People have been discussing for years, just who can spend their money the best, you or the government. It looks like the debate is heating up again and this blog will share some facts.
If you look at our schools, you will find that the amount spent per student is a lot higher than most think. I think the national average is about $14,000 per student per year. In some states is is well over $20,000 and in those states or cities the performance by the students is among the lowest. Washington DC is among the worst in terms of the amount spent and the poor results they get.
A lot of parents think that the government needs to pay for preschool and nursery school just like they pay for other years of school. This may sound nice, but when you look keeper into the situation things do not look so good and I will explain why. How about doing a little 4th grade math to see if it helps to understand the situation. Figure that what we spend on school is actually an investment and like any investment, it is the payback that justifies the investment in the first place. Got that?
Let's compare the actual cost of your child's senor year in high school with dollars spent on nursery school and pre school, including kindergarten. Most kids graduate from high school when they are 18 years old and with in about 5 years they are on their economic trajectory which includes paying taxes. Much of those taxes are actually for paying back that the government has invested in you. If can now pay back that investment in the form of taxes, the taxpayers have gotten their monies worth. In my calculations, I am going to use the $14,000 average per year per student.
(1) Senior year of high school
Using 5% interest rate the $14,000 invested in that senior year after 5 years is worth $17,864. That is the amount the student will have to pay back.
(2) Kindergarten
Kindergarten add an extra year to the 13 regular years of school and we still have to add that 5 years as above to the compounding period. How many years is that? It works out to 19 years! Now, at 5% interest our student now has to start paying back $36,358. Much bigger than you thought!
(3) Pre School
In this case, we add another year to the compounding period and now we get a total of $37,141 that your 4 year old kid will have to start paying back. Are you starting to understand the problem?
(4) Nursery School
Here we go again, adding another year for a total of 21 years before that nursery school cost will start being paid back. The total cost of that nursery school will have compounded up to $39,004.
Can you now see that the government is not giving you something for free. You kids will have to pay back the investment and it will not be easy. As a parent, most of us want to want to prepare our kids to have a better quality of life, but we have to do it in a way that we get the most from our investment and I think that you can see the we have to be very cautious about spending those dollars that will not be paid back for many years.
