Operation Varsity Blues is the FBI investigation used to charge 50 people “with being part of a long-running bribery scheme to get privileged kids with lackluster grades into big-name colleges and universities.” The FBI sting netted two actresses: Felicity Huffman from Desperate Housewives and Lori Loughlin from Full House. In addition, 33 parents have been charged including the former CEO of PIMCO and the founder of TPG Growth.
The alleged scheme involved bribes, donations to fake charities, changed SAT and ACT scores, and “athletes” recruited for sports they never played.
The amount of money involved in this alleged scheme is staggering – $25 million! Lori Loughlin and her family reportedly paid $500,000 to get their daughters admitted to USC as part of the crew team though they don’t row.
We want the best for our children, of course, but how far should we go? Does attending the “right” school matter? Is a private school better than a public one?
Chris Hogan, the author of Everyday Millionaires, sheds light on this subject. According to Mr. Hogan, 62% of millionaires graduated from a public college, 8% attended a junior college and 9% never graduated. In addition, 43% of millionaires had a B average or lower in college. Former president George W. Bush said, “To those of you who received honors, awards and distinctions, I say well done. And to the C students, I say you, too, can be President of the United States.” Mr. Bush graduated from Yale with a GPA of 2.35.
The University of Wisconsin currently has the most CEOs on the Fortune 500 list with 14. Wisconsin is a public university. The current tuition to attend Wisconsin is $22,500, including room, board, books and supplies. Go Badgers and On Wisconsin!
If you have children who will eventually attend college, here are a few suggestions to help you with your journey.
- Invest early and often in a 529 plan. The money will grow tax-free and when you’re ready to pay tuition your distributions will also be tax free.
- If you have the financial resources to send your kid to a small private school, then go for it. However, if you don’t, then explore the junior college – state college combination. You and your family will save hundreds of thousands of dollars in tuition. You might avoid student loans as well.
- Involve your children in charity work. Let them help others through volunteering, mission trips, or tutoring. This will give them a strong work ethic and keep them humble by serving others who are less fortunate.
- Get them involved, legally, in athletics, band, choir, theater, or robotics. Extracurricular activities will build character. It will also give them the gift of team work and fair play.
- It’s okay for your child to work during high school and college. Earning a paycheck and learning the language of business will serve them well for decades. Working at a fast-food restaurant, grocery store, or big-box retailer will teach them much about life. It may even provide a better education than they’ll receive in the classroom.
- Grandparents, and others, can give $15,000 per person, per year including your child. Utilizing the gift tax exclusion is a great way for grandparents to reduce their estate and help pay for college. If grandparents are willing and able, this is a great funding option.
I was disgusted and upset as I read articles about the scam. The fraud and deception involved is off the charts. More importantly, there’s some kid out their working a part time job trying to save money so she can go to college and her spot may have been taken by one of these fraudsters.
“You got to be the dumbest smart kid I know.” —Bud Kilmer, Varsity Blues
March 13, 2019
Bill Parrott is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.
Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.
 https://www.cnbc.com/2018/11/28/these-30-colleges-produced-the-most-current-fortune-500-ceos.html, November 29, 2018, Abigail Hess
 Money Guide Pro