4/20/2012 7:09 PM ET|
Should you pay for kid's college?
It’s not an all-or-nothing decision, and parental advice and encouragement can also help your student earn that degree.
Like virtually everything else about parenting, the topic of who should pay for college tends to bring out extremes of opinion.
At one end of the spectrum are the parents who declare their jobs are done when their progeny turn 18. "I've fed them, clothed them and kept a roof over their head," these parents reason. "If they want to go to college, they can pay for it."
At the other end are the parents willing to bankrupt themselves so Suzy can attend her dream college. They're the ones who ask me if they should take out a massive home equity loan, or withdraw the money from their retirement accounts, to pay the oversize bills.
Let me make the modest proposal that the best approach for many families is somewhere in between these opposites. You shouldn't sign your kid up for an education you can't afford. But even if you can't contribute a dime toward college -- many families can't -- you also shouldn't simply wipe your hands of the whole matter. Your kids need you to be an active participant and adviser if you want them to avoid a debt disaster.
Whenever I hear from young people with mind-blowing amounts of debt, like a woman who racked up a quarter-million dollars of loans for a bachelor's degree or a med student on his way to half a million dollars in debt, they're often kids from modest homes whose parents don't have college degrees themselves. The parents didn't or couldn't provide guidance on how much debt is reasonable, and their children likely will be paying for that for the rest of their lives.
It may be just as bad to let your darling think any education, no matter how expensive, is within her grasp just because you're footing all or part of the bill. If you won't have the full cost saved up before she starts -- elite private colleges run $60,000 a year or so now, and that cost will continue to soar -- then you need to start managing her expectations long before she starts applying to schools.
That means researching your options. You can start by checking out the net cost calculators of the schools you're considering. Not all net cost calculators are accurate, warned Lynn O'Shaughnessy, the author of the upcoming second edition of "The College Solution: A Guide for Everyone Looking for the Right School at the Right Price."
Calculators that ask only seven or eight questions won't be as predictive as those that ask 30 or more, she said. But you should be able to get a ballpark idea of how much the schools will cost your family.
You also can fill out the detailed expected family contribution calculator at FinAid. Using this calculator usually takes some time, but it can give you an idea of how much public and private schools will expect you to pay out of pocket.
You can match those expected costs against the amount you have saved for school and how much you think you can contribute from your income to see if a school might be affordable. If there's a yawning gap between your resources and your expected contribution, it might not be.
To pay for school, parents shouldn't:
- Cut back on their retirement savings.
- Borrow from retirement funds.
- Take on loans that would require them to delay retirement.
Borrowing against home equity is risky, too, because that's a financial cushion you may need in an emergency or to fund your retirement.
What's more, borrowing vast amounts of money or postponing retirement to pay for college isn't necessary, O'Shaughnessy said. Your kid has too many other, affordable options to get an education for you to bankrupt yourself.
"Don't sacrifice and throw your family into financial turmoil," said O'Shaughnessy, who offers a workbook for parents called "Shrinking the Cost of College" at her website, The College Solution. "People get too hung up on the grand name. Smart kids will do well, wherever they go."
For those of you who think your kid can just skip college -- your numbers are dwindling, but I know you're still out there -- let me give you a little context. Yes, these days there are college graduates without jobs. But people without college degrees have twice the unemployment rate as those who have them, and the picture isn't going to get brighter down the road as good union and manufacturing jobs continue to disappear. Some post-secondary education will be all but essential for those who want at least a middle-class standard of life. For more, you can read "Should your kid skip college?"
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Since I last wrote about paying for college, my daughter received a prestigious award from her college from the Alumni. It is a $5,000 cash award for her dissertation. Helping your children does pay!!! She also received from her professor this year a $4,000 award. In April, my dream for my daughter will come true in the form of having a PhD all paid for by the college.
Its not like once they hit 18 they will magically have stable income. Just because you were able to do it in your day and age when an economy was stable even booming doesn't mean your kid will be able to do that today in a shitty economy. Plus college today cost more than it did back then when the dollar had more value. Times change my friends. Give your children a better shot in this age. I wouldn't want my kids to end up in debt or working **** wage jobs for an eternity before getting an education/real job.
This has been a constant disagreement in our household as our children have gotten older. My husband was raised by a single mother on welfare with no higher education and he started working when he was 15, financial aid used his small high school earnings in determining his financial aid package and he had a balance after grants and student loans. I was raised in a middle class family and was eligible for financial my first semester only because there were 2 of us in college at the time and ineligible after my older brother graduated. I chose a different path and I just recently returned to school, as did my husband.
We have been talking to our children about their futures from the moment they were born and they all know that financial aid is not promised to them because we are middle class and that they must work hard in school to give themselves the advantage. In exchange for their hard work we will assist with what isn't covered. Our oldest child begins high school in 3 days and she has told us that she will walk with a 4.0 because she wants to go to Yale. However she has begun looking at other schools to help defray the costs. We will financially support their college education for 4 years only and as long as they keep their grades up. Because of our income, I don't really want them to work while in high school just in case they could get financial aid. We have 5 children that will need to go to some form of higher education with the oldest and youngest probably being the most expensive because the oldest will be going into her senior year of college when our twins enter their freshman year and our youngest because he will be an only child being 6 years younger than the next child.
If parents continually hand kids everthing in life the kids will NEVER learn to be self sufficiant
My husband just found out we are being transferred. My daughter who had 54 college credits (a junior) found out she really only has 19! The rest of them got thrown out as if they didn't exist. Why? These were like the credits in high school where you have to take bull crap classes to fullfill your credit requirements to get your diploma OR they were classes that were required to get in to a required class.
Take for example writing 101. It was a REQUIRED course to get into writing 102. Writing 102 was the class she got credit for not writing 101! WHAT A SCAM these colleges have going on!
I must add here that she had followed the advice of her counselor the whole time. These were classes her counselor told her she should take.
How many parents are paying for CRAP classes & don't even know it?
I went to college when I was in my early 30's. I was divorced, a military veteran, working full time, and I had to live with my dad so I could afford my child support and other bills. I was working 50 to 60 hours a week and attending class 4 nights a week. I will NOT say it was easy. It was one of the most difficult tasks I have had to ever do. I used the GI Bill to help pay for my schooling and I took out some college loans. The only help my dad gave me was he let me live at home at no cost (other than buying my own food and paying a simple utility bill every once in a while) and he LOANED me $500 to buy my first semester's books until my GI Bill money came in and I had to repay him.
I strongly encouraged my son to go into the military and let them pay for his college education. But as you can probably tell by now, his mother had other plans for him.
I have told him that I will not pay for his college education. He was not the best student high school and there were many times he simply just didn't try. He would not do his homework, study for quizzes or tests. So, my personal feeling is that he has NOT EARNED THE RIGHT TO ASK FOR MY HELP. If he done all the things he was suppose to do in the first place, I may be more willing to help him with his college expenses. But, until he shows me he can be responsible enough to do the school work (all while not living at home), I am not sacrificing my savings, retirement, or home to pay for him to go party in school.
For this reason, I will not pay for my kids' college education. I will allow them to live at home rent free provided they honor the house rules, keep their stuff tidy, and help out with a few chores. I believe the real world experience of working helps keep young people grounded and provides incentive to study REALLY HARD.
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