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Should you pay for your kid’s college?

March 3, 2008

RacerX and Single Ma both say they won’t (at least not 100%). Shuchong argues that her parents paid for hers and figures it was a good investment for the doors it has opened in her life.  Trent makes some points on why you shouldn’t pay, but the only one that holds up as a rule is that it is a burden on the parents.

I find the whole debate a bit perplexing. It implies that most people have the choice, which I don’t think is the case. Most parents will help their kids to the best of their ability, and if parents can’t afford to, what is there to argue about?

Paying for your kids college will no doubt give them an edge in the early stages of their life, and maybe beyond. I find that is difficult to argue. If you take two identical high school senior and pay for Student A’s education at the best school he can get into, and send Student B on his own, in most cases Student A will come out ahead.

But who cares? We’re never talking about two identical students, but individual students with unique talents, goals, and personalities. I want to emphasize that kids can be quite successful in life even if parents “choose not to” (or can’t afford to) foot the bill.

Here are my tips on how to make college affordable and still be able to compete with those who had an advantage. These tips are geared at those students who, given different financial circumstances, might have found themselves at a top school. These thoughts are not new, but I want to emphasize that they really do work and won’t put you at a huge disadvantage in life.

Scholarships/Financial Aid
This is obvious. Apply for all the scholarships you can, fill out the FAFSA, and with any luck, you won’t need to do any thing else on this list! However, don’t be fooled–it isn’t as easy as it sounds. Most students will get some help, but few will get everything provided.

Get a job while in college
Working full time is not ideal–school really does have to come first. However, in my part time jobs I never had a problem getting off of work when I needed to study. I hate hearing “my parents really wanted me to focus on school and be involved on campus, so I didn’t work.” My parents also wanted those things for me, yet I still had jobs throughout college and had a great experience. You can “do it all”, so to speak.

Very few kids who didn’t work spent more time studying than I did. For the most part, they just spent more time relaxing and goofing off with friends (which may have it’s benefits, but doesn’t further education/career. You can still “network” without having excess free time.) The worst cases simply spent a lot of time partying or smoking pot.

After the jobs related to my major, waitressing was a the best college job I had. The most money could be made on Friday or Saturday nights, and you would be done in time to go out with friends. Even if you have a job, make time to be involved in campus activities. Even if you are an officer in an organization, being involved on campus isn’t that time consuming. As an added bonus, you can add a nice bullet on your resume: “Maintained a [X] GPA while working 20 hours a week.”

Take Out Student Loans
I’m also tired of “I’m so thankful I’m not burdened with debt”.   My $133/mo really is not burdening me, especially when I think of the opportunities it provides me. Don’t be scared of loans, but don’t be careless with them either. You have to be smart about this, but student loans can be a good tool. It is silly to go into a bunch of debt to get a degree that won’t earn you much money. However, it is equally silly to forgo a low interest loan (especially subsidized) if you’ll have a strong earning potential once you graduate.

Pick a marketable major
There is something to be said for studying what you love, but understand the implications. I am not arguing that the world doesn’t need majors in comparative literature. However, studying something that has lower earning potential is a luxury. If you can get scholarships to do this, wonderful! If your parents are footing the bill, great! Have fun! Just don’t go $120k into debt to become a pastry chef (true story, saw it on Suze Orman). You’ll regret it, even if you love baking. (I do love math/science, but not everyone is a nerd like me.)

This isn’t to say you are limited to majors that lead directly to a lucrative career. If you are majoring in something impractical (or actually, anything) have a plan and be able to justify any money spent on that degree. Truly loving what you do can be justification enough, as long as you can afford to pay back any debt you incur.

Don’t go to a “brand name” school (unless financial aid makes it worth it)
I am going to admit it–a good school helps your resume for your first job. I doubt my current job would not have hired me based on my college resume, solely because my undergrad school is unrecognizable outside of the region. However, I’m less than two years out of school and working primarily with people whose college educations cost a lot more money than mine did (and getting an M.S. at top university fully paid for).

Without a brand name school, good grades are especially important. If you have mediocre grades at a mediocre school, you won’t stand out. If you are a bright student at a mediocre school, take advantage of it. Get high marks and get to know your professors. They might be able to hook you up with a grading or TA job, or they may have connections in industry. Be involved on campus, become an officer, and be an outstanding well rounded student.

After college, get your first job at the best company that recruits at your school. Do well in it, get some good experience. Perhaps you’ll find you really like your job and you are well paid, so no need to move on. If not, with a little experience you will have a good chance of getting in to any company you want to work for.

Bottom Line
Kids whose parents pay for college (especially fancy ones) simply do not have to be as motivated and outstanding those who are on their own. I’m not saying that they aren’t (there are talented and motivated students everywhere).

However, average (and below average) students at those schools will likely do better than average students elsewhere simply because of the parental advantage. Doors will be opened for them more easily, but you can open your own doors. If you are committed, hardworking, motivated, and have some sort of aptitude in something, you should be able to do just as well, even without your parents financial support.

What I’ll do for my kids
I’m not sure yet. I’ll help them to the best of my ability if they show the motivation and aptitude for college. If I can’t afford much, I’ll help them in ways my parents did–encouragement and support. I’ll also help them in ways my parents didn’t (because they didn’t know). I’ll be sure they apply for every scholarship they are eligible for. (I would have qualified for free tuition based on my ACT score had I taken them in the right month.  Still bitter.) I’ll have solid advice about the admissions process and show them outstanding schools that provide excellent financial aid. I’ll also help them navigate the financial aid office and truly understand any loans they take out. They will be personal finance experts by the time they graduate high school! And I’ll tell them everything I just wrote here (provided it still applies when my theoretical unborn children go to college!)

15 Comments leave one →
  1. March 3, 2008 8:29 am

    While I find your post interesting, I have to disagree with your bottom line. Full Disclosure: Scholarships and grants covered my entire college experience. I knew a few students that paid their way through school and were screwing up (yeah, I went to a fancy school). I think it depends on the individual.

    By my junior year, I was able to have a part time job, compete in varsity athletics, and be an active member of several groups on campus. My first year would have been much more difficult if I was expected to work, train, and study.

  2. sjean permalink*
    March 3, 2008 8:35 am

    It does depend on the student. I think you can screw it up either way! 🙂 But you can also be successful either way. I also think if you screw it up and have your parents there as a safety net, you have less to lose. You’ll get another chance, or two or three.

    I find it interesting that by junior year you were able to balance it all. My junior/senior yrs were the most academically intensive, and having a job was most difficult then (so I worked fewer hours). I was also involved in more by then. Freshman/Soph year I had more free time to work/play!

  3. March 3, 2008 9:49 am

    I was lucky enough to have most of my school covered by scholarships (academic and athletic). I know that my parents did pay for about a thousand dollars a year for my tuition and then for books that weren’t covered by my scholarships.

    My fiance did have to take out some student loans and I don’t feel like they are too bad. Sure she would rather not have them but they aren’t a burden for us only paying $100 a month on a low interest loan.

    I think when we do decide to have children we will probably start saving some money for thier education but I don’t feel the obligation to pay for all of thier schooling. I would like to help them out with maybe half but I would expect them to get some type of scholarships and if no scholarship then either a part time job or student loans. As long as they don’t plan on taking out hundreds of thousands of dollars in loans.

  4. March 3, 2008 4:10 pm

    This post is very well-reasoned and well put together. I especially like the part where you say that comparative literature isn’t worthless:)

    As for it being a luxury… that’s true. I don’t think I would have majored in it had I gone to a different school. My “plan” was to major in something I loved and was good at, and rely upon graduating with honors from a well-known school to get me a job. ( I admit to this not being my smartest plan ever, but it did work.)

    Also, I can say with confidence that I could have been an engineer at my state college, but that I never would have made it in the engineering department of the school I graduated from. I don’t have an aptitude for math. I could have made up for it in a less rigorous academic environment, (which my state school definitely was, I’m not saying this would be the case in every state school) but going somewhere where I was in class with math olympiad champions almost forced me to major in something in line with my academic strengths if I wanted to come out with decent grades.

    I guess that could actually be an argument for not going to a name-brand college. But I think there’s something to be said for an education that tests your limits and forces you to play to your strengths, even if it does it by pushing you towards a less lucrative major (or by giving you low grades if you choose to pursue something you’re not as talented in).

    Of course, I say that as someone who graduated without debt. Had I spent $120k for my degree, I might be thinking differently.

  5. sjean permalink*
    March 3, 2008 4:58 pm

    @shuchong – thanks for the comment. I think a non lucrative major from a non-well known school + a bunch of student loans is the worst combination. In your case, you had a plan and it worked, so it couldn’t have been too bad!

    There are arguments to be made for name brand schools, but I think a lot of us simply don’t have the option to sit and weigh the choices. Granted, I regret that I didn’t at least apply to a few places to see if fin aid would be there–perhaps they only seemed out of reach financially. Again, that is where parents pushing their student can come in–social/cultural capital.

    I think my grades would have been lower at a better school–I would not have been a ‘top’ student. But I think I could have hacked it. Maybe I’m wrong. I guess I’ll find out for certain when i get my MS switched to a “brand’ school.

  6. March 4, 2008 12:33 am

    Stanford is charging no tuition for incomes <$100K; and it also picks up room and board for incomes <$60K. There’s a lot more done to make education more broadly accessible, but it’s nice to see that some places are trying.

    I seem to recall an argument in the book Freakonomics that the choice of school did not matter as much as people thought it did. I’d have to re-read it to refresh my memory though….

    I expect we will contribute a lot toward our kids’ education.

  7. March 5, 2008 4:12 pm

    I like the fact that you are willing to be very open in your finances. I went to your goals page and was impressed that you had everything from running a marathon to saving teh $100K. On this paying for your kids college question…I am the parent of a college kid. This CK recieved a handfull of scholarships that will help dramatically…should pay about 20% of the total costs. ThIs CK also works, only 5 hrs/week for some spending money. Otherwise, we have chosen to pay for the balance of the college to take that stress off the CK. I am always amazed by the # of CK’s that end up paying for their own college costs. We are not rich and here is a plug for a website that we hope will in sort of weird way work and help pay for part of the college costs.

  8. March 5, 2008 4:15 pm

    two fatal mistakes it is

  9. March 5, 2008 6:59 pm

    sjean, I just got better at balancing things. Plus, I become much more productive at studying…less time wasted staring out windows, I guess!

  10. Colleen permalink
    March 6, 2008 8:38 am

    Such a great post. This is something my husband and I have talked about, probably more than we ought to. Both of us paid (rather, are paying) for our educations right now. Our parents didn’t fund ours because, quite simply they couldn’t (or just didn’t). While I went to a state school and came out with a manageable amount of debt, my husband went to a private institution and paid (we both agree) way too much.

    When we have children, we plan on setting up a 529 College Savings Plan for them and put as much as we can afford to away each month. When our children are ready to go to college we will say,”This is what you have to work with, if you overspend, it’s up to you to make up the difference.”

    Parent contribution is important to us both because, aside from career, starting your adult life out without so much debt would be easier – I know how we have struggled (and we still have many more roads ahead).

  11. sjean permalink*
    March 6, 2008 8:55 am

    I do advocate parents saving for their kids if at all possible.

    But sometimes that just doesn’t happen, and you (or your kids) are college age… then what to do?

    I guess that is my point. Private schools, sadly, are for those whose parents saved (or those who get scholarships).

  12. Linnae35 permalink
    April 24, 2008 3:54 pm

    Hi to all and I really enjoyed reading all of your comments, nice to see how well people get along even if you agree or disagree with others. My question is, my step daughter is heading off for college this fall she will get financial aide she has applied for scholarships but we haven’t heard if she has received any yet, her father started an IRA when she was small and its worth about 8,000 his family has given her bonds through the years and they are worth right now about 7,000 I don’t think some are matured yet so could be more in the long run. My question is should her Father pay on her yearly tuition for whatever her financial aide, grants and schoalrships don’t cover?

    As far as I know the mother hasn’t saved anything, plus his daughter and him don’t see eye to eye she only calls if she needs something(she is an only child.) I know its none of my business and I do stay out of his affairs with his daughter and his ex-wife and I hate the fact his daughter and him aren’t close or have much of a relationship but not much I can do, tried but I just gave up. Should he tell his daughter look I saved money for you for college, you have FA, grants the whole nine yards I’ll help you with books but the rest is up to you? Or pay the remainder of the yearly tuition and keep giving in to her cause he is afraid it might cause a fight with his ex and his daughter never speaking to him again? Either way this is a bad situation IMO, we want to teach our children responsibility and when your 18 the handouts are cut down a bit, yet some parents are in a trap and feel they have to do whatever it takes to keep their kids happy. Sometimes I feel what are we teaching our children when we don’t make a stand, its so easy to say yes but in the long run its not helping them at all to go out in the real world, saying no can be difficult for some and some kids just don’t know that word and that is sad, cause in the real world NO is a word we hear alot of.

  13. Haley permalink
    May 13, 2008 2:36 pm

    My little brother has come to us this last week with the news that he does not have enough credits to graduate. He is more like a son and much younger than the rest of us so we have supported him since our parents our gone. We talked the dean in to letting him go through the ceremony if he made up the 3 courses in summer school. We find out this last senior year he has been partying, missing school, drinking and won’t get a job at all. He was fired from his work study jobs and ran up one of credit cards $3000.00 which he only had the number to purchase a plane ticket. It would have been more but the boat rental place where he tried to rent a speed boat refused him twice with our credit card. Do we pay his tuition another $7000.00 for the summer program or do we let him fend for himself to hopefully instill some responsibility values in him. He has prior to this gotten student loans, grants and we made up the difference and provided him with spending money and clothing. We love him but we are afraid that by carrying him he will not stand up ever on his own. Not to mention, that if he does not finish school he may become an increasing burden on us in the future. Investment or Spoiling?

  14. October 24, 2009 10:14 pm

    I am whole heartedly against parents paying for their child’s education or their student loans. Some help is good, I think (i.e. free rent or paying for part of tuition based on good grades), but when parents pay for everything I really think it makes the student under appreciate their education…that applies to most everything. If your parents pay for things like phone, car, school, you’re not going to appreciate it because you didn’t work for it, you’ll begin to expect everything to just be given to you and be unprepared when you pop out of that bubble into the real world where you have to fend for yourself.

  15. June 16, 2010 11:14 pm

    Experts advise parents not to pay for their children’s tuition because there are so many aid/scholarship programs out there. Most advice I’ve read encouraged parents to instead put that money toward their retirement. I paid for college myself through working, financial aid and a small GPA-based scholarship. I didn’t want them going into debt for me. And though I think it’s great that some parents are able to pay for college, I’m appreciative of the experiences I gained by growing up and taking responsibility for my own education.

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