College Tuition...Who's Paying?

[deleted account] ( 12 moms have responded )

Do you plan to pay for your children to go to college? Why or why not?

Debate question sparked by the following article.

The numbers are daunting: The cost of a private college education can run over six figures -- and that's for tuition and fees alone, no room and board. As parents, we all want a better future for our kids, and a college education seems like a mandatory expense these days. But should you really be footing the bill for Junior's college education? Here are some reasons you may want to think twice.

The Hidden Costs of Paying the Bill
Student loans used to be considered "good" debt, but that assumption is proving false in today's economy. Just like mortgages have ballooned because of hiked rates, many of today's college grads are sitting on six-figures worth of debt, growing monthly with compounding interest charges.

Parents often co-sign these student loans, meaning they're responsible if their kid doesn't pay -- a costly ding to credit scores and finances at a time when parents should be preparing for retirement, or might be (financially) caring for an elderly parent.

And how about that retirement: Are you deferring savings from your retirement nest egg to pay for your kids' college? That monthly tuition or housing payment you're forking over to put Junior through college shouldn't come at the expense of financial security in your golden years. Imagine your son or daughter in the future, having to take out a loan to pay for your expenses.

Too often, parents put their children's college expenses above saving for retirement -- a costly mistake. The best way to ensure your child's financial security is to make sure your retirement is taken care of, so you're not a financial burden.

Exploding Debt
College away from home is often seen as a sign of success, with parents proudly declaring the top-notch school their kids were accepted to. Meanwhile, student loans balloon, and your kid is struggling to pay for groceries. The average undergraduate's debt runs $20,000, but variable interest on loans can make it inflate until the payments are impossible to make on an entry-level salary.

Graduate students in medical or law-related careers often graduate with over $100,000 in student loans. Add to this an average of $2,864 in credit card debt by graduation and Junior is bogged down by debt and moving back home. Families often assume that just because it's college-related debt, it's okay -- but it's still debt that will be a ball and chain for years (and years and years) to come.

A college education is still the best chance at a lucrative career. The Department of Labor shows that employees with a bachelor's degree out-earn their high school graduate counterparts by almost 77%. The best way to limit your child's debt is to look at alternatives to the conventional scenario, where your son or daughter moves away for four years to finish a degree. Start while your child is still in high school, and look for local community college classes he or she may be able to take before graduation. Consider your in-state public college; tuition will be much lower, and your college student can continue to live at home instead of paying for room, board and other expenses somewhere else.

Together with your child's school counselor, look for grants, jobs, work-study programs and other ways to pay for college -- this is a great opportunity to teach him or her about money, and how to graduate with the least amount of debt. Look at all alternatives; it's easy to be wooed by a private school's catalogue, but consider the debt you may be incurring.

The Bottom Line
Neglecting retirement savings or cosigning for large student loans isn't just dangerous for parents; it's a noose around the neck of their college graduated children too. Finding smart alternatives is the key to securing a strong financial future -- for the whole family.

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Jennifer - posted on 08/05/2011




When I went to university, I worked 2 jobs every summer to save for tuition etc. I also got student loans. I graduated with $21,000 worth of debt. That was in 1985. My oldest 2 daughters required surgery that amounted to $18,000 and $12,000 respectively. I told them that they were on their own to pay for college/university. I have started an RESP for my youngest daughter. After 2.5 years of saving, I have amassed $7300 in savings for her post secondary education. I still have about 3 years to save for her. She will be expected to work and save also. I will NEVER co-sign loans for any of my kids. It is a disaster waiting to happen if one does this. Besides how does that teach a person to look after their own stuff?? There are bursaries and scholarships that one can also look at. Bottom line is this......going to school close to home is economically sensible

Jane - posted on 08/15/2010




So, my daughter is 20 and just starting her Junior year in college. We saved for her but obviously, not enough to pay for 4 years. She worked very hard in high school and is on a full academic scholarship (tuition, room and board) and also gets music scholarships (she's a music education major) and is in the Honors college and that cover everything else. She actually gets stipend money from two of her scholarships so each semester, she actually gets a check from the school. We have been VERY fortunate. The money that was saved will be hers to do with whatever she wants like buy her first home or use it for grad school. It's up to her.

For my almost 17 year old son, he just started 11th grade. He'll most likely get "some" scholarship money but the field he wants to go in is not one of those where there is a lot of scholarship money for. So, we'll see. We've saved for him too but if we have to take out loans for him we will. I've always said I would pay for their undergraduate degree. After that, if they want to do post graduate work, then that's up to them to pay for.

Sarah - posted on 08/15/2010




I may appreciate the education I paid for myself, but i'll also be making monthly student loan payments until I'm in my 50's! And although I want to get my Masters, I just can't afford it unless I can get scholarships :(
We willl definatly pay for public state school for the LO, anything above and beyond is on her. Oh, and she better make good grades too, or the cash flow will go away!

[deleted account]

The system here in the UK is very different to the US. The majority of students here take out student loans and only start paying them back when they are earning over £15000 per annum and the amount taken is very small. We don't plan to pay for our son's university education if he choose to go. My husband is doing an access course this year and plans to go to uni the year after to become a fully qualified primary school teacher in 4 years. He will be paying for that and we wouldn't expect it any other way. My sister went to uni and whether my parents could or couldn't afford it they wouldn't have paid for it because it is important to teach children the value of money. Things shouldn't always be handed on a plate and at the end of the day they will appreciate what they've achieved more because they have done it themselves.

Lyndsay - posted on 08/14/2010




As a college student fully dependent on student loans, I can tell you that it is a pain in the ass to be so far in debt and still have a year to go. My parents didn't co-sign for me, so I am completely and utterly responsible for paying off my loan, by myself. Essentially, this means that when I finally do get a steady full-time job after school, I'm really not going to be enjoying my paychecks because a large chunk will be going to my student loans.

My son is three and for the past six months or so I've been contributing to the Gerber Life Fund. If I continue this, which is only like $9 a month, he will recieve $20 000 when he turns 21. I plan to use this towards his college education, and he can pay for the rest.

Amy - posted on 08/13/2010




My parents gave us the choice, they would either pay for our wedding or for college. We chose college, although it was paying for state school, not private. I ended up transferring to a private college and I paid the difference.

For our son we've started an EdVast savings plan for him. Our entire family will put a little in for birthday and holidays, that way it doesn't break the bank and it can earn interest and hopefully help pay for part of school.

I think what we make will determine if we help our children out with college or not. We won't be taking away from our retirement savings, but if we do it would be out of our "fun" money. We also plan to have a serious discussion on money and help make sure our children understand how to manage there money, when they get a job we'll help show them how to start saving for college themselves as well as other things they'll need and want.

Mae - posted on 08/13/2010




My husband and I have been planning to help pay for our daughter's college, but that is after we are done paying for ours. we having been saving a little here a little there to help pay part of it but she is gooing to pay for some too because we've seen too many people that are having their school paid for that are blowing off school and flunking because its not their money. I will help her apply for scholarships, grants, and anything else I can, I only wish that I would have GI bill to pass on to her but I'm using that for myself now.

Johnny - posted on 08/13/2010




We are absolutely planning & saving for our daughter's college education. In order to receive the money, she will have to work part-time during the year & full-time in the summers, it's not a free ride. Both my husband and I accrued significant debt in order to receive our educations. My undergrad was paid by my grandmother (though her will) but I had to pay my own way through Social Work school. My husband's family in no way valued education, they didn't even attend his high school grad. So they were not at all interested in helping him pay for multiple degrees in physics. We both worked all the way through school, but it definitely did not cover the costs. This left us beginning our lives saddled with large debts. We both paid them off, but it took a long time. During that time, we were unable to get into the real estate market, and prices here have sky-rocketed. By the time we were ready to buy, it was the choice between having a family and buying a studio condo. We bought the condo, but after a few years, we sold it to start a family. We will probably never own a home now (until my parents are gone) and it puts our whole family at a long term disadvantage. I would like to give my daughter the chance to have whatever education she desires and not have to make other sacrifices to do so. Many of my friends who didn't get educations are now farther ahead financially. I don't want my kid to have to sacrifice learning to get ahead financially. We have already started a significant savings plan for her, and plan to be ready to pay the bills when she gets there.

[deleted account]

My parents pay for my books which is a big help I used to pay like 600 per semester for books alone but then I found a great website that I can rent my books from for so much cheaper its I I was going to spend 600 on books cheggs prices make it less than 100 thats my parents just rent them for me now...I need to come up with the rest through loans and scholarships

LaCi - posted on 08/13/2010




I plan on paying for as much as I am able to reduce the amount of debt he'll start his life with. Now, if he turns out to be a smartypants and wants to go ivy league, I hope he gets scholarships and he'll still be needing loans. I'll contribute as much as possible though. I won't be telling him how much I can pay, I will expect him to save on his own and TRY to get scholarships ;) then when the time comes, we'll figure everything out.

[deleted account]

This is what my parents did for my sister and I:

We both managed to get scholarships to cover tuition. Louisiana has a great program called TOPS, Tuition Opportunity Program for Students. The state will cover the average cost of tuition for any in-state school for four years if you make a slightly above average GPA and ACT test score in high school. Most students who are considering college are able to get TOPS.

They had been saving since infant-hood for us (TOPS came around when I was in middle school). So the money that would have been used for tuition was used to help us rent apartments. We were still under their insurance and cell plans, and we had to get jobs to pay for living expenses. Good set up for us. We both graduated debt free, but learned how to budget and take care of ourselves along the way.

For my kid, we aren't saving yet. The plan:
Get out of debt (almost there!!), set up for retirement, pay the house off early. When my kids (currently pregnant) are in elementary school, I'm going back to work. Some of my money will be put away for college. I would like to have enough to cover the average cost of tuition at the very least. The debt we currently putting EVERYTHING towards at the moment is my husbands' student loan. I don't want this for my kids. I don't want them to start life in debt. It sucks.

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