Parents who spent their lives saving for their kids' educations are seeing their plans foiled by continued recession aftershocks -- and their college-age kids are being left in the lurch.
The Wall Street Journal relays the story of Maurice Johnson, laid off from a job with a $550,000 annual salary last year:
The family income of the Johnsons is a fifth of what it used to be. And the children are about to feel the pain. Mr. Johnson's two oldest are attending his alma mater, Johns Hopkins University, at an annual cost of $50,000 apiece. And his youngest daughter, 15 years old, recently began her own college search. Mr. Johnson isn't sure whether he'll be able to help her to go to college, or even to get the older kids to graduation.
Such situations don't have much of an upside for asset-less offspring.
In the long run, the drop in parental aid could make young adults a more financially resilient generation, like children of the Great Depression. But for now, economists worry that without parental cash, young adults may put off entering the housing market, settling into career paths and having families.
The Journal reports that 22 percent of adults 18 to 34 years old have been denied a loan, mortgage or credit card in the last year, twice the rate of other age brackets.
For now, the Johnson children are considering loans.
Has your family been affected? Did you have a once-full college fund that's now empty? Weigh in below.