The prospect of paying for college can be overwhelming, even for the most well-prepared students. Tuition costs continue to rise, even though parental and post-graduate incomes haven’t followed the same trend. So who should pay for college? Viewpoints vary as to whether students or their parents should be responsible.
Let's take a look at some common viewpoints.
VIEWPOINT 1: Parents should not be responsible to pay for college
Most parents want their children to be safe, successful, and financially sound. But does that require them to foot the full bill for their child’s college education — especially when paying for college often includes taking out loans? That debt burden can be a financial nightmare for parents who are trying to manage their own expenses while saving for retirement.
In these cases, some experts believe parents should say no to paying for college. These experts say that taking responsibility for funding their own education helps young adults learn how to be smart consumers. For example, when faced with the reality of the price of college, students can learn how to think creatively in order to afford their education. Deciding to pursue part of their program at a less-expensive community college, working part-time while taking classes at night, or choosing a more practical major can help. Plus, while a student can borrow money for school, his or her parent cannot borrow money for retirement.
Still, while one can argue there are benefits to students funding their own education, it often seems colleges expect parents to foot the bill for a college degree.
“The FAFSA takes into account parent income and, if a parent makes ‘enough,’ not only does the kid not qualify for grants, they also don’t qualify for federal loans,” says Sarah Tippett, editor of Homeschool Base, a volunteer-driven homeschooling resource, teaching, and news website. “The policy on federal loans is most upsetting, as federal loans often offer income-based repayment plans and options for forgiveness. Kids whose parents make ‘too much’ are stuck with private loans that can be brutal to pay off.”
Should parents be required by the government to pay for their child’s education? Tippett says no.
“First off, not every family could afford to pay,” she explains. “And, most importantly, not everyone needs to go to college or straight to college out of high school.”
Tippet advises parents to make saving for retirement their priority.
“Your child might be able to handle college debt, but debt plus taking care of parents is much more difficult,” she says.
VIEWPOINT 2: Parents should be responsible to pay for college
“We recently conducted a survey of home-owning parents and adult children, and we found that 61 percent of parents say their adult children expect them to help with tuition. We also learned that 63 percent of kids assume aid will come from their moms and dads,” says Ginny Walker of loanDepot®.
So, what are the advantages of mom and dad taking on all or part of their child’s college costs?
Some experts say doing so prevents young adults from starting their lives crippled by debt. Parental financial support can send a message about the importance of education and inspire a student to work harder. In addition, these experts suggest that paying for a child’s education is an investment in a child’s future — giving them a shot at better career options.
While these may be strong arguments for paying your child’s tuition, paying for a college education may be more realistic for parents who already have significant savings, particularly for retirement.
Who's really paying for college?
“Few of today's students can go to school full time, study enough hours to be academically successful and work enough hours — for enough income — to pay their own way,” says Marjorie Savage, author of You’re on Your Own But I’m Here if You Need Me, Mentoring Your Child During the College Years. “College costs have climbed faster than wages, and working part time simply doesn't provide enough income to pay for tuition, fees, and living expenses.”
So how, exactly, is America paying for college? The annual report by Sallie Mae® shows that parents are paying roughly half of college costs. For the 2019-2020 school year, parental income and savings covered 44% of students costs; another 8% came from parental borrowing. That compares to 25% of costs being paid through scholarships and grants, 13% from student loans, and 8% from student income and savings.
Are parents legally obligated to pay for college?
State law rules that the obligation to financially support your kids ends when the child turns 18. That means parents have no legal obligation to pay for their child’s college education — with one exception. If the parents are divorced and the divorce agreement includes paying college costs, one or both parents are legally obligated to pay for college.
What's a parent to do?
There’s much a parent can do to support their child’s college experience without digging into their wallet. Help them search for scholarships and fill out the FAFSA. Encourage your child to get a part-time job during high school and college. And, help them make smart financial choices during their college search.
Most importantly, start the conversation about college expenses early and have it often, says Jessica Velasco from JLV College Counseling.
“Financial aid is not created equal, and two colleges with identical costs could offer much different financial aid awards,” explains Velasco. “Therefore, as students and parents are going through the college search, financial fit is an important aspect to consider when adding colleges to the interest list. Research financial aid options at colleges by reviewing the financial aid pages as well as filling out the net price calculators to get a good idea about the amount of financial aid that may be offered if the student is admitted to the college.”
Finally, explore the option of taking out loans along with your student, as long as that’s manageable for you. And, together, look for tips to fill tuition gaps. There just may be more resources available for students and parents than you realize.