Yes we should pay. We did pay. Because the grandparents also contributed, the kids both graduated (from private colleges) with no debt. Also, because the money we paid for college was saved above and beyond our 401k contributions, the college costs did not jeopardize our retirement savings.
Our parents paid for our college educations. As my father put it to me as I was about to set off for school, “We can’t promise you an inheritance, but we can make sure you have an excellent college education.” We paid that forward for our kids. Their obligation: graduate in 4 years. They did contribute nominally toward non-tuition expenses, mainly through summer jobs. Working during the school year was not practical where they went to college, though they did have a couple of ways to pick up some spare change.
An important part of this general story is that people need to think about their own retirement savings very early in their working careers. Take advantage of every opportunity to put money into tax qualified savings and investment plans (IRA’s, 401k’s, 457b’s, etc.). And do not ever borrow from those funds. If you can put away 10-15% of your gross salary “pre-tax” into such funds, you are likely to end up at the place mentioned in the article: able to generate 70-80% of your pre-retirement income after retirement. That income, plus Social Security, will allow you to maintain your basic standard of living in retirement.
I agree @NEPatsGirl. We have always told our DC that we were putting money away and that they could cover their “share” with merit scholarships, AP credit, employment or loans, but that we would not co-sign for more loans than they can take out on their own. They need to be smart consumers. It has worked out well for my DS that he has covered his share of a school more expensive than our state flagship with merit so he can choose based more upon other subjective fit elements than simply cost. A parent is obligated to assist their DC on finding a path to success but they are not obligated to carry their DC all along that path.
I have been encouraged by more than one financial advisor over the years to adopt an investment strategy to ensure a transfer of wealth to my children. I bristled at the suggestion, and instead asked them to show me how I (and by extension my family) can best enjoy the benefits of my investment decisions while I am still alive to share those experiences. I don’t want to have a big pot of money left over when I die. So all things being equal, I would rather put the money into educating my heirs so they can earn a good livelihood on their own than save it for an inheritance – something that just rubs me the wrong way because my death is the occasion of the windfall to my children. It’s like I’m dead so I’m done spending money on me, so kids you can spend whatever’s left. Would it not be better that they benefit from my generosity while I’m still living and can see the fruits of my investment and use the opportunity to reinforce a life lesson about the value of an education to my children?
Scraping by to pay for education is worth it. My immigrant parents gave nearly everything they had to educate me and my four brothers. From my parents, I received the financial gift, but also the lesson that education is worth sacrifices which I think is an equally valuable “inheritance.” I believe I should pay it forward.
Speaking of wealth transfers… Is it better to pay 18% on a credit card or use that money to pay for college? Is it possible to do both? If a parent can get triple effort out of every dollar that is paid on debt to include funding college, is that worth considering?
Define “middle income” first. The answer will look very different for parents who weathered the last decade or so with mild financial fallout vs parents who were in highly impacted fields and lost their homes/had to wipe out savings, including retirement, to keep food on the table. Both families may have similar incomes now, but if there’s no cushion for one set, the situations are completely different.
As a result of our salary income and college savings (kept separate from our 401k), neither child qualified for need-based aid. One could have had a merit-based full ride at our neighboring university and was offered merit money by the state flagship and some other colleges as well. The college he chose to attend made him a NMS winner but only gave a nominal amount for this ($1K per year! That’s the way they are – or were).
Our family was lucky that things worked out for the kids as we had hoped. But we also had planned for the kids’ college. What the grandparents’ money did was eliminated the need to take college loans and allowed the kids to choose the best colleges for them.
Given what I know now I would encourage any parents with very young kids to start saving early for college and your retirement. For me it was a decision on family size. I chose to have just one child so that I could better provide opportunities for them. My feeling is my child is my future. The best gift I could give them is education. If I were not in a position to pay for the most expensive private college I would look at affordable options where she could graduate debt free or with minimal loans. I wouldn’t want her graduating with a big loan over her head which would delay her from settling down, owning a home or a car to get to work. She can live with out the expensive material things but no one can take her education away from her. If it means I have to take a 2nd job on the weekends I am willing to do that because after all when I’m gone whatever I have is for her only. I am willing to live with less to provide her with a education which would provide her a solid foundation for her future. If I had to chose between saving for college or an elaborate wedding I would choose college.
Going back to my last posting, minimum wage in my state is currently $10/hour so working full time results in $20k per year before taxes…before expenses…before anything. So if I told my child that s/he could live in my home and work full time for the number of years it would take to save up $50k while earning $20k per year or until the child reaches 24 years old and is elligible for aid without parent’s income, I’m still supporting this child financially into their adulthood. It may actually be more money than paying the $50k. Of course the tuition is likely to go up during this time. Worse yet, the child may lose interest in attending college. If the child is college material, I believe the parent should help out however much they can even if it means postponing retirement.
The system is currently designed to tap parent’s money while the child is a legal adult. In addition, the system does not even give a parent rights to look at the child’s grades without their permission. This is our government at work.
Agreed that we should be able to look at grades but my point is that the government has said that they are adults and you don’t have the right to see their personal information if they are over 18 but you have to pay or they can’t go to college (unless your family qualifies for aid).
I don’t have a problem with the law, because effectively parents funding their children’s education have all the leverage they need with the simple statement “I will write the next check after seeing the last set of grades”.
But if that statement needs to be made in between semesters, rather than something well understood ahead of time, there are probably other problems with the parent-child relationship.
I think it depends. Im not a parent, but I am a student. You have to remember that your income factors into the loans your child gets. For example, my parents make over 100,000 a year, Which counts me out of basically all loans I could possibly get without an extremely high interest rate. However, my parents are also currently paying for my sister to attend college, and they can’t afford to pay for us both at the same time. the whole system for loans and college is screwed up. Schools think parents are expected to contribute, but most parents think they don’t have to, which they are correct.
My husband and I think that we should pay for our children’s educations, and we do. We can afford to do so. I don’t think we owe our kids a $60,000 a year education, but I think we would do them a huge disservice by not paying for college. In terms of getting a job, college (or at least a post-secondary trade school) now seems to be what high school was a couple generations ago. I also understand that not every parent can afford to pay for college. Neither my parents nor my husband’s parents paid a cent for our college or post-graduate educations; we did it entirely on our own (albeit in a time when it was much more possible than it is today). However, I think parents should plan in advance, save what they can - including sacrificing in order to be able to save for both college and retirement if at all possible - and make every effort to at least help with college expenses.
I think it would be even better if the cost of college was not such an exorbitant expense, and the average family could afford it and a hard working student could, as we did, pay his or her own way through if necessary.
The comment upthread about financing weddings is an interesting one. I don’t think parents are obligated to pay for wedding expenses, which can top $40K nowadays. I come from a family that is fairly traditional (man’s family pays for wedding) and my brother’s weddings were paid for, in large part, by my parents. In other cultures, it’s the bride’s family. Either way, I find this convention very outdated. And given the choice, I would much rather use the money toward college.
^^ Agreed. I’ve already told both my kids that my contribution to their weddings will be minimal. I have one son so if tradition holds, I’ll be responsible for the rehearsal dinner and then I’ll gift him the remainder of whatever dollar amount I agree to with both kids. D can put hers toward the wedding or her dress or honeymoon or spend it in Vegas, I don’t really care lol. Although I was thinking I might slip my son a few extra $$ to even the score a bit since he didn’t go to college and has been virtually on his own financially since he was 17 (due to his own behaviors at that time).
It doesn’t really matter whether parents think they should or should not pay. The reality is that according the US government, you’re expected to pay for your kid’s college unless you’re poor. College funding is one of the few areas in US life where the dictum, “From each according to his ability, to each according to his needs,” applies to some extent financially. If you can pay and won’t, you’re putting your adult child in a pretty bad situation, because he likely won’t be able to get the loans and grants to go to college without you as a cosigner/guarantor.
The average family may be able to afford, with sacrifice, an average experience, i.e. two years at a CC living at home and commuting, and two years at a state directional. It’s the four-year residential experience on a leafy campus that’s the luxury good.
Re weddings: perhaps back in the day when a young woman’s choice of husband was her single greatest career decision, it made sense to have a “dowry” of sorts in the form of a wedding fund. Now, it doesn’t matter. I don’t see the point of saving a substantial amount of money for an adult child’s wedding.
@NJSue exactly. If you can, you should bc you are otherwise hobbling a kid that the FA Gods think should be able to pay.
Do the best you can do. I will pay bc I managed to save it over and above 401k. S2 I will have to hustle the next few years, but will get there for him too. I am proud to be able to do it for them.
. I was being sarcastic. I rarely am, but do get a wee bit tired of the NYU bashing here on cc.