I will not pay for my children’s college education, part 2

Continued from Part 1. Many of the personal finance sites I read concentrate on a few key areas: reducing debt, making investments, emergency funds, saving for your children’s college education and saving for retirement. I agree that most of these are important topics, but I don’t believe that you should save for your children’s college education. This may come across as a shocking or neglectful thing for a parent to say, but I have my reasons.

College costs. A report, “Trends in College Pricing 2006” (warning, big PDF), noted that “[p]ublished tuition and fee charges at four-year private colleges average $22,218 in 2006-07. The $1,238 increase over 2005-06 represents an increase of 5.9 percent, or 2 percent after adjusting for inflation. The average total tuition, fee, room, and board charges at private four-year colleges and universities are $30,367.” The report goes on to note that this amount is usually reduced by student aid, but let’s assume you’re trying to pay for them to go to the best college possible (no Cornell for my baby, only Yale/Harvard/Stanford for her!)

If we consider that tuition, fees, etc. increase at the same rate going forward (no sure thing) then a private school tuition for four years will be $42,000 in today’s dollars by the time my son is in college, around the year 2024. If you consider inflation, that will be $80,000 or more. So you’ll need $80,000 in the bank for each child. Keep in mind that the starting point, $22,000 is the average for a four-year college, not for the very best colleges. Yale, for example, now costs $35,000 per year all in. In 2024 a Yale education might cost – get ready – $370,000 for a four-year degree by my very rough calculations. I won’t have that much saved, frankly.

Personally I am not convinced that there is a lot of value in a private school education that is not present in a state university education. There may even be an argument that not everyone needs a four-year degree, to be honest. I am prejudiced. I received a bachelor’s degree and a master’s degree from a state university, and I work alongside Ivy League grads every day. They don’t make any more money or have any more prestige due to their schooling than I do; the distinction between our backgrounds was flattened out back in the first 3 or 4 years of our careers. By year 15 nobody asks where you went to school unless you’re talking about sports.

Those Ivy grads I work with may not be the most successful Ivy alumni, though. If you want a career with the movers and shakers of the world, you need to go to a school where you’ll meet fellow future movers and shakers. For every Ronald Reagan attending Eureka College there are a thousand Bill Clintons/John Kerrys/George Bushes attending Yale, I’m sure. But don’t think that a state school means your ambitions will be cut short, and unless you have ambitions to be the next hedge fund manager or a U.S. Senator I’m not sure a private school is that much better. After you get that first job, no-one will much care if you went to State U. or Fancy Institute except on football weekends. Of course, if you want to major in some specialty that only exists at some private school, or you have some other reason for going (family ties, etc.) there’s nothing wrong with it, but I don’t plan on giving my children an extra $328,000 just for the heck of it.

Invest in early education. One of the main reasons I’ve been uncomfortable with 529s is the fact that you are tying up money for a college education. I know you can get it out, I know it can be used for your own education if your child decides to run off to Nepal, and so on – but what if you need money for education in the early years? We are considering a private pre-school and kindergarten for our son; first, for safety and quality reasons and second, for our own opinions on educational philosophies (we are very interested in Waldorf education, for example). We hope that money spent early on can provide some love of learning that will help earn scholarships later on. I won’t have an answer on whether this was a good idea or not until 18+ years in the future, but it makes sense to me.

Conclusion

I guess in the end this is more of a decision related to your personal values. My parents helped me a lot during college, but I provided the great majority of the money for the total costs of my undergraduate and graduate education came from scholarships and teaching jobs, including 100% of tuition. While my parents could have (and I am sure would have) scraped together the money for me to attend Harvard (yes, I was accepted there), I never felt a burning desire to attend and haven’t ever felt that I shortchanged myself.

My hope is that my son will appreciate the fact that I have enough confidence in him, even now, to know that he’ll be able to put himself through college with scholarships and hard work, and hopefully we will return the favor by making sure first that we are never a burden to him.

I should also point out that I do have a 529 for my son (set up by his grandparents), but it’s mainly a place for relatives to put gifts. I haven’t contributed anything to it myself to date. Please don’t beat me up too much in comments.

  • SavingDiva

    My parents paid my tuition and room & board (I lived in the dorms all 4 years). I was lucky. If I do have children, I hope that I will be able to pay for their college education also.

    Since you already have a 529 set-up, have you ever thought about the Upromise program. I don’t know much about it, but it’s like earning credit card points toward their college education. Just a thought…

  • gus

    I stumbled on your site and enjoy your work. I am currently in school now and I cannot believe the astronomical costs of higher education. My parents are divorced and don’t have much money
    themselves and I could never even think asking them to fund my education even if they had the money. With that being said, I do take on the brunt of the expenses myself. After accruing more than $15,000 of debt my freshmen year at a private institution I realized that is not acceptable even with the substantial amount aid I received. It forced me to get in the financial aid office and look for ways to pay for it all. After two monthes of hard work in and out of the classroom ( I spent about 15 hours a week with a very helpful staff) I was able to get my sophomore year fully covered. As a junior now, it is a snap to get the proper funds to cover all my education.

    I think that you are doing your kids a favor by not paying for their education. The experience and skills they develop by having to work their way through college are invaluable. Rather than sitting around in a dorm drinking cheap vodka and chasing tail, they are developing as a person; learning how they world works.

    It is difficult at times, sometimes I do wish I had a nice little fund to tap into when money gets a little thin. It can be hard to find personal time when you are balancing a 23 credit course load ( math and bio majors), a girlfriend, jobs (I know plural which sucks) and family. Vacations have to be well utilized to remain sane, but It can be done. In the end it is worth it. I find that the most capable of my peers are the ones that also have pay their way through as well. They have the efficient study habits, time management, and people skills that will ensure their success in the future.

  • http://www.bripblap.com Steve (Brip Blap)

    @gus: Thanks very much for the compliment! I think that’s a great story, simply because you’re challenging what has become the thinking in America: that college is a right. I think people who work in college and pay their tuition themselves tend to be serious students, and start developing the time management and discipline that are going to help them succeed after college. Everyone wants their kids to get ahead, but making them feel like college is just high school with dorms is not going to make them grow. Learning how to manage your money and your time are just as important (or maybe more important) than the actual learning you do in class.

    I wish you the best of luck – but it doesn’t sound like you’re going to need luck!

  • Elizabeth

    Steve,

    As with so many other subjects, educating children is a topic on which I have strong opinions. Personally, I feel it is my moral imperative to send my children to college. A free ride? No. A good start in life? Yes.

    My husband sent all three of his adult children to college, full ride, for their under-graduate degrees. All three went on to earn advanced degrees on their own — one son has his PhD, another son a Master’s, and the daughter, who earned a double major, went on to earn two Master’s degrees. He was clear with them — they could go to anywhere they wanted to … as long as it was an in-state public school. Each one graduated without any student loans and all were given the used car they’d been driving to boot. I admire and respect my husband’s dedication to his children. To me, he has his priorities in order. The valuation of education is something he learned from his parents — both of whom came from humble beginnings and worked hard to better themselves. My FIL did not provide a college education for his son — he was very young and was still trying to put himself through college when my husband graduated from high school a year early. My husband tried college, couldn’t afford it, joined the Army, served his time, and finally went to school on the GI bill.

    My own father, in contrast, didn’t even stick around to raise us, much less see to our educations. I do not have a degree — many, many credit under my belt and I paid for every single penny of them but no degree. Someday I’d love to go back to school. But not until my own children’s college educations are provided for. I had my chance, now it’s their turn.

    What I really wanted to say, though, is how surprised and pleased I was to read of your interest in Waldorf education. My connections to Waldorf Ed go way back to my youth. My two younger siblings attended a Waldorf school for several years and now my daughter attends a Waldorf high school. I homeschooled both of my children using strongly Waldorf-inspired methods/ideals. The quality of education my daughter is receiving in high school far exceeds anything we could have hoped for in the local public high school.

    If our economic situation remains stable, my children will mostly not qualify for any type of financial aid but I have high hopes that there will be scholarships available to them. It is our full intention to pay the balance as well as living expenses and books.

    I can think of no more lasting or loving gift to my children than to have raised them in a loving and nourishing environment and then to send them out into the world with an undergraduate degree, no debts, and a dependable used car.

  • Greg

    Brip Blap I agree with this. Don’t pay for your kids college. I think a lot of the respect for academics and life in general is drained with a free ride. I am doing it all myself, I took a year off so I could. And yeah probably not going to get out of Alaska like how I wantcause it is too expensive, but least I can proudly say to my children that I believe that anything can be created by your own hands, and tell them how I paid for college.It builds character! ; )-Greg

  • http://www.paidtwice.com paidtwice

    Ahhhhhhhhhhhhhrgh.

    Someday I will write a rebuttal of my own to this whole idea. :)

    Thanks for being a great kid! Start adulthood with tens of thousands in debt, I did it, it builds character, having that hang over you the next 15-20 years. ;)

    Financial aid programs look at the income of the parents not the child when deciding on aid. The fact you make a lot handicaps your child in the world of financial aid. Sure, I got tons of need-based academic scholarships. I can send my kids to Stanford now for free if they got in. But you can’t ;)

  • David Schiffhauer

    I respect your decision regarding your children’s education. However, there are many flaws in it. I can see that you grew up from a family of strict rules and obviously you had to pay for your own college. So your answer is biased already. I think you need to have balance in your life. College is supposed to be fun, filled with sex, partying, studying and roadtrips. It is a change to be yourself and have fun. For instance, my father he did a similar thing you did and paid for all of his education grew up miserably and now hates his life. He wished he had a funner life that was more well rounded. My mom on the other hand had her parents pay for her college and she got a side job in the summer. But it is very important to have fun because that builds a lot more character. Going to college and working 20 hours a week while trying to handle a course load is unrealistic. I do not know what century you go to college but I am at Cornell and that is not even possible. You have to realize schools are much more competitive than they used to be and it is becoming harder and harder to maintain a certain GPA. Also where you graduate from college is a big determining factor of where you will end up in life. In law school if you are positioned among the Ivies you are guaranteed a salary sometimes 10 times as great say if you went to a state school. Your right maybe when you went to college 20-30 years ago this did not matter but it matters where you go to college now and this determines your salary. Most of the presidents went to ivy leagues. You should pay for your children’s education because karma will catch up to you. You are not teaching them any lesson except live a stressful anti-social life.

  • David Schiffhauer

    also you said about scholarships. Unless your children at the top 5% of their high school and have SAT scores in the mid 2000 range while manging sports and clubs then that is out of the question. Your ideas are valid if we were living 30 years ago. You are living in a different century. Scholarships are almost impossible now. Financial aid is only applicable to minorities and families that make under 20,000.00. Wake up to reality!! You need to seek guidance not from people on a forum and not from beliefs you had decades ago but something that is realistic that will help your child succeed. Not helping your child for their education is selfish. I know many parents who live on the poverty line and spend all of their money sending their child to college. Just because you grew up like that does not mean your children do to. And another thing about character. Life builds character. Getting a minimum paid job does not!

  • http://www.bripblap.com Steve (Brip Blap)

    @David: I understand where you are coming from, but I didn’t come from a strict family at all. I came from a family that valued independence and put a premium on my studying while in high school. I was encouraged to be active socially in high school, join clubs, make good grades and participate in extra curriculars. I got full tuition scholarships to every school I applied to (yes, even Ivy League schools). I have a young relative who is applying to university now, and she is having the same experience.

    I had a great time in college. I chose a less-expensive school to attend, had good scholarships and joined a fraternity and played varsity sports, as well. I graduated with honors, and I have never regretted attending a public school on full scholarships rather than mortgaging my future (either through a miserable college experience or massive student loans) to attend an Ivy – nor would I think that advice would change.

    I would certainly agree with you that nobody should take their advice from an online forum or blog or anything like that! I’m just trying to start thought processes. You have to make your own decisions about life.

  • Amber

    I agree with you about college. The issue you raise seems to be to be more about whether money set aside for college is the right place to put that money, or whether it should be put somewhere else (like a retirement fund). Based on my personal experience in the last few years, I think you are totally correct that kids should take some responsibility for their education (and this “maybe it was like 30 years ago” comments are BS).

    I am the oldest of 3, and I always knew that (1) I was expected to go to college and (2) I was expected to earn scholarship money if I wanted to go to a non-state school and that (3) My parents would help me out with living expenses if needed. I chose a private school (graduating in 2003), and had full tuition paid with a partial Air Force ROTC scholarship and partial Leadership scholarship at the school. My parents paid most of my housing expenses, and I had a part time campus job to pay for the extras. My parents moved to Georgia when my sister was nearing HS graduation… so she could go to college totally free (all high schoolers with B average can go on hope scholarship to state school). My younger brother followed the same route as me (private school and ROTC scholarship), graduating in 2006 and is now in dental school.

    I do think it is fair to expect your children to “earn” all or part of their college tuition (through scholarships, loans, jobs, etc). However, I think it is also important to be willing to help them out with money to make up the difference. I had a friend in college who had a very wealthy father who wanted him to “learn to be tough” and pay for college himself. As mentioned before, the financial aid is contingent on the parent’s salary, so this dad who refused to have anything to do with paying for college penalized his son. This created all sorts of bitterness between them, which still exists to this day. The friend got himself through Physical Therapy school, but is now saddled with huge debts and lots of anger.

    I don’t think parents can really say “you are expected to go to college” and then say, even though I’ve supported you for the past 18 years, you’re totally on your own for college. That doesn’t seem to backup the assertation that college is important. So I think its a balance.

    Anyway. Just some thoughts.

    • http://www.bripblap.com Steve (Brip Blap)

      @Amber: I doubt very much that I’m going to leave my kids completely high and dry for college costs. As you mention, I’ll probably contribute something. I don’t think that I’ll send them into college saying “I’ve supported you for 18 years – whoops! no more!” It’s not going to be a surprise. I will simply say that I don’t see much advantage in their mother and me bankrupting ourselves to send them to school; if they want a private school education they’ll have to do what you mentioned and take care of tuition. If they need help with rent, books, etc., sure. If they want me to pay for Private College X when they have a full ride ready to Public University Y – I’m not prepared to make that leap. I don’t see that as something I need to provide them – and in fact, if I prepare myself adequately for retirement so they never need to support ME that will be a big gift to them, too.

      I think we’re on the same page – thanks for sharing your story that shows that people can take responsibility and pay for their own education if it’s what THEY want and value, not just something their parents hand them!

  • Victor

    Hi,
    Just came across your website, enjoy reading it. I have been kind of wrestling with this question myself. I have two sons, with my oldest one, even though things were tough, we managed to put away some money for his college education. He’s been out of high school for a year, he’s gone through 4K of money ( going to a JC) and has’nt accomplished anything!!. He drops out of classes etc. At this point, I am starting to feel like he does’nt appreciate this money at all. My wife says that he will come around, but, I am not so sure. We also have a 529 for my younger son, and honestly with the way things are going in this economy. I sometimes wonder if the money would not be better spent either pre-paying our mortgage, or contributing to a Roth IRA.. Is anyone else out there having to make decisions like this, if so, I would like to know some of the pros and cons of each alternative.

  • Slinky

    The irony of this whole argument, is that the kids that will benefit most from working their way through college, are the ones least likely to have to. The ones who would appreciate the free ride the most are the ones least likely to get one.

    As someone who just graduated college two months ago, I feel the need to make a few points.

    To the side that believes in free rides:

    First: college is not for “finding out who you are”, “having fun”, partying or any of those other things. Do that and then go to college. You’ll save yourself a lot of money. College is for getting a degree. It’s a privilege, not a right.

    Second: working 20 hours a week and carrying a full course load being unrealistic? Huh, I’m pretty sure I did exactly that. I graduated with a 3.7 gpa and about 15k in student debt. None of the debt was for living expenses, just tuition. I would have owed less if I had been more focused on getting my degree in the beginning. My last year of school I didn’t work at all because I had saved enough that I didn’t need to.

    Third: Ivy league only matters in certain careers (law, politics, etc). I went to a state school and I’m making damn good money for my area straight out of college. Experience = money, not Ivy league. And anyway, if you’re making so much more, you can afford a few more loans, right?

    And to the other side

    If you’re well off and can contribute….
    Have you heard of the EFC? Expected Family Contribution? It’d be really nice if you’d all kick that in. That pretty much levels the playing field. Depending on how well off you are, it can make it significantly more difficult to go to school. If I ever become very wealthy (and I plan to) I shall create a grant that kicks in the EFC for students that are putting themselves through school on their own.

    If you’re not wealthy…..
    Let your kid live at home if he wants (and goes to a local). It doesn’t cost you nearly as much to support them as it would for them to live elsewhere. Also nothing wrong with ‘renting’ their room and having them help with groceries if money is really tight. It’s still a better deal for them.

    All that said, I started a 529 plan for my nephew. At the rate his mother spends money, I doubt they’ll have the cash to help him out at all. I contribute some money each time there is a gift giving occasion for him. It’s a gift for him from his sensible aunt. His grandmother (my mother) also contributes when she can.

  • Slinky

    Oh, and let’s not forget how great of a resume you’ll have by the time you graduate. Especially if you do a coop or internships in your field.

  • chris

    I had students loans and worked like heck after college to pay them off quickly. Since coming to Southern California, I am struck by how many kids I have heard say (I teach high school), “I can't afford to go to college, I have no money,” or, ” I can't go to college, no one is going to pay for me.” WHAT?????? Are they kidding? Take out a freakin' loan if you want to go! We don't have a 529 for our kids. I am saving a lot of money, but for our retirement, not for their college. My husband got into a good trade union and makes more money than I will ever make. College isn't necessary, if you find the right path. I have a master's degree and 19 years experience and with the economy in So Cal, I can't get a job – they can hire two people for what they would have to pay me.

  • Glenn Tiede

    I'm a college educator (professor of astronomy) and I agree with you completely. I work with students everyday, and the ones that are putting themselves through school are all around better students then the ones who are getting a “free ride” from Mom and Dad. They are better motivated, self-starters, more likely to ask questions and seek help outside of class, etc. Of course there are exceptions in both groups, but this is the general pattern I have found.

    I put my self through college, and now that I am on the other side of the lectern, I think it was one of the best gifts my parents ever gave me.

  • http://firstgenerationwhitecollar.com/blog/ moneymonk

    College or not, I will try to support them. However, the days of go to school, get a good job, and work for 30 yrs are over.

    The Entrepreneur route id more effective, however school does not hurt.

    It more important to teach my kids about money, credt and investing more than go to college

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  • car loan modification

    If we consider that tuition, fees, etc. increase at the same rate going forward (no sure thing) then a private school tuition for four years will be $42,000 in today’s dollars by the time my son is in college, around the year 2024. ———— what's the basis of this prediction?

  • kitchen aid part

    getting education in college is always cost a big money.we as parent of children should think smartly to pay the fee.

  • Jes

    I understand everything that you said, and agree on your major points. College IS very expensive and, more than likely, its only going to get worse. And parents should do whatever necessary to help instill the love of learning in their children as early as possible, which will only help pay for college in the long run.
    However, i do strongly disagree with the statement you made about “hopefully never being a burden to him” in your conclusion. Paying for your childs education at any level, should never feel like a burden. When the financial websites list their “key areas”, one of them will always be “making investments”. When you pay for your childs education, you are MAKING AN INVESTMENT IN YOUR CHILD to help them in creating a better future for themselves.

  • moored55

    I have twin girls just entering college. I am supplying a set amount toward college a year. The way I calculate it if they go to a junior college, away from home with all the attendant expenses, for the first two years and then to a state school the next two years, and work 50 hours a week summers, and work 8 hours a week the rest of the year, they should graduate without debt. I will supply a dependable used car. So upon graduation they should each have a decent car, a decent degree, and no debt. Sounds just like my experience, and it worked out for me pretty well. It's also fair, permits them to have a good start if they work hard, and limits my exposure. I'll do something like this for weddings, etc going forward.

  • j.

    I hate to say this, but I have been out of undergraduate school for almost fifteen years and whenever I interview for a job, the first question asked is: “Where did you go to school?” Granted, I am in education, but I know first hand institutions care deeply about the quality of one's education, and sadly that fact does correlate to the college one attends. I know it is not, in truth, as simple as this, but it is still the marker many employers use. I cannot stress this enough: go to the best school you can. It will open doors!

  • j.

    I hate to say this, but I have been out of undergraduate school for almost fifteen years and whenever I interview for a job, the first question asked is: “Where did you go to school?” Granted, I am in education, but I know first hand institutions care deeply about the quality of one's education, and sadly that fact does correlate to the college one attends. I know it is not, in truth, as simple as this, but it is still the marker many employers use. I cannot stress this enough: go to the best school you can. It will open doors!