In all likelihood, most advisors have spent recent months talking with clients about how their options for educating their children have been totally upended by the pandemic. It wasn’t supposed to be this way.
Funding college education, as senior editor Eric Rasmussen notes in a remarkable cover story on page 36, probably consumes more client capital than any other goal besides retirement. For the children of a majority of clients, going away to college was supposed to be the period in their lives when they made the transition to adulthood.
It still may be that, but it won’t be the transition they expected. Suddenly in a transformed world, it’s every college and every student for themselves. Some experts estimate that 200 colleges could fold in the next few years.
To a certain degree, the pandemic has shone a spotlight on problems building for decades in the world of higher education. There is little doubt many jobs and professions still require a college degree.
But how many jobs are these professions likely to offer in the future, and are the benefits worth the costs? After the financial crisis, I spoke with several advisors whose clients had shelled out about $400,000 for their child to earn a four-year liberal arts degree and a three-year law school degree, only to find there were no jobs.
Medical school graduates at least face an employment market where their skills are needed more than ever as a wave of physicians is expected to retire in the next decade. They are the lucky ones in many ways, but unlike previous generations of doctors, young MDs today are likely to spend years paying off huge debts.
Financial issues aside, the picture isn’t so clear for undergraduates. College was supposed to be a time when young adults form a long-term perspective on what they want to do in life. Today, they are trying to figure out what to do next month.
The pandemic is likely to force some cold, hard decisions.
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