Do you 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 are tough questions to ask and to answer, but they are very important when thinking about the ever increasing cost of higher education.

These kinds of questions are quite personal to me and relevant to my blog. A major motivation for starting Making Sense of Cents was my $40,000 student loan debt (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 per student, and surprisingly, it is often parents paying for college by taking out loans to cover kid’s education.

I’ve read countless stories of parents who have $200,000 in student loan debt for their children, and it’s these parents paying for college who have found that these debts are causing them to struggle financially, unable to reach their retirement goals, etc. These parents end up drowning in debt because they just honestly want to help their children get through college. What they don’t realize, though, is that there are other ways to help your kids graduate from college.

What’s even more surprising, is that many parents think this is the normal situation, and that every student has their parents paying for college. Even so, it’s a very tough decision for a parent to make.

Many of the emails I receive are related to whether or not a parent should risk or possibly ruin their retirement by helping their child pay for college.

Some of the numerous stories that parents have emailed me include:

• One family had a child in medical school, and the parents were paying for all of their college expenses plus food, car, rent, etc. The debt that they are incurring has left them unsure about their own future as this debt has made their retirement plans uncertain.
• One set of parents paying for college told me that they had over $100,000 in student loans taken out in their name so that they could send their child to school. Not only were they off track for retirement because of those loans, they also had considerable debts of their own outside of their child’s student loans.
• One mother told me that her and her husband were in constant fights over the amount of student loan debt they took out for their child. They weren’t on track for retirement and struggle with their daily bills, all because they thought that they HAD to pay for their child’s education.
• Another family had a child in law school, and the child said that if their parents don’t continue paying for their expenses, that they would hate their parents. This child was even more mad when the parents printed out every single blog post of mine and gave it to them (I did not tell the parents to do that, it was entirely their idea). The child said I was ruining their life (yup, that actually happened). And now, these parents are not on track for retirement.

I hate hearing about parents who are already in debt, not on track for retirement, and are now going even further into debt for their children’s education. Most children aren’t aware of their parent’s financial situation, and feel that tuition is something that the parents should pay for.

That said, I must admit that I am not a parent myself, and I understand that it is probably a difficult thing for parents to face.

However, I put myself through college entirely on my own. I paid for all of my housing expenses, food, college, transportation, and more. It is not impossible for a child to cover their tuition.

I don’t hold grudges against my parents for the fact that I had to pay for everything. Sadly, this is a reason for why some parents pay for their children’s education– they are worried that their children will be angry if they don’t pay. I am actually very grateful for the valuable lesson this has taught me about financial responsibility, and honestly, I would be more upset if I found out that my parents had gone into debt and were struggling financially to get me through college.

Please don’t be one of the many parents paying for college simply because you think you have to. If you can truly afford it, then do whatever you want with your money.

However, before you take out any loans, please stop and think about your own financial well-being before you take any further actions! Are you on track for retirement? Is this loan going to get you into crippling debt?  

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Quick note: If you are looking for information on college funding, I recommend attending the webinar 6 Steps To Quickly Secure Scholarships For College. Jocelyn Paonita Pearson, Founder of The Scholarship System, secured over $125,000 in scholarships and funding by following this system!

 

Parents, think before you cosign or use college loans.

The default rate on student loan debt averages around 10-15%. In recent years, 90% of student loans are co-signed by others (mostly parents).

So, what does this mean? This means that if you co-sign a student loan for your child and they default, you will be stuck with the bill. I wish more parents paying for college understood that before they signed on for that loan.

While you may think that 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 does. I have heard of several people who had a falling out with their parents and actually purposely stopped paying their student loans because they knew that their parents would cave in and start paying for them.

Yes, this is a disgusting behavior, I know, but it does happen to some parents paying for college.

College, of course, can be very expensive, which means that many people take out student loans in order to simply “afford it.” Before you cosign on student loan debt and pay for your child’s college education, I hope you understand the consequences that can come from it.

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Your children will probably see better grades without your money.

According to Forbes, children who have parents paying for college tuition tend to get worse grades. Many parents and students feel that taking the financial burden away from the student will free up their time to focus on their studies. This is because they think that having a job while in school will affect how well they do in college.

The reality is that students who pay for their own education tend to be more serious about it because they are paying for it with their own money. Students with parents paying for college, however, often take that for granted and become less motivated to succeed academically.

Of course, this isn’t 100% always true, but it is something to think about!

 

Parents, you can help your children in other ways.

If you cannot afford to pay for your child’s tuition while staying on track for retirement, or if you decide that you just do not want to pay for their college expenses, there are many other ways that you can help and support your kids while they are in school.

Some things you can do include:

• Emotionally support them. Even if you are not one of the many parents paying for college, you should support your children emotionally. This doesn’t mean that you have to agree with what they do, rather help them by listening to their troubles, giving advice, and helping them come up with a solid financial and college plan.
• Help your child understand personal finance. Helping your child understand how to organize their personal finances by teaching simple skills, such as creating a budget, will help them greatly, not just in college but throughout their adult lives. I recommend reading How To Create a Budget to learn more.
• Assist your child in learning how to make money. There are tons of ways to make extra money, and helping your children find ways to do so can help them pay for college and their living expenses.
• Show your children affordable alternatives. Choosing the right college and the right course of study can be overwhelming for a young person fresh out of high school. For example, your child may only think they should go to an expensive private university, but it’s important for you to inform them of more affordable alternatives, such as going to community college or a state university. These other options aren’t less valuable, and they might actually be better suited for your child’s needs.
• Help your child apply for school and scholarships. Applying for college can feel like a confusing thing for kids, but helping them find schools and helping with the application process can make it easier. There are also numerous scholarships that your child may qualify for. Some may require them to write essays, whereas others are based on high school grades. You may have to do some work to make sure that you find what scholarships they are eligible for, but most take very little effort and are given away by the college itself, which makes it a no brainer to apply for them!
• Help your child in other ways. For some reason, there is this myth out there that parents paying for college have to pay for absolutely everything else too. Instead of paying for their tuition, textbooks, food, dorm, car, and everything else, set limits. You might help by giving them emotional support, letting them stay in your home while they are in college, helping them find ways to save money for college, helping them cut 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 use to see how they are doing with their finances. Platforms like Personal Capital allow you to aggregate and track all of your financial accounts in one place. While your child might not use their retirement tracker yet, you can sign up too and see where you’re at for retirement. You can read more at my Personal Capital Review.

 

Parents paying for college – Is this a good idea?

To get back to the question of parents paying for college that began this article, I believe that parents should only fund their child’s college education if the parent is on track for retirement.

This is because there are multiple ways to pay for college (paying for it with cash, student loans, grants, scholarships, etc.), but there is only one way to fund your retirement.  Read more about staying on track for retirement at You CAN Reach Retirement! Avoid These Top 5 Mistakes.

Remember, you cannot take out a loan for your retirement!

Due to this, you should not wreck your retirement plans to help your children through college. You should analyze your financial situation and see if you are track for retirement to see if helping your children through college is possible.

If it’s not possible, be honest with yourself and your child. Ultimately, what motivates parents paying for college most of all is love for their children. There are many ways to support and show your children how much you love them, and it isn’t just paying for college.

Do you think parents should be required to pay for college? Do you think parents should wreck their retirement to help their children?