Recently, Legg Mason Securities released a study on parents paying for college. They talked to parents with investable assets of $250,000 or more and found that 72 percent expect their children to contribute to some of their college expenses, although only 2 percent expect the children to pay the whole thing.
I think that education is one of the best gifts you can give your children. It is not an expense, but rather an investment in your family’s future. I’d like it if everyone shared my values, but they don’t, and, well, that’s what makes the world go ’round.
I also understand that not every child is ready for college at age 18, and sometimes the parents see that but the child does not. I can’t blame people for not wanting to throw good money after bad.
Still, the decision not to pay involves some considerations. First, can you afford to pay? Financial aid is based on the parents’ ability to pay, not their willingness. My kid is an only child with two working parents, so he’s not getting any financial aid, and I’m okay with that. The children of parents who really can’t pay will usually get excellent financial aid, making most of my discussion moot.
What if the college says you can pay, but you won’t? Years ago, it was possible to get a job at a bank or a department store and pay for tuition at a state university. This was before my time, but I have talked to people who did it. You can’t do that now, though, and that makes the conversation sticky.
Someone fresh out of high school can expect to earn minimum wage, and that isn’t nearly enough to pay for a full-time education. A person working full time at minimum wage would earn $14,500 per year (before taxes). Meanwhile, tuition for two semesters for a business major and Illinois resident at University of Illinois at Chicago is $15,438 – and that’s without room and board.
I sometimes hear that students will work harder and appreciate their education more if they pay for it themselves, usually followed by some anecdote about a spoiled neighbor who flunked out. I agree, to a point, and my child regularly grouses whenever I commandeer some of his birthday money for his savings account. Given the price of textbooks, though, I know his savings will represent only a token amount of the bill. Ultimately, gratitude is a function of home training and maturity. I know people who are grateful that their grandparents left them a multi-million dollar trust fund, and every semester, I have a few students tell me that they deserve higher grades because they are paying for college themselves.
Some of the nightmare and student loan stories out there involve people who borrowed 100 percent of their tuition because their parents wouldn’t pay for it. That’s a crummy thing to do to a kid. If you aren’t going to pay, or can’t pay as much as the financial aid office thinks you should, you need to sit your child down and provide wise counsel on the options that they do have. Tell them early on what you will and will not be able to do. Moral and emotional support are free, and they matter more than money in the long run.
One other thing to consider: how about offering to reimburse your child tuition expenses for each passing semester, paying for the last two years instead of the first two, or agreeing to pick up the first few years of student loan payments instead of providing full tuition now? That way, you are giving your child an incentive, something many people need.
I was very lucky. My father was a community college administrator and my mother was an elementary school teacher. Their parents paid for their college educations (undergrad), and they paid for mine. Throughout high school, I knew that my parents expected me to chip in (with scholarships or working over the summer), but that my college tab was paid for. I graduated with a BS from a good, state university and no debt. I worked on campus during school to cover my books and incidental expenses. And my junior and senior year, I took a scholarship that required me to work in the state for two years after graduation (or pay it back).
When I became a parent, I had the exact same expectations for my daughter. We started saving as soon as I knew I was pregnant. Like your son, she’s an only child with two working parents, so no financial aid for her. But we’re preparing as best we can. If we need to take on more debt to put her through school, we will.
I completely agree that we’re making an investment in our daughter. I expect that our plan will make it more likely that she will land a higher paying job once she graduates and be able to live on her own — so this is also an investment in my marriage. 🙂
I’ve never understood parents who can pay (at least something) for their children’s education but don’t. As you wrote, the world is a very different place now than it once was. Paying for college is not so easy for someone without an education and a good job.
By the way, love the math you did there. 🙂