For many it’s a value question, “Is college worth it”. However, when one has a child, if college is something that is already in in the cards, then the process of saving for college needs to begin right away. Families need to become aware that the cost of college will most likely be the largest expenditure that they will have in their lifetimes. Media ads, however, concentrate on retirement, we are told to max out the 401k’s, IRA’s etc. But here’s some news for those parents who participate in their company’s retirement plans: the cost of college is coming sooner, much sooner than retirement. If parents save money on college, they will have more for retirement. The burden should not be on the student, although it might be wise for the student to have some “skin in the game”. If savings begins earlier, the question of whether a parent should pay for college will not seem as significant when the time for applying to college rolls around.
“max out the 401k’s” is absolutely the right strategy. If not old enough to withdraw, then you can borrow from your own 401k. That is how we paid for D’s medical school and bought our second home right after she graduated.
The time value of money with regards to retirement is incredibly important. Students should be responsible for paying their tuition, not parents. Should parents help? Sure, if they can, but it’s not their education. And when people have a child, how do they know “college is something that is already in the cards” nearly two decades in advance? Not everyone needs to go to college and it is independent of their parents background, or at least it should be.
“Students should be responsible for paying their tuition, not parents.” - it is up to each family to decide. It is no stranger’s business how each family spend their money or help or whatever. Well, in regard to: "when people have a child, how do they know “college is something that is already in the cards” - We simply told both of our kids that they do not have a choice there, sorry, they are going to college, period. And again, it was OUR family decision, not our neighbors or somebody on CC, for sure!! If they needed to go to college or not, was irrelevant to us, no democracy there, pure unadulterated dictatorship!! And how it should be was entirely up to us, we did not ask anybody.
not if the college is willing to pay with a generous merit scholarship.
Well the U.S. government certainly seems to think the parents should contribute.
"Well the U.S. government certainly seems to think the parents should contribute. " - There is such a law? It is first time I hear about such a law. I wonder what will happen to parents if they refuse to pay for college, will they go to jail for breaking the law? Do you know examples of it?
I’m referring to the estimated family contribution (EFC) on the FAFSA, which is what colleges use to determine need-based aid.
I agree that the government and the colleges themselves must think that the parents should be the first source of funding - otherwise why would the financials of parents who will not or cannot contribute (for reasons that aren’t taken into account for FAFSA/CSS purposes) preclude a student from getting financial aid? Although it’s not a law, and no one (except perhaps a parent who is subject to a divorce decree or support order) is legally obligated to pay for a child’s college education, it is an expectation these days.
That said, I do think funding retirement should come before saving for college, although ideally one would do both. Obviously not everyone has sufficient income for that, but many, many people could save a lot more than they do if they made it a priority.
The calculation of the family contribution is NOT the same as family obligation. I did not hear anything about “college paying family obligation” law, I might be wrong. Nobody is forced to send the kid to college that family cannot afford either. I know family of one MD, they sent all 3 kids to tuition free (Merit) unknown low ranked local college and they also lived at home instead of dorm to save money. Then they proceed to attend at the free (for them) local medical school because their physician parent was working there. These kids could have gone to Ivy’s and attend at expensive private medical schools. This family’s goal was not to have loans and they decided that they are NOT obligated to pay kid’s tuition either. All three kids are MDs now and debt free. Again, the family used their own experience of hardship paying off the medical school loans of the father and decided to have it better for themselves and their kids, they did not listen to GC or anybody else and they are much happier now than 84% of medical school graduates who have huge loans.
Whatever government thinks is irrelevant as long as it is NOT a law!
How does “the govt thinks parents should contribute” turn into a diatribe about laws? No, there is no law, and no one said there was. But there are federal policies that do indicate the govt thinks a parent has a role in funding education (if it isn’t fully funded by some other means, whether that’s scholarships or rich relatives or self-funded by the student). If a student needs assistance such as PELL grants or subsidized federal loans - these are dependent on parents providing information and meeting certain criteria. Parents can continue to claim students on their taxes. And yes, the govt does have algorithms based on parent earnings to determine anticipated family contributions, and colleges require this information before providing aid (some require it even for merit aid). Sure, college isn’t the right track for everyone, and no one needs to go to a $60k/year school, but if college IS in the plans, there is some expectation - look at how onerous it is for a college-age student to be declared independent!
I’m in the camp of setting expectations early on that college was a given, but also that college costs had to be within a budget set by us. College has been funded by a combination of savings, current earnings, and merit scholarships. But we still have to file a FAFSA every year, and we still claim those exemptions on our taxes that we wouldn’t be eligible for if our kids were working instead of in school.
Family decision. Every family has their threshold,about what they will or won’t…can or can’t pay for college costs.