000 Americans with investable assets of $250,000 or more. The survey is conducted on a semiannual basis by Merrill Lynch, which is owned by Bank of America.

 

While the survey found these Americans diligently saving for retirement, that doesn't mean their kids are getting their full tuition covered. A solid 47% of affluent parents said they did not plan to foot the entire tuition bill for their kids.

 

In many cases that was because they expected their child to receive some amount of aid from scholarships or grants, though we're guessing there won't be any federal financial aid forthcoming for these children. (How much should you be saving for college? Try MSN Money's calculator.) Post continues after video.

But another big factor had less to do with the high cost of tuition and more to do with financial education and value-building: 30% of respondents said they thought letting their kid pay some of the tuition would make them more appreciative of their education, presumably thinking that their freshman would be less likely to skip class if he or she was paying for it.

 

Another 29% said they hoped that the experience of paying for college -- which might necessitate getting a job or managing student loans -- would teach them about financial responsibility.

 

Indeed, financial education seems to be important to affluent Americans with kids. Many of those surveyed said they had imparted the importance of retirement planning and budgeting to their children, and one in five said they had brought their child along with them to a meeting with their financial adviser.

 

More on MainStreet and MSN Money:

11Comments
Sep 9, 2011 6:40AM
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See, millionaires have the same problems as us middle class working slobs,This article opened my eyes. We need to keep all those upper tax bracket loopholes and tax breaks, maybe eliminate our old age healthcare and cut our social security PONZE scheme entitlement so millionaires won't have to cut  their net worth, and worry so much about college costs.. Do the morons who write this stuff have any connection with the real world and what the guy making $70,000 grand a year with a couple kids, with no pay raises in years and a steady stream of benefit cuts, copes with?
Sep 9, 2011 8:20AM
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It's called sarcasm, Shirle.

 

I think the title of the article was misleading. The author isn't saying that the rich are worried about higher tuition costs, but that they don't intend to pay 100% of their kids' tuition in order to teach said kids about the value of money and education. Also, telling your child that you aren't willing to pay more than, say, half of their tuition but that you expect them to fund the other half with scholarships is a motivating tool used to encourage their kids to get good grades.

 

(Speaking for myself, I grew up knowing that college money wouldn't be forthcoming from my parents, so I joined the Army; I received four years of work experience, paid tuition for my degree AND a monthly living allowance while I attended school.)

Sep 9, 2011 7:26AM
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Crying I won't be able to vacation in St. Tropez and will have to downgrade to Maui! 

Awww, sorry rich nobles, that you may have to take a little nibble of what we peasant, middle class folks have to scarf down every day of our lives.  I know, why don't you cut more of our services so that you and little 'Buffy' can go frolic in the European sun?!

It's WAY past time for the middle class to rise and say ENOUGH!!

Sep 9, 2011 7:05AM
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Guessing there won't be any Federal Funds for these kids?  Guess again - the rich find ways to tap the middle class to support themselves.  All the while complaining about supporting the "welfare scum" of America.  Time for the middle class to stop supporting the "wealthy scum" of the US.
Sep 9, 2011 10:04AM
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But dad... I have to go to Ivy League or who is going to want to hire me with just a peons education? Nobody takes community colleges for real Dad!

Okay son, Ivy League it is but I'm only paying for half of your daily lunches!!!

Sep 9, 2011 10:20AM
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Boooooooo Hooooooooooooo! Poor little richie rich. Worried about the tuition to Yale or Purdue for your kids. Try being downsized 3 times and working 2 minimum wage jobs to put food on the table and keep the wolf from the door.  Out of touch a$$holes and out of reality  article. Jerks.
Sep 10, 2011 9:03AM
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This is actually true.  Families whose incomes put them just out of the window for financial aid are getting hit pretty hard (although from my present position, I do see this as a rather good problem to have).

However, this should serve as a wake-up call to the borderline affluent that their problem is the same problem as the students who have to borrow:  An inflationary system brought on by the wholesale removal of standard consumer protections (like bankruptcy and statutes of limitations) from the lending system that supports it!  The takeaway, here, is that these protections are not just consumer protections....they are price control mechanisms.

So in our (Studentloanjustice.org) mission to convince Congress to return the standard consumer protections that should never have been taken away, we hope and have good reason to expect that at least a few of the smarter citizens that fall into this "too rich for loans, too poor to pay" zone will find their way to supporting our call on these grounds. 

Sep 9, 2011 10:53AM
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the local college [siu] keep's wondering why they keep losing student's,  well duh even a 5th grader could figure this out,  try lowering your rate's,

Sep 9, 2011 9:05AM
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It is all information you can get on your own. Look at me: I did not go to college.

-Stalin

Sep 9, 2011 7:28AM
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eliminate our old age healthcare?! Are you stupid or just young? I'm guessing young & stupid. Our elder generation are not "throwaway's". They have worked their butts off so spoiled self-centered youth such as yourselves can say "put them in a corner & let them die".

 

Guess what 17571?:  you will be old one day 2. Then you'll be screaming a different tune.

 

If you're not young you just need to be slapped by your mama.

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