Your Kids (probably) Aren’t Above Average

I recently read a startling survey regarding parents and their beliefs about paying for college. The survey was done in 2006, and essentially shows that parents have unrealistic beliefs about their children. The survey states that 72% of parents believe their children have special talents that will award them scholarships.

Mathematically speaking half of all children are above average, and half are below. Just like doctor’s graduating from medical school, we can’t all be above average.

In contrast to the parents’ beliefs, 92% of financial aid administrators surveyed say parents overestimate the amount of scholarships and grant funds they will receive.

I don’t have kids (yet), but it doesn’t take much of a reach to understand that parents tend to believe their kids are better, smarter, and more talented than other kids. I’m sure they are, but it’s not prudent to assume that these differences will actually generate a free or subsidized ride to college. From a savings perspective it is better to assume that your children won’t receive any grants or scholarships. If they do, great. They can use all of that “extra” money in a 529 for graduate school or medical school later in life. Or you could use it for another child or grandchild.

A previous boss of mine actually offered his college-bound daughter half of whatever grants and scholarships she was awarded. He probably had too much income for his daughter to get any other financial aid, but scholarships and grants are open to anyone who applies. This method gives his daughter an incentive to search and apply for scholarships, and he gets a benefit as well.

Image Credit: juhansonin

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