As a new batch of college graduates take that exciting walk across the stage to receive their degrees; I pondered the idea of how many of them were returning students once lost in the life of family responsibilities to finally make their way back to the college education they had to put on hold. While there is the never-ending debate with the Democratic Presidential Candidates regarding student loans and the debt a college degree carries it frustrated me that they can't come up with a solution to include the mature students that missed out on the college experience after high school.
There are only eight states that have a state-sponsored pre-paid college fund. Florida is one of them. However, this fund is limited to a child and his or her future college education. Once the child graduates there is a limit of 10 years before the funds are lost and the principal returned to the depositor. If not used it does not transfer to another child. It does not cover the cost of books and expense outside of tuition. These items over a four-year span can be very costly. The other setback to this program, it's only for Florida schools and will not transfer to a college outside of Florida.
Every state has a plan called the "529 Plan". It is a lot like a 401K with the exception that the states do not contribute to the funds. The investor picks the investments and there are chances of taking a loss due to the type of investments made. Like a 401K it will fluctuate over time. The plus side of this plan is you can use it in any state of your choice. It can be used for other expenses like books and recently the law changed, and it can be used for K-12 private schools as well.
However, these plans are not set up for older adults looking to continue their education or change careers. We can only assume when politicians are promising to make college free for students, they are considering the fresh-faced high school graduates. But what about the working-class single parent that must support two or three children and is unable to meet the demands of a mortgage, car payment, and health insurance for the family? He or she certainly does not want to add the additional debt of a college education to the financial problems.
What if the states went a step further and like the 401K savings plans for retirement, changed the 529 Plans in a way that worked for every individual in a household? The matching contribution would come from the state the family resides. And like a 401K, contributions from the states could be percentage based on plans as well as the length of time. The family can withdraw the funds for any type of education, not by the student but by the expense. Turning in expenses to the state for payment directly to the educational establishment they are attending.
This type of system could very easily reduce the need for large amounts of financial aid. Give families the flexibility to shop around for the best prices without worry about breaking their personal bank accounts. A family of four with two working adults contributing to a fund on a by-weekly basis like their 401K could get the tax breaks as well.
Not everyone is prepared or able to start college straight out of high school. In many cases starting school and finding the pressure too daunting and dropping out to pursue other options is the best financial course for their family footing the bill. Yet these working-class adults come to realize at the age of 35 or older that the education they left behind has held them back from advancing in their career choices. The median age of the working class in the United States is between 35 to 55 years old. Their income ranges from $35,000 to $120,000.The median income for Central Florida is $45,000 per year. The average cost of tuition for continuing education $12,500 per semester and this amount triples for out of state students.
For a four-year degree, a student can incur a debt of over $50,000 just on tuition and an additional $20,000 from books and supplies. There needs to be a better solution. The cost continues to climb and the need for access to higher education is getting further and further away from the working-class. I intend to challenge the representatives in my voting district as well as the twenty-plus presidential-candidates running in 2020, in the eighteen months this question needs to be addressed to every politician whether they are running for office or not.
