Should parents pay for their children’s college education? Do parents have to pay for their children’s college education? These are tough questions to ask and to answer, but they are very important when thinking about the increasing cost of higher education.
These kinds of questions are also really relevant to my blog, as I began it extremely focused on paying off my $40,000 student loan debt (you can read about how I paid off my student loans in just 7 months).
My student loan debt was higher than the average $30,000 per student, and surprisingly, it is often the parents who are taking out loans to cover their kid’s education. I’ve read countless stories of parents who have $200,000 in student loan debt for their children, parents who are struggling financially, etc. These are parents who are drowning in debt for their children.
But, what’s even more surprising, many parents think this is normal. Even so, it’s a tough decision for a parent to make.
Many of the emails I receive are related to whether or not a parent should risk or possibly ruin their retirement by helping their child pay for college.
Here are some of the stories that parents have emailed me:
- One mother told me that her and her husband were in constant fights over the amount of student loan debt they took out for their child. They aren’t on track for retirement and struggle with their daily bills, all because they thought that they HAD to pay for their child’s education.
- One family has a child in medical school, and the parents are paying for all of their college expenses plus food, car, rent, etc. These parents are not on track for retirement and they have debt.
- One set of parents told me that they had over $100,000 in student loans taken out in their name so their child could go to school. These parents are not on track for retirement and they have a lot of other debt besides student loans.
- Another family has a child in law school, and the child said that if their parents don’t continue paying for their expenses, that they would hate their parents. This child was even more mad when the parents printed out every single blog post of mine and gave it to them (I did not tell their parents to do that, it was entirely their idea). The child said I was ruining their life (yup, that actually happened). And, these parents are not on track for retirement.
I hate hearing about these parents who are already in debt, not on track for retirement, and are now going even further into debt for their children’s education.
I understand that I’m not a parent.
However, I put myself through college entirely on my own. I paid for all of my housing expenses, food, college, transportation, and more.
I don’t hold grudges against my parents for the fact that I had to pay for everything (this is a reason for why some parents pay for their children’s education- they are worried that their children will be angry), and honestly I would be more upset if I found out that my parents went into debt and were struggling financially to get me through college.
So, if you want to pay for your child’s college education and can truly afford it, then do whatever you want with your money. However, before you take out loans when you’re not on track for retirement, please stop and think before you make any further actions!
Think before you cosign or use college loans for parents.
The default rate on student loan debt averages around 10% to 15%. In recent years, 90% of student loans are co-signed by others (mostly parents).
This means that if you co-sign a student loan for your child and they default, you will be stuck with the bill.
You may have a great relationship with your child, but everything can change once money is in the mix. I have heard of several people who had a falling out with their parents and actually purposely stopped paying their student loans because they knew that their parents would start paying them instead.
This is absolutely horrible, I know, but it does happen.
College can be expensive, which means that many people take out student loans in order to “afford it.” Before you cosign on student loan debt and pay for your child’s college education, I hope you understand the consequences that can come from it.
Related posts:
- Learning How To Survive On A College Budget
- How I Paid Off $40,000 In Student Loans In 7 Months
- 6 Ways To Save Thousands of Dollars On College Costs
Your children will get better grades without your help.
Now, if you’re still on the fence about whether or not to pay for your child’s college education, maybe this next fact will help.
According to Forbes, children who have parents that pay for their college education tend to get the worst grades. This is because students who pay for their own education tend to be more serious about it because it’s their own money.
There are other ways you can help your child get through college.
If you cannot afford to pay for child’s college education, or if you decide that you just do not want to, there are many other things you can do to help them.
You can:
- Help your child understand personal finance. Helping your child understand personal finance, such as creating a budget, will help them greatly in life. I recommend reading How To Create a Budget.
- Support them and help them make a plan. Even if you are not offering financial support for college, you should support your children mentally. This doesn’t mean that you have to agree with what they do, rather help them by giving advice and coming up with a solid financial and college plan.
- Help your child find ways to make money. There are tons of ways to make extra money, and helping your children find ways to do so can help them pay for college and their living expenses.
- Inform your children about affordable alternatives. For example, your child may only think they should go to an expensive private university, but it’s important for you to inform them of more affordable alternatives, such as going to community college or a state university.
- Help your child apply for scholarships. There are numerous scholarships that your child may qualify for. Some may require them to write essays, whereas others are based on high school grades. Most take very little effort and are given away by the college itself, which makes it a no brainer to apply for them!
- Help your child in other ways. For some reason, there is this myth out there that helping your child go to college means you need to pay for everything. Instead of paying for their tuition, textbooks, food, dorm, car, and everything else, set limits. You might help by giving them emotional support, letting them stay in your home while they are in college, helping them find ways to save money for college, helping them cut their college expenses, and more.
So, should parents pay for college? And, do parents have to pay for college?
Back to the questions that began this blog post, I believe that parents should only fund their child’s college education if the parent is on track for retirement.
This is because there are multiple ways to pay for college (paying for it with cash, student loans, grants, scholarships, etc.), but there is only one way to fund your retirement.
Remember, you cannot take out a loan for your retirement!
Due to this, you should not wreck your retirement plans to help your children through college. You should analyze your financial situation and your track for retirement to see if helping your children through college is possible. If it’s not possible, be realistic with yourself and your child. And, as you’ve seen in this post, you can help them in many other ways.
What do you think? Should parents pay for college? What do you think of college loans for parents?
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This is something that I’ve been thinking about a lot recently and I have three kids. Ideally, I’d love to pay for my kids’ education because I don’t want them to have to struggle to pay their student loans the way I’m doing now. Starting out adulthood stressed about money and having to work through college is not something I want for my kids. However, in reality, my husband and I will probably only end up paying for 25-50% of their education and help them apply for scholarships, etc. for the rest. Great post.
Yes, I think that’s something that I’ll end up doing as well!
The whole student loan situation has created a situation where college is wildly overpriced. I’m proud to say that we did finance our son’s entire college education through graduation with a Masters degree without student loans. I started saving for his education practically the day he was conceived. Every month I put something into his fund, even if it was only $25 during lean months. As our income increased I increased the amount I put into his savings. (At the same time we were fully funding retirement accounts and paying extra on the mortgage so it would be gone before retirement.) Of course, our son helped as well by working summers during high school and college. He took AP courses and tested out of 4 which saved an entire semester. He also took 2 or 3 classes at a community college during the summer because they were basic curriculum courses which were cheaper at JUCO. Then when he went to graduate school they looked at his courses while in undergrad school and determined the courses were so complex they immediately gave him credit for a full semester of grad level courses. It was a true partnership between him and us that worked out very well. And he has thanked us on a number of occasions for allowing him to start his after school life free of debt.
Great job!
We’re putting money in our kids 529 accounts. It likely will not be enough for them to pay for college completely, but there are so many other options that I am very hopeful that they’ll end up coming out OK without too many loans.
Yes and yes and yes. Parents have one and only responsibility towards their kids: raise and educate to the best of their extent. If you’re saying that an average collage debt is 30k, then it means that partents have 18 years to save 30k for their child to pay for their college. And by saving this, they get a positive interest rate snowball effect. 30k is only 139$ a month. If they save it with a 2% interest rate, they will end up with 40k balance at the end of this helping a child out to get education and allow them to start their life without DEBT. Now if a teenager needs to take 30k in debt and will pay it let’s say in 10 years after college, the total payment out of this 30k loan will end up being 60k. If we’re looking at 18 years, we’re looking at 108k$ paid. A difference between parents saving and kids paying back is like a difference between +10k vs. -60k. I have no doubt it is parents responsibility. It is also a responsibility to talk about it with the child and teach about the value of money. This way a youg person can get out of college, debt free, begin their life debt free, buy a house, and start saving, so that their children can study, DEBT FREE. Since they now have saved 100k from not having to pay of the stupid student loans, they can fund education for two of their kids! only because their parents were smart enough to save 139$ a month (yes, 4.6$ – the cost of a stupid takeaway coffee per day).
Thanks Agata!
Sorry but it’s not “only” anything. People with this attitude has created our overpriced education system. Some parents are struggling to pay their bills and save for retirement. What works for you doesn’t work for everyone. I went to community cimmunity college then transferred to private college with $18,000 total debt (2014) which I paid myself. My parents don’t “owe” me that. They owe me love.
I think if someone is not in the financial position to have children- then they just shouldn’t do it. I think she’s absolutely right and if someone can afford having kids, and plans accordingly- this is what should be done. At the end of the day, putting your kids in a position to take out student loans before they really are even adults shows poor planning on the parents end. Kids didn’t ask to be here in this world- they should be set up for the most success available.
Karla and I lead financial peace classes for 20 and 30-somethings and its crazy how many really truly believe there is no way to get through college without accumulating a ton of student loans. It’s sad really. We’ll definitely be sharing this with our groups.
Thanks!
I was fortunate enough that my parents bore the brunt of my student loans. I’m always thankful for their sacrifice, and some days it feels like I can never make it up to them enough. I did take on $25,000 of the debt to pay for my fair share, which we should pay off by next May or so.
I did a lot of things wrong for college, and I’ve learned what I want to do with my future kids.
Here’s the approach I’m considering:
1. Open a 529 college savings when the kiddos arrive. Contribute to it regularly and ask for donations in lieu of things like birthday presents for the kiddos.
2. Teach kids about personal finance early on.
3. Encourage them to seek out alternatives to college, like career programs or starting their own business.
4. If they choose to go to college, we can use the 529 savings to pay for it. We’ll strike some kind of agreement to help pay for only a portion of the loans, in addition to the 529 savings and scholarships. I would also encourage them to take college courses throughout high school and in the summers at a community college.
We’ll see how this plan actually plays out, but it’s very very difficult to succeed when you’re saddled with so much debt–as a parent or as a college student. It’s important that both parties find a balance that works for them.
Sounds like a great plan!
I believe parents who expect their children to attend college have an obligation to pay for it. I don’t believe they have an obligation to pay for an expensive private, out-of-state school, but certainly for an in-state public institution. There’s no way the average high school graduate can afford to pay their way through a four year degree these days and come out debt free and graduate in four years. Tuition has skyrocketed as have the cost of textbooks and the cost of living.
If you expect your child to attend college, you need to start saving when they are born and you need to set the expectation that you are only willing to finance a degree from a reasonably priced instituion and that if your child wants to go to a private or out-of-state school they need to earn their way in with scholarships.
Unfortunately, many parents are financially illierate and pass this on to their kids. How many parents told their children they could attend their dream school if they got in without sitting them down to explain to them how they would finance it? Your average high school graduate doesn’t know any better. They just know they want to go to Dream School and get Dream Job and make Dream Money.
Thank you! I just announced that we are having twins (kids number 4 and 5) and everyone keeps chiding me about how it’s going to be so expensive for us to pay for college. They usually seem pretty shocked when I announce that we’re not planning on paying for college. I am still paying off my student loans for undergrad and graduate school. My dad gave me about $3,000 my freshman year, but that was all the help I received from my parents.
We don’t want them to take on too many loans, so plan to help them in other ways. They will be encouraged to save up some money, look for scholarships, stick with State schools, etc. We will give them as much help as we can, but it makes complete sense that they will do better in college if they are personally invested in their education.
I know someone who purchased a college house and became a landlord. He made money, but his child was able to live there for free.
Yes! There are so many other ways to help your children.
Both my husband and I went into the Army after high school and the GI bill paid both of our college educations. I tell my kids if they want free college they have 2 choices: Army or Air Force. 🙂
Haha awesome!
I’ve seriously been thinking about this a lot lately. My kids are 8, 6 and 3 right now and I have 529 plans already for them. So at least they have something (which is more than the nothing my parents helped me). But, I feel that I did so well in college graduating summa cum laude because I had to work for it. I had to literally work to be able to support myself!
On one hand, I feel like they need to somehow realize it’s not a free ride and on the other hand we want our kids to be able to start out life after college without loans. I think we’ll be doing a middle road solution where we find enough to pay for a reasonable priced education assuming they can get a few scholarships and such. The rest will be on them-we will definitely not be taking any student loans in our own names.
Yes!
I was so lucky, and unusual that my parents paid for both undergraduate and grad school, and helped me pay off my remaining loans. They were in a financial place to do so, as my father is a major saver. They were also able to retire very comfortably and have a paid off house by retirement. If I ever have kids I may encourage them to check out alternate funding options for college (scholarships, grants, going part-time, etc.), as well as check out vocational schools, and other options for employment, like self-employment. College isn’t the be all and end all. My liberal arts degree would not have earned me very much in the marketplace without my masters.
Great post! So sorry for the parents who are in so much debt paying for college. I’ve started a 529 for my daughter and we also plan to go after scholarships just like our lives depend on it. No way will I be home broke and struggling trying to pay for all of that.
I would love to pay for at least half of my children’s college education. What I’ve noticed is the later people have kids the more they have been able to help. This is obviously a tiny and completely biased sample, but it’s encouraged me and my wife to hold off on having kids for longer than most. We’d love to pursue our education, business, and financial goals before having children to take care of.
I think half is a good number. A lot of my friend’s parents did this and it helped to keep my friends in check too because they knew that they were responsible for the other half.
My daughter is finishing her undergrad degree (state university) in three years this spring. We paid for 2/3 and she paid for 1/3. We told our son (who is a senior in HS) that he gets the same deal – of the state university cost. She is getting through debt free because of her summer jobs and since she finished in 3 years, we told her we’d give the same amount of money toward the first year of grad school too. Again – he gets the same deal – and he’s planning to do it in 3 years. He’s trying for ROTC too now – and he would get PAID to go to college if he gets it (because he would still get university scholarships too!) Trying to avoid debt but keep them highly involved in the costs too.
Great job Vicki!
Love this post! I hate when I hear people say it’s a parent’s responsibility to fully finance their kids’ college. Absolutely, parents should pay SOME, if they can, but there are so many ways kids can earn their own way, which means they have skin in the game. These bratty students threatening hatred and pettiness to manipulate their parents into paying for their luxurious school choices do not deserve to get a free ride. (I can’t believe that example you gave of the kid who said you’re ruining her life!) Whatever parents can or are willing to pay, they need to communicate that early on to their children so they can make wise decisions about higher education.
Yes, exactly!!