Here’s some food for thought.Â Sun Trust Bank has a program called Lightstream, which provides loans for K-12 education. I crunched the numbers for a $100,000 loan over a 7-year term.
- The loan would cost $1,555.63 to $1,657.02 per month at an annual interest rate of between 7.94% and 9.94% depending on your credit score.
- The same amount would cover about 16 to 30 hours each month in tutoring costs, considering hourly rates between $50 and $100
$100,000 invested in the stock market for 7 years – assuming its historic average annual return of about 8% Â – would grow to about $170,650 over a 7-year period. That number grows even more if you take advantage of some of the time horizon, tax, and compounding opportunities that are available for your investment through things like retirement accounts.
No one is underscoring the importance of education, it’s just important to keep it in context in terms of how much of our choices regarding education costs are due to our conditioning; how much are we buying into the notion that a private or independent school is the best option; and how much is it costing us in terms of our overall financial well-being and our ability to pass on generational wealth.
“A child’s success is not based on how much one spends for an education, as long as you find the right environment for your child to thrive in. There are options out there, but you have to be a savvy consumers,â€ says Wendy Van Amson, â€Žco-founder of Independent School Diversity Network.
Van Amson also understands from personal experience that you have to strike the right balance between your beliefs and your budget.
“My mother was a school teacher. There was a big emphasis on education when I was growing up, particularly early childhood education. When we looked at options for our own children and looked around at public schools, we felt it was necessary to invest in a private school education for early childhood. We knew when it was no longer affordable, our children could go to public school and would have a strong foundation because of their elementary education,â€ she says.
The intended morals of this story are to get you to explore all of your options, and to be honest about the messages you tell yourself that drive your financial decisions. Ask yourself if they are true. If you’re telling yourself that an expensive education is the best education, you may want to think again.
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