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Should Parents Pay for College?

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A 2022 U.S. News survey found that 43% of parents regret borrowing student loans for their children, with three-quarters of parent student loan borrowers sacrificing their own financial milestones to do so.

And yet many still choose to take on some of the burden of paying for their children’s higher education, whether to set the next generation up for a better career or reduce their debt.

“College tuition is higher than ever, forcing many young adults to take out hefty student loans that they’ll be paying off for years to come,” says Yosh Miller, CEO and founder of Hadley, an app for planning 529 savings. “This will be a deterrent for children unsure of whether to pursue a higher degree. While many parents can’t afford to pay for the entirety of their children’s education, setting kids up with a foundation will increase their likelihood to pursue and complete higher education.”

Should Parents Pay for College?

Deciding whether or not to help pay for your child’s college can be a difficult choice, but it is one that should focus on your own financial wellness as well as your child’s.

Pros and Cons of Paying For Your Child’s College 

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Whether or not parents should pay for college is a complex question, and one to which the answer may vary depending on your culture, financial situation and more.

“The question of whether or not parents have a responsibility to pay for their child’s education is completely subjective,” says Danny Cieniewicz, certified financial planner at Hyperion Financial. “For nearly every parent, they want to see their child succeed and many recognize college is an avenue to help them achieve that.”

Cieniewicz adds, “But many parents didn’t have the help of their parents and they feel it can be a valuable lesson for the child to figure out how to best pay for schooling.”

On the one hand, federal student loans take parental financial background into account, assuming parents will have at least some role in funding a child’s education. This might leave many parents with a sense of responsibility in the process.

Still, with tuition costs so expensive and the potentially large effects on your credit, other parents may be wary of taking on the risk. Plus, finding a way to fund their own school could help teach your child financial independence.

In the end, experts agree that helping fund your child’s education may certainly help their future, but it shouldn’t come at the expense of your own financial wellness.

How to Decide If You Should Help Your Kids Pay For College

Deciding whether you are going to help fund your child’s education is a deeply personal choice, but it can also be a practical one. Consider these tips before deciding whether it’s right for you:

  • Consider your own financial wellness first. According to Jack Wang, wealth advisor at Innovative Advisory Group, parents should first take a look at their own monthly cash flow and ensure it is adequate before considering any extra costs – particularly funding a degree. “After all, the family has to be able to survive day to day first before worrying about longer term financial goals,” he says. 
  • Check in on your retirement and emergency funds. Wang also says that while many experts will tell you to prioritize your retirement fund over an education fund, emergency funds are just as important. Both are critical to financial security. 
  • Ensure your child is serious about education. According to Cieniewicz, you might want to make sure your child is as invested in their education as you are before you put your own money up. He recommends asking the following: “Are they working currently and can they pay for college? Should they have a student loan in their own name? Have they actively been applying for scholarships? Have they worked hard in school to back the idea that you believe they’re serious about success in college?” 
  • Ask if you are willing to accept the risk. Loans are expensive, and can take a decade or longer to pay off. If you can’t fund your child’s education out of pocket, consider whether you are willing to accept the risks to your credit score of taking on a long-term loan. 

Best Practices When Paying For Your Child’s College

If you take a look at your financial situation and decide that you do want to help your child pay for college, there are several best practices you can follow to ensure you do so safely.

First, Wang suggests any parents assisting with college payments decide what that means for them.

“Make sure both parents agree on what they mean by ‘saving for’ or ‘paying for’ college,” he says. “In my experience, parents can vary wildly on what they actually mean. It is common for one parent to want to pay for 50% of a public [school] while the other wants to pay for 100% of a private [school].”

The next step is to take a close look at your budget and decide how much you can afford, either out of pocket or in loan payments.

“The most important thing to decide is a college budget,” says Cieniewicz. “Colleges will vary in cost, and many times the sticker price is not the same as the actual net cost. Parents need to have an idea of what the net price will be.”

“If you do not want to burden your children with extensive loans to repay soon after graduation – and if you want to protect your retirement savings – the best way to avoid taking student loans in the first place is opening an education savings 529 account,” says Miller. “The equivalent of a Roth account for education, they grow tax-free and are tax-free when you use them for things like private K-12 schooling, college tuition, room and board, grad school – and best of all, leftover 529 funds can rollover into your Roth IRA.”

“Sometimes, parents also think of doing a retirement plan loan or a home equity loan to pay for college,” says Cieniewicz. “Interest rates and other goals must be considered and should be talked over with an advisor and tax professional if this is planned.”

Alternative Ways to Support Your Child in Their College Journey 

Perhaps you want to support your child’s higher education, but you can’t afford to take on a loan or pay for tuition. That doesn’t mean you are out of ways to help them. Consider these alternative ways to support your child in their college journey:

  • Look for federal aid. The Free Application for Federal Student Aid (FAFSA) is the best first step for anyone looking to fund higher education. This will usually involve providing information about a parent’s financial status, so help your child fill it out to maximize the aid they qualify for. 
  • Help with scholarship applications. The right scholarship can pay for a big chunk of your kid’s education without the need to pay back pricey loans. Consider helping them research options and apply for as many as possible to lighten the financial burden. 
  • Encourage more cost-effective options. A traditional four-year university isn’t the best option for everyone, and in many cases a community college or certificate program can be the better choice for your child’s future. “In my opinion, parents should help fund education, though that doesn’t necessarily mean college,” says Wang. “It could be trade school.” Help your children research all options and choose what is best for them. 
  • Co-sign a student loan. If your child is prepared to take on student loans but is having trouble qualifying for adequate funding, consider co-signing their loan application. This can help them access better terms while still putting the responsibility in their hands.

Sarah Goldberg
Sarah Goldberg

Sarah is a seasoned financial market expert with a decade of experience. She's known for her analytical skills, attention to detail, and ability to communicate complex financial concepts. She holds a Bachelor's degree in Finance, is a licensed financial advisor, and enjoys reading and traveling in her free time.

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