This article is by staff writer Lisa Aberle.
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.
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 costs are only rising. Without my parents financial help and support with my tuition I never would’ve been able to attend. I think not saving for it is completely reckless. Granted, you may chose not to use that money when the time comes, but I think you are in for a real shock if and when your children eventually decide to attend college.
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 not take advantage of it? Many of us give contributions as Christmas and birthday gifts rather than more stuff.
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) and part-time jobs (theirs). So far, they haven’t needed to take out loans.
Whether college is necessary depends on both the aptitude and personality of the student. We knew from the time our sons were small that they would likely be interested in careers that require a college degree. They’re both pursuing STEM (science technology engineering math) degrees.
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 better off working after high school, taking a few classes at community college, bumming around traveling, etc., and saving the expense of college for when he or she is ready to buckle down.
As a parent, I’d rather give my kid $10,000 to blow traveling for a year than $20,000 (in-state cost of a year at state university in my state, including room and board) to screw up in college. (Of course, I’d rather my kid earned his “blow” money himself, but I’m just saying, I don’t think the economic calculus works out.)
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 is at the time. Anything above that, they are on their own.
I also think a good tactic is to be sure that you are mortgage free by the time your child is a junior or senior. This enables you to sock away a lot more money for tuition right before you have to pay it. Sure, you don’t benefit from the market and its returns, but you also are not dinged as much on the FAFSA calculations. The system definitely penalizes the savers.
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, in part, to our fancy educations) make too much money for our kids to qualify for financial aid. Instead of the 10K in debt that my husband came out with, they’d be saddled with many times that if they went to a state school and another factor of magnitude beyond that if they went to private schools. That just doesn’t seem fair– if our income determines how much they have to pay for college, we should use some of that income to foot the bill for it.
Here’s our deliberately controversial post on the subject: http://nicoleandmaggie.wordpress.com/2012/07/09/should-parents-pay-for-their-childrens-college-a-deliberately-controversial-post/
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 of high school, my dad told me that he had saved enough money to get me through at least a year of college. So I applied and went to a university. My dad’s savings, combined with scholarships, lasted for two years, and I didn’t get a part-time job until my second year to help pay for living expenses.
After that, it was all up to me, and I’ve been happy to do it. I have loans from my third year on, and I feel confident about being able to pay them off (especially since the field I’m pursuing tends to pay well). For the past year, I’ve worked full-time, but the pay isn’t that great and I could work a bit less and maintain my level of living. I’ve been paying on my older student loans while in school, and so far I’ve knocked out almost half of the loans I had to get for my bachelor’s degree (about $7000 that I’ve paid over the past two years). I only take out loans for tuition and I work for living expenses.
So, to summarize – if my dad hadn’t saved some money for college, I may never have gone. Maybe that would have been all right, but a big part of me is sure I’m better off now. But then, when the time came (when I was about 20), I was totally fine with taking financial responsibility myself. In fact, I wouldn’t have it any other way.
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, that’s one thing. But stiffing your kids’ college funds so that you can have more money for non-necessities for yourself is shameful.
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 a couple is so uncertain of their financial future that they plan *not* to save at least the EFC, then they should re-think their choice to have children.
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 full ride on tuition).
I couldn’t imagine putting my kids through this sort of financial stress when it’s something that’s avoidable with smart planning. Worse, I would never have them decide to take a different route to avoid having educational loans.
Maybe things will change once I actually have kids, but for now, saving to keep their education as debt-free as possible is what I feel I owe to my kids.
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 self. I think the same advice holds true here. It is all very well and good to say what worked for you when you were in school, but the choice to not save now for your children can very easily (though not necessarily) be one that you deeply regret ten years from now because of lost opportunities. I thoroughly understand that many liberal arts degrees do not seem worth the money, but if you child shows a significant interest in the sciences or in engineering, college becomes a good investment and a necessity to that goal. When I got my degree in mechanical engineering, I co-oped (worked full time ever other quarter in a job that paid at least double minimum wage that gave me specific and varied experience in my field. It was an ideal arrangement that paid better than most night jobs of my high school friends who were expected to “work their way through school”. It covered my living expenses, but did not come close to covering my tuition, which my parents graciously paid for at my state school. considering prices for schools have gone up significantly since then, I do not understand how people talk about kids working their way through school without realizing that the only way to do it is with massive loans. My parents were not unhappy that I left a lucrative career as a mechanical engineer to be a teacher. They trusted my judgement and were happy that when I was 25 I had many options to choose from and was able to choose something that worked well for my family. There are lots of ways that you can help a child through college without allowing them to be entitled, party animal basket weavers. There are a lot _more_ ways to do so if you have saved money and prepared for it.
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 later on. I would be most interested to know the best ways to save $ in a way that leaves flexibility. Ideally I would like the flexibility of using the money for tuition, helping them start a business, help them buy a house, or me taking a European vacation. Is the only way to have that kind of flexibility in an after-tax investment account?
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 towards my children taking time after high school to travel and participate in service projects where they can develop a broader understanding of the world, some practical skills, and decide what their next logical step should be.
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 collar jobs are not the end all be all of employment, but they are much easier for an older person to do.
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.
Compound that with women and our body structure, it just isn’t possible to keep that physical labor up for the long term.
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.
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, and writing articles and taking pics for the newspaper and yearbook, I managed to graduate with only $20,000 in student loans.
Yes, I had it tougher than most of my friends, but I still managed to find plenty of time to have fun and cause a little trouble. I was typically a B student in High School and College. It can be done, with some creativity, without having to work 50 hours a week. I could have done even better had I been more prepared, and made better choices. Live and learn!
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 that paid me $10/hour in 1981 (more than my kids are making now!). I was able to pay the rest of my way along with $5000 in loans. I wanted to give my kids a similar start so they weren’t burdened with thousands and thousands of dollars of loans.
Between my savings and their working, my first daughter had less than $10,000 in loans. Second daughter went to a private school and has about $15,000 in loans. 3rd daughter is attending UND and will probably get out without any loans. That’s the best gift I can give to get them off to a great start in life.
They all worked and understood what portion of expenses they were expected to pay. I didn’t give them a free ride. They learned to be responsible and knew they couldn’t “party through school”.
My advice is help them out however you can to help them get a good start in life. I owe my parents a boatload of gratitude for getting me off to a good start. That’s what I wanted to do for my kids too!
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 nice, but because of it’s proximity to the university I was charged $500 for the room, which they admitted was the amount of the monthly mortgage payment. I worked 30 hours a week at a post office to pay that rent, while my roommate was able to save a lot of her wages from waiting tables. It worked out for her. It really really sucked for me. As a kid from a working class family, I still find the whole arrangement distasteful, but it is undeniable that it benefited their child.
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, first house, or their college education before your entire neighborhood of people is a very good start.
As for college and condos– my advice is just don’t drag other students into it–you would be having what should be your kids peers in a lessor position because your child gets all the benefit of someone else’s even more fragile circumstances (unless of course, their parents are giving them a free ride.)
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 happen after the agreement’s been made to live together. On the flip side, the poorer roommate could veto the higher rent and the nicer cable package and the richer roommate could resent having to live without central AC and HBO.
As parents there’s only so much you could do to prevent what could be an agreeable situation turn into a resentful one. I think in this situation the best you could do is alert your child to the possibility that his or her roommates might not be compatible when it comes to sharing finances.
Now that I think about it, these sorts of issues could crop up with newlyweds….
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 estate ownership, but that wasn’t my point. My point was that the resentment I felt was real (not that I’m super proud of that fact).
As for why I chose that place, there were several reasons. I didn’t have a car, so I needed to live within walking distance of the university. I needed a flexible lease because I was planning to study abroad for a semester(on scholarship), and they were willing to offer it to me. It was also less expensive than living on my own, and I wasn’t so adept at finding other roommates. Lastly, I didn’t feel like $500 was overpriced–it was standard for what one could get by the university.
What I REALLY wanted to say was that, man, had my parents been able to pay a portion of my tuition, that would have put me in a much better financial position now.
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. Then I realized all the additional costs of owning a property!
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 veterinary school everyone is in tons of debt or has a lot of assistance. I am perfectly happy to pay for a good place to live and great room mates, especially when it is better than my last more expensive apartment!
As for school I did get scholarships for undergraduate but they are non existent for the first year of veterinary school(after year one they exist again as a sort of “you didn’t fail so you can send us an application now” thing). FAFSA definitely effects everything. Once you get above poverty for your family it expects something from your parents. There are online calculators for the expected family contribution. Supposedly this is ignored in graduate school unless you go into a medical field. There are amaing 0 interest lones until a year after you graduate and then interest starts at a low rate- only for kids whos parents don’t make much. The effects of your parents really don’t go away financially until you are married.
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 pass a physical I might consider having them pay for veterinary school. The asthma and foot surgery stopped that though.
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 to steer him to community college where he could go for free if his grades put him in the top 10% of his class. However, according to my state, because I am divorced, I do not get a lot of say in where he chooses to go. So I think you might just want to make sure you have a little something put away, even if you do not name it college savings. I didn’t have children thinking I would be divorced. Things happen.
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 one. It was tough, but through scholarships, working, and some loans, I made it through. My two younger siblings both started to college, but didn’t make it very far through, and managed to create financial disasters for everyone involved in the process.
In my opinion, you shouldn’t force a child to go to college; you can encourage it, but if it isn’t something they want, then it isn’t going to work out well. It’s harder, but people can do fine without a college education. Make sure they understand what their choices mean, and then let them make their own decisions.
I also don’t feel parents should have to pay for a college education. But you should be upfront about that if you aren’t going to. There are tons of scholarships out there. I didn’t get any need based scholarships, as my parents made too much money. I got a few for grades, but I was generally a B student. Most of my scholarships were based on my interests (writing, majors, etc). And keep looking all through college; Freshman year I had some scholarships, but by Senior year I had enough to pretty much pay for everything.
I think regardless of what you choose, the most important thing is managing expectations, and making sure kids understand the consequences of their actions. They need to understand the impact of not going to college. They need to understand the impact of what school they choose. And they need to understand the impact of student loans.
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 every other semester during college. I currently have no student loans, and I plan to keep it that way. Did I finish in 4 years? No. My first degree took me 5. My second took me 2.5 years. It can be done. Encourage your kids to help from an early age. If you pay for everything, when do you stop?
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 that purpose.She got a job as an RA, which covered her room and worked to pay for her board. Both finished college debt free.
I should add, “conventional wisdom” says you should save for retirement before you children’s college. I disagree. I’ve seen too many students drowning in debt, and I did not want my children to end up that way.
The best option for me was to save for both. We lived frugally and saved for retirement and tuition through automatic deposits from our paychecks.
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 wanted to drive. He paid for gas, and what every he wanted. He wanted those Nike Air Jordan’s, I paid $25 for new shoes, he paid the rest. He realized he needed a job and got one in High School to achieve the lifestyle he wanted. Now he is self sufficient w/ the money he has, and the money he makes, and is now in college.
As for college savings, I put money from a couple bonuses in an UGMA/UTMA account when he was young. This money was about $15k at the time and it is now at $50k. This money is all the money I am giving him for college. They money transferred ownership to him at age 18 (by law) and now technically it is his money to do with as he sees fit. When he fills out his FAFSA, it is honest that I won’t pay for any of his college and this is not taken into effect for his form. Thus it is just his money he gets from the Govt. (about 2k a semester) which covers most of his tuition and he works for the rest. No debt, and he has not touched his “college” money yet, which will be used when he goes on campus in a couple years. In theory he should get out with no debt and will have something like $10K left over so he can start his life with a great emergency fund to start his life.
Now I know what people are saying, what if he blows all his money? Well, he is an adult and can make adult choices. That was his money to go to college, and if he blew it all away, then guess what, that was his chance at a better life blown away. Some of the other comments about not needing college, you can get a great paying job without it, etc. Well that is fine if you want to be someone who has no back/knees and arthritis in 20 years from all the manual labor. Many industries require a college degree to get into, and those are the ones you should be getting a degree for. He is not studying history or english, he is studying finance. He wants to be a bank branch manager. You have to have a degree for that (or be really lucky).
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 provide any of his own information since he wasn’t paying.
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 his accounts yet. Whatever expenses are paid for by his 20 hours a week of work.
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 than going to my local community college after grants and aid were awarded by the private college, and they had a deeper pool of aid and private resources when I had a struggle. Don’t immediately dismiss private U.
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 school). I work at a university, I talked to the financial aid people before we filled out the form, I have read all 500 pages of instructions, and validated it with tax attorneys. Yes, what I did was legal, and works. Again if the students parents are married, then you have to. If they are divorced (or never married but have a custody agreement) then you can look at splitting up the parents from the form. Yes my ex’s income was on there, but she made below poverty level with 3 other kids. Thus he recieved a nice package. I am not necessarily dispensing any advice, but if you are in my situation, it can work.
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 fits me to a T. At the end of the day, yes, 99% of all the people out there don’t have the situation I have, and that is fine. I have validated I am doing nothing wrong with my university staff, and with tax attorneys. While I appreciate everyone telling me I am wrong, that is your perogative, but I have found a speically defined loophole which I am able to use, and am using it.
As for my son, he has been able to go to school, with no debt so far, and has good grades. He learned how to handle a budget from an early age, and is following that. This was the point I was trying to make. Next year, assuming the FAFSA comes back as something similar as last year, he will transfer to main campus in the spring and spend his last 4 semesters on campus, with any remaining money not covered by FAFSA, from the money I set aside when he was 5.
My parents did the same for me when I was a kid and as a student I did not use more than 10k of it, and the remaining 50k is now worth a little over 150k in the stock market as I have not touched it. That is what I am hopping happens to him. He might get a summer job like me, or something to supplement his education costs. Who knows. I was able to pay for my education through hard work, which is what I want him to do as well.
Pay for tuition (and room) but board and spending money comes from their own money or earned income. Simple answer to the original post.
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 option of being “emancipated” from one’s parents is, as far as I’m aware, the only way to exclude their income from FAFSA. And it’s not a cheap option.
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 I had was earned by me. I had to learn the hard way how to make that money last. I definitely saw a bank account with like .83 in it at one point. But I learned that I had to budget better.
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 (my field is quite volatile), I know that DC will be able to graduate debt-free. I think this is a tremendous gift to give a child, and I’m grateful to be able to do it.
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 themselves. They reach higher, and go farther. Are there exceptions? Of course. But the exceptions do not change the basic formula that college leads to better financial stability.
There is a large and growing income gap in this country – and those on the winning end have college educations. Again, are there exceptions? Sure. But by-and-large, educated people have far more options in life. You can teach them about personal finance and how to make the most of their salary and how to ensure that they are not spending above their means.
If you save something (based on what you can afford) for your kids’ college expenses, you can change your family outlook for generations to come and show your kids that education is important. Because it is.
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 to take out student loans, we said we would help them pay off their student loans if they graduated with a high gpa and payment would depend on our financial situation too.
Emotionally:
1) My parents never communicated financial education with me. They have extrememly excellent credit but I never knew how and they never told which would have been so helpful. So now from 2 decades of mistakes, I am obsessed with telling the kids what not to do. We talk about interest rates, credit cards, saving and budgeting and saving for college. I hope these tools help them not make the same mistakes I did.
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 and not squandor them. I had an even huger long-winded response written out and it got way too complicated. I basically went into how the idea of the word “responsibility” in modern/ developed society, is most often used in the context of getting out of duties. Where in other much less wealthy and developed areas, responsibility is widely used as a means of establishing ones duties.
By saying it’s not your responsibility, you’re saying by default that it’s someone else’s responsibility. Who’s? The brand new adult who hasn’t had 1/2 a lifetime + a partner along the way to save money? The kindness of a stranger or entity who gives the grants (which in my opinion should be reserved for those whos families don’t have the means). The government who writes the loans (which then becomes the student’s responsibility?). If not yours (the parents), than who’s? If someone is going to say something is not their responsibility then you better believe I will ask that follow-up question of: Who’s is it then?
I will just say the best gift my family gave me was paying for my education. Part of it was inheritence from my grandfather and part from my parents. I wasn’t a good student in highschool so I didn’t have a lot of fancy scholarships, but I worked nearly the entire time (in hs and college). Despite not being the best high school student I was accepted into all 3 of the state colleges I applied to and my parents had faith that I would finish my degree, which I did. At nearly 30 my peers are still paying off student loans. Meanwhile I was able to buy a house right out of college and now have turned that home into an income property, which put me even further ahead financially.
I’m a 29 year old woman-child (I really am mentally only 15 yrs old) and I help my family pay for my cousins’ schooling. Part of my savings are ear-marked to help my niece and nephews also b/c I know their parents have more financial responsibilities than me and may not be able to do it on their own. They are not my “responsibility” but I want to help b/c I know what it would mean for them. You don’t have to be responsible for something to just do it…we need to get out of auto-thinking and learn to be mindful enough to apply rationale to our individual situation. We don’t need someone to tell us or make us do something in order for us to just do it. Can you imagine what kind of world it would be if folks only did what they thought they should be responsible for an no more?
No matter how much these well-meaning parents think it’s the same, a student struggling and succeeding b/c money was not available is NOT the same lesson as a student who struggles b/c money is withheld. Trust me, there will be resentment. Possibly in the form of “Why should I be responsible for caring for mom and dad in old age? They should have saved more, or been more prepared, or took better care of themselves.” Our actions teach our children and I wouldn’t want my children to learn to withhold assistance as a means to “teach someone a lesson”. It seems petty and nonsensical, and just plain mean.
**I just want to add that I have never asked my family for a cent from the day that I graduated. I had my first job lined up two weeks after I graduated and never looked back. I understood the magnitude of the gift they gave me in order for me to become independent and to this day I am one of the most headstrong, independent people you could meet. So the fear that helping someone automatically equals spoiling them is completely unfounded.
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 to spend on themselves at the time. Neither would fill out the noncustodial parent form for aid, either.
What did I do? I fortunately was at a small liberal arts college with a strong commitment to social welfare. I explained I was going to have to unenroll over 4K that I could not come up with. I was immediately connected to a lawyer who, without charge, obtained for me, the status of emancipated student and my financial aid was adjusted to reflect the fact that my parents did not give a damn about me. I am extremely grateful for their assistance. Now I have a Ph.D. in science and an excellent income.
How do I feel about them withholding support? I’ve never been more humiliated. My parents taught me that the rest of the world found me more valuable and precious than the people who are suppose to care most.
If you want to hurt your child beyond measure, don’t save for something society pretty much expects you to contribute to. Cut off their legs before they even get started, because that’s what you’re doing if you do not contribute the EFC.
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 nights before exams, and their parents can help but don’t…it’s heartbreaking. They are so grateful for everything, even if I just buy them lunch b/c their only other option is not eating, or order a pizza for everyone.
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 worth the sacrifice and she will do what is necessary for her own future.
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 school.
I made childish choices about my education – because I wasn’t footing the bill. I still wound up burdened by my husband’s school loans.
Those experiences and life since have created a feeling in both of us that our kids will make more responsible and useful choices for their education if they feel the weight of its cost.
I fully plan to do whatever I can to relieve their debt as time goes on – and depending on our financial situation I intend to help set them up and get them what they need to the extent I can. However I think it is foolish to spend $70k/year so my child can get her party on at a private institution and major in some endeavor that will never earn her the life she wishes for.
If my daughter is willing to go to a public school and live at home she can likely come out with a full ride from Mom and Dad – but if she wants to go to private u. so she can live on her own in the big city and have all the fun she wishes, well, I’m not mortgaging my future or my other children’s so that she can do that. She’s aware of the situation – she will make whatever choice she wishes, because it’s her choice to make.
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. When that happens, either fewer people will go on to higher education, or the schools will figure out a way to lower the costs. Here in Tennessee, the governor is currently talking about a plan to provide 2 years of community college for free. Hard to say if that will actually happen or not, but I do think something is eventually going to change. So we will not be saving up huge amounts in a 529 plan. If both boys go to college, we will determine how much we will cover and what they will need to plan on.
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 choices. They want to be independent. But then you have to accept the consequences of that independence . . . which means PAYING FOR IT. Like the rest of the grownups
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 other than vacationing for two years on your dime. What conditions you impose on the money is between you and your kids, but I think it’s good for them, at some point, to understand there are restrictions and limitations to the help they’ll get. Just as importantly you are letting each of them know you are planning on helping them with their future.
My deal with my kids (since I was stacking in favor of education post high school) was that if they chose two years community college and two years at a state school while living at home, I had enough to cover that with no debt for them. Or I could put that amount towards some other form of training or education, say trade school or culinary school. If they chose to not seek any form of formal education post high school, then I would give them a number of years before using the money for other siblings or for myself.
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 of problems for the child because the government does hold the parents hostage (I call it extortion).
I would encourage the author to reconsider their choices. Putting money into a Roth IRA that you can tap if necessary could be a good solution. As well as encouraging your kids to get that Associate’s degree in high school.
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 did my friends.
Also, for those of you who think getting a bachelor’s degree isn’t worth it, or at least not worth as much – what about getting a JD or MD? You must have a bachelor’s degree to get into medical or law school. Just as it’s dangerous to think that BA or BS will be a magic bullet to a better financial life, we should also take a longer view on the overall effect of having that degree.
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 ways throughout life, at least until they finish high school or college. Having said that, if a child abuses the parental support system then obviously you put a stop to the support because there’s no point in helping someone who refusing to help themselves, even if it’s your own child.
So while you don’t want to save for their college, you can always save for their future in other ways be it to help them set up their own business, start a share portfolio or buy their first home. It doesn’t have to be much, but something is always better than nothing. Even putting a few dollars each week into their savings account can have a positive impact on their financial future once they become an adult. In the meantime you can teach them about good money management, debt, taxes, investing, and everything in between.
I’m going to have a baby in two months, and I can’t wait to open an account for them and contribute a few dollars each week. After eighteen years they’ll either have money for their education, a deposit on a house, or a trip around the world. I don’t know what their hopes and dreams are going to be, but as a parent, I want to be able to assist them to some degree. There won’t be any spoon feeding going on as I plan on teaching them to become responsible and grateful citizens as they grow up. But a little bit can go a long way.
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 and of themselves. Some people spend their entire careers in pursuit of full-time comm college gig, just sayin.
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 of her own. Own children have a very big age gap.
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 parents are willing to pay or even help pay for school.
For the record my $5500 for tuition was paid for by my parents. The rest was merit scholarships. College is so much more expensive now compared to the average income compared to when I was in college. I hate debt and could see no reason to saddle our children with heavy debt when we could pay. It was not easy and we dont regret going without so they could graduate and start their careers debt free.
“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 be fantastic. But we will pay outright for their education – from their 529s and current income and savings. The deal has always been – mom and dad will pay for them to attend the instate university or provide equivalent funding for them to attend elsewhere as long as they can cover the difference without loans.
We have made it clear from when they were young that college is a part of their educational path. They’ve been in a great school district since kindergarten, always surrounded by other kids that are expected to go to college. I don’t think they’ve thought about an alternate path – they’ve always looked forward to college and have worked to maintain their grades.
Community college and living at home is about what your kids will be able to do if you don’t save/aren’t able to save/won’t save (whatever applies to the general “you”.) The cost of most community colleges (tuition) in our area line up with the federal student loan limits. It is a strategy, but not the only one.
I think it is a parenting choice to not give a constant message of ‘college is in your future’. Many people are successful without it. Many more aren’t.
There are ways to cut college costs, to pile up college credits while in high school (through AP or CLEP), to get the equivalent of an AA degree in credits (through dual enrollment), etc. But those work best if the message is ‘you will go to college’.
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 this: she wanted to do the whole “discover who I am” thing before college. That sounds beautiful and all, but it’s super expensive. Not only the risk of never actually go to school after the discovery (I have seen enough) is pretty high, “later” also means “with family to support and without learning momentum.” Furthermore, you are trading 4 years or less of full time with, I don’t know, 5? 6? years of learning and working. Lastly, think about all of those years that you could have earned college-level wage while working with high school level job. Add interest, and it’s really high opportunity cost.
Secondly, that “college” money can be used for much more than just college. Entrepreneurs need seed capital, too! Even traveling the world can be that much more comfortable with some financial support. Starting, generally, is difficult. Thus, for a young adult, any help to kick start his or her life is greatly appreciated
Thirdly, think about the meaning of “progress.” Yes, you end up fine without college paid for. That does NOT mean your children can’t benefit from a boost from your lives! My personal philosophy is this: a family is progressing if each generation is more successful than the last. A college education is anywhere between $40,000 to $200,000, enough to buy (or down payment for) a house. Thus, all financial goals for people with college paid for is pushed up: when their peers pay off college debts, they can buy house; when their peers can buy house, they (says) attain financial freedom; when their peers get financial freedom (read: retirement), they already live their dreams.
Forth, I generally don’t think of “paid” education as financial gift, but educational gift. My family (at the very least) progress by education: my grand parents could (barely) read; my parents started life with high school and progressed to master; I started life with college and am working on Master (with an eye on an eventual PhD, perhaps). Thus, each generation bestows upon the next a gift of (ever rising) education so that the next generation can live better and accomplish more. Compared to this, early inheritance just sounds so dry and money oriented. Who does not want to be self-made? And the best way for parents to give their children best chance of self-made without literally handing them money is to hand them education.
Lastly, I understand the whole notion of “working through college” and its self-made, self-reliance sentiment. However, let’s face the truth. Those youngsters are 18 to early 20s. They have troubles getting through college as is. Another philosophy of mine goes like this: don’t tempt face and challenge statistics. Yes, it’s nice if your children can pull it off, but should you risk it? It’s one thing for statistics say x% of (which is pretty high last time I checked) college students dropping out. It’s another story altogether if one of those is your child, who drops of due to overworking (I have seen THAT, too). Or maybe they barely graduate with low grade point and now good jobs refuse them. Point to case, let’s compare 2 just graduated students, one with research and teaching assistant experiences, albeit low hours, and the other with, says, 40-hour-a-week Wal-mart experience. Which one would you prefer for your opening?
All in all, here is my view: I am deeply grateful that my parents paid for my college, and I plan to do at least the same for my children (if they wish to go even higher, I will try). And I believe that all people should strive for the same.
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 make each succeeding generation more successful. My grandparents were the first in their families to go to college, and they did it on their own. My grandmother once told me that my grandfather had so many jobs she had no idea how he made it through school.
And now my nieces are college bound. I don’t know if they’ll be more successful than their father – he’s done pretty well. But, one thing is for certain – they’ll have had a much easier start wrt finances.
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 my interest rates were 8.25% and interest accumulated from day 1.
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 guess what? You have a leg up on your business majors – you probably write better and, if your program was good, have more nuanced analytical skills.
Besides this view is so myopic and frankly counter to the interests of the majority of people. Guess who will continue to learn literature and history if the rest of the classes abandon it to pursue practical and specialized degrees that only teach them one skill? The rich and upper crust will. They will be laughing all the way to the bank and the halls of power as they read about Machiavelli and understand how people think and the ways in which history repeats itself, because literature and the humanities actually teach you those things in abundance.
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 for an easy undergrad degree.
And with a marine biology degree, very few people become dolphin trainers, unless you have your own pool and private dolphins. And you can’t swim with killer whales anymore.
Besides, who was the first one with the idea to swim with ‘killer whales’ anyway. That sounds like something you would do right after you say “Hold my beer and watch this!”
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 should save to help our children pursue their goals, but the idea that I can save the $200,000 (based on current rate projections) it will cost per child to attain a traditional four-year degree is ludicrous.
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 get 27 years old. So, your parents have to provide for you one third of your life.
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 for college cripples our kids financially.
This is such a hard question because of course, we as parents all want the best for our children, despite the fact that our obligations stop only at raising our children to become an independent adult at age 18. However, if we are trying to make the best decision for our kids on this important topic regarding whether parents who can afford to help should help, where is the research and information?
This article is discussing a future projection for the need for a college degree by using the “back-in-my-day” thinking. We have such an incredibly changing landscape so I am not sure what help anecdotal information about a situation 15-20 years ago would play into this. This article seems to rely only upon reviewing prior discussions on this board. It seems that the GRS crowd is more statistically likely to question the value of a college education because we generally question the value of expensive purchases. Questioning the value is a good thing, of course, but here, we need to know the value of a college degree 10-20 years from now. Few of us on this board have researched the trend of college degrees, but are basing our opinions on how life worked out for us and our generation–years ago.
There is so much information I think is missing to a piece like this. First, there should be some information about the need for college degrees. For example, just last week, CBS published a troubling piece, “More Companies Want College Grads,” which discusses that high school diplomas are no longer enough and that 27% of employers in 2014 have upped their requirements to getting a job that high school graduates used to fill. There are a ton of articles and research discussing this trend. And as the years pass, the number of companies with this requirement is going to only increase. This article should focus on the need for a college degree 10 years from now. Instead, it is trapped in the past.
Another troubling trend that affects this is occurring in the high schools themselves. As we become more technology driven as a society and look to data published on the internet, out high schools are becoming more focused on increasing their stats. This has caused a completely different shift in high school thinking from when I attended. High school administrators (and thus teachers) are focusing so much of their efforts on college enrollment and AP classes because this affects their rankings in the US News and World Report grades. High schools and principals care about their school’s rankings. And most states have additional state grading, to which AP classes and college-entry play significant roles. Thus the need for college is stressed in schools. So from high school on up, there is a different attitude about those who don’t go onto to college. Those without a college education will have a stigma, much like there was a stigma for high school drop-outs when I attended. (But husband is a high school teacher who teaches on the vo-tech side of campus–he knows this first hand. Schools are pulling money away from the vo-tech so they can put it into IB/AP/etc, which benefits the school’s stats.)
In addition, there is a ton of articles and data concerning the ever-increasing gap between college educated and high school grads. Data from the US Census shows that college-educated households are the only households whose incomes have grown on a per household basis from 1991 to 2012. And then, on top of that, there are the recent articles that point to trends as to how college education is affecting the marriage factor. It is more likely that college educated grads will marry other college educated grads. Only 17% of high-school grad men have a college-educated wife. http://www.pewresearch.org/fact-tank/2013/09/24/the-growing-economic-clout-of-the-college-educated/ And the marriage rate among high school grads without a college degree is dropping.
Finally, there is no discussion at all as to the comparison between tuition rates, minimum wage, and the availability of grants and scholarships. If you are weighing whether your child should be able to pay his or her own way because you did, this seems crucial. But again, our society today is so different. Tuition rates keep increasing well beyond the cost of inflation while minimum wage does go nearly as far as it used to. So kids now will spend more on college and earn less. Further, children who have parents who can afford college are penalized based on their parents’ income. They can’t qualify for numerous grants and scholarships based on their parents’ income.
In today’s market, where more and more kids go to college, it is becoming critical to set yourself apart–you have to make good grades and be involved. As an employer, I am faced with a ton of resumes from college grads and I can’t interview them all. I screen automatically for the top of the class and of those, I want to see things that make them stand out and show this is a kid with lots of initiative. Thinking a child will be better served by working for their degree does not seem to take into account that to get a good job, you need good class standing and be involved. Kids that have to work their way through school have less time, have less time to study, have less time to build that resume. Or the child will take years longer, which then costs more.
Finally, to me, if we are talking about the value of a college degree, there is a huge different between the value of a college degree in fine arts or liberal arts and a college degree in engineering or business administration. Liberal arts degrees are shrinking in popularity because it is harder to get a good job with them. We need to be talking to our kids about seeing college as a product or tool that has a particular use–it is a great tool to get a specific job. If we focus on what job they want after they graduate high school, you use education to get there. You don’t just blindly go to college.
We can all think of people who have succeeded in the past and beat the statistics, but this doesn’t mean we should make a decision regarding projections of the future by thinking only to past examples of people who defied expectations. We need to make an informed decision.
“In today’s market, where more and more kids go to college, it is becoming critical to set yourself apart–you have to make good grades and be involved.”
One of the ways current students are trying to set themselves apart is summer internships. Most of these are paid now, I think, but I don’t know if the pay would cover living expenses if the student has to get a summer-time apartment. Not everyone lives in major cities where these internships seem to be.
I mention this because this is another area where the haves and have nots are separated. When I was in school in the early 90’s I didn’t take any internships. Sure, I looked at the postings, but none paid as much as McDonald’s would pay me, and none were within commuting distance of where I lived, so whatever I earned would go straight into rent. So each summer I worked at McDonald’s because Mom would feed and house me. And I needed that summer job money to pay for stuff during the school year (movies, notebooks, etc.). I could have gotten a job during school, but that probably would have hurt my GPA. But if I didn’t have to worry about those expenses I would have applied for those internships and let my parents pay my summer apartment rent.
Will it be the same 18-20 years from now? Probably. It might even be worse – competition for internships and jobs could be ridiculously fierce. Maybe job applicants will be expected to have created their own web firms by college graduation. Or maybe employers will have been hit with sanity and realized that even those with menial McJobs have something to offer. But I am pretty sure it won’t be like it was when I was 18-22.
While it’s easy to rationalize why you won’t pay for your child’s education, especially when they are young, it’s a much different story when they are approaching college age. My fourth child is starting college in the fall. For each one of them, there were scholarships and basic Stafford loans, and we paid the rest. Then, we agreed with each of them that if they finished their undergraduate degree, we would pay off their loans. If not, then the debt was theirs. This gives them incentive to finish what they start. In addition, they can still be successful at all of the things that don’t require a college degree. But, it’s much more difficult to go back once you’ve entered the work force and taken on the real world responsibilities of a family, mortgage/rent, etc. I had great grades in high school, top ten of my class, and had to drop out of college my sophomore year because my parents couldn’t help. I don’t want to do that to my children. I missed out on some great opportunities throughout my life because I didn’t have a degree.
This whole post is just a double-down on being middle class. It’s interesting from the standpoint of – ‘Who is a person who is entirely happy exactly where they are and would want no more or less for their children.’ This author seems to be that person. Admirable in some respects, anti-American in others. I can’t fathom being ambivalent on college, but then I got a fancy degree that let’s me pull in $100k a year working 40hr weeks (I’m 28). Don’t know why you wouldn’t want that for your kids.
Another possible option that could be considered for making higher education more affordable is the military. I’m a veteran. After my 4 years of service, I took advantage of the MGI/Post- 9/11 Bill. That has been a tremendous blessing to help me pay my way through school.
Even better, would be pursuing acceptance into a military academy. Not only would they get a great education, for free, but would receive a paycheck while in training, have great opportunities as a commissioned military officer and then at the end of the initial contract can choose to take their skills & education into the civilian sector. With experience, and military background, they would be in a great position.
My parents made me understand that attending college and doing well was my job, and thus I would do only that. No screwing off, and no part-time jobs for spending money. I was to study and earn As, end of story.
They took out a loan each semester for the amount of that term’s tuition, room, and board. Once my grades were in, and deemed acceptable, they paid the loan off. Had I not performed to their satisfaction, I would have been handed the loan to pay off myself, with no further financial help to be had.
I graduated in 3.5 years with a 3.95 GPA, so I guess it worked. Living in terror of getting a B+ kinda sucked, though.
Good for your parents to give you the freedom to focus on your studies, but I think their standard of accepting only A’s was unreasonable. If I knew somebody was going to come down hard on me for getting the occasional B+, I wouldn’t have challenged myself nearly as much as I did – and I wouldn’t have learned nearly as much.
But I was in college in the late 1990s, when grade inflation wasn’t quite as crazy as it is today.
Also, not all colleges grade the same. My alma mater is known for piling on the school work and keeping the average GPA as, well, average. You could work like crazy and get a B, or have something of a life and get a C+/B-. A’s were rare.
My child was planed so was his higher education. I brought a child to this world I will arm him with the best education we could afford. We are saving toward it along with out retirement etc. I think if you planed to have children then you should think about how will you are going to pay for their education,too.
It is important to understand needs of our child.And when they become collage student it means they spend more.So we have to save more for our child.So save from today,it will become a huge investment.
I decided years ago that I’m not paying for my child’s education either. I’ve been telling my child since she was 2 that she will be paying for her own college education. That sentence is always followed by something along the lines of “so you better get good grades, do well at school, and either play sports well or get involved… or you can join the military.” Plus, she has several piggy banks. The biggest one is her ‘college’ piggy bank. In reality, I will probably ‘gift’ her large payments on her student loans (coinciding w her grades) – but she doesn’t know that. I have completed college with low student loan debt, and no help from my parents. I think the responsibility will strengthen her, and encourage better performance. And, never once have I felt bad about my decision.
There certainly are better ways to handle college for kids besides just paying a bill for 4 years tuition. I think what is much more valuable than paying their way is to teach them the costs and benefits of further education in finding what works for them, and what is a good vs. bad investment. Teaching them to work and save for what they want to do,with that being said I don’t think there is anything wrong with paying for their schooling, but it certainly shouldn’t be seen as a “given” or something for parents to stress about.
Why, oh why, do so many discussions on this topic end up in false-dichotomy world where a parent’s only choices are paying the entire college bill and paying nothing at all?
College is expensive, and it’s getting more expensive by the year. Most students can’t cover the whole bill with any single source of funds (scholarships, loans, need-based financial aid, part-time or summer jobs, parental savings, other family, etc.) – they’ll need to draw on money from as many sources as possible.
You can pay part of the bill, and still have them “work and save” for another part, if that’s so important to you.
I wasn’t trying to say that it is “either/or” situation. Towards the end of my post where I mentioned there is nothing wrong with paying for their school perhaps I could have been more clear, that I meant there is nothing wrong with paying for any amount of their school, whichever make sense based on the young adults plan and the parent’s financial situation.
I wrote an in depth article on paying for college on my website where I address finding a balance between several different funding options as well as discuss different paths of further education. http://actionecon.com/planning-and-paying-for-college/
If you are worried about your child partying through college/not applying himself or herself, you can do what my parents did. They paid for our college, but made us reimburse them for any college class in which we got a grade below a C. We stayed in town and went to a local state school to save expense on room and board. It worked out well.
Additionally, my grandparents had actually saved for our college education, but because we took an inexpensive route (and because my parents are very generous), they paid for our college and let the money my grandparents invested continue to build. It made a super down-payment for a house. It was back in the days when college was more affordable, but I remember taking those $1150 semester tuition checks to the registrar and the $400 checks to the book store and being very grateful. Having a college education has made all the difference in my life. And their generosity has definitely made it a priority for us to support our kids’ post-high school pursuits.
As a current college student, I’m on my own when it comes to money. I commute (with my own car, gas, and insurance), had to work my tail off for scholarships, and work two different part time jobs during the academic year and one part time and some odd jobs over summer and other breaks. I still live rent-free at home, pack my lunch, and handle all college monetary issues myself. It’s a lot of work, but I think it’s better in the long run because I’m the one who’s going to be paying off my loans, so I should know exactly what I’m getting into
I did not have any financial assistance from family regarding my college education and graduated owing $60,000 in student loans. My husband had help from his parent’s for one year of college, leaving him with $45,000 of loan debt upon graduation. Having a combined debt of $105,000 was overwhelming, especially since I am now a stay at home mom. We currently owe $70,000 in loans since we’ve paid some off. Each year now when it’s tax time, we put a chunk of money towards paying down the debt. I am by no means an entitlement individual, but if a parent has the means to save for their children’s college tuition, then they should. My husband’s parent’s bought a $600,000 lake house when he was a freshman in high school, yet they could only contribute $15,000 towards his college tuition via a loan? On top of that, his dad has very expensive collectable cars. Personally, I think it’s selfish to not help your children (not you specifically of course) if you are able to help them through college. I am trying to save $50,000 for each of my children towards their eduction because I do not want them to have the financial stress that my husband and I have regarding our debt. It’s terrible and hinders our ability to live as we want. I want better for my children than I had it, regardless of what I have to sacrifice to provide that for them. Kids should come first, not our own wants and desires. Those are just my two cents. :)
My grandparents along with my parents saved enough for both me and my sisters education. I benefited greatly from not having the burden of that debt over me. My sister benefited even more since she graduated in the height of the recession and took odd jobs with non profit companies during that time to boost her resume.
Me and my wife each contribute $80 every bi-weekly paycheck starting when she was only a few months pregnant. When and if we have a second child we will bump it up to a $100.
Saying that. I will not let them waste the money. Room and board when they are close enough to live at home is a no no. Sending them to a expensive school that has no benefit or taking classes that will not further their earning potential.
I will probably make them take loans and I will pay them off as they get good grades and make smart decisions.