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Should parents pay for the full amount of their kids’ college education expenses?

December 7th, 2009 · 11 Comments

Personal finance blogger The Baglady had an interesting comment on this issue:

"I don’t think parents should pay the full amount of their kid’s education expenses. They can get scholarships and loans for their education, but we will not be able to get scholarships and loans for our retirement."

Looking around me, I know several different kinds of parents with regard to paying for their kids college education:

  • Wealthy parents who provide everything to their kids. 
  • Middle-class parents who could barely afford to pay for their kids’ education. But, they have to live a very frugal life, save, save, and save.
  • Middle-class parents who could only afford part of their kids’ education expenses. They feel tremendously guilty about their inability to fully support their children.
  • Low-income parents who simply cannot afford. To a large extent, they let their kids to figure out how to pay for their education.

I have two little ones. When they get a little bit older, I’ll tell them that I’ll help them, but not much. They will have to earn their way to finish college and beyond.

This has nothing to do with my own financial means or ability to pay. I guess you can call it "tough love". Let me explain from my own experience.

As I wrote in I grew up in the hood, I had a humble beginning. From early on, I knew that I had to figure out a way to pay for college education myself. During my senior year in high school, I spent a lot of weekends in the public libraries to research about scholarships, grants, and other forms of financial aids. I read every financial aid book the library had. I applied every single scholarship that I was eligible for. I submitted my financial aid application on the first day that I was allowed to submit.

The process of applying scholarship was like selling a product. The more cold calls/sales visits you make, the more sales you’re going to get. I applied hundreds of scholarships, and ended up with several thousand dollars of free money.

The summer before I started college, I calculated my budget on a spreadsheet. I went through a similar budgeting process before every semester. I tracked my expenses closely. I worked every summer during college.

The result? I was able to self-finance 100% of my college education. I never asked for a single cent from my parents. I never ran out of money. I didn’t have any financial worry during college, which allowed me to focus on my study.

This experience was extremely beneficial to me:

  • I learned to be very resourceful since I had to rely on myself to get the funding for my education.
  • I acquired personal financial literacy early on.
  • I learned to be financially disciplined and responsible.
  • I learned to save.

While I was in college, I was amazed by how little some of my classmates knew about money matters. When they ran out of money, they just called their parents. Some of them complained about how expensive college had become, but they never took any initiative to figure out how to work the system to get more free money for their education.

A few years ago, I had the opportunity to speak to a group of under privileged high school students in rural Montana. Most of them never thought about going to college. I told them:

"It’s true that college tuition keeps going up and it’s getting harder to pay for college education. But, this country still provides many resources to help students to make through college. Nobody in America should be prevented to go to college because of financial reasons."

A lot of people will disagree with my statement. But, I really believe that with the proper planning and resourcefulness, you’ll figure out a way to pay for your own education.

When my kids go to college, I want them to learn to be resourceful, and figure out how to pay for their own education. I’ll be there to provide support, but I don’t want them to be fed with a "silver spoon". 🙂

Tags: Personal Finance

11 responses so far ↓

  • 1 Marie // Dec 7, 2009 at 10:39 pm

    Hi Bill,

    I'm rubbing my hands together with glee having just read this post; great topic, one that is never quite definitive because, everyone has their reasons for their behavior. One point you raise indirectly in this post's writing is that one has to ask themselves – what sort of 'education' do I want to provide for my children? I too know people who come from the (loose) categories you listed above, and their attitudes all seem justifiable; a wealthy parent who wants a college education to be as rich and worry free as possible, to clear the way for future opportunities (i.e., removing the need for loans or worrying about finances); the middle/upper-class parents who pulled themselves up by their bootstraps and wish to impart a similarly valuable education on their children. The reasons are all there.

    Not sure if you wish to take this discussion any further, but in order to give your children the education you wish for at the college level, the behavior has to start much earlier than that. What a kid sees at home subconsciously affects how they see life in general, whether it is finances, common courtesy, respect for elders, respect for others, etc.

    As an Asian, you can imagine I was taught to pursue education with all of my wee little heart as my main tool for the future, and hence, support flowed in that direction. It was not, however, as if everything else was paid for without question; there was a periodic reinforcement of values all along the way, and usually in the direction of getting the most out of college. But anyway, that was a different time, a different economy, a different set of life requirements.

    That being said, bravo on wanting to teach your kids the value of hard work and earnings, and of earning what you want. In the world they are going to grow up in, the 'silver spoons' are swiftly disappearing.

  • 2 Educomment // Dec 8, 2009 at 9:52 am

    Let me build the counter case:
    First of all, I don't live in the US, I have studied in the UK (overseas student). The number of scholarships available here is very low, so I applied for the two I was eligble to, but I didn't get one.
    So how do I finance my studies? My parents pay the lions share and I have a bank overdraft that I can use in case my cash burn rate exceeds my earnings.
    So how has this affected my education?

    1. I have worked during all semester brakes, but rather than working with the primary objective to make as much money as possible (typical student job), I completed internships in companies I was interested in, also abroad. Hence I earned very few money, but I believe that I have learned a lot of interesting things and that the internships contribute to my career development. A simple student job would not have helped me achieve this.

    2. I studied a foreign language for two years and also stayed abroad. I was part-time working during that time, but my income was no way near my expenditures (student visa -> limited max salary). So i could not have done that without my parents financial support.

    In essence, I think one needs to strike a balance between spoiling ones kids by paying for everyting and making live unnessarily hard for them, as it may well limit their choices and prevent them from achieving more. Neither is desired and parents should make their judgements based on their children's personality.

  • 3 GeekMBA360 // Dec 8, 2009 at 6:43 pm

    Thanks. Very well said.

    I think the key is to raise the kids in a way that they don't take things for granted. Make sure the kids recognize how fortunate they're to have the parental supports and resources so that the kids will make most out of it, instead of wasting the opportunities.

    In your case, clearly, you've taken advantage of what you're given, learned a new language, tried internships in areas you're passionate about, etc. Good for you!

  • 4 GeekMBA360 // Dec 8, 2009 at 6:45 pm

    What a great comment!

    “the behavior has to start much earlier than that. What a kid sees at home subconsciously affects how they see life in general, whether it is finances, common courtesy, respect for elders, respect for others, etc.” I cannot agree more with you on this. I'm already learning this — my kids will pick up my behaviors very quickly — if I speak something inappropriate or get emotional, they'll learn to pick up the same thing. As a parent, I need to set the right example for them.

  • 5 CoSkay // Dec 8, 2009 at 11:52 pm

    I agree with your statement here more-so than the rest of the post.

    I am one of the fortunate individuals whose parents paid for their college education. My family puts a high value on education and wanted to ensure my sister and I were able to pick what was best for us.
    However, I was raised not to take things for granted. I am extremely thankful my parents paid for my education and supported me throughout. I worked during the semesters as well as each summer to earn extra cash. After college I saved money and am currently paying for my MBA (with the help of some loans).

    Perhaps the reason why I am responsible, is because I watched my parents save when I was younger. They didn't splurge on new TVs or cars or fancy vacations every year and instead put money away. This might actually add another segment to your mix, “Families that could have paid for college educations, but didn't save for it.” In my opinion that has potentially negative implications because it could create a snowball effect of individuals never learning to save their money.

  • 6 mscheng // Dec 9, 2009 at 1:40 am

    One thing I left out (tho I think it was largely implied), is that I could and can tell that education is still extremely important to my parents and those in my family, hence their values were reflected in their behavior and have thus affected me. I endeavored to begin reading the paper every day because I see my parents read them every day. I get my love of learning from them, something that I'm sure you will be imparting on your own kids 🙂

    Mindful and meaningful spending is something imparted on my boyfriend by his own parents, and I can see it in both their behavior and in his, and hence I turn to him to learn from that kind of behavior.

  • 7 GeekMBA360 // Dec 9, 2009 at 1:55 pm

    Great comment, Courtney. “”Families that could have paid for college educations, but didn't save for it.” — Totally agree. I actually think a lot of families are in this category. Our nation's saving rate was pretty low before this financial melt down. 🙂

    As both you and Marie commented, it's really important for parents to set the right example, and instill the right value to their kids. I'm still learning how to do that. It's not easy, but well worth the effort. 🙂

  • 8 GeekMBA360 // Dec 9, 2009 at 2:08 pm

    Thanks, Marie. I remember when I was a kid, I spent hours and hours to read. Books were my best friends. And my parents were book worms, so I picked up the reading habit from them. I totally agree with you — values and habits run deep in the family, and have huge impacts on kids.

    I'm glad that you're picking up the good values from two families. 🙂

  • 9 chadp // Dec 30, 2009 at 12:40 pm

    I'm sorry but I have to disagree with this article on some very key points. First off, I am a senior psychology student who has worked full time every semester while sustaining a full-time status at school. My parents are very capable of helping me if not paying for all of my college. They also have the “tough love” mindset which I feel has more consequences than benefits. For me, working full time has hindered my ability to do well in school. Although I have managed to keep a 3.2 gpa, it is not even close to what it needs to be in order to get accepted in a masters program. Being a psychology student, it is most beneficial to continue and obtain a graduate degree. In order to go beyond a bachelors degree you must also be devoted to school programs and doing research projects, things I am unable to even think about doing while having to work outside of school. I feel as though my parents are out of the loop when it comes to college costs. Neither of them went to school or had help from thier parents. Their reasoning is simple, “since we didn't get help why should you?”. They look at me as a young, will-bodied individual who doesn't have the burden of raising children and therefore can devote all of my time to work and school. What they don't realize is how difficult school can be, especially if you have to limit your time to study. Sure, I get school loans that cover the costs of tuition and books, but I am left with barely enough to cover a months rent. In addition, the loans I obtain are constantly accruing interest. Working full time sets you back from graduating in the hypothetical four years. It will have taken me six years to graduate, two years that have delayed me from paying back loans and moretime to rack up debt. Finally, I find that parents who expect their children to pay for all of their school but promote getting an education are hypocrites. Throughout my childhood I have been told by my parents to get an education so as to avoid the backbreaking labor jobs they had. But, it seems that when the time to go to school comes, they are fast to ignore their words of wisdom.

  • 10 chadp // Dec 30, 2009 at 5:40 pm

    I'm sorry but I have to disagree with this article on some very key points. First off, I am a senior psychology student who has worked full time every semester while sustaining a full-time status at school. My parents are very capable of helping me if not paying for all of my college. They also have the “tough love” mindset which I feel has more consequences than benefits. For me, working full time has hindered my ability to do well in school. Although I have managed to keep a 3.2 gpa, it is not even close to what it needs to be in order to get accepted in a masters program. Being a psychology student, it is most beneficial to continue and obtain a graduate degree. In order to go beyond a bachelors degree you must also be devoted to school programs and doing research projects, things I am unable to even think about doing while having to work outside of school. I feel as though my parents are out of the loop when it comes to college costs. Neither of them went to school or had help from their parents. Their reasoning is simple, “since we didn't get help why should you?”. They look at me as a young, well-bodied individual who doesn't have the burden of raising children and therefore can devote all of my time to work and school. What they don't realize is how difficult school can be, especially if you have to limit your time to study. Sure, I get school loans that cover the costs of tuition and books, but I am left with barely enough to cover a months rent. In addition, the loans I obtain are constantly accruing interest. Working full time sets you back from graduating in the hypothetical four years. It will have taken me six years to graduate, two years that have delayed me from paying back loans and moretime to rack up debt. Finally, I find that parents who expect their children to pay for all of their school but promote getting an education are hypocrites. Throughout my childhood I have been told by my parents to get an education so as to avoid the backbreaking labor jobs they had. But, it seems that when the time to go to school comes, they are fast to ignore their words of wisdom.

  • 11 alicedebrax // Aug 26, 2010 at 3:42 pm

    College students graduating this year will feel the effects of the economic crisis in the job market. A survey conducted by the National Association of Colleges and Employers found that employers plan to increase their college hiring by just 1.3 percent this year over 2009, the least in six years.

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