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Writer's pictureBill Holmes

The Importance of “framing”Part 8 – Getting it Right – Paying for College!


With college, you don't always get what you pay for!

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” Aristotle


“Always be a first-rate version of yourself, instead of a second-rate version of somebody else.” Judy Garland


All of my children have paid for their own college. Does that make me a mean parent? A bad parent?


I don't think so.


I’ve spoken to a number of parents who paid for their kid’s college education, and their frame goes something like this. “I had to work very hard to get through school, and I don’t want my children to struggle like I did”. That is a fine frame, but I don't believe is a good predictor of a likely outcome.


As a side note, one of my friends who took this approach recently told me that his adult son had moved back home. It seems he can’t find a job with the degree he chose. My friend let him pick the degree and pay for it, now his solution is to pay for his graduate school!


Sigh.


By the time one of your children goes to college, they are no longer a child. They are a young adult. As an adult, they need to understand the adult choices that we all make. One of the key choices we face is how to best allocate our resources. Deciding where to go to college, how much you are willing to pay and how you are going to pay is a great learning opportunity.


My frame is that you need to make a child pay for their college, that way they are focusing on both quality and value!


As the great Milton Friedman once said, money is spent 4 ways:


"1. You can spend your own money on yourself. When you do that, why then you really watch what you’re doing, and you try to get the most for your money.

2. You can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.

3. I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!

4. I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government."


If I pay for my child’s college education, they are spending my money on themselves. The “value” component is completely lost.


My children choose their college, determine what it will cost, and find a way to pay for it. Of course I help with the choice, and I do incentivize them choosing college by telling them that I have money set aside for them. If they graduate and find gainful employment, I will give them the money.


And I have!


What has my frame on this issue produced?


I have 4 daughters. One is a Nurse at John’s Hopkins Hospital and is working on her Masters (employer paid!) , one just graduated magna cume laude from the University of Maryland, and the third is currently enrolled in a nursing program at a community college and will transfer to Maryland next year. The other is in the top 10 of her class in High School.


What is your frame?


Coda


COVID-19 is fascinating! The governments reaction has been incredibly aggressive, and I can’t argue with the logic of the approach. We only have so many hospital beds, and if everyone gets sick at once we will be completely overrun. Already my local hospital isn’t taking new admissions and the skilled care facilities are not accepting new patients. And yet the disease doesn’t appear to be even as dangerous as Swine Flu! I do see bad framing everywhere, so I am going to explore that in the next installment.


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