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October 27, 2006

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I have four children. When the time comes, I have told them that I will help out with college expenses the best I can, but don't expect me to foot the entire bill, because I cannot.
Currently, I am not saving significant amounts of money towards college. My savings are going into retirement accounts.
I've emphasized with my children that obtaining a college degree and doing well in college are far more important than where the degree comes from. Accordingly, I've explained that the worst case scenario for them is that them is that they can live at home and attend the local public university and pay as they go. And that is still an excellent option.
I was recently annoyed to end to read an article in Money magazine about a child who went to an elite east coast university and ended up over $100,000 in debt at graduation. She then got a low-paying job with a non-profit organization in a high expense city. Now her parents are bailing her out of the financial mess she is in. This persons decisions made little sense from a financial perspective and I find it hard to believe that the intangible benefits from her "elite" education were worth the drawbacks of starting life so deep in a whole.

The best gift my parents ever gave me was to pay for my college education. I don't think I appreciated it as much while in school, but now that I am out and many people I know are saddled with high student loan debt, I appreciate it so much more. I had to attend a state school for them to pay for it, but that was a minor sacrifice and really not much of one at all since Virginia has such great state schools.

If possible, I will fund my future children's college education because I know what a big difference it made to me. Now, I don't think it is smart for parents to sacrifice their retirement, but as long as I can afford it I will. I'll probably have a similar rule to my parents that my kids need to go in-state. The difference between in-state and out of state or private will be their responsibility.

When talking about how your kids are going to pay for school, you forgot about LOANS! That's the main way I had to pay my college education (on my own) because for some reason getting a 94.4 GPA in high school and keeping a 4.0, in college being involved in each campus and doing volunteer work seems to mean nothing to anyone who gives out grants, scholarships, or other free cash.

It all came down to this: didn't matter if I was paying alone or not. My dad was making X, so I was elligible for Y. Nothing more. Oh, and I'm a white girl from a middle class background. So I guess I was screwed from the beginning.

Yes, I'm bitter. But I'm glad I did it on my own, freakin loans and all. I took my schooling a LOT more seriously.

If you're going to do this to your kids, be sure you teach them from a very young age how to save and budget money. My parents did and I would have never survived without having them include me in their financial household decisions. Savings, spendings, stocks, bonds, CREDIT CARDS, and loans. All of it. It might seem like divulging too much info to your kid, but it sure is worth it in the end.

I totally agree with the fact that the student should be responsible to take charge of his/her education.After all there are several options to finance one's education.

My parents had a rule: they would pay for all 4 years of college, but we had to pay for our books, clothes, entertainment, etc. Also, they would not pay for more than 4 years, so we had to complete our education in that time. I think it was a great way to do it and I hope to do it for my kids.

My husband's parents constantly bring up the fact that it took him 6 years to finish college - but they paid for it! I would STILL be in college if there hadn't been a time limit - I loved it!

I had a friend who had to put herself through college and she worked so hard that she missed out on the fun of college. She is still recovering financially.

I do regret one thing - I went straight to graduate school and took out loans that I'm still paying off. I'm not working in my field - got burned out on it in grad school. Most of my friends and I agree that we wish we'd never gotten our M.A.'s.

I was lucky enough to have parents who paid for my college and thus I did not have any loans to pay off when I entered the job market. I created enough of my own by running up credit card bills in my early working years.

My vision is to create the same kind of environment for my children when they graduate college. I am lucky enough to have the ability to save both for them and for my retirement. One thing I am doing is using a Roth 401K (I'm old enough that I can tap this for college) to save money that is earmarked for college (great way to save on taxes) and I also have a small 529. My goal is to be able to save enough for college in the next 10-15 years and then to encourage my kids to find way to pay on their own through work, grants and scholarships. Then, I can give them a graduation gift of what is left over in their account.

I realize everybody doesn't have the luxury to do this, but with college only getting more expensive, giving my kids a head start is something I feel is worth it and not having them burdened with loans upon graduation is a priceless opportunity.

I'm wondering exactly what you mean by half and half? You mention grants, but are you including need-based aid and so on? Here's an example of what my tuition bills for 1 year looked like:

Expected parent contribution: $8000
Expected student contribution: $4000
Work study: $2000
Federal Student Loans: $2000
Need-based grants: $22000

Total cost: $38000

What would you expect your child to pay in this scenario? If you include grants as their contribution, they've already matched more than half of the total cost. I think the fairest way is to ignore the grants entirely, and split the remaining $16000 evenly -- which is what the financial aid package stipulates anyway.

As an aside, the above example is why it grates on me when people generalize about private schools being too expensive. Private schools also have the most aid to give -- I paid much less for college and graduated with less debt than most of my similarly-situated friends who stayed in California and went to UCs. Apply to both public in-state and private colleges, and compare aid packages. You might be surprised at which ends up cheaper for you.

Wendy --

First of all, we'll work together to decide what college they should go to. We're not funding half of four years at Harvard just because one of our kids decided they want to live in Boston for four years.

Second, in your example, we'd be willing to pay up to $19,000 of the cost (half of the $38,000). I'd be shocked if we get any need-based grants, so any grant we do get are likely due to their accomplishments (grades, activities, sports, etc.), which we view as them having "earned."

So, if the total cost was $38,000 and they earned $22,000 through scholarships, and so on, we'd pick up the remaining $16,000.

That said, we'd really need to be convinced that this school will give as good an education as a less expensive school. It seems a bit pricey to me.

My situation was much the same as Chanelle's. My parent's graciously paid for tuition for 4 years. I paid for books, housing once I decided to live off campus, and everything else. They made it very clear, however that once 4 years was up, they were done. I took an extra semester and then made very sure I graduated in December!

My wife did it all on her own through scholarships, student loans, and part time jobs. I honestly feel like she took her education much more seriously as a result. When you are paying for something it becomes much more meaningful. I think I would have been less likely to skip class for a game of basketball had I been writing the checks!

As a result, we've made it clear that college will largely be on the shoulders of our kids, one of whom is 14 and seriously starting to think about that. We have already talked to her about 2 years of community college to get things started, or applying to schools like College of the Ozarks (http://www.cofo.edu/)where you work your way through.

I like the idea of paying half, however, I might split it differently so that my children pay even less. I want them to feel that they need to take responsibility and earn their education. However, I realize that college is putting children into more debt today than it did in the past - even when you account for things like inflation. My fiancee is still trying to pay off her school loans nearly 10 years after graduating from her state school.

The complicating factor is that if my children get into Harvard, I'm going to try to do nearly everything I can to make that work financially.

I go to a $40,000/year private school that is very highly ranked, although it's not a big name like Harvard or Yale. My expected family contribution is around $30,000/year. I took out about $20,000 of interest-free loans through the 4 years, and my parents paid the rest. So all in all, they've spent over $100,000 on my education. I realize it's a very big sacrifice that my parents have made for me, and I think it's probably the best gift they have given me.

My parents are not wealthy, but they have saved and managed to fund their retirement accounts and my education. I definitely plan to pay the bulk of expenses for my child (notice I said child, not children - two sets of tuition would be ridiculous!). I would want to give my child every possible advantage and tool for him/her to succeed. And although I didn't pay for college myself, I certainly appreciate my education, have done fairly well, and have secured a job that will provide a ton of experience and financial security and which will allow me to pay off my loans in one year.

And if my kid gets into Harvard... he/she is going! :)

I've never seen a real-life situation that matches "my parents paid for my college and I have no obligation to them." I think that it sets an unrealistic precedent for the rest of the child's life.

My mom co-signed loans for me and that was about it (except some pizza money here and there); I worked every summer and on campus after freshman year. My wife worked full-time and paid for everything herself. We both graduated in four years. I've never met anyone whose parents paid for school who took things as seriously as we did. (I have met people on scholarship who did, though.)

Honestly, as an ethical issue I have no problem with either one. My objection is when one finds two conflicting attitudes present within the same parent:

1. "Paying for college is entirely your responsibility."
2. "Go to college right after high school or you're out of the family forever...not only will you be ejected from the house you grew up in on your 18th birthday, but all your other relatives will be forced to choose between you and me, and they've known me longer."

If a parent is going to demand that their offspring go to college, the parent should be willing and able to pay for it. If they're financially unable or ideologically unwilling to foot the bill, then college should be optional for the kid.

Had my mother lived by that, I'd have a much better credit rating right now, wouldn't have spent a decade flat broke all the time being hounded night and day by bill collectors, trying to put a life together out of the shambles that college left me in.

How will it be handled with the as-yet-unconceived children I might or might not have in the future? Well, my willingness to pay is almost 100% unequivocal, and my ability is a function of too complex a list of factors to predict this far in advance...but I'd bet on being able to cover tuition, books, fees, and room & board for four years per kid without undue hardship, given how the winds seem to be blowing on all those trends.

(Why "almost" 100% unequivocal willingness to pay? Well, I still insist on veto power over really stupid spending of my money. But since they'll need at least part-time jobs ANYWAY to pay for the stuff that TBFR&B don't cover, that veto doesn't mean they can't do stupid stuff...just that if they want to, they need to find other ways to pay for it.)

I come down on the "children should foot the bill" part of the divide. Parents paying for college is a wonderful privilege, but, at the end of the day, I find it reprehensible to suggest that it's some sort of enormous burden that a child shoulder the load for his/her own choice. If a kid chooses an outrageously pricey school - *cough*like I did*cough* - then that's on the child.

I would have loved for my parents to even cover the Expected Family Contribution portion of my financial aid package from UChicago, but it didn't happen. So what? It's my education. If I wasn't willing to invest in it, then I had no business there. Eight years later, I don't feel like my $200 a month loan payments are any huge boulder weighing me down. The education was well-worth it.

I grew up in a family where my parents, for the most part, lived pay check to pay check. We did have a few family vacations where we drove the station wagon and stayed at Holiday Inns, and we always had at least one gift at birthdays and Christmas, but there was never any EXTRA money. My older sister was not interested in college at all, but she also had few skills as she spent most of her high school free time on the swim team and hanging out with friends. My dad gave her a couple hundred dollars to buy books and register at the community college, but she lied about going there and spent the money with friends. He bought a used car for her to drive until she could get a job and buy one herself, then the plan was that the car would go to me and my other siblings in turn. My sister totaled the car and my dad couldn't replace it for us.

So, when it was my turn, and I had actually worked a lot while going to school and making perfect grades, I was very surprised to hear my parents say they had NO MONEY at all to help me...not even $25 for an application fee. I registered at the community college and got a full-time secretarial job. I rode the bus to work and school. Between my AP exams and my community college work, I was able to have a year's worth of credit a year out of high school. Then I was eligible to file for financial aid on my own (I had been living in an apartment that I paid for because my parents had moved to another town and clearly said "you are on your own now.")

With the help of financial aid, and a full-time job that I scheduled around my classes, I put myself through a public universtity in three years. I was accepted by two private schools, but there was no way I could have ever paid for that. Now my son is in his senior year of high school, and he is only talking about private schools. He is very intelligent and makes really good grades in very difficult classes. We have paid for him to take classes before school at the local community college, and we provided a car for him to drive. He pays for insurance and gas. The problem is that he won't get a job. He says his grades are critical to his acceptance at the private universities and he cannot manage his load and hold down a job (he won't even try to make it work).

He's very bright and his SAT score was a little over 2100, so he's thinking that colleges will be falling all over him with offers to attend their school. So far he has not completed even one application. I am at my wit's end thinking about solutions to this problem, but I don't see him even making the tiniest effort to select a school and make arrangements to pay for it.

Will colleges really want to pay to have a kid like him, or aren't they a dime a dozen? Will the schools ask how much his dad and I make and expect us to contribute to his education? I have two other children at home, ages 12 and 2 and while we make a decent living, I think it is unfair to think we should take from our family's standard of living to give money to a person who is perfectly capable of working. How does paying for my child's college education benefit the rest of the family and make our financial future any more secure?

My parents keep cars for ten years and consider going to Applebee's a " night out". They are broke, and barely take care of themselves. I make $7 an hour at Starbucks, and work another part time job for extra cash....the point is, I have been denied grants from the goverment over and over, I cannot pay the $800 tuition for the community college I want to go to, my credit rating sucks so I am being denied for any loans. It is beginning to seem that you must meet a specific criterea for attending college, much less to recieve grants. Oh yeah, and as I spend hours in the financial aid office, people who's parents have lived and supported their families with welfare are getting the grants that my dad breaks his back for minimum wage to provide. I can't beat the system. And I have no way to pay for college, even if my employer will reimburse my costs, I cannot afford it. All I can do is pray pray pray.

Credit requirements are tougher now, and loan options are fewer because many banks no longer view private education loans as a good investment. So the numbers will be a lot different for the 2008-2009 school year and beyond. Fewer students will be able to afford to go to college, but many resourceful students will discover innovative funding sources.

A larger percentage of college students and parents will seek alternative funding sources, such as contributions from family, friends, and alumni. Alternative funding websites, such as SchoolRaise.com, are available to help students and parents reach out to the people in their social networks (friends, family, alumni, etc.) and request help paying for college, $50 at a time.

I'm in college and I don't expect for my parents to pay but knowing that I have 1000 dollars in expenses to come up with out of nowhere and not knowing how I will be eating my next meal its nice if the parents chip in. Parents are financially stable while an undergrad can only get certaint jobs and they also have to study. I do belive that students who don't lift a finger to support there education is a spoiled brat, but parents who refuse to help there strugeling child is selfish. If I were a parent I would not want the possibility of my child poor dirty and living on the streets just because I refused to come up with a financial plan for their education. And I can tell you from a firt hand experiance that if your having 50 anxiety attacs a day wondering how you will pay your expenses studying dose not come easy. And by the by... employers look at which college you go too and pixar will choose RISD and MICA over community college A, and the law office will choose Harvard and Pinceton over community collece B... so all this just go to community college bs is simply that unless I chooses to take a lower paying job in my future...

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