Wealth managers who've readied clients for the financial burden of sending a child to an elite four-year college this fall face an arguably harder task: Helping those clients prepare for the increased risks their kids will be shouldering in the months just ahead.
Any such tutorial should emphasize how much the "Animal House" experience that many college-educated clients remember has changed–and how little it hasn't.
Fat, drunk and stupid…: Wild partying remains a campus-life constant, as does a general disregard for the property, safety and privacy of oneself and others. A mixture of alcohol, academic stress, unstructured personal time and an underdeveloped maturity level continue to make college a cauldron for behavior ranging from thoughtless to reckless. What's changed most is the extent to which campus life no longer affords escape from the real world. Take, for example, the laptops and smart phones most freshmen carry around, or their car and credit cards. These "necessities" connect students to broader risks in ways that can't be ignored.
The latest technological devices, and the social networking they promote, have greatly increased the physical and financial threats the affluent freshman faces. These technologies also increase the potential for liability for well-to-do parents. Where "Animal House" pranksters once put a horse in the dean's office, now they may create a phony Facebook page lampooning the dean's "relationship" with the school's mascot. Likewise, where a stolen student ID card once created an intra-campus administrative nightmare, the information extracted from the card today might lead to an identity theft well beyond the campus walls. And where a student once could remain relatively anonymous, Twitter and other real-time chat tools can render between-class whereabouts an open book to thieves and stalkers.
The Permanent Record
Perhaps most disturbing for parents looking to protect a family reputation–or students hoping to later trade on their name in the work world–is that evidence of youthful indiscretion can follow them, literally, for a lifetime in cyberspace. Once upon a time, a night of alcohol-induced idiocy was willfully forgotten in the day (or two!) it took to sleep off the hangover. Now, embarrassing cell phone photos and videos can be viral by dawn. In other words, there really is a "permanent record." Students should consider the high probability that a classmate may post character-impugning comments, or "tag" troublesome images of them. Families of potential victims, meanwhile, should think ahead to purchase insurance that can respond to such virtual exposure with an aggressive legal response that, at a minimum, will deter further incidents. Online services like www.ReputationDefender.com can monitor unwanted online attention on a client's child and respond. Given the open exchange of information that an academic environment encourages, parents should also consider identity-theft-remediation services that can help clean up fraudulently tarnished credit records.
Home Sweet School
A dorm, fraternity house or off-campus apartment has many of the exposures a primary residence does. If anything, threats of robbery, assault, home invasion and liability for injury that guests sustain are greater in these second homes. Safeguarding valued property with adequate insurance is a must, regardless of whether you need coverage for portable electronics that are easily stolen from an unlocked dorm room, or for a car parked blocks from campus because its freshman-owner doesn't have on-campus lot privileges. It's also important to consider how major events, such as the 9-11 attack, Hurricane Katrina, the Virginia Tech massacre or the recent swine flu outbreak, might force a student to vacate campus for a prolonged period. New insurance coverages can address tuition loss and/or housing, transportation and meal expenses created by such catastrophic incidents.
