Thursday, April 27, 2006

Why children shouldn't pay for college

I read a very interesting post at Free Money Finance and made what seemed to be a a very contrarian reply.

Fundamentally, I believe that parents should pay for as much of their children's college and graduate education as they can without jeapordizing their retirement savings (I didn't mention that part in the comment). We hope our children will help us when our health fails, but we also hope to never be a financial burden on them.

Many others feel that children will not value their education if they do not pay for some or all of it theirselves. I agree that they need to have a feeling of contribution, but in my thoughts, hard work and good grades are more than sufficient. After all what is more important: children paying for college or graduating with excellent grades? I think the later.

Outside expenses, vacations, etc... I really don't have an objection to children pay for their own entertainment, etc.... Free pleasure and luxury can easily demotivate children and lead to idelness. Let the children save up for the pleasures and luxuries.

Another thing I recommend, that few others considered is having children take one or two years off before going to college. Let them explore the world, taste work, travel and experiment outside of school. Give them a chance to mature so they appreciate school all the more. Most of us agree that a college education can be helpful in obtaining many jobs and is necessary for the graduate degrees that other jobs require. Experience in the workforce as an unskilled laborer can be very challenging and motivate a child to improve their opportunities by completing a higher education.

Here's the text from my post, please share with me your thoughts:

I am in disagreement with the let the children pay for college crowd.

My core belief is that it is the parents' primary responsibility to help their children grow and prosper in our society.

My secondary belief is that an active hands on education should focus on values, ethics and responsibility. A child's character cannot be developed without aggressive attention from parents.

I had to pay (75%) for the vast majority of my education at an elite private insitutation. Paying my way and accumulating debt was an enourmous burden and a competitive disadvantage.

I disagree with those who argue that their children should pay for 1/2 or more of their schooling. If they are hard working and competitive students, they should have the opportunity to focus on their education and competing for good grades.

Let chidren save up for personal expenses, vacations, etc....

A large school debt is a significant burden for new graduates who should concentrate on investing as much as possible into their new retirement accounts - not paying off student loans. We all know the value lost by not saving early on. Furthermore, high student debt might disuade children from furthering their education, i.e. "how can I afford graduate school with all these college loans? (I do understand they can be deffered)"

A solid work ethic is what enables our children to be admitted to a most competitive school and to succeed within it. That ethic can and will be dilluted with external work obligations.
For those unsure if their children will value their education if they do not pay for it, I recommend having their children take a year off before attending college - most likely at the child's expense.

Let them work for a year as an intern in the careers they are considering or as an unskilled laborer. Both approaches will educate them greatly and motivate them to excel in their education.

Also, a gap year might help them achieve a certain level of maturity that the entering freshman may not initially have. Think of it as a chance to explore and grow without risking grades.

Have a wonderful evening,


freedumb said...

I'm not a parent, but I have some comments coming from a recent, sort of, college graduate...
- I believe working is good during college. It helped me manage my time. Without work, it was just about playing around and studying...not good...especially when studying goes hand in hand with a lot of campus jobs.
- I don't agree with taking a year off before college, especially to's easy to forget the discipline school requires...For me, if I had started work before college, I may have never gone back to school...Definitely subjective though...some kids might actually react better to taking a year off...I know I wouldn't have...
- As far as paying for college, I could see it going either way...It's really the parents choice...If my kids expected it, I maybe less inclined to help out though...

Just my 2 cents...Interesting post! Thx, FF.

Anonymous said...

I believe that working while in college is a good thing. It certainly made me concentrate as I realized I had four years to get my degree and if I messed up all the extra expense was going to mine and not my family's.
I would agree though that some time in the real world can help convince you that getting your degree is worthwhile and motivate you. I took 8 years between my Bachelor & Master's degree, and only then was I ready to get back into studying. As I had to pay for it all I did it as fast as I could so I would carry as little debt as possible. I took 2 years for my Master's degree and held down 2 jobs while I did it.
If I was to pay for a child I think I would determine the cost of tuition at a local community college and I would be willing to pay for that. Anything more expensive and he/she would need to find grants or take out loans for the extra cost.

Wanda said...

As a college student who's parents are paying for the vast majority of her college expenses, I might be a bit biased - but I definitely agree with Makingourway. Working can be beneficial, for example, if a student works 10 hours a week doing research for a professor or an internship at a company and takes a full course load, then that work will teach time management skills and provide practical experience. On the other hand, if a kid has to work 25 or 30 hours a week paid at minimum wage just to make the ends meet and still have to take massive loans - then his/her grades will suffer, no matter how smart they are. Studies have shown that once a student works over 20 hours a week their grades will go down dramatically.

Scott, community college is a fine option for many students - but the risk is real: many students who go in with the intention to transfer to 4-year colleges don't. They drop out or only manage to get an Associate's. Even if they do transfer, they probably will be behind their classmates in terms of academic preparation and would have lost out on 2 valuable years to network with their classmates.

If I have a kid, I'd want him or her to have the best opportunities available, to have the best leg-up that I can give him/her. I believe that is what every responsible parent should want. I'd want my kid to recognize and appreciate my efforts, to be sure, but I don't want them to miss out on the big bucks (graduating on time from a good school, with marketable skills and a strong GPA and network) chasing the small change (working at McDonalds to pay for school or going to a community college instead because I refuse to help them, and be dragged down by tens of thousands of debt after graduation).

Anonymous said...

I want my kids to have every advantage but also must make sure that we don't jepordize our retirement. You stated:

A large school debt is a significant burden for new graduates who should concentrate on investing as much as possible into their new retirement accounts - not paying off student loans. We all know the value lost by not saving early on. Furthermore, high student debt might disuade children from furthering their education, i.e. "how can I afford graduate school with all these college loans? (I do understand they can be deffered)"

I guess what needs to be said is that if the parent can continue to contribute at least 10% to their retirement fund and pay for their kids college they should.

Great post!

Anonymous said...

Interesting post. My parents started paying for college when I first went. But when I got there, I realized I wasn't ready. I ended out doing very poorly and eventually dropping out. It was at that point where my parents stopped paying my way. They were only willing to pay for my tuition and living expenses if I was going to do well in school. Otherwise, it was upto me to fend for myself.

After joining the military, I had a new appreciation for school. I went to school at my own expense, even though my parents offered to help. I ended out doing much better than I even had in school and I didn't drive my parents into debt to pay for it.

College debt can be a huge burden, but I can't say that I would pay the bills for my kids to party and do poorly. I think it really depends upon the situation.

Jim said...

I disagree. I went to an expensive private law school and believe me when I say that there was a huge difference in effort expended by the students who were borrowing money for law school versus those whose parents paid for everything. One of my classmates was already in his mid-30s when he started law school but his father paid all the tuition anyway because was very wealthy ($50-100 million in net worth).

This classmate was very lazy, almost never went to class, and rarely studied. I assume that a significant cause of his poor work ethic was due to his years of leeching off his parents and really not ever having to work that hard to survive.

He is now in his early 40s and still lives in the same apartment where he lived in law school. He has never worked as a lawyer and currently works from about 10:30-5:00 PM weekdays for his father doing menial tasks.

makingourway said...

Everyone, thank you for the thoughtful comments. They've provided me with much to mull over!

freedumb, if a child wants to work part time during college, good for them. They may want to the money for luxuries, vacation, new clothes and other expenses. for some people, having to work during school, helps them become more organized and value their experience. Having been in that position, I had to make many academic sacrifices, I wish I didn't have to make.

As a parent, I want to give my child the choice. If they work hard and get good grades, I want to reward them by paying for school. Also, I believe it's my responsibility to give them a leg up.

Scott, based on my philosophy of giving my children as much of a an advantage as possible, I'd fund the best school they could attend. I'd draw the line at entertainment and similar expenses (really anything other than food, books, transportation and basic clothing). If they can attend the #1 school in their chosen discipline - why not help it happen? Plus the cost difference between community college and a top line private university is so significant, I'd recommend considering a different (more expensive) bottom line.

Wanda, I agree with you and am glad to see the oppinion of a young lady in college who appreciates the benefits of her parents' assistance.

garyp, I agree with you, too. You have to save for retirement before paying for college. Children can win scholarships based on financial need, but there are no scholarships for retirement.

jocular jarhead, thanks for the insights. It sounds like some time off (in the military) really helped you. That's why I'll advocate it for my children - a gap year. In your situation, paying for school worked for you, but at least you had the choice - your parents were very generous offering to help. Also, I agree with you, partying, entertainment, should be your children's expenses. If they do it and can't maintain good grades, then the parents shouldn't pay for school.

jim, you raise an excellent point about an issue of character. Your schoolmate who didn't work hard was lazy - plain and simple. I've met many people like this, they are most often the beneficiaries of what the millionaire mind calls adult financial outpatient care. The problem with this person wasn't that his parents paid for law school, it is that they failed in their fundamental responsibility as parents: they did not teach their child a sense of responsibility, they did not challenge him and they did not teach him a sense of urgency.

If your friends parents had given the tuition money to any of your harder working colleagues, I sincerely doubt it would have corrupted them - they would have continued to work hard and been good students.

Have a wonderful day,

Frank said...

Sorry for coming to the scene late. I posted about how I anticipate my wife and I supporting our kids during college: here.
In my post I anticipated paying for college in three ways: savings, earnings, and loans. I fully expect my kids to take out some loans precisely because I want them to own a part of their education. That being said, I don't want them to be crippled by debt, so it's a balancing act that we'll have to figure out somehow.
I do expect them to work at internships during the summer, however, because the contacts and experience can be very rewarding.

Frank said...

Also, I hope you don't mind me leaving links to my posts in your blog, I don't mean to spam. I felt the post were relevant and wanted to try to add to the discussion. Thanks.

makingourway said...


If I can afford it, I'd rather my children have little or no loans after college -- provided they earn my tuition payments with good grades.

If they work hard and obtain good grades, that's enough buy-in from them. Good grades and dedication will show pretty clearly. If they don't show enough, then they'll have to pay in cash or by debt.

I agree with you that internships are definately a very important component of their education. Businessweek just published an article on undergraduate business programs (philosophically I prefer graduate programs instead) - BW indicated the better programs were aggressive with internships.

Have a wonderful weekend,

PS I don't mind if you include relevant links in your posts.

Anonymous said...

If I were a parent I would encourage my child to not work in the first year of college. It's tough enough to adjust to college classes and life. You can still work in the summer, during Christmas break and when you're an upperclassmen (which is what I did and worked out well for me). This way, you fully enjoy college and also learn to be a responsible adult. My parents were not able to help with college tuition. I did notice that many kids who got a lot of parental help did not value their education as much. I was there because I really wanted to be.