Comments on: I will not pay for my children’s college education, part 1

By: Dentists in Bradford

Dentists in Bradford — Fri, 19 Jun 2009 04:40:48 +0000

May it have some specific reason otherwise its strange.

By: Michael

Michael — Fri, 20 Mar 2009 04:33:58 +0000

I must say, I'm always amazed as I hear people talk about saving for their children's college as though it is a must, even when they are paying off debt. Parents don't owe it to their kids, but I agree that it is nice. I'm planning to at least assist my kids through college, If I can't cover all the costs.

It seems like parents' first responsibility is to do their best to make sure they won't be a financial burden to their children when they are older. I don't want my children to have to take care of me, because I was saving for their college rather than my retirement. I definitely think that saving for college comes after paying off all other debts; however, I'm flexible on the mortgage. Still, my plan is to pay off the mortgage and then use that mortgage payment to help fund the children's college.

By: Steve @ bripblap

Steve @ bripblap — Wed, 04 Mar 2009 01:42:31 +0000

Great story, Shey, and I have to say I agree completely – it's a lot of freedom to “own” your own education, and not feel that it was a gift from anyone. I feel the same way – I paid for and earned my education, so I don't need to feel an obligation to anyone else for that education. If you were miserable, and now you're not – good for you!

By: Shey

Shey — Tue, 03 Mar 2009 12:45:01 +0000

I went to a state university on a full ride and then a very prestigious (and expensive) law school on student loans. My parents never paid a dime for my education. I wouldn't have it any other way.

I remember when I was a first-year in law school, talking to one of my classmates and finding out he had NO student loans. This was shocking to me. It had never occurred to me that someone's parents would be shelling out the $40,000/year for room and board. I know it happens all the time, but it was like I was living on a different planet, because it was so far from the environment I'd come from. My parents gave me unconditional love and support, and those were the tools I used to make my own life. After practicing law for a few years, I was truly miserable, so I started to find my way out. I focused on paying down my student loans so that I could take a job that would make me happy. And I did! I still owe some money, but it's manageable. Most importantly, though, I don't feel like I owe my parents or some other benefactor to keep using a degree that they paid for. I wonder how many of my classmates wish they could step into a more fulfilling job, but don't because they would be letting their parents down. I'm really happy my degree has no strings attached.

By: Dana

Dana — Mon, 23 Feb 2009 17:34:40 +0000

I think it's conditional. IF you have your debt and retirement taken care of, then it can be a good thing to help your kids with college. According to The Millionaire Next Door, it's the one form of "financial outpatient care" that actually benefits your kids in the long run: teaching them to fish, rather than handing them one.

BUT, if you're thinking along these lines, it doesn't have to be college. You could also help them secure an apprenticeship or start their own business, and achieve the same result.

AND, you shouldn't earmark the money as college savings. That may come back to bite you in the bootie later. As bripblap says, you don't know what your children will eventually do. So if you're going to save the money, save it, but only as regular savings, not as a 529. If your child gets that scholarship then the money's free and clear--maybe you could even take one last family vacation after their high school graduation, before they leave for college. It'll be your last chance to see that much of your kiddo for a very long time, if ever.

By: bubelah

bubelah — Sat, 15 Nov 2008 16:32:24 +0000

LB, like any undergrad I got a position as a “Business Analyst” in Finance & Accounting about 7 years ago. I am not going to name the company. The BA position is pretty generic name for all undergrads entering any kind of porgrams (at least it used to be when I graduated from College). My two College mates got in to an Investment Banking Analyst program (2 year program) at JP Morgan the same time I did. We were all in honors program in school though. Maybe it helped.

By: Layoffman Brothers

Layoffman Brothers — Sat, 15 Nov 2008 01:54:06 +0000

What was your position and the firm's name?
A bulge bracket ibank WILL NOT hire unless you went to elite schools except for operational positions. NYU, Georgetown, Fordham are good schools but not what the upper echelons of society sends their kids.
Exceptional cases are: personal connections, minority kids, kids of firm's clients, or SUPER TALENTED (like Division I quarterback with 4.0 GPA in Econ)

Plus, last 3-4 years were a bubble for financial firms. During dotcom bubble kids who majored in English at state schools got jobs as computer consultants making $80-90K. The real test is, how many of non-elite school grads will get a real job next year. And when the analysts get laid off and apply to bschools, where you went to school will matter. Academia cares about reputations.

The elite schools are for lifelong connections with super rich kids anyway...practical education to get a job for these folks are meaningless. I know my school, 60% didn't qualify for any financial aid, and your parents must make $200k/year to not qualify...so 60% of kids had parents making $200k/year and this was years ago.

Elite colleges simply give you better chances to succeed.

By: Craig Kessler

Craig Kessler — Thu, 11 Sep 2008 14:04:49 +0000

That's an interesting point of view and being a recent college grad, clearly can't put myself someone's shoes who has children. I understand your approach and see potential financial benefits to that, at the same time that would have to be a very difficult decision for a parent to make.

You were very fortunate to receive scholarships, but the majority don't even very bright students. Student loans are available, but as college tuition continues to increase, to put 100% financial burden on a young person these days is very difficult. I know my parents were happy to financially help out with my college education so when I graduated I wouldn't have years of financial burden, and could begin saving for my future. I really appreciate it and hope I am in a good financial situation where I can do the same for my future children. I'm curious to hear responses from parents and their take.

Craig
www.budgetpulse.com

By: starbucksgirl

starbucksgirl — Mon, 11 Aug 2008 23:24:05 +0000

Nikki, I have to agree with Bubelah and I have to add one more thing. Paying $40,000 a year for a graphic design degree is insane. Graphic design is a highly competitive field so unless you are VERY well connected in that industry you will never make back the return on your investment for college. Even if you are well connected you will still not receive a good return on that investment as salaries are not that lucrative in that industry (generally). I use to work for Walt Disney Imagineering and the people that were in the graphic design field were the best in the industry and only received their jobs because they had connections and they didn’t make enough money to support their families. You would do better to choose a degree that will enable you to save for your future. Maybe a profession that is in demand where your salary is likely to be raised throughout the years (i.e. accounting). If I were your parents and had saved money for your college education I would not be paying for you to go to school to get a graphic design degree.

By: Bubelah

Bubelah — Mon, 04 Aug 2008 12:04:15 +0000

Nikki, are you blaming your parents for not saving for YOUR college education? Did they provide good home, stable environment to attend and do well in school? Did you go to a good school, public or private? I assume it was public. Is the $40,000 a year school the only school available for graphic design? It is YOUR choice to go to a $40,000/year school, you are an adult, you know what you are doing.
I think parents responsibility is to give their children a thriving, stable and stimulating environment at home so that they can have happy childhood and do well in school. Maybe your parents even went as far as moving to a slightly more expensive neighborhood so you could attend a good public school. But they do not have to save for your college, especially if you go for the most expensive school. They need to save for their retirement so that they are not a burden to you later. Of course it would be nice, but it’s not an obligation.

By: nikki

nikki — Sun, 03 Aug 2008 19:57:59 +0000

My parents never saved for my college education and right now cannot pay for any of it. I was a straight A student, honor society, tons of extracurriculars, 2170 on my SATs, all that good stuff. The school I’m going to is very well known for what I’m majoring in, graphic design, although it costs $40,000 a year. Through my hard work I was able to get $30,000 a year in scholarships. And the other $10,000? Well, I was planning on taking out a student loan. But you need a cosigner with pretty much perfect credit to get a student loan these days. I’m on the computer every day looking for a solution to pay for college college, and I worry and stress all the time about not being able to pay for school. And so, because my parents never saved, there’s a good chance right now that I will not be attending school, despite all my hardwork. So I’m sorry, but I have to disagree with you.

By: Jane

Jane — Tue, 08 Jul 2008 19:39:56 +0000

I’m kind of in the middle on this subject. I believe, if you have the money, parents should contribute to your kids college education as much as they can. (BUT NOT if they are going to hurt themselves in the future.) If you cannot contribute money they should be helping junior at a minimum with finding out how to go to college, for example those scholarships and probably by allowing them to live free at home so long as they are in school, etc.

By: Dividend Growth Investor

Dividend Growth Investor — Wed, 23 Apr 2008 13:00:54 +0000

I agree that going to a prestiguous university will be a great investment only if you create a great network of friends. But if you are a poor kid who studies a lot in order to keep your grades and not lose your scholarship and you work full-time to support yourself, I doubt that you will be able to fully utilize the networking opportunities of a big school. Although I do believe that having an ivy league school on your resume will open doors for you..
Same as being in a social/business fraternity will open/close doors for you..
I myself paid for the last 3 years of college myself. My first year was paid by my parents. I knew that they won’t be able to pay my education, so it was up to me to work hard ( academically and labor-intensively) and apply for scholarships smart. What I would encourage my kids to do is to work during summers and save money for college. Then work during college summer and winter breaks 2-3 jobs in order to pay for their expenses. That way the kid would really understand the value of the dollar – and learn to budget hopefully. Since I had to support myself and pay out of state tuition out of my own pocket ( I couldn’t obtain student loans ) I knew I had to cut costs by living off campus.

By: Steve (Brip Blap)

Steve (Brip Blap) — Sat, 15 Mar 2008 02:51:28 +0000

Robert, I don’t think anybody has a true formula for comparing education to school costs. I am prejudiced – I think I got a great education from a state university (in which I was in an honors college) that cost me nothing thanks to scholarships and low tuition. So I got an infinite return on investment – $0 spent on college vs. a lifetime of increased earnings.

But as to whether Duke at $20,000 per year or whatever it is now versus NC State at $8,000 per year is a bargain or a ripoff? Hard to say. Depends on the major, what you do with your spare time, etc. I personally think an expensive education is a ripoff unless you either (a) gain the skills to become very rich and pay that debt off in a hurry or (b) get a great network that helps you get rich. I personally don’t understand putting myself in debt just for the privilege of studying at a university – but I’m exceptionally debt-averse.

Good question, though, and if someone answers it someday they’d have a good career as a college counselor…

By: robert

robert — Fri, 14 Mar 2008 21:19:05 +0000

to Steve- I agree with your first point. However, that first job will most likely have a bearing on your subsequent jobs. And I think you are correct about my choice of school examples.
Ultimately, I wish that school name didn’t make a difference. I also realize that the individual is still the determining factor. As far as the quality of education in relation to the school costs, does anybody have an idea on how to realte the two?