Why we aren’t saving for our children’s college educations
For a few years, I got to skip Dave Ramsey's Baby Step 5. Save for our children's college education? That was an easy one…since we didn't have children, that answer was NO!
But now we have two kids (soon to be three), which means our days of delaying that decision are over. And since our oldest child is ten, we've already missed out on a decade of compounding.
Most personal finance experts, including Dave Ramsey and Suze Orman, recommend saving for your children's college education only when your own financial house is in order. If you still have student loans, credit card debt, or anemic retirement savings, it's much better to get yourself out of that hole.
But we can't really use that argument against saving for our children's education, either. Our only debt is a reasonable mortgage that should be paid off in 12 years. And our retirement savings are good. We don't have tons of spare cash, but we could save something, but I am not sure I want to.
The Not-Gonna-Pay-It Argument
Do parents have the responsibility to pay for their child's education if they can?
I have asked myself that question many times. My husband and I have discussed our responsibility for our children's educational costs many times as well. But first, let's answer a few more questions.
1. How important is a college education?
Well, according to the Bureau of Labor Statistics's earnings and unemployment rates by educational attainment chart, a college education isimportant. There is an 8.3 percent unemployment rate for high school graduates compared to 4.5 percent of graduates with Bachelor's degrees. And, no surprise, a Bachelor's degree pays off in salary too ($1,066 in median weekly wages vs. $652 for high school graduates).
Still, I remain unconvinced that college is a necessity. But it could be my background. Although I love education, both my husband and I come from families that are largely made up of people who found jobs that didn't require degrees, or they own their own businesses. My husband and I did go to college, but we both started out in vocational/technical fields. To familiarize myself with what GRS has already been published on this subject, I read several articles on paying for college in the archives (along with all the comments). Readers are divided, it seems, between feeling that liberal arts degrees are an extravagance that some can't afford and feeling that the degree was their ticket to a job, not to mention the connections, critical-thinking, writing, and other skills that my husband and I did not receive in our very specific educational pursuits.
I would like to think it's possible to learn many of these things by being a life-long learner. I love teaching, so I am not saying that teachers have no value. However, could a voracious reader with an interest in learning and intense curiosity find ways to make up for a lack of a college education — at a much lower cost? Assuming a degree isn't required, of course…
2. Is college the right thing for my children?
My husband and I made the decision (this was an easy one) to place a value on education, but not a specific route. Because we don't want them to feel like they have to go to college, we want them to know their options. They know that we went to college, but they can look at relatives who didn't and still have managed to be successful. Owning their own business is one option. Getting into one of the trades is another. A two-year degree, or four-year degree, is certainly not off the table, either.
Whichever option they choose, we plan on supporting them in every non-financial way possible.
3. If the child pays for his own education, would he spend his own money more carefully than he would spend ours?
The answer to that question, for most students anyway, is probably yes. But I think that responsible students wouldn't waste their parents' money, either. Anecdotally, I have heard stories of kids who partied through college with their parents' money, and those who were responsible. I have heard of those who partied through college without their parents' money and those who worked a full-time job or two to make it through.
4. Our parents didn't pay for our college educations, and it worked out okay for us.
My husband and I both worked hard to get through school without the financial assistance of our parents. In some strange way, I know that was a character-building experience, and I want to pass that on to my children. However, college is much more expensive than it used to be. Do I really want to saddle my kids with astronomical student loan debt in the name of character-building?
Of course not. But I am hoping that we can give them high levels of support that will help them make the best possible decision.
How We Can Help Our Kids
Even though we won't be paying for our children's tuition, we can help in other ways.
- We will continue to strengthen our own financial position, which indirectly helps them.
- We will allow the child to live at home, rent-free, while they are going to college — if they want to…
- I would consider finding a full-time teaching position at a community college that would allow my children to attend for free.
- As an investment, we would consider buying a house in a college town where they attend. I know two parents who purchased rental property in college towns and rented it out to students. While I am not sure if these parents charged their children rent, we would allow our child to live rent-free in the house. It's another way we could help them…and hopefully, the other student rents' would cash-flow the property.
- Give them their inheritance early. My grandfather's belief was that his kids were much more likely to need their inheritance while they were raising their own families, instead of using it when he passed away, presumably at an old age. He started distributing his assets, just a little at a time, when my parents still had young children. My mom has done the same thing. And we plan to just keep the family thing rolling and periodically give our children — when they're adults, of course — smallish amounts of money to use as they please.
Since we're still getting to know our kids (and they're still learning English), our plan may need to change. But for now, we'll continue saving as much as we can, and talk to our kids about life after high school.
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I think you should consider paying and saving for the expected family contribution that the Fafsa determines. The government expects families to help, but not necessarily afford the cost. If you do not, expect your child to need to have a full time job while attending and max out loans.
You should DEFINITELY estimate the “family contribution” and plan to save that amount, unless you want to cripple your kids’ financial lives. You might not have all three do it, but saving nothing is irresponsible and has your children starting out in a debt hole that is very hard to climb out of.
I agree with this. When I was in college I think you had to wait until 25 before colleges considered ONLY the student’s income.
Also, from what I’m seeing where I work, a bachelor’s degree is becoming more like a high school diploma – it’s required to get your foot in the door, and then you’re expected to get an advanced degree or certification. Assuming this trend continues by the time your children are 18 it will be even more important for them to get a bachelor’s degrer.
FAFSA’s expected family calculation includes the cost of room and board, which can equal or exceed the cost of tuition. Lisa is planning to offer her kids rent-free living, either through living at home or through purchasing a rental house near their kids’ school of choice. She’s also considered working at a college in order to provide her kids with free tuition. I think either way, the savings her children will receive from doing so will certainly prevent her their financial lives from being crippled.
I am really, really glad that my parents did not think like you and your husband. Yes, parents are not financially obligated to provide for a child’s high education, but what 18 year old is able to be financially successful straight out the door on their own? I went to a nearby University and worked three jobs while attending college and I STILL had to take out loans. This was in addition to the financial help that my parents were providing, scholarships, and grants. And compared to most people, my University was not nearly as expensive as everyone else’s and… Read more »
Yes, many students will spend less if they are footing the bill. BUT, most students — especially in the U.S. — are relying on someone else’s money in the forms of loans, bursaries and scholarships. I’ve seen many students spend their way through university because they really haven’t grasped what debt is. IMHO, the key is to teach kids financial responsibility. Then they’ll be better able to make smart choices regardless of whose money they are using. My siblings/in-laws are saving for their kids’ education because the government will match 20% of contributions up to certain limit per year– why… Read more »
We have two sons in college, a junior and a freshman. We didn’t save money specifically for college; we concentrated on getting into the best financial condition before they went to college. We paid off all debt and maxed out our retirement accounts. We also spent a lot of time helping our sons in high school earn the highest possible grades and scores on college entrance exams. They both earned large merit scholarships to a nearby private college. They live at home, which saves a tremendous amount of money. We’re able to pay the remaining costs through current income (ours)… Read more »
It’s hard to know at this point, whether college is a good fit for our kids. They’re both bright, but (no surprise) school is very frustrating to them right now. Once they get more acclimated to the US and English, I am hoping we’ll have more insight to guide them.
I like your philosophy on helping them get into the best position pre-college. We plan on doing that for sure. Also, love your thoughts on getting yourselves into the best financial position, too.
I agree with you. I have plenty of time to save for college, but first of all I have to see what are their aspirations
I think it would be worthwhile to look into whether college savings accounts can be used for vocation schools as well. And what happens if the child decides against college.
Yes, 529 accounts can be used for vocational training at accredited schools.
They can be used for both.
529s can also be used for Gap Year/Semester programs like Outward Bound, Where There Be Dragons, and Carpe Diem. Incredibly beneficial educational experiences that build the life skills, global mindset, ethic of service and world exposure that college isn’t designed to facilitate.
Honestly, I think that “partying your way through college” can be one of the more important lessons IN college. The freedom that children have to make their own decisions, but do so in a safe “stepping stone” environment means that they can learn that the actions that THEY choose, not just the ones required by their parents, have an effect on their lives. They have to learn balance in order to succeed. Not to mention that some of the best friendships are forged over a beer or two, in my experience.
While I understand this perspective, I think it’s out of date and no longer agree with it. I think the new economic paradigm is such that, unless money is no object for your family, college can no longer be that kind of “stepping stone” into independence for less-motivated kids. It may have been reasonable (debatable, I know) to party your way through college when tuition, room & board and fees were what they were when I was in college in the early ’80s, but not anymore. IMO, a kid who still needs to grow up and learn responsibility would be… Read more »
My wife and I don’t have kids but we’ve already talked about this. We both had some help from our parents when it came to paying for college, but we had to take out loans as well. We both feel that we learned a lot from that. As a result, we are going to do our best to save for our kids educations, but we aren’t forcing them to go to college. We will let them decide what the best route for them is. If they decide to go, we will help but won’t give them a free ride.
We are not saving for our three children’s education in a traditional sense (529s, prepaid tuition plans, etc.), but we are willing to eventually take contributions out of our Roths to pay for their tuition. I also think it is helpful to manage expectations. My parents paid for me to go to a fancy private school, but I don’t think we will be able to do the same for our children. By the time they are in middle school or early high school, we will probably start subtly making it clear that we will pay whatever the state school tuition… Read more »
We’re paying our kids’ way through college. My parents scrimped and saved our entire lives so that they could afford college and that was a much better financial lesson than us taking out massive loans at high interest rates and having to pay them back. An amazing lesson seeing that those sacrifices paid off when we could go wherever we wanted for college and then coming out of college without crippling debt so that we had more freedom to choose graduate school or different kinds of jobs. In terms of our kids, unlike our parents, my DH and I (thanks,… Read more »
Your first paragraph, times a thousand. Dh and I were both products of homes where education and the doors that it opened were valued beyond measure.
My oldest started college this year, and has several merit scholarships which pay for a large part of her college expenses. I am so happy that dh and I saved in the early years and can write checks without any pain to help her out.
I am also afraid that our kids will not qualify for any aid so we are saving small amounts monthly and plan to use income from our rental properties to pay tuition while they’re in school. We also put all birthday/Christmas money in their accounts instead of letting them spend it. They’re only 2 and 4 and it’s already adding up in a big way.
I’m always impressed by how much you save for your children’s college. I’m sure that one day- like you- they’ll be able to understand the sacrifices you made to save for them.
I’m in college now (I got my bachelor’s in 2012. I was just accepted to graduate school, but I’ve been taking some necessary undergraduate courses for the past year since my bachelor’s is unrelated to my graduate pursuit). Quite frankly, when I was in high school, I didn’t want to go to college. There were several reasons – I didn’t see a need for it, no one in my family had done so (except for a couple people with vocational training) – but one BIG reason was that I didn’t want to be saddled with debt. Then, my senior year… Read more »
You illustrate a good point – saving for college gives you OPTIONS, just as having a college degree gives you OPTIONS. And having those options can make a huge difference!
This whole post strikes me as a bunch of pretty poor rationalizations. Declining to save for your children’s educations because they might decide not to go to college is like declining to save for retirement because you might be able to work until you die. Or going without an emergency fund because you might not lose your job. Or going without health insurance because you might not get sick. Except that by stiffing your retirement, emergency fund, or health insurance, you’re mostly just hurting yourself, not anyone else. If you genuinely can’t afford to save anything for your children’s education,… Read more »
I have to agree completely. While I don’t think that college turns out to be the right choice for every high school graduate; there’s no good reason to purposefully limit a student’s post-secondary options by insufficiently saving for college. Tuition inflation and salary stagnation have conspired to make it the idea of “just pay for it yourself, kid” a poor choice for parents. Parents should be saving enough for the EFC for each child that they choose to have on the presumption that said children will ultimately be academically qualified to attend college. To be very direct about this, if… Read more »
As a recent law school grad with large debt, providing my (future) kids with a debt-free college experience is my #1 goal. I was the first to go to college in my family and while I’m making double/triple what other family members are making, I feel as if I’m strapped with debt that I can barely manage, for a seemingly unending period of time. I doubt I would have appreciated the college experience any less if my parents had been able to pay for a portion of my education (they paid for my living expenses in undergrad, I got a… Read more »
When I taught math in high school one of the most irritating things kids used to say to me was that because they wanted to be an (rock star, pet store owner, stay at home mom, historian, etc)they didn’t need math. My response to them was that while it was very well and good to know what you want to do, an education was about widening your options so that when you are older, when you know the job market better, when you discover interests and passions and opportunities, you are not hampered by the decisions of your high school… Read more »
Great comment. I am an ME myself and worked/scholar-shipped my way through undergrad. I graduated without any loans, then got paid to go to grad school. One thing that helped me a TON was getting married after my 2nd year of undergrad, because then I was not a dependent (for scholarships and financial-need based stuff). My parents helped by providing me a bed and car for the first 2 years. I was planning on NOT saving anything for my kids college tuition, but your comment has me reconsidering. Perhaps I need to save (at least something) just to have flexibility… Read more »
You can take your contributions out of an IRA Roth and tax-advantage the earnings.
I am increasingly convinced that college is not a necessity. My boyfriend is a carpenter, dropped out of college after freshman year, and is close to making six figures at age 27. Meanwhile, my roommate busted her butt and racked up loans going to school, interned like crazy, finally got a job in corporate where she works over 12 hours a day. But because she’s on salary she only makes 50k. I think college is a great place to learn and experience a lot of things., particularly critical thinking skills; but it’s certainly not the only option. I am leaning… Read more »
One thing you have to think about is longevity, though. It’s a lot easier to be a carpenter when you are in your 20s, 30s, and 40s. But what do you do in your mid-50s and beyond? Not everyone can start their own contracting firm and succeed as the boss with younger guys doing the actual grunt work. At some point, he might have to stop because of health or joint problems. He should be extra careful about socking away his bounty into investment and retirement accounts, so that he can retire early if need be. I agree that white… Read more »
Also, even if their 20’s not everyone can do manual labor for work (as a lot of vocations tend to be).
You must consider longevity and health. People in the office environment are in better health than laborers and tend to live longer. My husband didn’t go to college and went into the family plumbing business. It was great in our 20s because he was young and making great money. By 40 though, his knees and back are shot and has had carpal tunnel surgery on one hand so far. He regrets not getting a college education and having an office job where he uses his brain instead of his back and has encouraged our teenagers to get a college education.… Read more »
Suppose, your children turn out to be academically-qualified and want to become doctors? You don’t get into that track except by way of college.
College is definitely not the only post-secondary option that leads to happiness and a fulfilling life. But saving for college – the subject of this post – is about being able to provide options.
Who would or can afford to pay for their kids going to medical school?
We don’t plan on strictly saving for our future children’s college education, unless our budget allows for it (so, our retirement fund comes first). We will probably end up paying 50% of wherever they choose though, as I have seen my friend’s parents do this and it seems to work out.
I went to both undergrad and grad school all on my own penny, so I know it is possible.
And how long ago did you do this? 30 years ago it was possible for a student to do so, but now it would take a student working 50hr/week all year round, making minimum wage to afford the average university.
I read Michelle’s blog, and I don’t think she’s very old (under 30), but I’ll let her answer to that. I graduated undergrad from a private school 15 years ago that was ~$22,000 per year, somewhat in line with what many in state public schools charge now. But that was back when Stafford loans capped out at like $5,500 per year (Freshman year was only like $3,000), and private loans were much harder to come by. My parents didn’t pay for anything, but through scholarships, a fellowship and being an RA my Senior year, a variety of part time jobs,… Read more »
I have 3 daughters and got a late start saving for college due to a divorce. By the time the oldest started college in 2004 I had about $2500 saved for her. By the time the 3rd started in 2010 I had over $8000 saved for her. With college tuition running anywhere from $10,000 at a state school and $25,000+ at a private school, it’s hard for a student to pay their own way these days, especially if they are making $8/hour. My parents helped me out my first two years and then I was able to get a job… Read more »
From my own experience, not having parental help as set me back from financial health. My parents were unable, not unwilling, to help. I am nearing 30 years old and still paying a large percentage (about 40%) of my income to student loans. Despite having a decent job, I feel I will not be able to own property, have children, or put significant amounts toward retirement for a long time. As for your scheme of owning a rental property–I had a roommate in college whose parents did just this. They were wealthy and purchased a two-bedroom condo. It wasn’t that… Read more »
If you hated it so much, why did you choose to live in a condo with a $500 a month rent?
Ray – I really appreciate your input here. Also, can you expound on the condo problem? To me, it makes so much sense, so I am interested in why it was so bad for you.
Was the $500 unfair for that area? Was it more frustrating that your roommate didn’t have to pay rent? Or something else?
I care because I don’t want our kids’ potential roommates to feel the same.
Lisa, Having had a more well off roommate, in my case: 1)It wasn’t about the cost of the accommodations. 2)It wasn’t about having to pay rent. 3) It was about every day, busting your tail off to be able to stay in school to encounter someone who did not have to scrape by. They had it better, and while I was happy for them, it hurt every day because being poor hurts. A while back, you wrote a piece about overcoming poverty and how to do it. Supporting your child with a small inheritance to use for the new job,… Read more »
Sally, it sounds to me like you are saying you couldn’t bear it because your roommate was better off than you. “It hurts to be poor.”
Why didn’t you move in with someone else so you didn’t have to deal with constant jealousy?
And what do you think life will be like when you are out in the real world? Hint: lots of people will have it easier than you.
I did. After my lease ended.
Of course, everyone is free to do as they like. I was merely expressing what it was like to me, at 18.
My solution–finish my education and stop being poor. Don’t worry, I feel great now and I donate generously to my former college’s grant system.
This conversation made me think of something else that can happen with roommates whose parents are in a higher tax bracket than your parents: the wealthier roommate could make/force decisions the poorer roommate can’t afford. Ideally, this sort of thing wouldn’t happen, but if you’re 18 odds are you won’t see trouble ahead. The wealthier roommate may want the more expensive place, the more expensive cable plan, etc. because the wealthier roommate is immune to the effects of paying higher bills, and they may be clueless/insensitive to how it could affect the poorer roommate. And some of these decisions could… Read more »
Hi Lisa, Sally’s comment speaks to what I meant. In my mind, the hours I spent working at the post office meant my roommate was living rent-free and a wealthy family was adding another asset to their portfolio of assets. Was it fair? Sure, no laws were broken, and I agreed to the arrangement. But there is an element of class struggle here that people need to recognize. I personally don’t feel that this can just be boiled down to, “well they made a smart financial decision.” Anyway, I’m sure a thesis can be written on the ethics of real… Read more »
Ray (and Sally), thanks for chiming in to give your perspectives. Should we go the rental route, we’ll definitely consider your experiences and try to be as compassionate as possible to our kids’ roommates.
Just out of curiosity, did your college self understand the costs of owning real estate? (I’m not being sarcastic, I’m curious). $500 may have been the mortgage payment, but then there’s condo fees, insurance, property taxes — not to mention closing costs buying the condo. The reason I ask is that my university self would not have known about these costs. Myself and another tenant rented rooms from a young professional and our rent probably paid her mortgage. I used to think she had it easy until I started to look at buying my own place a few years later.… Read more »
It is about perspective. I am in veterinary school (cheap in Texas at $160000) and one room mate and I hand a check for $470 once a month to our other room mate (It is about midrange for the area but it is a house with my own bedroom a large 1960’s kitchen and unlimited pets with no pet deposit). Her parents own the house. One of us is paying the mortgage and the rest of the money goes to utilities, fixing up a 1960s house in need of maintenance, etc. Paying rent to a classmate is relative. Once in… Read more »
Absolutely Sarah, it really is about perspective. Your positivity about the arrangement makes a huge difference. It was hard for me to see it that way.
So, I guess my final advice to Lisa, if she were to move forward with the rental property, would be to find a renter you and your child feel comfortable with, offer a fair price, be an attentive landlord, and keep the financials of the arrangement as private as possible. I’m sure it will work out fine.
We are saving for our children’s education using 529 plans. We intend to pay for parts of their education but not the entirety of it. My feeling is that if I can bless my children so they are able to start their post-college life debt free, then I should do that. I know there are many lessons to learn about money management and responsibility by working in college. However, I can teach those same lessons to my kids while they are still in high school.
Just wondering, there is no mention of the military in this article. Isn’t that an option for paying for college?
It’s a good option. The National Guard paid for my son’s tuition as well as that of two nephews.
The military can be a great option. I would suggest ROTC before enlisting, however. My kids are offered a new car if they go to a service academy and get their degree.
It’s an option. But putting your life and health on the line for your country is serious business, and it should be a path that’s chosen freely, not out of desperation. And it especially shouldn’t be a path that parents coerce their children into just so they (the parents) can have a few hundred more dollars a month to spend on themselves.
Johanna, that last sentence was nasty and unnecessarily so.
To be clear, I’m not talking about all parents of children whose educations are funded through the military. This discussion is about parents who could afford, without sacrificing any necessities, to put something aside for their children’s college fund, but who choose not to because they don’t want to.
So I’m talking about parents who do that, and who rationalize it by pushing their children toward military service. That is, they’re pushing their children to risk life and limb, for the sake of some extra money to spend on non-necessities.
If that sounds nasty, it’s because it is.
I had two classmates who’s parents did that to them. They literally took them to the recruiting office and said pick one you are enlisting. One was a middle class family and one a richer family so it was not a money issue in either case and both could have gotten loans. Granted at 18 they could have argued and taken themselves off to school but neither one of them did and it could have messed up their acceptance by their parents. It does happen. (this was two separate incidences). Military paying for college is nice though. If I could… Read more »
Not if your kid grows up to be a pacifist.
I am glad we are not the only ones struggling with this question. We are saving for our children but if they will pursue a traditional college education remains to be seen. Being home schooled and above grade level my hope is they can do college classes before they are 18.
In my state, children of divorced parents are considered disadvantaged and the courts make parents pay for college – though if you write up your divorce agreement to tell specifically what you are willing to pay and it seems reasonable and beneficial, the judge will probably adhere to it. On the other side though, as my child is 14, and I currently have $50,000 saved for college, he is thinking of college as someplace to go to escape the cold winters here. I am trying to steer him to in-state schools because it will be cheaper. I am further trying… Read more »
My Dad was always very strict that all 4 of us would go to college. It was implied that he would pay. My older sister did not like school at all, and it was a huge fight all through High School, and for 2 years after when she didn’t go to college. I went off to an out of state, private school. I learned after my Freshman year that Dad wasn’t actually planning to pay for school. It was harsh to be going into my second year having to figure out how to pay for that year and the previous… Read more »
As someone who put herself through two undergraduate degrees (and currently working on a master’s) I think it’s vital that people pay their own way through school. That being said, I knew from a young age I was expected to go on to college (whether it be a trade school or university) after high school and that I would have to pay for it. My family helped me in that I had to put money away into savings my entire life for college. I worked through high school and college. I also interned in a field that paid good money… Read more »
I wrote to Amy Dacyczyn, author of The Tightwad Gazette, for advice, as I didn’t want my two children to leave college with debt. She said she paid for two years of community college for her own children, and they had to find a creative way to pay for the remaining two years. Sounded like a good plan. However, my son joined the National Guard and they paid 100% for his college, with a monthly stipend that paid his room and board. My daughter attended an inexpensive state college and we paid for it out of money we saved for… Read more »
I was an RA my Senior year of college, and it was a huge help financially. I tried to be one my Junior year, but didn’t make the cut. It was weird, going into my Junior year I was cut early in the application process, whereas going into my Senior year several Dorm leaders were fighting over me. A year makes all the difference!
Keep in mind that your financial situation determines what financial aid is available to your children. My freshman year I qualified for a Pell Grant, Perkins and Stafford Loans, and campus work-study program. I lost most of this aid in subsequent years as my parents’ financial situation improved, and had to rely on private loans with higher interest rates. I also struggled to find off-campus work without transportation.
I had a job off campus for a while, in the evenings, with no car. I either walked or took the bus to work, and paid a coworker gas money to take me home after work.
People have made fun of me for years for what I did for my son and college (especially on financial management sites). My son was never the best student. I mean his first grade card above a 3.0 was in 9th grade. I never knew if he was going to college. That did not stop me from instituting my plan. I taught him along the way the basics of frugality (save 50% of what you make, you spend your money on stuff you want, have a budget, delayed gratification, etc.) All of this paid off when he was 16 and… Read more »
Except in very rare circumstances, unless the child is above a certain age, married, or has dependents of their own, the parent’s income is taken into consideration on the FAFSA, regardless of whether or not the parents have any intention to pay for school. I tried everything I could as a student (short of getting married or getting pregnant) to get my parents off the FAFSA, since they never paid a dime. It was even worse that I had to fight my Dad every year to get their tax information for the FAFSA; he didn’t feel he should have to… Read more »
I have helped my son fill this out twice now, and have not lied/mislead the form. It specifically states “How much money are your parents going to contribute to your education?” The answer for me is $0. His mother’s income is used on the form as our child custody agreement states we will each pay for 50% of his college. I paid $48k already, and will contribute no more. Again, he is getting by by going to a community college for 2 years, then transferring to main campus for the final 2 years, and not taking any money out of… Read more »
They don’t care how much you are willing to pay. They determine your EFC by your assets and income. I tried everything to not have my mother’s income counted, including bring evidence that she was not spending a dime on me. It does not matter.
As you stated, his mother’s income was used. I can’t speak to divorce, as my parents were (and still are) married. I’m guessing it’s the custodial parent who’s income is used in that case. The point being, a parent’s income was still used to configure the family contribution.
I would have count my lucky stars if my parents has 50K for my college ed. You;ve done a great think for your child. I don’t know what the case is now, but 15 years ago, income and assets were still considered jointly in a divorce, and it did not matter if my parents put zero. I hope things work out well; things may get tougher when your child transfers, even though you’ve put a lot aside for him because of the assets/income rules. Another thing to consider for parents–I went to a private college because it cost me less… Read more »
As I stated before, every situation is different, and distinct. I validated everything I did when my child was 9 and I got guardianship (but joint custody). Due to being joint custody, the child can pick which parent they are going to use as the terms of the FAFSA, if the other parent is not going to contribute to their college (according to the rules). As the parent with the most assets, it made sense that I was the one he did not pick (and I also had technically given him the money aready, which was in his name for… Read more »
But that’s not how most colleges calculate financial aid; colleges will consider a parent’s ability to pay regardless of whether the parent is willing to (barring certain showings of “independence” that are extremely difficult).
If you answer the questions properly, as written, and not the “intended” purpose, you don’t have to report a parents income if they are contributing no money to their college education. I am not as I did when he was a minor and he is contributing that money himself, which is reported.
Not true, if the parent is a custodial parent prior to 18.
As you stated in your other answer though, your ex-wife’s income was considered. So his financial aid is not being considered on his income alone; since his parents are divorced, it’s being considered on one parent’s income, instead of both parents.
Define custodial. There is custody and guardianship (which are legal differences). My ex and I have joint (50/50) custody, but I have primary guardianship (means he lives at my house the majority of the time). My house is home and I provide the majority of the expenses and claim him on my taxes. However, he has no custodial parent, he has custodial parents. In that case, according to the documentation of the FAFSA, you can pick which parent you wish to be under. There is an entire section in the FAQ of the document explaining how this works, and it… Read more »
I think if you had explained the specifics of you situation from the start people wouldn’t have been so quick to tell you that you are wrong.
From studentaid.ed.gov:
What if my parents aren’t going to help me pay for college and refuse to provide information for my FAFSASM?
You can’t be considered independent of your parents just because they refuse to help you with this process. If you do not provide their information on the FAFSA, the application will be considered “rejected,” and you might not be able to receive any federal student aid. The most you would be able to get (depending on what the financial aid office at your college decides) would be a loan called an unsubsidized loan.
Also wanted to chime in about the parents’ income being counted. My parents also paid nothing for my college education, but I received zero financial aid because they made enough money that the government considered them ABLE to pay for schooling. They just weren’t willing, but it didn’t matter. I tried to have only my income looked at, but wasn’t able to do that until I was 25 years old and in graduate school. The situation must be different with divorced parents.
Yeah, this is some dangerous misinformation, and you can see from this comment thread how pervasive that can be. A friend of mine in college went through hell because her fairly well-to-do father refused to contribute. It did not matter; his income was what counted, and she had to cover everything in loans. I never asked my parents to pay anything. Luckily for me their expected contribution was so low, I was able to cover it from my summer jobs, and the rest from loans. But FAFSA does not care who is paying. ETA: Please see comment #44 below. The… Read more »
I can remember crying in the financial aid office because it was so unfair. My parents were contributing $0 to my college education, and my Dad fought with me about even giving me his financial information for the FAFSA. They made too much money for me to qualify for any need based aid, so I could only get Stafford Loans (unsubsidized, of course). And then one of the financial aid officers actually had the nerve to recommend I have a baby, so I would be considered independent! Yeah, because THAT’s the best solution for a broke college student!
The best gift I ever received was graduating from college debt free. This was all in thanks to my parents who paid for my schooling. I chose to graduated a year early in order to save them money. I guess it depends on the kids and the family. I think it helped me to know what my parents were doing in order to make those payments. The more open you are with kids about money and what it means, I think that they have a better perspective of it. Also, my parents only paid for school. Any spending money that… Read more »
Paying for college is important to me. When my DH passed away a few years ago and I received a life insurance settlement, I put 10% of it into my DC’s 529. That money has grown very well (inadvertent market timing had me investing near the bottom of the market) and there is now enough there to pay for 4 years of tuition, room & board, and fees at a four-year state university, assuming the fund’s growth keeps pace with or exceeds inflation. This gives me incredible peace of mind – no matter what the future holds for me professionally… Read more »
I am distressed more by your assertion that you don’t want your kids to feel forced to go to college than I am about your not wanting to pay for it. You clearly come from a family that does not value education highly. Good for you for making the choice to sacrifice and go to college yourself. But what if your parents had made it a priority in your family? What if you and your husband had gone straight out of high school? What would your career options have looked like? In families that value education, kids expect more for… Read more »
Scooze, I am not sure if your comment was directed to me or not. I assume so, so I’ll answer accordingly.
My husband and I both entered college straight out of high school. I had plenty of career options.
You’re right that college educationswere not pushed in either of our families. But I wouldn’t say that education was not important. I felt very supported by my family in whichever way I wanted to educate myself.
When I went to college, I had to work 2 part time jobs just to pay for college. My parents paid for the first year to get me on my feet but the rest was up to me. Although I don’t want my kids to have to work 2 part time jobs to pay for their college, they both have part time jobs. Here is what we are doing: Financially 1) Contributing to 529 plans(got started late since I was uneducated about the plans) 2) Giving them a rent free place to live during college. 3) Since they will have… Read more »
Honestly, I would feel like crap if I knew my parents could afford to pay for college but didn’t, and the only reason they could give me is they didn’t feel responsible. This is not in response specifically to the author, but to the whole idea of “responsibility and teaching kids a lesson in self-sufficiency or whatever”, which is rampant among well-meaning parents. What lesson is there to teach? What if the student is a good student and needs no lessons? Instead of forcing arbitrary lessons, it would be better to just INSTILL the value of respecting money and opportunities… Read more »
I couldn’t agree with you more. I was from a family of four, the third to go to college. To date, I am the only to graduate. My parent’s expected contribution was 4K. My self help from summer work was 3K. Cost to go to college $30,000K. Student Loan 3K per year. The rest–grant aid from the federal government, and private sources. I’ve never been more depressed than when my parents used me as a tool my freshman year of college. One semester in, they were divorcing. Neither, supposedly, could afford any of the family expected contribution despite having plenty… Read more »
To add on to my edit from above (didn’t have time to finish editing…sorry I can’t shut my mouth up!): ……the fear that helping someone automatically equals spoiling them is completely unfounded. Quite the opposite in my case…this act of unconditional, no strings attached generosity has created such a big warm comfy place in my heart for students or anyone trying to better themselves and I do what I can do help. The college kids I work with who are struggling and agnozing over loans and paperwork and having to take off semesters b/c of money issues, and work long… Read more »
Well said. And good for you for paying it forward.
We’re doing this as well with my DH’s extended family. They’re so low income that so far our contribution (for community college) has been literally under $500/semester for the two oldest. But just being able to buy books before classes start makes such a difference.
Lmoot,
You have made many points in your response, but there is just one I would take slight issue with. Don’t assume that because you paid for college for your children that they will be there for you in your old age.
‘Taint necessarily so.
I love this. I paid for my daughter to go through 2 years of Community College while living at home then 2 years at an in state college. I had been a single parent all of her life and I knew the very best start I could give her would be an education. She went on to get a MBA that her workplace paid for – which is now requiring her to work overnights for one year as repayment and it’s hard on her. But, in saving for the 2 years at College, she got the concept that it was… Read more »
College is not the time to teach financial responsibility.You should do it from day one.
If they go to college, that’s a test for you. If you pay at least your expected family contribution for your child’s college and they squander it, consider it a failing grade for your parenting skills, lick your wounds and move on.
Not paying at least the EFC because you want to teach a lesson either comes from 1)Not understanding how financial aid works and not understanding as so many have pointed out, how it cripples your child or 2)Selfishness justified by rationalization.
Wow this has certainly drawn a lot of comment and stories from all sorts of situations. I have three children, one approaching college age and the others following along behind. We have not been able to save for their college to any significant extent. However we have always made it very clear to them that they should expect to finance their continuing education, though we would certainly allow them to stay with us while they attend one of the many colleges in the area. We have also spent money each year on what we consider an excellent college preparatory private… Read more »
DH and I both chose inexpensive schools, and we feel very blessed that all of our costs were covered by our parents. We definitely plan to help our kids, with whatever direction they decided to go. My boys are currently 3 and 5, and we do have a small 529 set up. However, I really don’t think the way our college system is set up in the country is sustainable. With tuition and fees going higher and higher all the time, at some point it just is not going to feasible for people to be able to pay for it.… Read more »
I just listened to a Ted Talks discussion about how some colleges are offering free online classes. I, too, think college will be far different 15 years from now.
In reading all these comments I also wonder what people call ‘could help but won’t’ for parents choices – I am not sure how much is ‘right’ for a parent to suffer to a child can do what they wish. I would never turn my child away from my home if they were putting effort into making their lives progress. If my child wanted to leave to me the choices about their continuing education I would find something I could afford that I thought would be worthwhile and pay for the whole thing. But they want to make their own… Read more »
This is all nice, but in the end your message to your children is you aren’t paying for college. So you are stacking the deck against your kids going to college the same way someone who tells their kids they’re saving for college stacks it to encourage their kids to go. Just be aware you are doing it. My recommendation is you put some money away for each of them with the idea that the money in that account is to help if they chose college, or trade school, or start a business, or whatever provided they have a plan… Read more »
There are some interesting research studies showing that having a college savings account for a child (even a small amount) will increase their chances of both beginning and completing college. Where your money is, there will your heart – & goals – be also!
In many places, a hard-working HS student can graduate with both a diploma AND an Associate’s degree from the local community college. There is no cost to attend the CC. However, you must be SURE that all of the credits will transfer. Starting college as a junior is a huge help. I am grateful to have been able to graduate from college with no debt. However, I can see that there are situations where parents cannot pay for college, and it is correct to focus on retirement over college is necessary. However, to refuse to pay does create a lot… Read more »
I did this and had a bachelors at 19. Even with taking out student loans to go to graduate school (which was a stupid mistake), I still was able to get out from under it all by 26. Knocking those two years off of school were a huge benefit for me.
I know we can have a very healthy debate on the value of a liberal arts degree, and while that debate is related to whether a college degree is worth anything, it isn’t quite the same. You can get a bachelor’s degree in engineering or business, a finance degree. And, a liberal arts degree in computer science or some sort of applied science would be marketable, especially a business degree in finance or accounting. I think it’s misleading to assume that going to college = majoring in basket weaving. Or partying. I didn’t party my way through college, and neither… Read more »
Thanks to all.
We should develop a habit to save something in everyday. It will become investment after a day.
I like your list of how you’re planning to help your kids in other ways. Especially placing yourself in a healthy financial position as that takes away a lot of stress and worry for the entire family. While there’s no guarantee that your kids, or anyone’s kid, is going to end up going to college, saving for their future is important. I’m under the belief that children don’t ask to be brought into the world, parents make the choice to have them, and it’s their responsibility to give them the best start in life and assist in financial and emotional… Read more »
Having as one of your options “get a full time job at a community college so your child can attend for free” seems to me a bit pie in the sky. Maybe it is different where you live, but in Northern California those jobs are extremely difficult to come by and often take years to successfully pursue. You might have more success securing a non-faculty job at a major university and getting a discount that way. I was able to pay my UC grad school tuition by working as a RA and TA, which were also great learning experiences in… Read more »
I just resigned from my full-time teaching position at a community college last year. My specialty is in high-demand with very few competitors for open positions (due to a small number of qualified individuals in my field and the research has shown this probably won’t get better anytime soon). Obviously, things could (and will) change, but the chance that I could be rehired at the same institution or a different one is higher than the average, because of the things I’ve mentioned. Not that I am counting on this, but it is an option.
I am planning to help with some of the debt,my oldest who is 15 is a honor roll student, I motivated her to get the best grades she can get so in the future she could get schorlaships. She is planning of attending two year a community college, she will live with us(no bilss) and will work a part time, we will save her part time money and my income tax money for the other two years(university). My other two kids are very young, by the time they are in college our older child will be married and with kids… Read more »
I feel if a parent can help they should. Our kids got theirs paid in full by us and we were glad to do it. The deal was if they started sloughing off the money dried up. FAFSA is a joke if you have made very good decisions and been ultra frugal. We make an average income but the most our kids ever would qualify for is 4000 in unsubsidized loans because we have acquired too many assets through careful planning and frugality. I think it is very unfair to college kids that their parents income counts when not all… Read more »
“I think it is very unfair to college kids that their parents income counts when not all parents are willing to pay or even help pay for school.”
I agree. The problem, though, is that if they let you just say, “Mom and Dad refuse to pay” then a lot of families would game the system by doing just that – claiming the parents wouldn’t pay then they actually would.
One of my students commented that she looked at all the bling in her parents rec room and realized that was where her college money went. Wow.
Dh’s parents paid for his engineering degree. i paid for mine (my parents wouldn’t/couldn’t.) Dh’s college tuition was about $500/term, mine was $1500/term. He’s 8 years older – we both attended state universities in the same state. When my two kids go off to college in a few short years, we expect to pay about $20k-$25k/year for tuition/room/books/meals at the state university. A freshman in college can only borrow $5,500 for their entire freshman year. Even choosing the cheapest room and meal options isn’t going to close that gap in any appreciable way. Merit money may be there. That would… Read more »
Frankly, call me Asiatic and parent leeching if you want, but I find the idea of parents helping out their children during college time (not exactly college education per se, if one is so much against it, but during the start of one’s adulthood) to be both practical and, well, romantic. First, let’s talk about if college education is important. Is it? Seriously, is it? If one has to grab it at some point in his or her life, getting one at 18 is much much more cost effective. I remember once sitting down doing math with my sister about… Read more »
It isn’t just Asians who help their kids through college. My WASP parents helped me and my brother through college for many, if not all, of the reasons you list. My mom grew up when women weren’t expected to go to college. She thought she was going to be a housewife, so even though she could have gotten a bachelor’s she only got an associate’s. Well, after getting divorced she realized she needed that BA after all, and it was MUCH harder to get it as a working mom with children. Also, my family values education, and they try to… Read more »
If you have to disclose your income on their FAFSA and your income is high enough to require that your student pay high interest on unsubsidized loans, then by not helping, you are actively working against your child. At least cover the interest that they are being charged due to your income. My parents didn’t help, which is fine, but I got saddled with a lot of extra costs because the government simply won’t allow for a student to be “independent” unless they get knocked up or fall under a few other categories. I didn’t qualify for those exemptions, so… Read more »
While I do like your list of how you’re going to help your kids in other ways, I would reconsider. A bachelor’s degree is likely to be a standard requirement for many career paths when your kids are 18. Taking out too many loans is the very worst way to start their adult life.
My father helped me by letting me stay in the house rent free. I attended community colleges, and a close state college. I paid for my own tuition.
Any kid can get free education, just join the military. Or take out loans for a career where you get the loans forgiven when you work in certain areas.
If you get a major in history or marine biology, plan on working as a restaurant server…
“If you get a major in history or marine biology, plan on working as a restaurant server…” This is such a hackneyed and untrue stereotype, especially when it comes to history and the humanities in general. You do realize that many people who major in history go on to become lawyers and make six figures? Or politicians or public policy experts? Google how many presidents, congressmen and women, and judges majored in history. You would be surprised. I wouldn’t. And I don’t even think these are the outliers. You can easily transition from a liberal arts degree into business. And… Read more »
Haha, Jane, I was just about to chime in to ask how *marine biology* got lumped in among the stereotypically “useless” majors.
Unfortunately, these days, there’s no degree that will 100% guarantee that you won’t be waiting tables or working in some other low-paying job. But you’re better off with pretty much any degree than with no degree at all.
I agree, any degree is better than no degree. And many degrees lead to other jobs than you study for. But a degree in History, or marine biology will likely lead to a job doing something else in life. Why not get a degree in something like that instead. A science degree for a science job. A lawyer never became a lawyer due to a history degree, it was because of a law degree. Probably because of the undergrad degree did not have job prospects and then got a law degree. Or they just needed any degree and chose History… Read more »
The current model of college education is quickly fading thanks to changes in technology and a weakened economy. Many speculate that college costs are a bubble waiting to pop. Our children (my oldest is 7) will most likely have a wide range of opportunities that won’t necessarily require a four year traditional degree at a physical campus. Shorter training programs and online education will probably be much more prevalent for future generations. In our parents’ generation, a traditional college degree was a ticket to a better future. For the current generation, it’s a huge financial weight without much benefit. We… Read more »
In Germany, parents are required to pay for their chiildren´s university unless they are really poor. Then the students will get financial help. The income levels are really low. If your parents are over that income level, you can even sue them if they don´t pay for your education. At least, the parents have only to pay for the costs of living, because the university fees are neglectable (about 200 euro per semester). But on the other hand, if you get a bachelor´s degree, you usually are 23 to 24 years old, and for a master´s degree, you can easily… Read more »
This article pretty much sums up what I think. 🙂 I’m firmly in the camp that a child becomes an adult before FAFSA thinks they are and that they need to provide for their own expenses. I’m raising adults, for goodness sakes… not life-long children!
I know it doesn’t encompass the problem here, but this thought comes to mind: College education needs to be worth what we pay for it. That is, it seems like college education should be worth the tens to hundreds of thousands of dollars it costs. Even to the student. Even if paid on non-subsidized loans. I would agree that paying for our kids has the potential to give them a financial boost. But it’s not a guarantee, depending on the area of study that is pursued. It is also arguably good life experience. Arguably. But I disagree that NOT paying… Read more »