8/14/2013 9:45 PM ET|
Why parents shouldn't pay for college
Students with skin in the game are likely to party less and achieve more, research finds.
Professor Laura Hamilton interviewed some "really angry, bitter parents" as she researched why some students left college with little to show for their tenure there.
The parents shelled out tens of thousands of dollars for their children's educations, only to see lackluster grades and degrees in all-but-useless majors that were chosen because they didn't interfere too much with the kids' socializing.
"One of the things I started to notice was that some of the people who had resources from their parents weren't putting those to the uses the parents thought they were," said Hamilton, whose research turned into a book she co-authored called "Paying for the Party."
That observation is no surprise to those of us who attended college on scholarships and work-study only to watch our financially supported classmates party away their copious free time.
But Hamilton, an assistant professor of sociology at University of California, Merced, went beyond anecdotes to dig into the numbers. She examined data collected by the National Center for Education Statistics to determine what effect, if any, parental support had on college outcomes.
What she found: Parental help is associated with lower GPAs -- but higher graduation rates. In other words, students who get family help paying for college may not study as hard, according to the report published in the American Sociological Review, but they're more likely to get degrees.
This confirms another study by Public Agenda that found college dropouts were far more likely to be going it alone -- trying to pay for school without parental aid -- than those who actually graduated.
The fact is that it's really tough to work your way through school these days. The cost of college has more than doubled in real terms since 1980, and even public colleges now cost more than $20,000 a year. Financial aid is largely determined by parents' income and assets, so if they opt not to help, the student may have few options other than massive student loan debt.
Hamilton's study showed that student loans, like parental help, are associated with lower academic achievement. Scholarships, work-study and grants, on the other hand, are associated with higher achievement.
Most of the detailed data Hamilton examined was collected in the 1990s. She confirmed her results with more recent, but less detailed, surveys conducted in the early 2000s. She's confident the trends she observed are, if anything, even more pronounced today as college costs continue to rise and many schools try to attract affluent students who can pay their own way with easy majors and a "party pathway" that emphasizes socializing over academic achievement. That emphasis can be distracting or even devastating to the economic prospects of less-affluent students, she said.
Here's what Hamilton advises parents who want to ensure their investment in education is worthwhile:
Don't assume all college educations are equal. Universities have dramatically different agendas and resources. "You should pay a lot of attention to the type of institution it is to make sure it fits your child's needs," Hamilton said. For example, a college that caters to wealthy students may not have advisers skilled in helping "first generation" students (those whose parents didn't attend college) to navigate the system. You can ask the admissions office for statistics showing how many first-generation and minority students actually graduate; low numbers, or refusal to provide those numbers, indicate the school may not be a good fit.
Make sure your kid has some skin in the game. Even if you can afford to give your child a full ride, you probably shouldn't. Although working more than 20 hours a week boosts the chances a student will drop out, a less demanding part-time job can make your child more responsible and more aware of the costs involved in education.
"It's not bad to have kids help with expenses," Hamilton said. "Working 10 hours a week isn't going to kill anybody."
Make your expectations clear. Talk to your children, early and often, about how much their education costs and what sacrifices you're making to ensure they get a degree, Hamilton said. Set a GPA that you expect them to maintain (making it reasonable based on the child's abilities) and stick to your guns. "It can't be a bluff," she said. If your child's grades slip, you'll have to be ready to withdraw support or transfer them to another institution. One set of parents Hamilton knows told their daughter that if she didn't maintain her grades in the competitive business program she chose, they'd transfer her to a regional college nearby and have her live at home. The girl kept her end of the bargain.
Stay involved. Helicopter parenting often gets a deservedly bad rap, and you shouldn't be calling your children's professors to argue about their grades. Since many colleges lack adequate advising services, though, you may need to stay involved in helping your child pick an economically viable major (that is, one for which there are actually jobs available) and review course selections to make sure they're getting what they need.
Beware the Greeks. Big universities dominated by sororities and fraternities may not be a good fit for middle- and lower-income students trying to achieve economic mobility, Hamilton said. The "party path" of easy majors and lots of socializing may not hurt wealthier students, who have the connections to land well regardless of how well they do in college, but could be devastating to students of lesser means who don't have the same advantages and who could be distracted from academic achievement.
"If they're wealthy or affluent, it doesn't matter what GPA they get. They're going to be fine," Hamilton said. "It's the kids who need the credentials who are really suffering."
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
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Another reason parents should be very cautious paying for their child's college education is retirement. The child will have 45+ years to pay off their loans prior to leaving the work force, whereas the parents may have 15 or fewer years of work remaining to accummulate their retirement nest-egg.
Counter to most offered sage advice we paid for the full bachelor degrees for both our kids and it worked out for us and them. They knew going in that any advanced degrees would be all on them. One obtained his JD and the other is about to start on his MD.
I recommend that all school loans be in the child's name. The parents can assist with paying off these loans, anywhere up to 100% of the amount,, if they are willing and able - but they are not legally obligated to pay.
Her mother and I are so proud (yeah Im gonna brag), she was valedictorian at her school, captain of the varsity cheer team, and got a FULL FOUR YEAR SCHOLARSHIP TO NOTRE DAME UNIVERSITY! She received the AnByrce Scholar Initative its first year at ND. It includes everything including study abroad. I wish I could take credit (and we did support her), but her kindergarten teacher predicted Kassidy would "do something big with her life"
It can happen...my daughter is going to be the first one to get a college degree (i went to community college for 3 years, had a 4.0 and dropped out...go figure)
I am flying out to Indiana with her next week to get her setup and I am still struggling to get all the cash together (I have not gotten a dime from my parents since I was 21) but even if I have to sell my TV and couch, I will make sure she gets what she needs to get thru college!
I feel like I won the lottery!
We feel college (even a public institution) today is too expensive and beyond the means of a student, unless they borrow a lot of money, which is dumb. Our third and last child is halfway through college. We were very clear with our expectations.....graduate in 4 years with a worthy degree, get good grades, and have no debt. Each child has been responsible for one third of their total cost. Each of them were expected to have a part time job, and start saving in high school. Any academic/athletic scholarship they earned would count toward their one third payment.
My wife and I are ecstatic that all three have or will graduate on time with honors, and face post graduation with no debt. We feel we covered all the bases....skin in the game, realistic expectations, reward for extracurricular participation and academic excellence, make the experience efficient and worthwhile, and end up prepared for the real world.
My parents and Grandma helped me with my degree and I helped my daughter get her degree. I cold not have even considered telling my daughter no and I would hope that when the time comes she does the same for her children. My degree is in applied art and engineering and hers is mechanical engineering degree.
I'm helping her pay off the little bit of school loans that she has, despite being on scholarship.
Nothing new here. Forty-odd years ago I worked to supplement rather scimpy G.I. Bill Benefits. No debt. Twenty years later my son worked to supplement Mom & Dads not overly generous support. Again, no debt. In short, parents should help to a point, kids should also work part-time at school, full-time summers. The partying mentioned here by those totally supported students was the norm even forty plus years ago, and probably before that. Of course, there were exceptions to the partying rule, but not many.
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