PenPenWrites

Through my 401K at work I get to invest retirement money through Vanguard. Vanguard, in turn, tries to keep me up to date on my investment options and, occasionally, more. As in this recent piece, which I've edited to shorten but you can read the whole thing here and follow any subsequent comments.

"Students these days are graduating from college with significant debt: According to the U.S. Department of Education,
the total outstanding federal student loan debt exceeds $500 billion.
Worse still, many graduates have little or no experience in managing a
budget, and many have had (and may continue to have) parents who bailed
them out of debt crises—postponing the inevitable experience of
managing their own debt. This is a serious problem.

A recent study by Sallie Mae
talks about students living beyond their means, and on average running
up credit card bills in excess of $3,170. That doesn’t include average
college-loan indebtedness of $21,000 at graduation, and an increasing
default rate for those loans just short of 7%.

Not all graduates are in the same circumstance. Plenty have worked
their way through, carried loans, competed and won scholarships, and
know exactly what they need to do to pay down their debt and keep
financial control of their lives. Kudos to them. But suppose we haven’t
done our children the favor of making them at least partially
financially responsible during or after high school? Is it too late to
remedy that?"

Well, that was quite a surprise coming from a financial institution. My reaction to the question she raises was one I posted as a comment on the site. It went something like this: While parents may have
postponed their children's ability to budget and deal with debt, many of us can no longer afford the bailout.  Is it too late to teach adult children lessons that
should have been learned when they were in their teens? The question in my mind
is, if we couldn't allow them to feel the pain then, are we up to the challenge
now–especially when the are stakes higher and the pain may be more prolonged. I
think the financial issue masks an emotional one: The desire to ease the way for
our children. We aren't necessarily doing them a favor.

what do you think?

I