Are Parents Obligated to Pay for Their Kids’ College Education When Money Is Tight?

June 18, 2014

As both a parent and a college graduate, I’ve been on one side of this equation and will be on the other side in less than a decade when my son heads off for college. We are just coming out of a recession and many people are filing bankruptcy because they’ve been hit hard and debt is draining their retirement accounts. In many cases, student loans are a factor, either because borrowers are struggling to pay them off decades later, or because they over-borrowed on PLUS loans or private loans to help their kids get through school. So the question du jour is: should your parents pay for your college education? The answer: maybe, maybe not.

Angry child

Will you pay for your child’s college or let them go it alone?
Image source: Flickr Creative Commons User Mindaugus Danys

If parents are rolling in dough, paying for their kids’ college is a no-brainer. But that’s not the case for most Americans. Less than half of parents (48%) are saving up for college for their children according to a 2012 Household Financial Planning Survey. This number has dropped by 8% over the last decade. Plus, the lower the income, the fewer families that are able to save. In the lowest bracket, just 19% of families are able to put aside money for school.

That lower income bracket was my family. My mom didn’t work and her husband wasn’t a great earner and what they did earn, they blew, so there was never a thought to save for my schooling. In fact, I worked nearly full time throughout high school to pay for my own school trips, clothes and lunch money, and was pretty much self-supporting.

Savings by income level

Who’s saving for college?
Image source: CFP.net

When I applied for colleges, I did it with little counseling – I graduated from a very large high school in South Florida with one frazzled counselor overwhelmed with problem kids. The A plus kids couldn’t get much of her time. All on my own, I chose a private girls college that was highly competitive but well rated because it was near family and very prestigious. They flew me up for an interview on their dime, accepted me and promised 100% financial aid.

I was 17 and doing this all on my own. What I didn’t know was that 100% financial aid means you have to borrow. Back then the max was $2,500 and I signed the documents without a thought. What I didn’t know about was that the costs I was shown didn’t include my textbooks. I arrived at college with about $80 in my pocket after a summer of waitressing to save up for a cheapo car only to find my textbooks would cost $400.

I was floored. No one told me. I never asked. I was financially clueless about how college costs operated. Thankfully, on a campus that small (less than 500 students), they were lenient and the bookstore was willing to let me finance the books. I borrowed $325 worth of books and to save some cash, there was one other textbook I checked out of the college library and renewed it again and again all semester long to save $75. If anyone else had reserved it, I would have been hosed.

I had an on-campus minimum wage job that was a requirement of my scholarship. I worked in the A/V lab dubbing foreign language tapes and setting up projectors for classic movie nights in the campus theater. (Yep, I was an A/V nerd pushing the cart around campus…) This paid almost nothing and most of it went toward my textbook debt. I babysat professor’s kids and tutored fellow students for pizza money. I was flat broke.

Female Army soldiers

Army life didn’t pay for school as much as I thought it would.
Image source: Flickr Creative Commons User West Point US Military Academy

Then an Army recruiter came to campus and told me the military would help pay for my college and cover my student loans. This was less than accurate and so were many other things she told me (like I could wear make-up while in boot camp) to get me to sign up. But it sounded good, so after one semester of study at the fancy girls school – where I struggled academically because I was under so much debt stress – I joined the Army Reserves and set off for boot camp putting my studies on hiatus. That hiatus would last three years.

I did one full year of Army training and found out they paid not much more than minimum wage either, so I wasn’t able to really save up much for school. Despite this, my military experience has been invaluable and provided me the discipline (if not the money) I needed once I was back in school. But I didn’t take a straight line back to college from the Army. Instead, I wandered to Europe for a couple of years and settled in Germany for a bit (awesome experience and allowed me to use my four years of foreign language studies) before I decided, at 21, I needed to get my tush back in college.

I came home dead broke, slept on my mom’s sofa for a month (she was then divorced and remarried to another compulsive spender) and was determined to get back in college – again with no parental financial support. I found a job waitressing, a junker car, then took a second job as a secretarial temp. I saved, saved and saved, got accepted into a state college and found out that what I had worked so hard to save didn’t really make a dent in the costs, considering I still had to support myself and couldn’t work two jobs while in school.

Waitresses sun basking

Waitressing generally won’t finance your way through college
Image source: Flickr Creative Commons User Flattop341

The real saving grace for me was student loans and moving in with my boyfriend to share living costs. He was self-employed and had himself not finished college because his parents were too wealthy for him to qualify for much financial aid and going through a messy divorce so neither would put up the funds for his schooling. He was determined, though, that I would get my degree.

We were young, broke and in love and I borrowed to pay for school and to supplement living costs. I got out of school with about $30,000 in loans and a degree in Accounting and a minor in Journalism. I was the first person in my family to graduate college and they all showed up to see me walk the planks and get my degree Summa Cum Laude – including the live in BF that was, by now, my live-in hubby.

I had a job straight out of college at a huge corporation as a lowly staff accountant and found that making those student loan payments was hard. I did deferments, forbearances and struggled for a long time to get the debt under control. A few promotions later and it became easier, but the debt grew due to the forbearance periods. Paying off student loans is no picnic, but is manageable as long as you can find (and keep) a decent job.

College graduation

Her future’s so bright, she’s got to wear shades.
Image source: Flickr Creative Commons User Nazareth College

So, what are my thoughts on parents paying their kids’ way through school? I never got to enjoy that perk and I firmly believe that parents have to prioritize and take care of their own finances first. You shouldn’t drain your retirement account or mortgage your home to pay for your kids’ college. Putting your financial security at risk to give them a leg up just isn’t wise.

After all, you need a place to live in your golden years. The beneficiary of the degree is the student themselves, so it’s incumbent on them to shoulder the load whether that means working every summer in high school, sacrificing social time to pursue dual enrollment while in school (I did that too), taking breaks from school to work and anything else they must do to get through school.

Even for those parents with cash galore, you may want to slow your roll and push back on your kids and make them pay for part of their college costs. What I experienced in school was that the kids whose parents were giving them a free ride took it for granted, didn’t work as hard, lolly gagged through more years of college than they needed to and generally weren’t appreciative (for the most part – there are some exceptions, naturally).

But the people that had to scrimp and save to get through school truly value their degrees. If you’re a parent and can save up for your children’s college without sacrificing your financial stability, it seems like the decent thing to do. I don’t always put as much aside as I should and I admit, like many, that I’m counting on my son’s grades to get him a scholarship.

And if my son does have to take out student loans, we’ll strategize to minimize them. And, if we can and he needs the assist, we will probably chip in for payments until he gets his financial footing. Plus, we live in a state with a HOPE program, so in-state school is pretty much the only option open to him unless (fingers crossed) he can get into the Ivy League (they are very generous with financial aid).

Little league baseball

Athletic scholarships are rare and not usually much money
Image source: Flickr Creative Commons User Pete Simon

For those parents that are planning on a sports scholarship for their budding athlete’s college, read this recent blog I wrote on the subject. Less than 2% of hopefuls will get an NCAA scholarship and those that do will be shocked at how little this is in dollar terms. Unless you’ve bred the next Michael Jordan, don’t count on this. Keep your kids focused on academics and put the money you would have spent on cleats and travel baseball into a 529 Savings Account.

And for any high school kids that are reading this, know that no matter how much money your parents have, they aren’t required to pay for your college. That degree will benefit you, not them, in the long-run, so it’s incumbent on you to do everything you can to help yourself with college costs. This means getting good grades, taking advanced classes, doing volunteer work, being well-rounded, working part-time when you can (and full-time in the summer) and putting all your wages and birthday money into the bank.

And if you know your parents are struggling financially, making a solid plan to pay for your own college costs is essential. I’ve been where you are and it’s hard – especially if you work to contribute to the household income or pay for some of your own living costs. There are still things you can do even if saving will be a struggle. Find out if your school has a dual enrollment program. This allows you to take college courses in lieu of standard junior and senior classes on the school system’s dime.

College student

Community college classes can make your overall educational costs much lower
Image source: Flickr Creative Commons User The LEAF Project

This was not an option when I was in school, but I took community college classes in the summer for cheap because I was trying to get credits out of the way (and I was a huge nerd and missed school in the summer). Start looking at scholarships early, keep your grades as high as possible and work and save all you can. Then carefully evaluate all your financial aid offers and opt for the one that requires you to chip in or borrow the least.

Spending two cheap years knocking out core courses at a community college before heading off to a state school is another low cost way to get half your college done. I didn’t have a keen understanding of the true cost of college and went into the process incredibly naïve and simply couldn’t afford it. But after dropping out for three years, working and realizing that I was likely to be a minimum wage earner indefinitely without a degree in hand, I found a way to do it.

Better for you if you can be savvy when it comes to college costs and forego the ups and downs I experienced on the way to my degree. But despite the struggle (and the debt), I don’t regret the sacrifices I made to get my Bachelor’s. If you do have to borrow to pursue your education, sign up for Tuition.io’s free student loan tool to keep track of your debt from day one so you always know how much you owe and don’t get in over your head.