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What Happens if your Kids Don't Go to College?

What Happens if your Kids Don’t Go to College?

As parents, we all want to provide our children with a quality education, more so, see them finish college. That’s why many parents choose to save for their children’s education. But, what happens in the event your child won’t be able to go to college?

In this blog post, we’ll explore:

  • Importance of having a plan in place
  • Investing on college education
  • Alternative to college

Importance of having a plan in place

When you start saving for your child’s education, it’s important to have a plan for if your child cannot pursue higher education for whatever reason. This can also help ensure that your hard-earned savings don’t go to waste.

An option is to transfer the savings to a different child or family member. If you have multiple children or grandchildren, you may be able to transfer the funds to another child or grandchild who is planning to attend college or university. This can help ensure that your savings are still being used for their intended purpose.

Alternatively, you could keep the funds invested for a future child or grandchild. If you don’t have another child or grandchild who plans to attend college or university, you could keep the funds invested for a future generation. This can be a smart strategy for those who want to ensure that their family members have the financial resources they need to pursue higher education.

Investing in college education

There are various investment and savings plans available that can help parents save for their child’s education.

In the United States, A 529 Plan is a savings plan with tax benefits intended to assist with educational expenses. Initially focused on postsecondary education expenses, it was later broadened in 2017 to include K-12 education and in 2019 to encompass apprenticeship programs. In addition to these uses, 529 plans can be used for repaying student loans and contributing to a Roth IRA.

In Canada, the Registered Education Savings Plan (RESP) is a tax-advantaged investment account that can be used to save for a child’s post-secondary education. Contributions to an RESP are tax-deductible and the funds grow tax-free until withdrawn.

It’s worth noting that some investment plans, such as the RESP, may have restrictions on how the funds can be used if your child doesn’t go to college or university. It’s important to research and understand these restrictions before investing in any plan.

The Australian government spent $20 billion on tertiary education in 2022-2023. This includes funding for universities, vocational education and training (VET) providers, and other tertiary education providers. However, it is waiting for the formal signing of the Australian Universities Accord before further discussions on the 2023 Budget’s education component is laid down, part of which includes $127.3m for new opportunities in the higher education sector connected to the AUKUS nuclear submarine programme for the Royal Australian Navy.

In terms of student contribution to tertiary education costs, the Higher Education Loan Program (HELP) is available to Australian citizens and permanent residents to assist with the cost of their tertiary education. Under the HELP scheme, students can defer payment of their tuition fees and repay them through the taxation system once their income reaches a certain threshold. In 2022-23, the threshold for repayment is $48,361 per year.

As for the number of students enrolled in tertiary education, Universities Australia reported that there were 1.6 million domestic students enrolled in tertiary education institutions across the country. This includes both undergraduate and postgraduate students.

Alternative to college

Embracing vocational training

In Australia, vocational training offers practical and hands-on education that equips individuals with specialised skills. Apprenticeships, trade schools, and vocational courses are viable alternatives for young adults who are more inclined towards practical learning. These avenues provide comprehensive training in fields such as carpentry, plumbing, electrical work, automotive, hospitality, and more. By opting for vocational training, individuals can gain valuable skills, certifications, and industry experience that open doors to rewarding careers with competitive salaries.

While these options may not be as expensive as a four-year university degree, they can still be valuable investments in your child’s future. In fact, according to the Australian Government Department of Education, Skills and Employment, vocational education and training (VET) can lead to high-paying jobs and career advancement.

Entrepreneurship and business endeavours

Not attending college can also provide an opportunity for young Australians to explore their entrepreneurial spirit and start their own business ventures. In today’s digital age, launching a startup or online business has become increasingly accessible. Resources like online courses, mentorship programs, and networking events offer valuable support to aspiring entrepreneurs. By pursuing entrepreneurship, individuals can develop critical thinking, problem-solving, and leadership skills while creating their own career paths and financial independence.

Pursuing creative arts and skill-based careers

For those with artistic or creative inclinations, not attending college does not mean forsaking their passion. Australia has a thriving arts and creative industry, offering opportunities in various fields such as acting, music, writing, design, and visual arts. With dedication, talent, and perseverance, individuals can pursue these careers by building portfolios, networking, and seeking apprenticeships or internships. While success in the arts often requires hard work and resilience, it can lead to fulfilling careers and personal satisfaction.

Personal development and lifelong learning

Regardless of the path chosen, ongoing personal development and lifelong learning are crucial. Without the structure of a college curriculum, individuals can still pursue knowledge and personal growth through self-directed learning, online courses, workshops, and community programs. The ability to adapt, learn new skills, and stay informed about industry trends is vital in today’s ever-changing job market. Emphasising continuous learning equips individuals with the flexibility to explore different career opportunities and adapt to evolving professional landscapes.

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DISCLAIMER:  This article is for informational purposes only and is solely the opinion of the author.