Families with college aspirations for their kids are erroneously relying on the dream of sports scholarships instead of the challenging work of savings.
The practice of saving is very tough. A study by the Pew Charitable Trust reveals a third of all adults are not saving at all! It is no surprise then that just 48% of parents who want their kids to go to college are saving for that expense according to a study funded by Sallie Mae. Parents who are anxious about college expenses are on the hunt for alternative funding. Their kid is special, and so there must be funds available! Enter the youth sports machine. The financial situation in recruiting and youth travel sports, now a $7 billion business, is summed up beautifully by Michael Rosenwald of the Washington Post:
“In the past two decades, sports has become an investment to many parents, one that they believe could lead to a college scholarship, even though the odds are bleak. Parents now start their kids in sports as toddlers, jockey to get them on elite travel teams, and spend small fortunes on private coaching, expensive equipment, swag and travel to tournaments.”
The draw of getting a piece of the $3.3 billion in athletic scholarships is logical, but parents are on the wrong track. The ‘investment’ in youth sports would serve them better in traditional savings mechanisms.
As in any financial discussion, the first question should be, “Is it worth spending money on?” Sports and a college education have long been desirable to parents of American children. Why? The National Federation of High School Athletic Associations reports that high school athletes have better attendance, better grades (up to a whole point higher in some states), better school spirit and optimism, and higher graduation rates. Moreover, according to Brigham Young University, women who play high school sports are 41% more likely to graduate from college. This does not even touch on the anecdotal beliefs of improved teamwork, work ethic, and problem-solving skills. A college degree reduces unemployment (in 2013) to 3.5% versus 7.5% for a high school graduate. A Georgetown University Center on Education and the Workforce study released earlier this year found college grads make $1,000,000 more than a high school grad over their lifetimes. STEM degrees make even more! Ok, so yes, it is worth paying for both sports and college. However, can sports pay for college?
With the big youth sports machine and the thousands of recruiting agencies that have popped up hounding families with offers of intangibles like ‘connections’ to universities and products like polished videos and sports resumes, it is easy to get caught up in the fervor. However, there are currently university sports roster spots for 2% of the kids playing high school level ball. That is across all divisions, and Division 3 schools do not even offer athletic scholarships! If your kid is not KILLING it in your metropolitan area, there is little chance she will play on a D1 or D2 team. These companies are exploiting our bias of how amazing our kids are and our fears of not being able to provide for them.
Before we get into the scholarship scene, let’s talk a little about how great our kids are. Mine are terrific. Truthfully, my daughter may graduate as valedictorian. That is right, people, valedictorian. One in a million, right? Well, 1 in 67,000. There are approximately 67,000 public and private high schools in America, and each one has a valedictorian every year. That is a serious reality check. On the sports front, there are 7,500,000 high school athletes, and there are about 150K roster spots at US colleges. To play at a D1 school, a player needs to be a varsity starter all four years and All-everything up to All-State selection. So my daughter probably isn’t going to play lacrosse for Maryland, but I still love to watch her play. Keeping our perspective of where our kids fall in comparison to the other applicants can help us understand our true odds of getting a full ride. The odds are not good.
There are only a handful of sports that guarantee full ride scholarships. These are called ‘head count’ sports and include football and basketball for men and basketball, gymnastics, tennis, and volleyball for women — at Division 1 schools only. All other sports programs are called ‘equivalency’ sports and the scholarships are based on a total dollar value, which usually results in partial scholarships. Individual equivalency programs CAN give a full ride if they feel it is necessary to secure a specific athlete, but it is rare.
This begs the question: If your little darling is a prodigy and garners a coveted university roster spot, would a $2000 a year scholarship ($8000 over her career) make up for the untold thousands you spent on camps, coaches, and combines? Unlikely. A family can spend $2000 on sports extras each year in high school alone. If those funds are saved, it will cover the $8000 — and then some with interest! A $150/mo contribution to a 529 plan at 5% starting her freshman year in high school will be able to cover it. The takeaway here is you are not going to get your sports ‘investment’ money back.
Ok, so no; sports are not a tuition cash cow. Here are a few numbers: 2013-2014 sports scholarships equaled about $3.3 billion. Total grant aid to students was $112 billion in 2012-2013, which roughly represents only half of total student financial aid. Athletes received $11.1 billion of those grants for reasons other than their sport. So, the money comes from elsewhere.
Where does that leave us? Go ahead and put your kids in sports. It is good for them. Skip the travel team and private coaches, and put those fees in savings instead. Don’t spend a ton of extra money on recruiting companies when you can do that work yourself (or better yet, your student can do that work HERSELF.) Coach contact information is on the University web page, and coaches claim to prefer contact from players and parents to the “spam” they get from recruiting agencies. Compile your own video of sports highlights to distribute or post to public domains like YouTube.
Stop paying for extra sports training, and pay for a tutor. Academic performance has more to do with a child’s admittance and funding than any other factor.
College tuition will be one of the greatest expenses of raising your children. If you have not started saving, start right now. Look into your state’s 529 plan and education IRAs which both offer tax benefits, and make some deals with your kids. A college degree is a critical factor in lifelong financial success. However, it does not have to be a degree from a fancy private school. There are many ideas and plans out there to minimize college costs from doing a few years in community college to applying for every little scholarship for which you qualify. The books listing all known scholarships are three inches thick and available in the counseling office of your child’s high school, your public library, and book stores. Be creative and do the work yourself.
Paying for college need not be a dream.
Guest Contributor: Jean Himelspach, an AFC® and a ridiculously proud parent of two obviously extraordinary little darlings, who is tired of the games and wants to go back to just playing sports.