College is so expensive that most parents can’t possibly afford to pay for it — but if they can, should they?
“There are decent arguments to be made both for and against parents paying their children’s tuition,” said Giovanni Braghieri, CEO and co-founder of MyConsultingCoach. “On one hand, refusing to pay for their children’s higher education is a valuable lesson in managing personal finances and being fiscally responsible. On the other hand, students loans are a crushing economic burden that’s only got heavier over the years, while post-graduate incomes have stagnated.”
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See: How Parents Should Invest Now to Pay for College Later
GOBankingRates asked the experts to explore the pros and cons of both sides of this complex and challenging issue.
Not Paying Could Give Them a Character-Building Experience …
Centuries of parenting wisdom and basic common sense remind us that kids — like people in general — tend to appreciate things more when they have to work and sacrifice to get them. People who spend their days on college campuses see the results every day in real life.
“Understandably, students tend to fall into two buckets,” said Will Peach, a medical education specialist, doctor-in-training, and online educator. “The first is made up of students who are apathetic and unmotivated toward their education. The second is comprised of those who take their destiny into their own hands and look at their college education with a profound level of seriousness and concentration. Anecdotally, I have never met a single student in that first camp who is self-financing or taking hefty loans to pay for college education. Students who don’t have financial support from their parents seem more motivated to succeed and make the most of opportunities that come their way.”
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Braghieri agrees — at least in theory.
“It’s true that being responsible for your personal finances builds character,” he said. “It also teaches smart decision making such as choosing less expensive colleges over ones they can’t afford and getting part-time jobs to fund their education. While that’s all well and good in theory, the reality is usually much different.”
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… Or Decades of Student Debt
There was a time when college was financially accessible and the tough love of “if you want something, you have to work for it” could be a practical life lesson. Today, it’s more like if you want something, you have to drown in debt for it.
“Part-time jobs aren’t nearly enough to cover any of the expenses of higher education nowadays,” Braghieri said. “Students would have to work so much that it would bring their academic performance into question.”
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Also, if a parent has the income to pay but chooses not to, it can paint the child into an impossible corner.
“If the child’s parents are making enough money, then grants, scholarships, and federal loans are out of the question,” Braghieri said. “Without income-driven repayment plans that come with federal loans, the student has to rely on private loans. They should be the last resort.”
Finally, trying to teach your children lessons about money management as they’re walking out the door for college is kind of like brushing your teeth for the first time on the morning of your dentist appointment.
“If parents haven’t nurtured fiscal responsibility in their children before college, they shouldn’t expect them to be able to take on the burden of financing their own education,” Braghieri said. “Handling money responsibly is a value instilled from a very young age, not when the child is about to step into adulthood.”
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Either Way, Have a Plan — and Get on the Same Page With the Grandparents
The best strategy is to strategize — to plan early and start saving with a tax-advantaged account like a 529 plan.
“Unless they’ve been putting money aside for college, they would have to take out loans or sacrifice their retirement funds,” Braghieri said. “It’s not advisable to spend retirement savings on tuition, or anything else for that matter. It’s money you won’t get back any time soon. PLUS loans are a potential solution, but keep in mind that you can overborrow those and that they come with high-interest rates. You should always max out federal loans first before exploring other options. The rest of the tuition should be covered by personal savings and part-time jobs. Only when you’re out of all other options should you turn to private loans. You’ll have to co-sign for your child, so make sure there’s some form of a co-signer release policy in place.”
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It’s also important to present a unified front on the issue with the child’s grandparents if they had hoped to contribute.
“Helping your grandchild fund their college education is truly a gift that will last a lifetime,” said Jack Schacht, the founder of MyCollegePlanningTeam.com. “But in order to make the most of it, you need to do your homework. Talk to your grandchild and/or their parents about their goals and plans. Do your research as a family. And by all means, take advantage of the many resources and experts that are available to you. Together, you can ace this.”
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Last updated: Sept. 13, 2021
This article originally appeared on GOBankingRates.com: Should You Pay For Your Kid’s College? Experts Weigh In