Affording It All

Updated on November 28, 2011
J.V. asks from Chicago, IL
28 answers

It's that time of year when I do our 5 year financial plan, take a look at our long term financial health, and figure out our current priorities.

Well, I just did a college saving calculator and I am stunned. I did one of these when my daughter was born almost 4 years ago and I nearly fell off my seat, but I am still stunned. There is just no way we can save enough to even send them to the in-state school I attended.

It just got me thinking, how do people truly afford it all? I know that some folks just make buckets of money (my brother is one of those people), but how do us average, middle and upper middle folks afford it all in today's economy? Incomes are stagnant, food costs are going up significantly every year, as is everything else. It seems like our basic bills (water, gas, electric) have doubled in the last few years, yet our income just can't keep up. We are frugal (with some luxuries), and I try to shop smart, but there are only so many corners you can cut.

It just truly isn't possible to save enough for our own retirement and the kid's education, and my husband makes a decent amount of money! After basic bills, there just isn't enough to afford it all.

So how do you do it? And how do you pick priorities when they all seem equally important?
Edited to add:
I just want to add that I do have a semi-plan for how we are going to do this: we max out our retirement and have a set amount that goes into the college funds every month. When we are done paying off my own student loan debt in 3 years, all that money will then go into their funds, and I do put any gift money in there already. With every raise my hubby gets, more money into each account.

I am also going to homeschool, so I am hoping they can do the first 2 years of college at 16, saving us two years of a 4-year university tuition rate. If things are really bad, we will send them to Europe, as they are EU citizens, where there are caps on costs, etc. I am also hoping they go into unusual trades (for instance, there are very few women brew masters in the world, and maybe my daughter could pay for college by brewing world class beer. Who knows! Maybe my son will be a plumber. That would be great too. Or maybe my daughter will be a plumber since she is very interested in the internal workings of the house.

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answers from Phoenix on

My kids are doing College Plus online which is so much cheaper and faster because we can't afford it. Between being frugal and doing extra things to make money, I still ask this same question.

3 moms found this helpful


answers from Washington DC on

We save what we can. It is not my intention to pay for my kids college education.

I/we will pay for what we can - other than that? They are responsible for getting good grades and possibly a sport to earn scholarships and grants...this subject has been brought up before. Jim At Home Dad had this question...

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answers from Washington DC on

Well, we don't. We gift the kids what we can afford for college and it will be about 1/3 to 1/2, if they spend wisely. The rest is up to them. Loans, work, etc. My SS got and maintained an academic scholarship.

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answers from Chicago on

We will help with our child's college with what we can, but she will have to do the rest.

Many of my friends got loans and scholarships and did it on their own and I did too. It made me more responsible in college to get good grades (as I was paying for it) and it made me responsible when I got out to pay it back. I HAD to get a job! And I did. There ARE jobs out there, the economy is NOT as bad as the news would make you think.

My husband owns his own business and is constantly being told "the economy is bad, how do you do it?" He does it the same way as when the economy is good except he has to promote more and work a little bit harder. He makes good money and is expanding.

You just can't go into agreement with what "everyone says."

9 moms found this helpful


answers from Dallas on

Save for your retirement. Your child can work and get student loans, scholarships, grants, etc., but you CAN'T get any of that for your retirement.

9 moms found this helpful


answers from Seattle on

Most people don't pay the "sticker price" of college. Everyone but the fabulously wealthy gets aid of some type. This is the way it has always been.

However, please encourage your children to be very, very deliberate about whether they want to go to college. I am 37. People 10 years my senior are still paying off college debt. College debt can be crushing and interfere with your ability to achieve financial success and stability for the rest of your life.

Here's the shpiel I give the parents and teens in my life:
If you want to go into a field that requires a college degree, by all means go for it. If you want to go into medicine, there is no way to get there except by college degree.

If you can go to college without going into debt, (paying with scholarships, grants, and savings), go for it. All else being equal it is generally better to go to college than to not go. "All else being equal" is a key phrase here. All else is usually not equal.

If you want to spend a lot of money on an extraordinary experience, go for it. We don't consider a trip around the world an "investment". We consider it a fabulous experience that helps us to become more well-rounded people. It is just fine to consider college the same way. But just as we wouldn't intentionally go into debt for 20 or 30 years for a fun trip, we shouldn't intentionally go into a huge amount of debt for a recreational college experience.

If you just want to go to college in a vague idea that college degrees are always a good investment, please think again. College was always a good investment 30 years ago. It is not true now. The last thing a young adult needs starting out today is to be carrying $100,000 in debt.

There are a number of fields, many of them growing, that value practical experience much more than a college degree. Computers and farming come to mind. Most blue-collar work is trained through apprenticeships, and much of this work pays very well. Even some types of health care and teaching are starting to move to the model of "a little education and a lot of practical experience."

Take a good, hard look at today's economy and the skills you think will be needed in future decades. Ignore the "professional advisors", they often never leave their offices and don't have a clue about the real world. Go and walk around. Talk to your friends and family. Read newspaper articles. Pay attention to trends and patterns. Think for yourself and make a reasonable prediction about what the future holds. Then figure out the best way to acquire skills that match with future needs and your interests. This may not include a college degree.

The thing I always mention is food. Food prices are skyrocketing and industrial agriculture is collapsing. Whatever field you choose to pursue, I highly recommend learning something about how to raise your own food. The current low status and low pay for people raising food may be changing radically in the next few decades....

Eldercare and computers are also growing fields.

Good luck!

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answers from Williamsport on

Suze Orman said it best: "You can't afford to send your kids to college!!!"

She then went on to explain that most people do it by going into credit card debt and taking out massive loans to live, and not saving for their own retirement, emergency funds, etc.

Unless you make buckets of money, you cant' afford it. Period. It's also not good to sacrifice your own financial security in order to put your kids through school. If your kids totally kick butt in school and are driven, they will find supplemental funding to go, and even if they attend a community college, if they're serious, the designer degree only goes so far, and after the first few years, your work resume takes over.

Don't feel bad. My parents didn't pay for me to go to school. I went to art school for one year, dropped out because I was too broke to continue, I paid off my loans for that year for the next 10 years. Meanwhile, I worked waitressing and odd jobs, got into an assistant level at a clothing company, and within 15 years had worked for various companies and started my own clothing line in NYC living comfortably until taking a break to have kids.

My parent's parents didn't send them to college either. My dad went to Harvard on full scholarship and my mom worked her way through nursing school. We only have one uncle in our entire extended family who paid to put his sons through college. One is doing well, one isn't, but everyone else is doing fine too. Don't feel like you're the ONLY ONE who can't afford to pay for higher education for your kids. Most people can't.

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answers from Dallas on

We do believe it is our obligation as parents to pay for our daughter's college education. We believed that before we planned a child and I got pregnant. Our thought process is why would you bring a child into this world and not get them out of college debt free so they can begin their own life debt free.

Daughter is currently 16 and fully funded for college. TRUE, not everyone can afford it BUT, our daughter is going with no debt, no loans because WE made it a priority.

We teach by example to her to live debt free, live beneath your means and delayed gratification.

I realize I am in a minority on this issue but that is ok... everyone is entitled to do what they feel is right for their family.

Retirement is also a top priority. We are heavy duty planners. We don't do a 5 yr plan. We are constantly planning and tweaking our plan if needed. We are well funded for retirement as well.

We have 1 child by choice and she is much like us as far as a business mind, very detailed, high goals set for herself, and she has a college plan in place as for as what college would best fit her, etc. Her "job" is to maintain her good grades. Although she is an honor student and cheerleader, we don't bank on any type of scholarship... if she gets one, then that is just more help for her.

We live a good life, not luxurous, but a good stable life and I am thankful to have a husband who is bright financially and that we are both on the same page as far as priorities.

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answers from Pittsburgh on

Well, our philosophy is this:
We need to save for our retirement first.
We are also saving in a 529 Plan for our son's education, but definitely not at the rate of projection.
The thing is, if you do not save for retirement, it WILL be too late at some point.
As for a college fund that is lacking or nonexistent...there are options for funding a college education, grants, scholarships, loans, financial aid, work, etc.
I paid my own way through college by working, getting scholarships and obtaining MINIMAL loans--only what I needed for each year. My loans were paid in full on time. It's do-able if you want to do it. But once we retire, income will fall and the same opportunity to get around "failing to save" won't be there.
We WILL, if we can, pay for college and help as much as possible, of course, but we're not "counting on" paying for it in full.
For a good reality check of when/how/where to save for life's 'big stuff'--I recommend a Dave Ramsay plan.

6 moms found this helpful


answers from Austin on

We have 4 kids..... using student loans, part time jobs, grants, etc. my two older ones paid their way. I wish we could provide that, but we couldn't. We did help where we could, by providing car insurance, health insurance, cell phones, an inexpensive car, and other assistance as we could. #3 is now in school and doing it on student loans and work (she is married, but they both have very low-paying jobs, and she also has a son). #4 will be looking at culinary school in the spring... that will be expensive! He does have a $5,550 grant from being in an Americorps program for 10 months, so that will really help.

My parents did pay for my education, and frankly, I'm not sure how they did it. I did get a couple of scholarships one year, but that was it.

I really wish we could help more, but we can't.

5 moms found this helpful


answers from San Francisco on

The average people DON'T afford it all. That's why people are protesting.

Send them to Europe then! That would be a better option for many reasons. They can also do the first two years at a jr. college. They can do work study. There are ways to make it somewhat affordable.

5 moms found this helpful


answers from Boston on

I have the same concerns as yourself. On paper, my husband and I are a 100k+ a year household. That means nothing in the area I live in. Unless you were gifted a home, the median home price is 395. And that gets you a fixer upper. Forget about any aid. With our salaries, apparently we should be able to afford it all. But unless we want to live in a money pit, we have no choice but to throw our money into our mortgage every month, and make each item we own last until it is no longer usable. I am hoping that my children can earn scholarships, and maybe by the time that time comes, we are in a better spot financially. My husbands work is specific to this area, so it is not like we can go to another state and reap the benefits of large homes for 200k. So we keep grinding, hoping the choices we make will be for the benefit for all of us. Good Luck, and just an FYI, I had to pay for my own college tuition- I think that is also becoming the new trend. Parents are no longer footing the bill, because quite frankly, they cant.

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answers from Colorado Springs on

Nobody can afford it all. Some folks *look* as if they can.

But people survive, and their children do get their educations. If your brother isn't tearing his hair out about affording things right now, you may rest assured that he will do it some time in the future.

Meanwhile, parents go without the assurance of success. They do the very best they can. They also teach their children how to have good attitudes and good work ethics. All of them look for the opportunities that pop up.

There are some important parts of life that can't be planned on a financial spreadsheet. (I know you know that - it's just that looking at those numbers can be very daunting!)

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answers from San Diego on

Education is awesome if you can afford it. It's nice to get it for free. But it doesn't happen for most people. I'm not convinced that it even should.

My husband and I hung onto God's principles of tithing and believing early on. He went from 5 an hour to 35,000 per year and then to 55,000 per year. He stayed there for many years. I finally pushed him out of the nest and told him to stop talking about freelance and just do it. He went from 55,000 to 150,000 in less than 6 months. Then he was let go of that position and put into a 40,000 per year job! But you know what? He gave his all to it, just like when he was making almost 4 times as much. Then he got an offer for 140,000 per year. He gave his all for 4 years and then the company folded. He had to take a job for 55,000. It was hard to go back like that. But within a year he was at 75,000. This year he made near 100,000 with bonuses. Through it all, we tithe and we work to our all. I do the same in my business. I've learned how to maximize my business tax benefits and my income is higher in reality than it is on paper. (LEGALLY)

Neither of us have degrees and we both really want them. But raising 4 kids has been tough and we just don't have it. Our kids are figuring it out on their own too.

God is good and he can take people on a path you never thought possible. What's interesting is, that our standard of living has always been about the same. No matter how high or low things have been. We never figured out how to afford huge luxuries when he made a lot. But we've never starved or wanted for too much either. It seems that the repairs on our house or cars or the large dental bills or past medical bills always take every dime we make. But I'm so grateful that God always gets these bills paid! Even my unwise debts get paid every month. God is no respector of persons. He rewards us for our faith and obedience.

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answers from Seattle on

Like you, we homeschool, so hopefully 2 years will be free (dual enrollment), unless he goes ivy after that, in which case we start all over with 4. Shrug. We'll see how things go.

As far as affording it? We can't. How much have we saved for his education? Not a penny.

My husband just graduated a couple years ago (doubling his salary with that little degree because prerequisites for the same job he was doing require a degree after your name, and now it's almost doubled again). Which is well and good and fantastic... BUT *I'M* still in school. And will be, until about the same age our son will be headed to school.

I call it the 'paying for college perpetually plan'.

Out of highschool I joined the military at 17, although I don't get military benefits (long story), it DID have the rather fantastic result of making it so that colleges don't look at my parent's income until age 24. Over the past several years of going to school I have become a QUEEN of squeezing blood from rocks. There are a million and one grants out there that just need to be written for. Then there are merit scholarships, award scholarships, student loans, jobs that match or pay for part of your schooling, childcare subsidies, the whole 9 yards. It's a MESS of paperwork... but one thing I can tell you is that starting at age 13/14, my son will be joining in. Scholarships technically start in elementary school (science fairs and those sort), but when serious money REALLY becomes available is 9th grade. There are several dozen scholarships available for highschool freshmen. Then the number doubles again as a junior. Then we're talking REAL MONEY as soon as you're out of highschool.

I have a friend, though, who wrote for a couple hundred scholarships while in highschool. She's my muse. She avoided the 'big' ones, and went after 'small' money. $50-$200 dinky little scholarships. By the time she graduated... she had over 100k "floating" that completely paid for her tuition and living expenses. ((These days, the equivilen number would equal out to about 150k-200k))

I'm not that rockin'.

But I try.

In general, I win about 1:10 that I write for. In total, I've won about 35k in aid in addition to FAFSA aid (paid for 3 years of a fancy *awesome* preschool for my son that i'd NEVER have been able to afford on my own, and about $1000 a month to live off of as long as I'm actually in school.

Which isn't a LOT, but it's doable. Heck, if a family of 3 can live off of $1000 a month for 2 years solid, a single college kid CERTAINLY can (don't know what 1000 will equal in 10 or 15 years, but whatever the equivilent number is).

PART of my son's homeschool curriculum starting in just a couple years (he's 9) WILL BE grant writing. He already sees me do it. He technically knows how it's done, he just hasn't done it himself, yet.

So how will we afford it for him? The same way we afford it for ourselves. By getting reeeeally creative.

4 moms found this helpful


answers from Boston on

Oh J. I so know what you mean. It seems that we're just getting hit on all sides and there is no breathing room or light at the end of the tunnel. I think that the reality is that most of us can't afford it all, but I don't know that most of us ever really could.

At the end of the day, retirement savings absolutely comes first. There are many ways to finance college and limited ways to have income in retirement. When your children go to college, you'll apply for financial aid and that will calculate an expected family contribution based on your family's income, expenses and savings. Some schools will meet you at the ECF by providing scholarships, grants, work-study and loans. Some schools won't meet you there and those are the ones your kids won't go to. I know very, very few people who paid the whole cost of their children's college educations - most got some help of some kind.

I think that you're ahead of the game by planning at all - so many people really have no plans to curb spending, get out of debt and save for future priorities. One of the pieces of data that I crunch at my day job is average retirement account size and it's only about $50K, which is alarmingly low. We have hundreds of thousands of plan participants who are nearing retirement age (55-65) who have less than $100K saved for retirement and no pension. That's truly frightening.

On the other hand...keep in mind that the economy moves in cycles. The late 1980's - early 1990's were a pretty rough time. I remember friends' parents' businesses failing, people working extra jobs to make ends meet, housing prices tanking, etc. and then it all came roaring back in the late 1990's. So know that eventually, the economy will turn around - history tells us that it always does. And when it does, remember these hard times and save, save, save for the next downturn, which history tells us will follow the upswing.

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answers from Charlotte on

J., there are some wonderful community colleges to get basic general college requirements, even if the kids are interested in the unusual trades, as you put it. A lot of people who really don't want to pay for the liberal arts part of college do the first 2 years (associate degree) at community college, then transfer to a 4 year or trade school.

It really sounds like you are doing all the right things. The hard thing is the compounding interest right now - with interest rates being so low, yet the cost of food being inflated, it's hard to make your money work for you. Keep doing what you are doing. The EU possibility sounds great. If you end up having a high school later on which has an IB program, that is very helpful for looking at European schools. For a high school with an AP program, your children can actually end up entering as sophomores in US schools if they do well enough on their AP exams - colleges sometimes accept 4's on the tests and give college credit so they don't have to actually take the classes.

I think that a lot of people use their bonuses to pay for college costs. If your husband does get a bonus, if you can defer at least half of it for retirement until your kids are in high school, that is a prudent choice. (If you defer the whole thing, you have to dip into your own savings or do without a paycheck or two in order to cover social security that has to be paid on the bonus, and that's hard to swallow all at once, though of course, it's really an issue of timing). Then when they are in high school, go ahead and put back all of the bonus you clear for college expenses. We don't qualify for federal grants, so that is what we have done. You can qualify for subsidized or unsubsidized loans to cover what you can't pay out, and this is what the children sign for. If you don't want your child to take on debt, use this as a carrot/stick approach. If they make good enough grades, pay off the loan. If they don't, they are on the hook for paying it off, like you had student loans of your own. That makes their college experience mean more to them, I think. I know it did for me - I paid my last monthly payment on my student loan the month my first son was born. We celebrated with chocolate and a sip of wine, LOL!


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answers from Houston on

I have to respond, to Rosemud (Rosebud?) lol
Don't send them to Europe any more, the tuition in the UK used to be free, and it still is in Scotland, but in the rest of the UK, and almost all of Europe it is almost more expensive than America. In wales it is 3000 pounds a year, and England it is 9000 pounds a year, so for a four year degree (3 years over there) it would be around $27000.
I go to a good community college, where my associates degree is going to cost $10000, not bad. My local 4 year bachelors prices are $40000 for a 4 year.
It won't be as bad as you think, there are loans, and scholarships, and help, she can work part time (When I did my bachelors, I worked at a gas station on the weekend and one evening a week)

3 moms found this helpful


answers from Santa Fe on

I know what you mean - costs keep rising but salaries are not keeping up. Back in our grandparents day the money they made went much further. And today we have SO many things we all feel like we need (cell phone and phone plans, internet, tv monthly bills, etc) that our grandparents did not spend money on. We save a set amount each month for retirement/college educations...and more if we can. I know college will be crazy expensive once our kids are that age and I think of it this way...I had financial age to help me through college and they probably will too. We will help pay for what we can and they will apply for scholarships, grants and loans as well. That is the way I did it. You just do what you your best! We expect our kids to not only go to college but also to graduate school.

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answers from Providence on

My husband is the financial planner in my household. The minute we found out we were pregnant ( unplanned), he started saving, and making an account for our son. Any time my son recieves money on birthdays, special occasions, etc.,, he puts it in his account. He also puts a certain amount in several savings accounts at each pay period. We live below our means. We don't have any credit cards, and the only debt we have is our mortgage, and one car to pay off ( the other was paid off). He makes a great salary, however, he sets are means below it, so we can save the rest. We dont' go out for dinner( just for special occasions like birthdays, anniversaries), we buy in bulk, and we conserve in water, and electricity. We also don't go on any family vacations( unless planned for and budgeted in advance, and to visit with family).

As far as college education, my husband and I both want an account for my son regardless if he wants to go to college or not. We save what we can for him. Once he turns 18, he can decide what he wants to do with it. Their are scholarships, student loans,etc..However, If he wants to go to college, he will need to work hard to pay for it. We will give him what we can.

As far as priorities go, we see them as health, food, home, and transportation. The rest are luxuries/entertainment. We don't have a line phone, but two cell phones( middle line, no internet/games/or other fancy things), we have a family t.v., and laptop. That's about it. I don't see the need for extras, or fancy gadgets. We also live comfortably and happy. It works for us.

Added:@ Casey-I meant he can decide what he wants to do with it,however, if it isn't a responsible choice, he can wait til he is ready to make one..I won't just be handing him all of his money once he is 18. I was 18 myself once, I know the plays!

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answers from Chicago on

Only have 2 seconds to answer, but here's one tidbit: my girlfriend's financial planner told her and her husband to save for their retirement first and then for college. They said kids can find different ways to offset college costs -- scholarships, loans, etc., but there is no way to save for retirement last minute. So put yourself first and do what you can for their college funds w/o jeopardizing your retirement.

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answers from Washington DC on

I am one of five kids and we are all 2 years apart in school years. My parents paid our college loans while we were in school, as well as paid for all of our books, but we pay for it once we graduate.

That's how I plan to do it for my kids. I don't know many people that really afford to pay for their kids college.

I would LOVE to be able to save that money, but then they can't live now. No sports, no extras, no vacations, no fun things. I just can't do it all.

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answers from Beaumont on

I can't wait to read the answers you get because these are questions I ask myself all the time.

We've been following Dave Ramsey's plan for financial living and it is allowing things to be paid, savings to be put in place etc. and we're getting there SLOWLY however, for the people who don't have some sort of system, and live by it, how DO they do it??

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answers from Chicago on

I don't know anyone who paid out of pocket for college, but I know a heck of a lot of people who went to college. Four year universities. Private liberal arts schools. I'm a high school guidance counselor, and part of our job is to help our students get into college, and help them pay for it. There are hundreds of scholarships to apply for out there. If your kids are in sports, activities or music, there are scholarship opportunities. If they're academis whizzes, there are scholarships. There's also the FAFSA form you fill out to help get financial aid and loans. Almost everyone qualifies for some sort of financial aid.
I have three kids myself, and we've got fourteen years before the first goes to college. Yeah, I'm freaking out, but we're saving what we can and we'll look for scholarships and get loans to cover the rest.
By the way, unusual sports like golf and unpopular musical instruments like bassoon and string bass will make your kids more marketable to colleges:)

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answers from Nashville on

Save it one drop at a will add up when you need it to in 5yrs. By then you will be doing another 5yr plan and it can change. Don't starve yourself today for an uncertain future, but you can save a little here and there...

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answers from Minneapolis on

College costs are going up tremendously, because our state and federal government are supplying less than half of the money that they did even 10 years ago to support colleges and universities. We as a country have decided that higher education is not a priority. That leaves individual families that DO believe higher education is a priority to struggle with the now monumental costs of college. In the meantime, more and more jobs require a college degree, and even an advanced degree to even get into.

NOT every student can qualify for scholarships and grants. Many have to get student loans, which then leave them starting out tens of thousands of dollars in debt before they find their first job, which is paying less now than before. That is if they find one. Unemployment for new college grads is over 30% right now.

This is not a pretty picture. It's part of the reason people are protesting in the streets.

We can't afford it all, that's what's wrong with our economy and the policies in place. Again, this is why people are protesting.

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answers from Houston on

Rae from Warwick...I woudln't be too sure about letting your son decide what to do with all your hard earned cash when he turns 18..believe me...that will change...not a good age to have a wad of cash...just'll see!! Little saving do add up over the years...I am in the saving mode myself.

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answers from Washington DC on

You do what you can and you tell them they have to fund it.
My son is an Army ROTC 4 year scholarship recipient. That pays his tuition and his good grades got him a scholarship that will cover part of his room and board. He will graduate, go to grad school on the Army's dime, and then pay them 6 years worth of time. He earns money while he is in school. He will come out with a job. He will gain experience. He will not make as much as he would have if he came out and just went to work, as we all know the government doesn't pay as well. BUT, when he retires from the Army after 20 years, he can double his salary and do the same job AND he'll have to college loans to pay off. :-)
He wants to serve his country.
He wants to give back.
That is really what it's all about, isn't it?


1 mom found this helpful
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