We are in the middle of the college search with our first child. Many of our friends have kids that have finished college or are going now that give us advice and opinions based on their experience. We have been talking to them about the costs and if they have their child contribute to the payment. One family pays for two years and leaves the rest for the child, which gets more expensive for the student if they don’t finish within 4 years. Another covers tuition and leaves room/board and other expenses for their child. Another family covers a certain amount and leaves the rest for the student.
I feel that it is important that the student does contribute and have told my daughter that she needs to cover $5k a year through work or loans and we would cover the difference up to a certain amount. That amount will cover many of the schools she has been accepted too due to merit scholarships she has received, anything above that amount will also need to be covered by her if she feels she needs to go to that particular school.
My question is do you feel your kid needs to have skin in the game when it comes to paying for school?
We don’t. But, our kids don’t need to be told that they need to do their best or continuing isn’t an option. College is for their future, not ours.
The “skin in the game” is a philosophy that doesn’t personally mesh with how we raised our kids bc they have been raised from early childhood knowing that they are responsible for working to the best of their ability and that education is how they pursue fulfilling their goals. So, slacking off and making poor grades means that it impacts their future. We don’t bail our kids out of the natural consequences of personal decisions. They have to live with what happens. So if poor grades means losing scholarship $$, moving home and commuting to a CC or local school would end up being their reality. We are able to offer a limited amt of $$. Honestly, our kids respect that college expenses are a familial sacrifice. They know their attending university impacts the lives of all their siblings as well as parents. It is a privilege, so their skin is already “in the game” just by the mere fact that they are attending.
Fwiw, our older kids have all maintained high GPAs and graduated with honors or are currently in college with a high GPA. While we have a very limited amt of $$ we can give our kids, none of them have taken out loans or had to work during semester classes. All of us consider classes as their job and that they will put forth their best effort in them. (they have all been homeschooled and this has been their reality from early childhood.)
Yes, we want the kids to have skin in the game. For us, that means they pay for travel, books and meet the work-study amount offered by their schools. Thankfully, (well, sort of), we get enough financial aid that their work-study portion has more than covered the EFC.
This worked wonderfully with ds1, who covered all of this and graduated with less than $5K in subsidized loans. He came home every summer and worked to make sure he could cover the travel part of his responsibility. In fact, he got a fat refund from the school when he graduated because he had squirreled so much away from work-study.
It hasn’t worked so much for ds2. I mean, it has to this point, but he is not fully meeting his work-study option so he’s had to pay his portion through summer earned income. Just yesterday we had the talk that he couldn’t do the summer internship in another state he wanted to do because he’s put himself in a bit of a bind financially and will have to come home (or anywhere he can find free room and board) to work to make money to cover next year’s tuition. While he’s studying abroad in the fall, he’ll be losing the opportunity to do work-study so working this summer is even more important. He’s pretty disappointed, but he knows it’s a consequence of not working his full work-study hours. Right now, he has enough saved to cover tuition but not the travel and books portion. If he worked during the school year to cover the tuition, he’d have plenty for travel and books. This was his decision to not do it, and now he has to live with the consequences. He hasn’t taken on one dollar in loans the first two years, which is great, but he might need to change his mind about that.
Yes! One example is that summer and part time school year earnings will be earmarked in part for expenses. H and I and our siblings had experiences working on the line in automotive manufacturing plants all summer where the earnings practically covered a year of in-state tuition. Not possible now.
Our kids’ “skin in the game” is earning high enough grades to keep their merit scholarships. We pay tuition, R/B, fees and books with enough dollars to cover our state flgaship for 4 years. S1 and D1 both went to a small LAC and made up the difference with merit scholarships (we are full pay everywhere.) Their entertainment was on their dime so each worked a little during the school year and every summer.
We did require that S1 take loans for his grad school (even though we could afford it) because he needed to learn how to manage money with his lifestyle. It was a great learning experience for him; he found out very quickly what happens when you don’t have much in your bank account.
Our kids are extremely grateful that they graduate UG debt-free as they have many friends without this luxury.
Wouldn’t a better way to give kids “skin in the game” be to set up the following scheme (before the application list is made)?
Set a limit on your actual family contribution, say $AFC.
If the student chooses a school more expensive than $AFC (net after financial aid grants and scholarships), then s/he needs to cover the difference with student loans and/or work earnings.
If the student chooses a school less expensive than $AFC, then the student has no loan or work obligation, and the leftover money may be allowed to be used for other educational purposes (e.g. if an extra semester is necessary, or for post-graduate professional school).
No. I’m divorced but insisted on a divorce agreement that made my ex and I pay for UG and part of grad school.
My offspring did well academically in college and also participated in several ECs, one of which was very time intensive. If I’d insisted on “skin in the game,” those ECs would not have been possible. They were worth it.
Our d’s “skin in the game” was her loans. Since she did as well as could be expected (kept her scholarships, graduated with honors), we are helping her repay them.
@ucbalumnus, your options may work for some families. They didn’t work for us, because we did not want to set the limit on our AFC, and were willing to pay full ride minus loans if we, as a family, decided that would be the best option. But she knew from the outset what that would mean to the family, and she chose a more affordable option.
We expected our kids to work during college. This was to provide their discretionary and book funds, and also to get some job experience to add to their resumes. We also asked that they take the Direct Loans. It just helped us with cash flow. They also both had scholarships that required a minimum GPA to keep…and that was expected as well.
As a graduation gift, we gave both repayment of their Direct Loans. Those payments are a drop in the bucket compared to their actual college payments!
This is a family decision…for each family to make. What you do shoild not at all be affected by what others are doing.
As an aside, we felt that funding college was NOT a subject for discussion with family or friends. When the subject came up, we would say we have the issue covered, and change the subject.
I am well aware of that. However, I am also aware that many parents require kids to have part time jobs during the school years and full time summers as a matter of principle. My offspring did work full time 3 of 4 summers, but had only part time, elective jobs during the school year, making participation in ECs possible.
Wouldn’t that mean that you could set your $AFC to the price of the most expensive college minus student loans you would pay for? Or did you require her to take loans even if she chose a less expensive college? If so, what was her incentive to choose a less expensive college?
That is definitely true. Though different college options definitely lead to different financial realities. Many choices are going to lead to more loans than others for families that don’t have a large college budget.
We do have the ability to pay for some of our kids’ college expenses. However, we refuse to take out loans and we encourage our kids to take the same position. That means college searches are pursued from affordability first and foremost. Finances are never out of the discussion from the very beginning of the process.
Does the student contribution require officially taking out a student loan? Our kids work during the summer or coop to contribute to their costs, but that is not the same as taking out a loan.
Yes, we required loans no matter what. Her incentive to choose a less expensive college was 1) she understood that money was no unlimited, and realized the sacrifices that had been made and would continue to be made to fund her various opportunities and education; 2) she knew that choosing a less expensive school meant more additional activities/opportunities would be available to her; 3) she chose the college she wanted, rather than choosing based on the highest price tag. Ultimately, she did not choose the most expensive school, but she didn’t choose the less expensive school, either.
I didn’t assume that simply because there is money available, a 17 year old would necessary spend all of it, and give no thought to other criteria.
It’s labeled “student contribution” on the Profile, but the schools don’t really care who pays that amount. It doesn’t necessarily have to come from the student.