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When wealthy parents won't pay for college

Some well-to-do moms and dads tell their kids they're on their own for higher education. What are their options?

By Karen Datko Jun 5, 2012 2:13PM

Image: Graduation cap (© Brand X Pictures/Photolibrary/PHOTOLIBRARY GROUP LTD)Many parents can't afford to pick up any of the cost of sending their kids to college. But what if parents have substantial income and savings but refuse to help out?


There truly are parents like that. A recent survey by Legg Mason of parents with $250,000 in investable assets found that:
A majority thought their kids should contribute a small portion of the total, while close to one-third thought they should contribute up to half. Only 7% thought children should contribute most of it and 2% believed children should be responsible for the full amount.
Washington Post personal-finance columnist Michelle Singletary recently referred her readers to a Reuters story about well-heeled parents who believe their kids won't properly appreciate their college education if the parents chip in. Singletary disapproves of that. She wrote:
We know that even the brightest students can't count on getting scholarships or grants. So, either the child gets a scholarship, or he or she has to work like a dog while trying to take classes and/or take out costly education loans. 

That made us wonder: What exactly are the options for students whose well-to-do parents won't help pay for their college education? A Web page at FinAid provides some answers. (It turns out FinAid gets this question a lot: "Some of the more common questions received by FinAid come from students seeking help because their parents refuse to provide any help for a variety of reasons, including misplaced priorities.") (Post continues below.)

The fact is, no matter what parents think, they're considered responsible for paying to educate their college-bound child, if they can. Stepmothers and stepfathers are too, FinAid says. So when the child applies for financial aid, they'll want to look at your income too.


Students' options

Students, what can you do if your affluent parents won't help?

  • Get your parents to fill out the free application for federal student aid, known as  FAFSA. If they don't, you will be cut off from any need-based grants or loans. However, you may be eligible for higher-cost unsubsidized Stafford loans.
  • Look for schools that provide merit aid not tied to ability to pay.
  • Wait until you turn 24, which makes you an "independent student." You're also independent if you're a veteran, married or have kids. FinAid adds:
Before 1992, one could become independent if the parents didn't claim the student as an exemption on their tax returns for two years and the student provided evidence that he or she is self-supporting. This is the old definition, and is no longer valid.
  • Get your mom and dad's parental rights terminated in court.
  • Some parents won't fill out FAFSA because they're not paying their taxes. If that's the case, FinAid says:
If you have evidence of your parents' tax evasion, you could consider turning them in to the IRS, since the IRS does provide a reward for such information. (If your parents are sufficiently wealthy, the reward could pay for your education!)

Sound harsh or over-the-top? Unless you're an independently wealthy teen, understand that affluent parents who won't help out with college costs are limiting your options. Reuters says:

If Mom and Dad aren't contributing any money at all, it's the student who's going to have to come up with the difference -- by dipping into any savings they might have, working part time while pursuing their degree, or taking costly loans.

Singletary asked her readers for their opinion. Not one response she shared sided with well-heeled parents who refuse to help their kids. Those readers appreciate that tuition and other college costs are a much greater burden than they used to be.

Parents' options
Parents, if you are helping foot the bill, you're perfectly within your rights to set some ground rules and demand financial responsibility. For instance:
  • Require that your child work part time during the school year and full time in summer. The money earned will help pay agreed-upon living and college expenses.  
  • Your child must stick to a budget. If you have yet to raise a financially aware child, this is your last chance. Set limits on spending and track it.

Fewer than half of students graduate in four years at 33 of the 50 state flagship schools. The overall four-year graduation rate is 31% for public colleges and 52% for private ones, the federal government reported this year.

If the kid can't do these very basic things, then cut them off.


What do you think? Are parents who can afford to help with college but don't being selfish?


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22Comments
Jun 5, 2012 3:44PM
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My parents 42 years ago refused to pay a dime for my college as they saw it as a waste of money. I was a girl. I was a good girl, no mouthing off, no smoking, no drinking, no breaking curfew, did all of my homework, blah, blah, blah. They forced my younger brother to go to college and chose his major, one he hated. He has never worked a day in his life, became mentally ill from all of the drugs he took in college. Parents divorced, father married a girl my age. Put her through 14 years of college and grad school. She now makes $65,000. per year. I think after taxes it took her 10 years of working to break even on the cost of her education.

 

I put myself through one year from money I had saved from high school jobs. Dropped out and banged around in crummy jobs until I was 23 when i started my first company. I read and read and became self educated. I started several more companies over the next 35 years. I saw my parents very little. Hadn't seen my father or mother in 15 years. Annually I would call Dad just to let him know i was still alive and in one of my last conversations with him he said, "I never was very good at picking a winner."  Nice, but late. My last call was from his wife a year later, crying and telling me how Dad needed help, he had a stroke and it was very hard on her having to take care of him and she needed money to hire help so she could work. I told her it didn't sound like a very good investment. It is not that i am angry but when I was 18 and needed them to just help a little with my education, I was a bad investment.  Dad was VP of a fortune 500 company. He had the GI bill for his college from World War II.

 

I know what it is to be homeless basically at 18 and it is too young. I have taken in 6 children who were all abandoned by their parents between 9 and 18. It is important for these children to have a support system and college is not the answer for everyone but someone to guide them into the future is always the answer. I disagree with this article in some respects because in some cases parents shouldn't pay and in some they should, it depends upon the child. The final point is that parents need to recognize who the child is and what is best for that individual child and you do that by knowing your child. The answer depends upon the child.

 

This article appears to be casting a disparaging glance on the wealthy as if they are all cold and cheap. More of the liberal media's attempt to cleate class warfare. And I hope this reporter remembered to claim as income that lunch that her company bought her last Friday before her child turns her into the IRS for income tax eveasion.   

Sep 17, 2012 10:23PM
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My parents are definitely upper middle class, but I have four siblings. And college is now ridiculously expensive. Sending all of us to school would totally bankrupt them. So yeah, I'm very understanding of the fact that I will be paying my own way. The problem I run into is when filling out financial aid. I get nothing because they are wealthy, even though they aren't contributing. And I can't really become independent unless I marry, which is not an option. 

So! I'm a 4.0 student with honors and wealthy parents that can't afford college. Seems a little messed up. 
Dec 19, 2012 12:52AM
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1. Stop making generalizations about the upper class children. My family's income is just over $800,000 and I am no where near spoiled.  I not only have been forced to move to multiple different countries due to my dad's job but also pay for everything I own other than my bed and the sheets that came with it. Along with my parents wrecking my childhood they refuse to pay for my college and you think I can just fork up hundreds of thousands of dollars to pay for my undergrad, masters and PHD? Good joke. Being wealthy does not necessarily mean you are anymore privileged than the average middle class family so get that through your heads.

2. Comparing college degree now and to everyone out there who is in their 40s and 50s is not only irrelevant but an ignorant statement based on what? Your opinion with no facts? Yeah y'all are making some great points..... How about you try and get a job in 2012 at 18 years old without anything but your high school degree? You can't because of the level of competition within my generation and the economic situation america is currently experiencing. Working your way up in companies does not happen the way it use to anymore, yes there are some exceptions, but not many. 

3. The "why" generation? More like the "****ed over by baby boomers generation." Not only do I get to struggle to pay for my college but I also get to pay off YOUR generations ambitions to become chief police of the world. O and if you don't want to pay for my college (which I think you should be taxed for) then why should I pay my taxes so that you can get health care as you quickly reach the dependency age when I am in the work force? Welcome to the real world my friend. YOU rely on my generation to save your **** when YOU cannot work. YOU rely on my generation to pay off all of the debt YOUR generation has left for us. So how bout you when you fulfill your responsibilities  and stop leaving it to my generation, so that I wont be economically stressed and unable to afford college, maybe then I'll be able to pay for it on my own. But you didn't give me that situation did you?
Jul 28, 2012 6:11AM
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I will be able to help with my childrens education but I am really on the fence. I went to college with no help from my parents--they probably could have helped a little but they couldn't foot the entire bill. I completed enough credits to  graduate in 3 yrs. I went to a state school and I had about 15K in student loan debt at the end. I never skipped class on friday to go to the beach, I didn't have a car,Ii lived on campus for 2 years and I got accepted to med school on the first try. I contrast that to people whose parents were paying for school, a car, an off-campus apartment and an allowance and credit cards. They took 5 yrs, changed majors a bunch, went out every thursday night (college night) and were average students. I think that I will make my children finance their education for at least half. When they graduate I will write a check to pay off their loans as a graduation present. I have 4 children to put through college. There are a lot a parents who don't have ample retirement because they spent it on a college education for their child(ren) and now that they are coming back home after graduation so I think it is important to reserve some resources. Plus if they are paying they can have any major they want.
Jun 7, 2012 2:34AM
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Fewer than half of students graduate in four years at 33 of the 50 state flagship schools. The overall four-year graduation rate is 31% for public colleges and 52% for private ones, the federal government reported this year.
Do these people never stop to consider that the reason students aren't graduating in four years is BECAUSE they have to work their way through? My last 30 credit hours took three years because DH was laid off four times is those three years, requiring me to drop out to work more hours, take fewer classes per semester so I could work full time, and in one case, transfer schools and move across the country so he could get a new job. 
Aug 9, 2012 1:32PM
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This is BS. How biased are u people? Notice how the only people talking about this are the older generation. You guys are selfish AF. I understand if u cant afford to pay for college, I get it. But if you are living comfortably and have a decent amount for your retirement and you dont pay for your childrens education, you probably dont love them very much. Instead of lessening the strain on them for the future you are being selfish and (not really) adding 10 years of your life where u will just sit in a retirement home while slowly losing your memory. So, if thats more valuable to you, then have at it. Selfish generation.
May 15, 2013 8:07PM
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I am one of the parents who can afford to pay for their kids college.  For years, we have told our kids, we will pay as long as you earn a 3.0 gpa or better.  If you are below that, the next year will be on you.  Now that has occurred with one of my kids.  Her previous grades and test scores indicate she is smart enough to meet the goal, but she missed it this year.  Each semester, she missed turning in a few assignments, which resulted in some lower grades.  She also admits she finds it difficult to stay focused on the work and easily gets distracted by the internet.

We spent $60,000 on a private university this year, when the other option was a free ride at a military academy.  To some people it may seem like we are selfish.  To us, we feel like we are holding our kids accountable for their commitments.
Dec 2, 2013 9:55PM
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I received no help with paying for my college education and I am still paying my own student loans off. My husband is still paying his loans off as well. (we both went to college later in life). My daughter is a college senior, looking at colleges for next year and from what I read here, I am considerered to be responsible for paying her college tuition as well? I will never get out of debt at this rate!!
Jan 29, 2014 2:08AM
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If the child gets bad grades in highschool I will not cosign a loan or at cash prove you can do it!  No effort does.not equal a reward.  Since these kids are the everyone gets a trophy troop.
Oct 23, 2013 2:38AM
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My dad is a rich and didn't give me a dime for college. He said it was more important to travel than to help w college.I believe in working hard,and I did. Got good grades and am working hard at a low-wage job, and responsibly paying back student loans. My dad is now old (and more broke) and said I should pay him back for raising me. I said " I am broke, in debt, and hope all works out for you. Hope you have enoughn money for me to stick you in a retirement home or at least till you die"
Apr 6, 2014 12:35PM
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Parents are not obligated to pay for college and it should be their decision to pay or not to pay. There is nothing wrong with a kid staying home and working his own way through college. Work a semester and save, go to school and work. Repeat cycle until finished. There will be no loans to pay and the kids did it all by themselves. Now doesn't that feel good?

I love the article that said take them to court. I'd disown that kid and never forgive them. And still not pay. I will never give my financial information for a student loan. Too many ways to get a degree without a loan. Who cares if they're 30 when they graduate.
Sep 5, 2012 3:37PM
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how about all the why generation kids why should i work why should i have to leave home why should i be responsible for myself why should i have to pay for MY SCHOOLING every body else should bow down and kiss my feet and treat me like a Queen !!! yeah you know who you are !!
Jul 28, 2012 10:07AM
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I earn over $200.000/year without a degree of any kind. If you work hard, are ambitious, and make the right decisions you can be a success without college.
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