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College Student Blows $90,000 College Fund in 3 Years

College Student Blows $90,000 College Fund in 3 Years

In light of the recent MOAA Spouse column on financial advice for college bound students, I thought this recent story about a young woman and her college funding problems would be interesting – as well as the broader issue of her parent’s role.

 

During a radio show in Atlanta (The Bert Show), Kim, a soon to be college senior, called in for help because she’d used up the $90,000 college fund that her grandparent’s had set up for her. She had used it for tuition of course, but also for a trip to Europe and “school clothes” and now with a year left of school the money was gone and she owed the school $20,000 that she didn’t have.

 

She explained the spending this way:

 

“I used it to budget for school clothes and college break money, I probably should have not done that. I took a trip to Europe. The Europe thing, I thought, was part of my education, and that’s how I tried to justify that.”

 

Kim also admitted she wasn’t good at budgeting. But this is point at which her story jumped from just a call to a morning radio show to making headlines. Instead of stepping up and acknowledging her misdeeds, she cast blame on her parents:

 

“Maybe [my parents] should have taught me to budget or something. They never sat me down and had a real serious talk about it…”

 

She also dumped on her parents for not helping because she, like, knew they had the resources:

 

“[My parents] said there was nothing they could do for me…They’re not being honest with me saying they don’t have [money] because my dad has worked for like a million years and they have a retirement account.”

 

Aside from her dad being really old, her logic that her dad should access his retirement money to bail her out from bad spending decisions casts some light on the decision process she must have used to blow through $90,000 in three years. Of course this reasoning is coming from a woman who had to budget for “school clothes” at college. How many new-clothes cycles does a college student need? If the student doesn’t grow, they’re good for a couple of years with their clothes.

 

With her parents saying they wouldn’t give her the money (they suggested a loan), the show’s DJs brought up getting a job at her school. However, Kim said that would be embarrassing, and noted that she:

 

“…know [her parents are] trying to teach me a lesson and blah blah blah and character building but, like, I hope they realize [working part-time] could have such a negative effect on my grades and as a person.” “I’ll have to work at least 15 hours a week. I won’t be focused on my studies and it’s hard enough as it is.”

 

These comments show me she’s trying to justify not having to do a little hard work – lots of students work 15 hours or more and get A’s. I teach these type of students. I think what she’s really trying to say through her millennial-speak is that she won’t be focused on her social life (where she can show off her school clothes).

 

After listening to the full interview though (there are 5 segments – you can hear them at The Bert Show website), I realize that Kim’s not unique here. I think we all have stories of kids from college not knowing basic life lessons. For instance, at the Boston University new student orientation my wife attended this summer, one parent asked the head of housing if laundry service was available for students in the dorms. Heck, my 13 year-old can do his own laundry.

 

So, while I don’t think her parents are to blame, I do think a lot of her problems do stem from growing up without being prepped for life on her own. As such, Kim’s story should raise some red flags for parents. When our kids do go off to college and start living independently, they need to have some life lessons already instilled in them – cooking, smart spending habits, washing clothes, speaking well, etc.

 

Looking at Kim’s situation, should the parents share the blame? Should they have guided her more in budgeting decisions? Please tell us in the comments below.

 

Saving for your children’s education requires a long-term plan. And, like saving for retirement, the earlier you start your plan the better. Use this calculator to help develop or fine-tune your education savings plan.