Think parents should help pay for their children's college education? Do you think parents should be required to pay for their children's college education?
These questions are hard to ask and answer, but they are very important when thinking about the ever increasing cost of higher education.
This type of question is very personal to me and relevant to my blog. One of the main motivations for starting making sense of cents was my 40.000 dollar student loan debt (which 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 USD per student, and surprisingly, parents often pay for college by taking out loans to cover raising children.
I've read countless stories of parents who have 200.000 dollars in student loans for their children, and it is these parents paying for college who have found that this debt is causing them financial hardship, not being able to meet their retirement goals, etc. These parents end up drowning in debt because they honestly want to help their kids get through college. What they don't realize, however, is that there are other ways to help your kids finish college.
Even more surprising is that many parents think that this is the normal situation and that every student have their parents pay for college. Still, it's a very difficult decision for a parent to make.
Many of the emails I receive are about whether a parent should risk or possibly ruin their retirement by helping their child pay for college.
Some of the many stories parents have emailed me about:
- One family had a child in medical school, and the parents paid all college expenses plus food, car, rent, etc. The debt they incur has made them uncertain about their own future, as that debt has made their retirement plans uncertain.
- One group of parents who paid for college told me they paid over 100.Had taken out $000 in student loans in their name so they could send their child to school. Not only were they out of retirement because of these loans, but they had significant debt of their own outside of their child's student loans.
- One mother told me that she and her husband are constantly fighting over the amount of student loan debt they took on for their child. They were not on track to retire and were struggling with their daily bills, all because they thought they had to pay for their child's education.
- Another family had a child in law school, and the child said if their parents didn't keep paying their expenses, they would hate their parents. This child was even angrier when the parents printed out every single blog post I wrote and gave it to them (I didn't tell the parents to do this, it was entirely their idea). The kid said I was going to ruin her life (yes, that actually happened). And now these parents are not on track to retire.
I hate to hear about parents who are already in debt, not on track for retirement, and are now taking on even more debt for their children's education. Most children are unaware of their parents' financial situation and believe that tuition is something parents should do pay for.
That said, I have to admit that I'm not a parent myself, and I understand that it's probably difficult for parents to put.
However, I went to college all by myself. I paid all my housing costs, food, college, transportation and more. It's not impossible for a child to take his or her lessons.
I don't hold a grudge against my parents because I had to pay for everything. Unfortunately, this is one reason some parents pay for their children's education – they fear their kids will get mad if they don't pay. I'm really grateful for the valuable lesson this has taught me about financial responsibility, and honestly I would be more upset if I found out my parents had incurred debt and were struggling financially to put me through college.
Please don't be one of the many parents who pay for college just because you think you have to. If you can really afford it, do what you want with your money.
However, before you take out loans, please stop and think about your own financial well-being before taking any further action! Are you on the way to retirement? Will this loan put you in crippling debt?
Quick note: if you are looking for information on college funding, I recommend attending the webinar 6 steps to quickly secure college scholarships. Jocelyn paonita pearson, founder of the scholarship system, secured over 125.000 US dollars in scholarships and funding by following this system!
Parents, think before you co-write or use college loans.
The default rate on student loans averages 10-15%. In recent years, 90% of student loans have been co-signed by others (mainly parents).
What does it mean? This means that if you co-sign a student loan for your child and he or she defaults, you are stuck with the bill. I wish more parents paying for college understood this before signing up for this loan.
While you may think you have a great relationship with your child, everything can change once money is in the mix. In my experience, not many things cause as much tension in family relationships as money. I have heard of several people who have argued with their parents and intentionally stopped paying their student loans because they knew their parents would cave and start paying for them.
Yes, this is disgusting behavior, I know, but it happens to some parents who pay for college.
College can be expensive, of course, which means many people take out student loans just to "afford" it. I hope you understand the consequences of doing this before you co-sign student loan debt and pay for your child's college education.
Your kids are likely to see better grades without your money.
According to forbes, kids whose parents pay for tuition tend to get lower grades. Many parents and students feel that taking the pressure off the student frees up their financial time to focus on their studies. This is because they believe that having a job in school will affect how well they do in college.
The reality is that students who pay for their own education are more likely to mean it because they pay for it with their own money. However, students with parents who pay for college often take this for granted and become less motivated to succeed academically.
Of course, this is not always 100% true, but it is something to think about!
Parents, you can help your children in other ways.
If you can't afford to pay your child's tuition while you're on track for retirement, or if you decide you just don't want to pay college expenses, there are many other ways you can help and support your children while they are in school.
Some things you can do are:
- Support them emotionally. Even if you're not one of the many parents paying for college, you should still support your kids emotionally. This does not mean you have to agree with what they are doing, but help them by listening to their problems, giving advice, and helping them come up with a solid financial and college plan.
- Help your child understand personal finances. Helping your child understand how to organize their personal finances by teaching simple skills like creating a budget will help them not only in college, but throughout their adult life. I recommend reading how to create a budget to learn more.
- Help your child earn money. There are countless ways to earn extra money if you help your kids find ways you can pay for college and their living expenses.
- Show your children affordable alternatives. Choosing the right college and major can be overwhelming for a young person just out of high school. For example, your child might just think he should attend an expensive private university, but it's important to let him know about less expensive alternatives, such as going to community college or a state university. These other options are no less valuable and may be better suited to your child's needs.
- Help your child apply for school and scholarships. Applying for college can be confusing for kids, but help finding schools and assisting with the application process can make it easier. There are also numerous scholarships your child may qualify for. Some may require you to write essays, while others are based on school grades. You may need to do some work to make sure you find out which grants they are eligible for. However, most are very low cost and awarded by the college itself. Therefore, it's a no-brainer to apply for them!
- Help your child in other ways. For some reason there is this myth that parents who pay for college have to pay for absolutely everything else. Instead of paying for their tuition, textbooks, food, dorms, cars and everything else put limits on how much they can spend. You can help by giving them emotional support, letting them stay in your home while they study, helping them find ways to save money for college, helping them lower their college expenses, and more.
- Set your child up with a personal finance tracker. Financial trackers and apps are great tools for young people to see how they are managing their finances. Platforms like personal capital this feature lets you consolidate and track all your financial accounts in one place. While your child may not yet be using the retirement tracker, you can also sign up and see where you are for retirement. You can read more at me personal capital review .
Parents paying for college – is this a good idea?
Getting back to the question of parents paying for college that started this article, I think parents should only fund their child's college education if the parent is on track to retire.
This is because there are multiple ways to pay for college (with cash, student loans, grants, scholarships, etc.), but there's only one way to fund your retirement. Read more about how you can stay retired you can achieve retirement! Avoid these top 5 mistakes .
Remember, you can't take out a loan for your retirement!
Here's why you shouldn't ruin your retirement savings to help your kids through college. You should analyze your financial situation and consider retiring to determine if it is possible to help your children through college.
If it's not possible, be honest with yourself and your child. What ultimately motivates parents to pay for college is, above all, love for their children. There are many ways to support your children and show them how much you love them, and it doesn't just pay for college.
Think parents need to pay for college? Think parents should ruin their retirement to help their kids?