If you’re looking for ways to pay your way through college, take a look at this follow-up article for some ideas.
A college education can be invaluable in today’s society. Nearly every parent wants their children to go to college so they can get a high-paying career but many think that it’s going to cost them an arm and a leg to put their children through school. While it would cost a considerable sum to fund your children’s education, you’ll give them a much better chance of success if you don’t pay their way.
I graduated in 2002 with zero student debt, but that wasn’t because my parents paid my way. In fact, they only had a couple thousand set aside by the time I graduated high school. Because I knew my parents weren’t going to pay for my education, I had to find my own way and I enjoyed a more successful school career for that.
It sounds heartless, but I won’t be paying for my children’s college education. Of course, I’ll stash away some money so I can help them when they need it, but it certainly won’t be enough to pay even a semester’s expenses. I want them to succeed, but I want their success to be their own – not something I bought for them. You, too, should take the same route and let your children take ownership and responsibility for their education.
Don’t Put a Penny in a 529
You have enough obligations to tend to beyond worrying about how to pay for your child’s education. You have to keep a roof over your head, food on your table, gas in your car, and a retirement fund to fill. Long gone are the days when a parent can count solely on their children and their government to care for them once they retire. Your 401(k) or IRA is vastly more important than a 529 as far as personal reward is concerned. You can always take out a loan to fund an education, but you can’t take out a loan to fund your retirement.
A 529 plan sounds like a good deal on the surface, but only if it’s growing faster than “guaranteed” investment vehicles and if you’re 100% sure your child will go to college. While your retirement fund has decades to grow and balance out any periods of sour markets, a 529 plan will be tapped within two decades of its initial funding. Depending on the market conditions (which are uncertain right now), you may end up giving your child less money by using a 529 than if you had invested in CDs or savings bonds. And if your child chooses to not pursue a college education, the earnings on the 529 investment will be subject to both income tax and an additional 10% federal tax penalty.
Foster Ownership of Their Education
From early in my education, my parents reinforced the idea that my effort would pay off in the future. They encouraged me to work hard in school, take the hardest classes I could handle, and garnish my schedule with a few extra-curricular activities.
At the same time, they discouraged me from taking any sort of job during the school year. Their opinion, which I share, is that when you’re in school, studying is your job. The little amount of money you make as a teenager earning minimum wage is a paltry sum compared to the payoff from a strong GPA and meaningful activities.
Because I knew my education was my ticket to my future, I focused all my energy on it and was rewarded with a full scholarship to a highly-respected state school.
Shop for Scholarships
Full scholarships can be hard to come by. The competition is fierce and it takes a high GPA and great ACT/SAT scores to hope to land one. Partial scholarships and grants, on the other hand, are far more plentiful and are a perfect way of helping to fund a college education.
Starting in junior high, I started applying for (and receiving) scholarships ranging from $1,000 and up. All it takes is a lot of patience and endurance, a lot of essay writing, and a touch of luck. There are a number of resources listing scholarships and grants, so I won’t bother to list them – just cast your net wide and apply to as many as you are qualified.
Don’t Fear the Loan
That’s right; let your children get student loans. If you consider a career as an appreciable asset, that student loan can open the opportunity to make more money in the future and it essentially pays for itself. Yes, a student loan can cause a few years worth of pain – we’re still paying off my wife’s student loans – but the value of the education far outweighs the cost.
Besides, since it’s their education, shouldn’t they be the ones paying for it? It’s great to be debt free, but having student loan debt isn’t a bad thing. In fact, having student loans can actually help their credit if they’re diligent about paying them off – which will open more opportunities for them later, such as better mortgage rates, more available jobs, etc.
Help Up; Don’t Hand Out
You may choose to let your children fund their own education, but sometimes their efforts won’t be quite enough to cover their expenses. In these situations, it’s completely appropriate to help your student though a rough spot. The goal is to let them take control and ownership of their life, but not to leave them high and dry. You don’t have to (and shouldn’t) fund their parties or outfit them with the dorm room of their dreams, but if they don’t have enough cash for books and food, it will be better for their education if you help them out rather than force them to get a job. As I said before, jobs are a distraction from their primary career as a student and should be avoided unless as a last resort.
Let Them Choose Their Future
Not everyone chooses to go to college, and that’s ok. Neither you nor your child is a failure if they choose to forgo a college education. There are plenty of other opportunities out there that do not require a diploma and some are just as profitable as ones requiring the sheepskin. Going to college, by itself, will not make them successful – their success is almost entirely up to the way they live their life. If your son or daughter would be happier as a model, a mail carrier, a garbage collector, or a retail manager, it’s much better for them to be happy and make (potentially) less money than be stuck in a life path they hate.
Focus On Raising Good Kids Today
In the end, your children’s ability to succeed in life will rest completely on their shoulders. The best way you can help your children before, during, and after college is to focus on raising responsible, mature, and life-loving kids today. No college savings account, no diploma from a prestigious school, and no highly-profitable career path will help them in the future if they are irresponsible with their life and their money. Don’t worry about how to fund their college education, because there are far more important things to concern yourself with between now and then. Focus on raising good kids today and the future will find a way to work itself out when it comes.
Photo credit: J.Salmoral
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I love it! Great write-up.
I paid for my own through a scholarship and have a bit of student loan debt (which is my fav debt).
We’re going to require our kids to do their own schooling as well.
I think way too many people are foregoing their own needs for the sake of their child’s education, which can be afforded in other ways like you mention.
Instill some personal responsibility!
Excellent post. I don’t agree 100% though. My parents helped me and my siblings. It was my choice to take over and finance my own schooling. I save for my kids’ college – so that I could help – but I wouldn’t tell them to discard other options and I will definitely encourage them to be financially independent and responsible. Putting money into 529 is a way to save on taxes – it’s still is your money – you didn’t give it away until you gave it away.
Thanks for the insight and I have to say that I agree with you.
We funded school for our first child while he lived at home. He had no ownership and spent four years without earning a degree. He has continued his eduction at his own expense and his ownership in the financial end of this transaction has resulted in completion of his program.
Our second child decided that she didn’t want to live at home so we funded her living expenses (dorm/apt and food) while she acquired loans for tuition. It took five years but she completed school with a degree.
While both children are completely different, my experience concurs with your conclusion that ownership in the education experience makes anyone more motivated and serious about the process.
I say to each his own. You should do for your children what you feel is right. I personally will want to save for my potential kids college education, because I had to fund my education through federal and private loans, and now am racked with thousands of dollars in debt (I went to a public in state school). If I can help it, I don’t want them to have to go through that and borrow the money like I had to. I would do this after I had fully contributed to a 401k or Roth IRA, and by being frugal in other areas to be able to set some money aside each month for them.
PT – Personal financial responsibility is the key, you’re right!
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Sivan – You’re free to disagree. :) I am saving to help out my children, but I won’t be footing any serious bills. If they pursue higher education and need a little help to make ends meet, I’m there – but I’m not going to be doling out any handouts.
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Kim – Your experience with your first child sounds a lot like my brother-in-law. It was my in-laws experience with him that led them to pay for none of my wife’s schooling (plus the fact that they didn’t want her to go to school, which is another story all on its own).
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Sarah F. – “You should do for your children what you feel is right.” Which is exactly why I wrote what I did – it’s what I feel is right. :) We completely understand the pain of student loans, as you can see in my Financial Health sidebar. That’s part of one year’s worth of loans my wife racked up at a private college. She worked nearly full-time and went to school full-time for the first 3 years and her grades suffered for it. She would have done much better in school (and got a higher-paying job and paid off the loans faster) if she had taken loans throughout college instead of working.
You make an interesting argument why kids should help or earn the way to a college degree. Sounds like you had a wonderful financial foundation that helped guide you through school. I think a good argument is whether kids should work through school. I’ve heard some parents make the argument that school is “work” and that they should focus on studying. Although, others like yourself had to work and go to school. Sound like you benefited from both.
I stumbled too.
A tough love article. Don’t agree 100% as I want my kid to have the best education possible without worrying about money, but I also see you perspective of getting them to value money. Good advice about limiting part time work and to focus on studying, similar advice I gave in a recent article.
I can’t say I agree 100%. My parents paid my college fees, every little cent. They even helped me out with my graduate school, paralegal certification, and my dad tells me that he’s going to help out with law school.
But then maybe we have very different situations.
But I did everything I could to make sure the costs are low.
1) I graduated very early from high school at a private institution (14).
2) I finished top 10% of my class, and got some scholarships.
3) I went to schools that offered me discounts up to 50%.
4) I managed my money well.
In the end, my parents thought that it was a good investment for my future.
While I think you make good points, a general sweeping statement like this is always dangerous because you can never really say with certainty how your children will respond. But you’re right, offer a hand and assistance but don’t necessarily push them in a certain direction.
Jim – Yes, you can’t anticipate everything, which is why I’m saving some money to help my children. I’m just not going to pay their way; it’s so I can at least cover them in an emergency.
Just a counterpoint: Knowing that my parents were working to put me through school made me work even harder to do well and get the most out my education. I’d be more than content to waste my own time and money stretching out the experience with Advanced Basket Weaving, but squandering the hours my mom was working? There was no way that was going to happen.
Most kids seem to turn out fine whichever path the parents choose. Good for you for having a plan.
Thanks for this article. My parents helped me with housing, but I was responsible for my tuition costs and books. Since I knew I was in charge of tuition and other expenses, I got a scholarship and a part-time on-campus job. My parents showed they cared, and I learned the value of hard work.
I’m considering something similar for my son.
I agree with this idea of teaching your kids the value of hard work by making them take responsibility for SOME of their own college expenses. But like many others who have posted in response to this article, I don’t agree with it completely. When I graduated from high school, I had the nation’s colleges and universities at my feet–I was accepted at every school to which I applied, which included a couple of Ivy League schools. However, my father didn’t make any effort to save for my college expenses (he bought stuff for himself instead) and he adamantly refused to take out loans for college expenses (but he later borrowed a giant sum of money to add an addition onto his house). As a result, I was forced to go to the local state school down the street. I will resent the choices that my father made in regards to financing my college education for the rest of my life, and I have no intention of repeating my father’s mistake with my own children.
We have paid for 4 years tuition for our son and he has not graduated; he has changed his degree and needs another 2 years. He also just quit a part-time job, but said he would find an on-campus job which he has not done. His grades this past semester were not very good. We decided to stop financing his college tuition, which was very hard for me to do, but we have retirement needs to fill. I will soon find out if he can handle this on his own. In the meantime, like other parents, we are helping out with some things like unpaid medical and car repairs. Wish us luck! I believe what we are doing is right.
Good luck,
The government wouldn’t loan me enough money to go to college, so my parents took out “Parent Loans.” I made it through college in three years and graduated in the top 10% of my class (while working part-time & volunteering at the local food bank). Maybe I’m an aberration, but I don’t believe whether you pay for your child’s college education determines how successful your child will be in school – how you raised your child for the past 18 years will likely play a bigger role than how much you pony up for his/her higher education.
Not not saving up enough to pay for your child’s education may even leave you poorer because you may have to take out those parent loans. Or I guess you could just hope that your child decides a high school education is enough to succeed in the 21st century.
there is always the military choice.
I finished law school in 2007. I managed to get a scholarship after the first semester because of a high GPA Lots of hard work and sweat went into that and it covered 50% of tuition. I also worked part time at a law firm during the last two years, making $18.00 per hour. Nonetheless, I have $35,000 in federal loans. My parents are divorced. My Dad covered the bar exam prep costs which added up to $6000 (that includes living expenses while studying for the bar). I took a clerkship with a state judge after I graduated, which doesn’t pay much (the clerkship is for two years).
After the clerkship started and my student loans came due, I asked my Mother if she could help me. She say no, because I am capable of taking care of myself and because she never asked her parents to help with graduate school.
I will be honest. I hate my mother for that. That may sound drastic, but it is true. Judicial clerkships are very valuable experiences, but they don’t pay well. Why she wouldn’t want to help her daughter, when she can afford to do so, is beyond me. Sometimes it makes sense to help your kids.
While you make some interesting points, I have to disagree. My parents are paying for my college tuition, while I work full time as well. I pay for rent and all other bills, but because they are financially able to pay, they do. It is quite silly to say that because an education is paid for that responsibility would be lacking; that is up to the individual, not a predescribed notion of a slacker college kid. I take pride in maintaining good grades, and feel fortunate everyday that my parents are taking the burden that would be tremendous for me, while still expecting me to work, and be somewhat self sufficient. Making things more difficult on your children (when you are financially sound and able) is discounting what other struggles they endure. I work doubles to pay rent and other bills, as well as cut back where it is appropriate within my budget. The values that are required to obtain a good education are cemented with upbringing and experience, not necessarily that which occurred after you received your high school diploma.
I have learned the hard way, we paid tens of thousands of dollars for a private college, so my Stepson would get a great education, no debt. Guess what, in his Senior year he decided to drop classes and get poor grades which cost him his graduation. He said he can enroll the next Fall and take a a couple courses then one of the classes is only offered in the Spring, so he needs to take one more year of classes. That was the last of the private school. He has yet to speak to myself or his Father, for 4 months, because we have let him down and won’t help him graduate. Yes, please learn from our mistake. By the way, Stepdaughter is attending a State University, not as expensive but still we are paying cash out of pocket again to keep her from debt. This is her Junior year, she has now called and decided she is changing her major she no longer has interest in her original field of choice. Again, we are the bad people who want nothing to do with any of this situation. We just wanted our kids to be successful and paying for college does not do that. Learn from these mistakes, we are not the only parents that are living this ungrateful nightmare.
Personally, I had a very hard time paying my own way through school. My parents were unable to provide financial support, I had managed to save a few thousand dollars myself working summers prior to college, and I did receive three scholarships. The problem I ran into was my parent’s income (while not a resource to me) was too high to qualify me for many sources of financial aid, and I was forced to claim their income on my financial aid applications since I was younger than 25. I did receive one small loan (not even one term of tuition) but I had to work a large amount of hours throughout the school year in order to make ends meet. After one year of school (public, in state) I was completely out of money and had to move home with my parents for the summer. Even working one full time job AND a part time job that summer didn’t put me anywhere close to paying for my second year of school and so I did not return. Instead I found a full time job with benefits and got a small apartment. In the end it took me SEVEN YEARS to finish my bachelor’s degree (starting and stopping as money was available) and I still ended up with a $15k loan. I think I very clearly understand what you mean when you say a student needs to have a sense of ownership over their own education…I definitely felt that 100%. However, after my experience I fully intend to pay for the basic expenses (tuition, room and board, textbooks)associated with my boys’ college education! I felt the financial stress I was under during my schooling was very distracting from my education and I would have enjoyed the experience (maybe been more involved on campus in extracirriculars) if I wasn’t so preoccupied and worried about how to pay for the coming term.