My last post that detailed our on-going discussion here on who pays for college costs -- parents, kids, or both (see Should Kids Pay for Their Own College Expenses or Should Parents Pay It All? for background and the other discussions) generated a bunch of comments on its own -- so the conversation goes on. Here are the comments from that post for you all to review, starting with the first one:
I married young (after Sophomore year), which actually ended up better financially. I attended a private, Christian university in Oklahoma City (or Edmond, depending on how the wind blew), and being married allowed us some freedoms. We moved out of off-campus housing and got a cheap apartment. Eventually, we moved again to on-campus married housing, where we paid $370/month for rent, free cable TV, free Internet (wireless from the University), and other paid utilities.
The other thing that made a huge difference is that I was able to get a job working for the university in the IT department. I worked very hard, and even ended up with a supervisory position, monthly salary, and a 50% discount on tuition for my wife and I, with a +5% discount each year after. The only thing that stunk was that right after I graduated I was laid off. As part of my contract, I had a certain number of weeks equal to the number of credit hours that I completed under my program (I think it ended up being 31). They waved that part of the agreement, and let me know my position would end June 30, giving me basically two months to find a new job.
As far as who paid for college, my parents took out a PLUS loan to pay for my first two years, and ended up just paying it off. However, I've been responsible for the loans after I was married, and now have accumulated just under $39k. I think there should be a happy medium between kids paying off all the debt and parents paying all the debt. I think parents would do well to start saving for their kids, especially in tax-free programs. I mean, why not? Investing in your kids is really investing in your future.
Another thing to mention regarding college is that industries change. I entered college in 1998 looking to land it rich in the computing industry, and ended up finishing in 2003 and unable to find even a lowly tech support position, even though I had been working part and full-time for 2-3 years. Sometimes the industry is not the same leaving as it is entering.
Interesting perspective. That's what I love about these discussions -- real people who have gone through them (or are going through them) give us their thoughts on the issue. That sort of stuff is great feedback in my opinion.
Next, we hear from another person at ground level of the discussion:
I work for a private university and used to work in the Financial Aid office.
When people choose a college, they are thinking about (as Jeremy mentioned) the end goal of a job. The purpose of that education is to get to that job. However, it is also to educate them for life and that life is going to have bills. With that in mind, I don't think that there is a one-size-fits-all answer to this question. If your child has reached a level of maturity in that they are responsible with money as well as being able to be responsible with the gift of an education, I see nothing wrong with you paying. If you feel that your child needs the experience of paying for college to help build that maturity and those good financial habits, by all means, work out a solution that includes them contributing to paying for their education.
The other big factor is the financial health of the family as a whole. I've seen parents pay all out for the first child and have no money and no ability to borrow more when child number two comes along. I've also seen students have to leave school because of tragedies that made the parents unable to pay and even needing the earnings of the student to get the family back on its feet.
And just to put a little bit of a spin on Jeremy's last point, I hope that students/parents aren't choosing a major/job with earnings (potential) as the only variable. Help your children choose something that they will love to do and that will give them a sense of fulfillment.
And another good comment -- this time from a student:
I am a student and currently doing a summer internship to save up for the upcoming academic year (I check out FMF during my lunch break). I also work on campus when classes are in session. As someone stated in a previous post, students (or any other individual) place greater value on the things they have to pay for.
I grew up in the West Indies in a family unit where money was always in short supply. I remember having to contribute to the costly high school and community college exit examination fees and being driven to study harder so as not to waste years of my birthday- and Christmas-gift savings.
And you know what? At the end of it, I was awarded a full scholarship to pursue my undergraduate degree at a US university. With the BS degree and that scholarship complete, I'm working again to pay my way through the graduate degree. Additionally, I recently received two partial scholarships as a member of various student organizations. I value these scholarships and view them as being paid to learn and produce good grades.
I hope students out there can see the value of the money they receive from external sources like scholarship programs and parents and find ways to maximize their educational experiences. I know too many individuals, especially from home, who would love to go to university but cannot secure the financial backing to get a student visa.
Now, do you think this person will appreciate the degrees she's earned? I'd say "yes!" for sure. That's what I hope to instill in my kids by having them pay for part of their college expenses themselves.
Here's the next comment:
I realize that it is not possible for all parents to pay for their children's higher education. However, that being said, I think it should be a parental goal. Giving your children the gift and benefit of financially supporting their college career is probably the most substantial and meaningful gift you will ever give them. It is absolutely one of my biggest goals to pay for my children's undergraduate education, and I think that if other parents can contribute to their child's schooling, then they should.
That being said, I think that it should be obligatory for children in college to work part-time jobs or internships throughout their four years. They should definitely be responsible for bringing in their recreational money and learning to save as well.
It's true that an education is one of the biggest gifts you can give your child. Education helps set them up financially for life -- and can mean millions of extra dollars for them throughout their careers (versus not getting a degree).
Here's a position that's a bit different than most of the others:
I think students need to pay for themselves and parents only help if they feel their kids need it.
Having just graduated less than a year ago, I noticed students are more frugal when it is their money and knowing that if they spend it all, they can't afford to go to the movie next week or go out and eat at X restaurant for a friend's b'day the following week.
Learning to live frugal is a skill by itself. You learn to buy books from half.com instead of the student bookstore, you learn to borrow books from friends, ask around for books, etc...
With that said, there is a fine line between doing that and having your kid work 3 jobs to support themselves. Maybe the kid needs to realize, I either gotta cut back on expenses or increase income. I know there are some exceptions like med school that makes this logic harder but that’s what loans are for. :)
Really good points -- especially about teaching them to be frugal. Since I had to pay for most of my college on my own, I certainly learned how to save a buck. That skill has been very helpful in my post-college life.
Next is a comment from a long-time participant in this discussion:
I think most people reading this blog are going to be proactive and informed when it comes to college costs, so the decision not to pay can be addressed by emotional or philosophical standards, as opposed to purely economic ones. The question on whether or not to pay for your child's college implies that you actually can afford to do so.
So this comment is independent of the debate on who pays for school, but I would say to put the same (if not 1,000x more) research into choosing a college as to choosing a home or car. You want to find someplace that is going to be a good return on your investment, but not more college than you can afford.
I think that quite a few parents do not inform themselves about the college application and financing process and have a mistaken understanding of what they or their child can afford. This is like when a person gets "upside down" in their house or car payments because they didn't assess the total picture before they bought the item. There are plenty of smart students that qualify for aid, but are strapped with significant debt before they properly start on their careers. Or, they are unable to finish their educations because they can not afford the total cost after the first year, due to tuition increases or aid reduction.
If you go to the Chronicle of higher education website and search for student debt and aid, you can find articles about the average loan debt, college costs (and their inflation rates).
At the colleges themselves, it can be useful to see what is the typical aid package, what is an optimal aid package, how many hours are students permitted to work (at a campus job) and what is the job market near the college if work-study isn't adequate to cover the costs. Also, what is the graduation and job placement rate, and how coursework taken at a community college or AP high school classes transfer into college. This should be done before the child even steps foot on the campus (like how you never test-drive the car until you’ve figured out the financing)
Also, what "intangible" aid is going to be offered by the parents, if at all? A child that agrees to go to a local university or college may be able to commute (even if they don't live at home), which reduces the amount of aid needed (room and board on and near campus is often much higher than in areas a little farther out.)
Information like this can help the parent decide (before the college visits even start) what the total financial "picture" will be for their child and for the family overall.
Here's another perspective:
When I was in college my parents were struggling, but they wanted me to do the best I could and concentrate on school. The deal we had was I had to work during the summers and give them $1000.00 per summer towards my education. And anything I made after that I could keep. $1000.00 was a lot of money to me in the 1990's. But it made me appreciate the sacrifice and importance my parents put on education.
Currently now I have three boys that will soon be entering high school. We have told them that we do not promise a car or a computer or nice things, but we will do our best to make sure you will get a good 4 year college education. Anything after 4 years they have to pay for. That being said, I do expect them to have summer jobs. I will expect them to pay for car insurance, gas, etc. But my husband and I will make sure education is taken care of.
Interesting. This opens up the whole conversation of "who gets to pick the college?" Do they get four years paid at Joe Blow College or Harvard? ;-)
Here's a person who's been where I've been:
I generated angry comments when I wrote in a post that I planned to help the kids as best I could when it was time for college, but ultimately it was up to them, and it's odd how financing college has so quickly become such an expectation of parents. People who can't read commented as if they had not even seen the part where I'd help as much as I could - which frankly could mean paying most of it IF, and that's a gigantic if, that were possible. IIRC the college part was in the context of teaching the kids that they would in fact need to support themselves when they become adults, and be preparing for and thinking about that ahead of time, something I never got from my parents and am still recovering from 27 years after hitting adulthood.
There is also less but still somewhat of an expectation that kids should be able to go to a college that costs real money, not a state school. Nor enough of an expectation that colleges should be subject to the market and run like real businesses that can't increase their prices at several times the general rate of inflation year after year after decade.
I went to college - a pretty radical thing in my family - by paying for a state college on my own dime, with my father putting me up during most of that time and my mother tossing me $100 toward books a few times.
The whole conversation on this topic started when I said we plan to pay half of our kids' college costs (they can pay for their half in any way -- scholarships, work study, savings, etc.). I had comments that seemed to imply that we should pay the entire amount -- so I'd agree with this commenter that it's now becoming somewhat expected that parents should pay for college costs.
What do you think? Is there anything else to add to the conversation -- or have we said it all? ;-)
I feel fortunate to read things like this while kids are young, and family expenses (relatively!) low.
Both my husband and I have MBAs and having that debt hurt us financially (we delayed buying house, etc.)
My parents never included us in any financial discussions, or encouraged us to do anything creative (in retrospect, wish I had explored Peace Corp, or the like, to get debt forgiveness...)
So... for my kids, want to use saving for college as a way to help teach fiscal accountability AND creativity. We have the 529 w/ direct deposit, and a cool "adder" from a company called Little Grad (www.littlegrad.com). We do a lot of our shopping online and show kids that when we do, we're also putting money in their college fund. (Almost $300 in less than a year... helps that grandparents and aunts are involved...)
Finally, they get allowances, a portion of which goes into their "college jar", and will continue the practice with gifts from grandparents and part time jobs.
SandraD
Posted by: Sandra | August 11, 2006 at 01:24 PM
I wish my parents felt obligated to pay for my college! :D
Posted by: twins15 | August 12, 2006 at 12:57 AM
What about the grandparents who have "promised" to pay for the grandchild's college education. Now the burden is on them - granted they agreed to this, but it entails much more than expected. A residence hall is out of the question for personal reasons, so an apartment is needed. A car is needed, all personal expenses, etc.
The parents claims they are not responsible because this was promised long ago. Now here we are shaking our heads and wondering how we got into this situation. It is not that we cannot afford to do this, but shouldn't the student have some responsibility in this endeavor, let alone the parents. They just bow their heads and say we can't afford it. This child is a 4.0 with a #1 standing in her class. That does not make her special these days. A lot of kids have that. So, do we pay for the whole ride, or what?
Posted by: Diane James | November 27, 2006 at 07:21 PM