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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Michelle-
So many thoughts on this subject as we have a child that will be entering college in another 1.5 years. As a parent, you certainly do not want burden your kids with college debt as they start the next chapter of their life. On the other hand, as a parent, you do not want to impact your retirement goals either, so it becomes a balancing act. It’s never too early to look at merit scholarships. We just found out you can apply for some as early as your freshman year. Communicating with your child and laying out your expectations is key.
I was very fortunate, I received an R.O.T.C scholarship that paid for everything. Speaking with friends who had to take out loans gave me an even greater appreciation.
I unfortunately came from a poor family and there is no way my parents would have ever been able to pay for my college. I never thought twice about it and just paid on my own. Although I only ended up going to a community college and it was a lot cheaper.
As children, you shouldnt rely on your parents paying for your college or giving you anything for the matter other then shelter, food, love and support.
I say this now of course as I dont have children yet but lets see what happens once we start popping them out. 🙂
This is such a great topic to cover!
My parents aren’t really that well off. I went to a private uni and therefore fees were a lot higher than average. But I put it all on Government FEE HELP (which i’ve maxed out) and I currently hold that loan. However, half way through my 2nd year of my 2nd degree, I ran out of government assistance. Because I had a job I was able to pay off $25,000 of my degree which was a massive relief, and that was all in a year’s work. My parents gave me money sometimes for food but I don’t think parents should have to carry that burden (along with their home loan) to have to pay off their child’s student loans as well.
I think going through college and having to pay for everything myself, has taught me so much about money, how to save, how to budget and I’m confident that I’ll easily be able to pay off my student loan.
Amanda
I do not believe parents are responsible for paying for their child’s college education. My parents did not help me pay for it because at the end of the day: college is optional. I get that it can increase your chances of getting a better job and moving up in society, but there are far more graduates who either don’t have jobs or can’t get one in their field. My parents did however, help my siblings in different ways. Here are some of them:
1.) Staying on their insurance (health & car) while in college
2.) Allowed to live at home with NO bills (if you wanted)
3.) Random things like: gift baskets that had living essentials: toilet paper, tooth paste, laundry detergent, candles etc
I do not live with my parents (still don’t) and have 1 1/2 of college left to go. If parents are able and WILLING to help financially then go ahead, but they most certainly should not go into debt behind it. College is very expensive and I was fortunate enough to graduate high school with above a 4.0 gpa. I did win a renewable scholarship and even a grant. I understand those who feel like the parents are responsible for paying if they are the reason their child/children are going to college, but apart from this reason parents are not obligated to pay.
I think it depends. First, can the parents afford it? I paid for my own college. Growing up, my parents were essentially minimum wage workers. There was nothing for them to give me. And I didn’t even know what to expect. Neither of them went to college and had zero insight to help me plan – I did my own research, filled out my own apps and paid for them from my part-time work earnings, took the entrance exams without any tutoring or prepwork, etc. When the time came, I just pretty much announced to them where I was headed.
It was hard paying for college. I qualified for some grants, but there were many other expenses. At any given time I worked 3-4 different part time jobs. I was exhausted all the time. I even took a year and a half off to work a full-time job and a part-time job because I did not have money to return the following school year.
I did not have the best grades – I just didn’t have the time or energy to hit the books like other kids, nor was I the kind of smart that memorized everything at the first pass. I was bummed with reality. With that said, 2 conversations motivated me and changed my life. One was at a career fair where one of the reps told me that most companies just want to see that you started and finished something and are motivated. The 2nd was with an alumn of my school. He said that once you have your diploma, your GPA won’t matter nuch. And, if anyone asks, just tell them something great. The chances that that person will pull your transcripts is slim to none. And, you know what, they were both right – and no job has ever even asked about my GPA! I still have some federal student loans lingering. The interest I’m paying is small – in the 4s. My husband and I have a small, but lovely home, which we actually refi’ed 3 years ago into a 10 year loan at a dirt cheap interest rate – no issues qualifying. We don’t carry credit card balances and save money every month into emergency and retirement. We manage to do all the normal things that come with being adults.
For me, having come from parents that make very little. And an extended family in which, for the most part, everyone earns a very low living wage. I now lead a much more comfortable life than I think I otherwise would have been destined to, had I not chosen college – I view my student loans as my fee for this better life. I was lucky enough to have graduated before the recession and found a job within the first year. It paid peanuts, but after a few years, things improved. I’m currently trying to work for myself – so who knows where that’ll end up…but I hope well!
With that said, the other side of the coin, is that when parents make more money, their children will qualify for less aid. If they’re able to afford it, it would be helpful to have at least some savings set aside.
Parents should also communicate better and earlier. Having volunteered to speak with upcoming high school grads, on behalf of my alma mater, there’s a lot of kids that don’t know their parents have no money to help them with college. If a high school student can work part-time on evenings, weekends, vacations, etc, it is not far fetched that they could make $7,000-$10,000 during their junior and senior years (sometimes even sophomore year) and set aside their own college savings (I wish I’d have had that foresight and someone to guide when I was a kid!). If kids are aware of the financial situation, and they see college as part of their future, having those conversations early can help them prepare themselves financially for that next step.
Sorry for the long rant…
For us, we paid part of our kids, but with conditions. They had to do CLEP/DSST or AP exams to earn extra credit, they were encouraged to do Community College first, get their AA (provided they could get an AA in a field they could work in after they finished in 2 yrs – if the program was longer the program option was thrown out), then find a college that accepted a large amount of transfer credits, allowed them to do online classes. My youngest child is benefiting from all this practice I did with my older two kids. She is 16 and finishing her BS in Info Sys and Comp Sci within 2.5 yrs of in school time, online, and I spent a total of $24K for her degree including the cost for her CLEP and DSST exam credits she transferred into her college.
Making the right choices with money and side hustling non-stop as a future “side hustle millionaire” will make the option of paying for your child’s education that much easier. I believe parents should pay for their children’s tuition because it’s not just an investment in their children. It’s a gesture of love and helps them get financially set for life, whether they choose to work for someone else until they retire, or start an online side hustle and become a [side hustle millionaire]. If you personally ask me, I feel if a person or child has the opportunity to achieve a good college education, go for the gusto. They may not need the degree later on after becoming a side hustle millionaire after venturing full-time into entrepreneurship, but it’s always good to have a “college degree anyway,” and go the extra mile out of inspiration to do the transformation educational work.
First, let me get this off my chest: People shouldn’t have kids if they can’t afford to send them to college? What kind of crackpot garbage is that?
That said: My husband paid his way through all but his first year of college. It took him 10 years, but you know what? He ultimately paid for it himself with no loans. Admittedly, his situation was a little more complicated but he has no debt for his bachelor’s degree. We later paid for mine with student loans, but we paid them off quickly.
We have 18 year old twins. One goes to our local early college and will have her high school diploma and two transferable associate degrees (science and art) at the end of this school year (she is a “super senior” and is getting those degrees for FREE); her twin brother graduated from our local high school at the end of the first semester of his senior year (2018). He then went to work full-time for his father at our business*.
As of now, our 18 year old son is working full-time and getting a certificate in welding at the local community college; he then will be working on an associate degree in applied science with a focus on welding – a degree that will transfer if he chooses to get a bachelor’s degree later. He is getting a trade that he can then use to pay for a bachelor’s degree should he choose to go back later. The associate degree is being paid for out of a 529 my parents put $1000 in a dozen years ago. It should cover most of the associate degree. But as I said – he is working full-time, and is fortunate enough to have a lot of leeway on his hours at work – I don’t think it’s unreasonable expect him to pay the little that remains of his community college tuition on his own while he lives at home with no bills.
After filling out the FAFSA, our daughter says our EFC is basically what would cover tuition and fees at a state university. We can do this by drawing proceeds from our business, and we will be glad to do it. However, room and board is pushing it for us. We are fortunate enough to live in a college town, and we have parents in state who live in a college town with whom she can live. So, she has two choices of university, both decent ones, that would meet her needs. She has to make a decision – live at home for free and go to one of those schools or take out a need-based Stafford loan to cover living in a dorm. To me, this seems like a fair balance; she can stay at home free or get a loan that SHE has to pay back in order to live in a dorm. She is a well-adjusted, responsible adult who does a LOT for our family. She doesn’t want to put us under any kind of financial strain, so she is agrees with this plan.
We also have a 16 year old (junior) at early college who will have two associate degrees when he graduates high school (he will also be a super senior). His situation is unique and he will likely get some merit-based scholarships; he will never get need-based funds (but that’s another story). College for him will not put anyone at financial hardship.
Additionally, we have a 10 and 11 year old. At this point I don’t see them going to the early college high school (they are both more into school activities – something that you miss out on going to early college). However, our local high school has programs that allow students to take courses through the local community college (frequently online or on the high school campus) that actually goes toward their high school diploma. Again, these are college transfer courses and are again free to us (I’m assuming they are state funded, but it’s a new-ish program so I’ve not looked into it much yet). I fully expect them both to take advantage of these. They also each have $2000 in a 529 funded by my parents as well, so that can cover at least a couple of semesters at community college to get some transfer classes in. I anticipate our EFC for them will be significantly higher, but again, we live in a college town and will be prepared to pay tuition and fees and books.
There are several ways to pay for college, and a multitude of colleges to go to. One thing that I think is crucial is communication – my children know that I would like them to go to college, but that it is ultimately their choice. They know – and have known as long as they’ve been able understand what college is – that we will pay for tuition at a local school – anything beyond that is their choice. Short of going to a school that has something unique to offer, in our opinion sending an average student somewhere is wasteful.
Some states “require” parents to pay for college. I think what bothers me most about this is FERPA. I have to pay what could amount to an exorbitant amount of money – money I work hard for – but I have no legal right to see what that money is getting me? Meh. If I’m being forced to pay money I should be allowed to see what they are doing.
When all is said and done, if you choose to send your child to your alma mater three states over, or the private school that they “just HAVE to go to!” then that is your choice. But downing someone because they can’t afford to do that, and saying they shouldn’t have children if they can’t afford college – well, that’s just bad form, and frankly very condescending. The student needs to have role in – and in fact, take a strong lead in – finding out what is out there and taking advantage of it – be it early college courses, merit scholarship, or need-based financial aid. If it is within their means, parents should cover any college financing deficits, but the onus shouldn’t fall on them to cover ridiculous and unnecessary college expenditures.
*We purchased a business, and are making payments – this was not a start up. We are not on track for retirement but expect to double up on retirement funding after the business is paid off, which is very soon.
In the past, parents were encouraged to create special bank accounts to save for their children’s college education. Today, parents can create YouTube channels and document their children’s life as they grow up as a means of generating passive income from ads in YouTube videos. And the more they create and upload YouTube videos documenting their children’s growth and making money from affiliate links promoted in YouTube videos and earning AdSense revenue from Google ads appearing alongside and in the footer of YouTube videos, parents can have a peace of mind knowing it’s a little easier today to save money by making money online from YouTube and affiliate marketing as a means of paying for their kids college education.