Kids college: Let them pay?

[Bikechuck]

I paid my way through university thanks to a very will paying summer job on the railway. But tuition has skyrocketed since the early/mid seventies and well paying summer union jobs with scads of overtime are much more scarce.

We were happy to pay for both our children's post secondary education. Our aim was to have them graduate with zero debt.

Son is returning to graduate school next month. He has been working for a few years and has savings. We have told him that we are more than happy to assist him financially. Why not? He simply has to ask.

This is what we did for our daughters.

I paid for my own college but that was in the 70's when you could afford to do so with a summer job and a part time job during the school year for walking around money. That is not realistic these days.

My daughters had skin in the game by working summers and contributing to most of their own walking around money. My older daughter was a Resident Assistant in her dorm which helped her have more money during the school year.

My older daughter worked on a masters while employed as a teacher and her school district paid for some of her tuition, she borrowed money for the rest. I paid her loans off when she had children of her own.

My younger daughter attended a fully funded PhD program but we helped her with spending money for 7 years or more with that. She graduated from that program with no debt.

Education is a core value for our family and funding the kids education was an investment in our family. We are happy that we made that investment and we hope that our daughters continue that tradition with their children.

 

[daylatedollarshort]

It depends........

As far as I know, current FAFSA guidelines require retirement & 401(k) assets to be included on the FAFSA form and are included in the Expected Family Contribution calculations. Back in 1999 and 2000, when our sons graduated High School, these assets were not specifically mentioned to be included.

The advice we received at the time was to "Include everything that is asked for. Omit anything that is not specifically requested."

Maddening to me was that in 2014, when our 32 year old son was applying to Medical School, my financial assets were required on his FAFSA application! He had been out of college for 10 years by that time, had been employed for 8 of those years (only unemployed for the 2 year duration of his Pre-Med studies), and his investment portfolio value astounded me.

Retirement accounts are exempt assets for the FAFSA and the independent status age is 24.

 

[gatored]

My parents paid for my schooling (including Graduate School). Same for my wife. I'm not going to ignore how much of a head start that was in our ability to be on a path for FI.

Our plan for our 2 daughters is to pay for their education as well. This plan is a "pay it forward" model and we expect that model to be carried to the next generation. This isn't for funding a lavish lifestyle because they have no debt like most of their friends are likely to have. One idea I have been tossing around is paying for undergrad and then they can take out loans for grad school. As they start their careers and they add money to their 401k's I will make an in-kind payment to the grad school debt, thus increasing the chances that the pay it forward model makes it to the next generation.

The "they need to have skin in the game" arguments seem a little self-serving (better lifestyle now if not saving for College), but I realize there are often competing priorities (retirement, elder care, medical, etc.). No doubt though that Children need both an understanding of money and a work ethic. The foundation seems to crumble without those in place.

 

[Tiny Kingdom]

First, each med school decides what age is "independent". Doesn't follow the same FAFSA rules for undergraduates.



Second, I'm paying for my child's college education as a cost-saving measure. I want him out and independent rather than living with us until he's 50. He's very bright and has good test scores, but has several learning disabilities and gets easily frustrated because of them. He'll be choosing my nursing home, as the saying goes, so there's that.



My husband paid his own way through school. He knows how hard it was and he's the only college graduate in the family until you get to cousins removed. I had help from my parents and worked for "extras" like summer abroad. We could work enough at minimum wage to make a dent. Totally different situation for the offspring. We're looking at living at home, JUCO's, etc as a cost-saving measure, but also as a way to help him manage his learning disabilities. We're retiring in the two comma club, so it's a disconnect to expect him to pay for college by stocking groceries on the graveyard shift and with loans.

 

[CaliKid]

I want my kids to go to the best school they can get into it. I have little interest in paying for a marginal private school (as many of them are) but am fully on board if they happen to get into a top notch school. Plus, it's important to note a lot of the really good private schools have such huge endowments that everybody qualifies for significant financial aid no matter your income.

 

[athena53]

The "they need to have skin in the game" arguments seem a little self-serving (better lifestyle now if not saving for College), but I realize there are often competing priorities (retirement, elder care, medical, etc.). No doubt though that Children need both an understanding of money and a work ethic. The foundation seems to crumble without those in place.

I agree. I once got into a lengthy discussion on this with a woman who insisted her kids valued their college educations more because they'd had to pay their own way. I got the strong feeling that she hadn't been able to afford to put them through school and that was her rationalization, but I really resented her implication that those of us whose parents paid value our educations less. I backed down because we were at a party hosted by people I didn't know very well and I didn't want to be a PITA.

 

[BigNick]

I think that parents who don't want to pay for their kids' college education should consider how they would feel if the kids decided not to go to college as a result. If you would shrug and go "OK, fine, up to you", then fine. But if you would find yourself putting some sort of pressure on them, then why do you think you should tell these adults how to spend their money?

 

[Ready2Save]

My wife and I both had to pay our way. We were both non-traditional students holding down FT jobs and PT students and it sucked. We don't want that for our kid and plan to fund 4 years of undergrad at an in-state public U. I imagine we will have our kid work in the summers to earn some walking around beer and pizza money.

 

[MI-Roger]

I don't think the bolded part is true, or at least wasn't when I went through it in 2010-2017. Anything considered a "retirement asset" did not affect the calculations directly. There's the "Federal Methodology" and the other one, which asked about retirement assets, but those did not affect the EFC.

Yes, I checked the on-lline version of the current FAFSA and it does not require parental retirement asset information. It also did not require this information when my sons were going to college. So either the form changed multiple times (no/yes/no) in the intervening years, or I was mis-led regarding a change that never occurred.

You have more experience than I in this regard, but my understanding that once your kid was independent, your finances were NOT required on the FAFSA. No way I'd sign a FAFSA for a 32 year old.

I was livid when I was required to provide this information. I was certain there had to be an exception due to his age. I could not find an exception on the web page and the request was very clear. Perhaps it was an in-house financial aid application from one of the Med Schools to which he was applying rather than the FAFSA.

In summary; my experience with college financial aid information is too aged so I will refrain from making other comments as I am only muddying the waters.

 

[kgtest]

He'll be choosing my nursing home, as the saying goes, so there's that.

Never forget my DF one demand when he finally admitted I knew more about investing, handed over the keys and fully disclosed his entire financial picture to me before making me executor.

His one demand...
NEVER put me in a nursing home.

 

[kgtest]

Yes, I checked the on-lline version of the current FAFSA and it does not require parental retirement asset information.

Thanks for clearing this up, love this forum, for the open discussions.

 

[candrew]

I once got into a lengthy discussion with a woman who insisted her kids valued their college educations more because they'd had to pay their own way. I got the strong feeling that she hadn't been able to afford to put them through school and that was her rationalization

Giving that woman the benefit of the doubt, let's agree that her kids do value their college educations. If she is assuming it's because her kids had to foot the bill themselves, she may very well be selling her own children short. For a variety of reasons (finances being one), DW & I were not in a position to fund our sons' educations post high-school. Both of them value their education and training not because they had to pay their own way, but because they now work in career fields of their endeavor and that also pay them both very, very well.

 

[SumDay]

We paid ~80%, and told them they had to come up with the rest (state school). Both chose student loans, unfortunately, but it wasn't that much and they've both paid them off in less than 10 years from graduation. We wanted them to have some skin in the game, so to speak. I'd do it again.

 

[Winemaker]

For those of you who think kids should pay, I have to ask:

On what part time/summer job (while also attending school) do you expect your child to net ~$25k per year to then pay for school?

Sure, I can see you want your kids to strive for scholarships, etc., and for some student loans might be a consideration.

I don't have kids, but I would not want them to come out of college laden with debt if I could afford to avoid that. Neither do I think would I push them to college if they weren't ready, nor fund a super expensive school if a decent public option was available.

Mom and dad requested that I pay half so that I had some skin in the game, I was the first on my dad's side of family to get a 4 year college degree, and I chose mining engineering as my field. When I wasn't in school, I was working 32+ hours in a hardware store, and co-oped in 3 coal mines in the late '70's to put it all together.

I told my kids the same thing, early. Whatever they got for scholarships accounted for their portion of tuition. DD worked as a waitress/server, child care instructor/aide, and went to a private school that was the #2 school in country for pre-med, her intended major at the onset. She changed majors before classes began, but elected to stay at that school, despite the cost, $20,000/year tuition. Never took out a loan, despite it took 5 years for her to get a degree in 2004.

DS, went to private university for mechanical engineering, also $20,000/year. He received several scholarships/stipends. But he also worked as a server with his sister, worked in a coal mine in the maintenance department, and in the engineering department for a mining equipment manufacturing company. Graduated in 4 years, had money in bank when he graduated in 2007.

It can be done.

 

[dtbach]

I worked my way through college with no help from parents. Got some scholarships and was able to graduate in 4 1/2 years debt free. But I didn't really have the college "experience" since having to work 35 hours a week while in school and then 10 and 12 hours shifts in summer pretty much kept me busy.


But I didn't want to have my kids go through that. So we pay for tuition, books, cars and insurance. They have to pay for rent and food while in school. I'm glad that they can have the experience in college that I didn't get myself.

 

[PatrickA5]

I worked my way through 7+ years of night school while working full time at one job and weekends at another. I'd work from 8 to 5 and then go to school from 6 to 9. I'd get home around 10pm and study for the next nights class. Repeat 3 nights a week (9 hours per semester and even summer school). I pretty much hated everything about college, but was motivated and still made good grades. Didn't get to enjoy any of the "fun" stuff in college.


I paid 100% of first DD undergrad and grad work. 2nd DD decided to try to do it the way I did and burned out as a Junior and most likely won't go back. DS is now a Junior. I will pay 100% of his undergrad and grad if he want's it. I'm happy to do it because I can afford to. I wish my parents could have helped me out, but I guess they couldn't (or wouldn't).

 

[MI-Roger]

Back again with facts not anecdotes.

Some/many/most(?) Med Schools require parental financial information on the FAFSA for the student to be considered for financial aid from the Med School. This is independent of the Federal position regarding age limit based emancipation for federal loans.

Google "fafsa for med school parental information"

Relieved to know I am not losing my mind - yet.

 

[sengsational]

Thanks for that clarification Roger. They really got all "up in my business" for the undergrad kids...way more intrusive than anything else I'd ever experienced. But if you want them to provide the discounts, ahem, they call them "scholarships", then you play by their rules. I'm not sure how thorough I'd be with a form from a med school that grown offspring was trying to go to. What if he said he you moved to Ecuador 6 years ago, and he hadn't heard from you since?

 

[MI-Roger]

Thanks for that clarification Roger. They really got all "up in my business" for the undergrad kids...way more intrusive than anything else I'd ever experienced. But if you want them to provide the discounts, ahem, they call them "scholarships", then you play by their rules. I'm not sure how thorough I'd be with a form from a med school that grown offspring was trying to go to. What if he said he you moved to Ecuador 6 years ago, and he hadn't heard from you since?

In the end it made no difference as he was awarded a Full Ride scholarship to Med School (who even knew those existed?) but I was furious my financial data was collected!

Still not happy about it 4-1/2 years later. He was 32 years old for God's name and had been living apart from us for 10 or 14 years, depending how you view out-of-state college 10 plus hours away by car.

 

[WhenIsItTime]

Wow - so many great responses and thoughts to consider. I'll respond to a few:

Cost of college/university is rising faster than wages: I totally agree, so will at least contribute to my kids college for that reason as I don't want them graduating with a bunch of debt.

Junior college: I did 2 yrs at a JC and my wife did 1. I think this is great way to transition into college, if not get started in high school. Especially if my kids are not committed to a career choice.

Career/university choice: This may not be popular comment, but I don't think the price differences across schools is linear with quality of education and I think career choice may dictate what I'm willing to fund from an ROI perspective.

I am one of those that worked my way through college. I call it my J-O-B scholarship, working 25 hours/week when in school, and full time summers and breaks. I also did some co-op program work when in school. Net result was the 5 year plan to graduate, but also graduated with essentially no debt. I did not go on spring break trips, did not drive a newer car, did not eat out much, or go to bars drinking much. All of those took more money than I could afford.

I do realize it is harder to do now than when I was in college. I also believe a kid should have some of their own skin in the game. This works for many things, not just school. Kids should have to work and realize what it takes to earn a buck.

You said it well. I worked 45 hours per week year around and completed school in 4 years. My social life was non-existent and my GPA suffered. Given that as I look back, I try to distinguish whether my career success was due luck, good timing, or earned. Could it have been better with a more traditional college experience?

The comments on allowing more "kid time" before "adulting" and supporting education is better than helping them buy too much house are compelling.

I started the other thread the OP references. OP has a great point. I think working through college can build great life skills for kids who can handle it. Some kids need hours and hours of study time and others can multi task and still do well in school. I think it depends on the kid.

Thanks for other thread. I've read every post there. Great info.

Whatever you decide you owe it to your kids to let them know well in advance.

Great point! My Dad did that for me and it allowed my to work/save early. To be fair, I'd say he challenged me to pay my own way. I new he couldn't afford it all for me and my two brothers, but knew he had my back if I needed cash flow help. Later in life I wish I had gotten better grades for scholarships. I intend to make sure my kids are aware of these choices and to regularly discuss it and push them.

You've given me a lot to think about. Great input!

 

[brett]

Education is a core value for our family and funding the kids education was an investment in our family. We are happy that we made that investment and we hope that our daughters continue that tradition with their children.
Bikechuck is offline


...................We feel exactly the same way. So much so that we have an educational savings plan for our grandchildren and have also made provisions for their post secondary edu expenses in our wills. Those monies come off the top of the estate.

 

[kevdude]

I paid my way through college as my parents couldn't afford it. My wife and I paid for my master's many years later. She had college paid for by her family as well as her downpayment for home after college.

We initially told our kids (currently jr and 8th grade) that we'd pay for instate tuition and they would have to pick up the difference if they went out of state or private school. Now, though, I think we'll pay for a top out of state or private school. I figure if they bust their arses off enough to get into a top school (i.e. Stanford, Berkeley, Princeton, etc., not just any out of state or private school), we should help them since we have the resources. We have told them grad school is on them, but if the portfolio holds up, I'm sure we'll help out a bit with that as well, but only if necessary. I'm also assuming there will be no aid, unless there will be merit scholarships. The tuition calculators I've used at many of the schools says no aid so we're expecting to pay full retail.

Our son (jr) is hoping to finish in the top 10 in his high school and is taking all honors and AP classes. He's currently studying for the SAT and is scoring around 98% on his practice tests, so it's a good possibility he'll get into a very good school. He is also pretty active outside of school as well.

Our daughter is a different story and will most likely be happy in state. Plenty of time for her tho.

 

[Scuba]

Both DH & I paid for our college educations through a combination of jobs and scholarships. We don’t have kids but if we did I would require them to work in high school and then I would match their earnings in some way so that they had “skin in the game.” I went to an expensive private college that I only got to attend due to a full tuition, room and board scholarship. Lots of my classmates had a full ride from their parents and did a lot of partying and not much studying. I worked 20-30 hours per week during the school year and 60-70 hours per week during the summers to have money for books, fees and spending money. While in college, I was a little envious of the people who were running off for beach weekends or party weekends in a nearby city. However the work ethic I developed served me well and was an enabler to ultimately reaching the C level.

 

[bloom2708]

3 kids, oldest in college. We saved enough for the local state school. Costs matter. They know that. Oldest picked the local state school and a good program. If she succeeds it will all be covered. Happy to do it. I ended up with $10k in student loans, but I didn't pick the state school. If I had, it would have been covered by my parents.

 

[wdberry62]

One reason why parents should help their children pay for college: the financial aid rules pretty much force them to. If your parents don't have any money, then you don't have to pay for college. If they do, then you have to pay more than any 19yo should be expected to (at some schools). It's a crummy system, but there it is.



On the other hand, I don't believe just because you can afford something means that you have to buy it! IMO you should spend the extra $120k only if you feel it is worth it. My kids are attending good schools for 15-25k a year, and, because I think that was the right choice, I gave them a substantial bonus for not to attending the 70k a year schools that accepted them.

+1


In-state tuition for a state school is what we budgeted - if they wanted to go to a more expensive private school, the delta was on their dime (all 3 went to state schools). We paid for BS/BA only - grad degrees were their responsibility; we encouraged them to get a job, save money and cash flow grad school if they were so inclined.



This seemed to work for us. Everyone knew the rules up front and we were able to get our kids through college without significant debt (for either us or them) or without spending what we thought were crazy amounts for an education.