The recent bribery scandal involving different colleges, universities, and Hollywood celebrities sheds light on how far parents are willing to go to send their kids to the best schools. After all, graduating in top universities guarantees not only bragging rights but also lucrative opportunities and even financial security throughout their children’s lives.
The scandal isn’t the only proof. So are the different studies that show that U.S. parents will break the bank for their children’s education.
How Much Does Education Cost for Parents?
The 2017 survey by the HSBC Bank was significant for one reason: it revealed the huge spending parents made for the sake of their kids’ future. Among 15 surveyed countries, the United States ranked fourth with an average cost of $58,464. It’s the only non-Asian nation among the top five. It also bested China, Australia, Canada, and the UK when it came to spending.
When broken down into different levels, much of the spending occurred during primary school, followed by university and college. It might be because moms and dads today tend to plan early for their child’s education.
More than 65% of the surveyed parents said they started making plans for schooling, while 60% already discussed funding decisions. As expected, most of these learning-related expenses went toward tuition (particularly, private tuition), books, and other miscellaneous fees. But in a different study, about 2% of the income goes toward supplemental education, making an education franchise a sure-fire money-making business.
The parents’ obligation also doesn’t end as soon as the child receives a degree. A Merrill-Lynch study cited how over 75% of the parents continue to fund their kids’ needs, including everyday expenses. In turn, their contribution toward their kids cost twice as much as their retirement investments. The HSBC survey also mentioned how 94% of the parents are willing to cover for the postgraduate studies of their children or even send their kids abroad, especially in the UK.
Where’s the Funding?
Low-income families are less likely to spend this much, but it doesn’t mean they don’t stretch their budget to accommodate education. Much of the money they spend on education came from their day-to-day income and personal sacrifices. About 18% changed their working style while 24% forfeited their “me time” or personal hobbies.
Over 15% reduced or stopped all forms of leisure activities, such as holidays, while 15% said they developed different social circles. More than 55% came from day-to-day income, 34% from general savings or investments, and 24% from education plans. In spite of these, many parents still thought they were not doing enough, or they should have started planning for their kids’ education early.
Why Are Parents Spending a Lot?
There’s no doubt that education matters, but why should U.S. parents spend this much for their children? It’s all because of optimism. The HSBC survey revealed with the right education, 84% of the parents believed their children will have a bright future. More than 75% thought their kids will land a well-paying job.
Make no mistake about it: U.S. parents still value their children’s life happiness over career success, but they are also willing to secure the latter as much as they can.