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The question of whether parents should pay for their children’s college education is complex and multifaceted. It involves not only financial issues (namely, can you afford to?) but also ethical and personal considerations. While many parents aspire to pay 100% of their children’s college expenses to allow them to graduate debt-free, others feel that it’s important for kids to have some skin in the game.
If you’re weighing this issue, you’ll want to consider both the reasons for and against paying for your kid’s college education. Here’s a closer look at both sides of the argument.
Key Points
• Whether parents should pay for college depends on their financial situation and personal values.
• Parental support can give students a head start on their professional and financial goals.
• Student financial contributions can build a sense of responsibility and financial accountability.
• Paying for a child’s college education may risk parents’ retirement and financial security.
• College financing options include savings, grants, scholarships, part-time jobs, and loans.
Why Parents Pay for College
Some parents feel it’s their duty to cover the cost of their child’s college education. Here’s a look at some arguments in support of that viewpoint.
Giving Your Child a Head Start
The average student borrows over $30,000 to pursue a bachelor’s degree, according to the Education Data Initiative. That’s no small sum. Students who graduate debt-free generally have a leg-up on achieving their professional and financial goals. They can consider taking a job based on their career aspirations, rather than the one that pays the most. They also have the freedom to put all of their financial resources into other goals, such as building an emergency fund or buying a home.
Helping Your Child Stay in School
When you send your child off to college, you likely expect them to emerge with a bachelor’s degree. But the national college graduation rate is only around 61%. Among those who leave school, a significant number cite financial reasons for their decision. Taking the college bill off your child’s plate may help them stick to the program.
Allowing Your Child to Focus
Getting a job can help your student cover some of their tuition costs, but if they have to work too many hours, it can make it difficult for them to focus on their studies. Paying for their education may give them a better chance of getting good grades and possibly qualifying for academic scholarships. They might even be able to take on a bigger course load every semester and graduate early.
💡 Quick Tip: Fund your education with a low-rate, no-fee SoFi private student loan that covers all school-certified costs
Why Parents Don’t Pay for College
While many parents believe they should pay for college, others feel that students should be responsible for investing in their own education. Here’s a look at some reasons why some parents decide not to pay for college.
It Could Threaten Your Retirement
If you can afford to save for a healthy retirement and pay for college, you’re in good shape. But if you feel like you have to choose between the two, paying for college and not saving for retirement could force you to work longer or leave the workforce with less money than you might need.
It Builds Responsibility and Accountability
Having your child contribute to their education through part-time jobs and loans can help foster a sense of responsibility and ownership. They may value their education all the more — and work as hard as they can — knowing how much this opportunity costs.
It’s a Good Teaching Moment
Helping your child figure out their college financing and teaching them good financial habits now can help them continue those habits after they graduate. If you cover everything for them, they may have a difficult time transitioning to life after college and may end up coming back to you for help.
How Parents Paying for College Can Get Financing
If you’re interested in footing some or all of the bill for your child’s college education, you have a few different funding options. Here are some to consider.
Savings
One way to help students pay for college is to put some money aside each month in a 529 plan. Even if your child is already in high school, you can still open a 529 plan and take advantage of the federal (and sometimes state) tax benefits. Money in a 529 account grows tax-deferred and withdrawals are tax-free when used for eligible educational expenses. Any amount saved for college can reduce your child’s future student loan debt.
Parent PLUS Loans
The U.S. Department of Education offers PLUS Loans for parents that you can qualify for as long as you don’t have an adverse credit history. Parent PLUS Loans give you access to certain benefits, including the option to defer repayment while your child is enrolled at least half-time and for an additional six months after your child graduates. However, these loans also charge relatively high interest rates and upfront loan fees.
Recommended: Should You or Your Child Take Out a Loan for College?
Private Student Loans
If you have excellent credit and a strong, steady income (and your child doesn’t get enough federal aid), you may want to explore getting a student loan for parents with a private lender. Typically, you can get prequalified with a soft credit check with many lenders online to see what rate you qualify for and compare it to other lenders and Parent PLUS Loan options.
💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.
Financing Options for Your Child
If you’ve decided that you can’t or don’t want to fully pay for your child’s college education, here are some ways that your child can get the funding they need.
Grants and Scholarships
By completing the Free Application for Federal Student Aid (FAFSA®), your child will automatically be considered for many federal, state, and institutional grants and scholarships. Scholarships are also available through private organizations and companies. To apply for these, your student will likely need to fill out a separate application for each one. To find more “free money” for school, your student may want to use an online scholarship search tool.
Part-Time Job
One good way to pay for school, especially if your child has a full or partial scholarship lined up, is to work part-time while in school. This can help pay for living expenses, books, or possibly even tuition. Working full-time during the summers can help to pay for the next year’s worth of expenses.
Student Loans
College students have a choice between federal and private student loans. In general, federal loans are better-suited for undergraduate students because they don’t require a credit check, have relatively low-interest rates, and offer access to income-driven repayment and loan forgiveness programs. Your child can apply for federal student loans by completing the FAFSA.
If federal student loans and other aid isn’t enough to cover your child’s full cost of attendance, however, private student loans may be another option. Just keep in mind that you may need to cosign the loan application to help them get approved.
The Takeaway
The question of whether parents should pay for college is a personal one with valid arguments on both sides. Ultimately, the decision depends on your individual financial situation, retirement goals, and philosophical beliefs about your child’s responsibility.
Many parents choose to contribute to give their child a head start and allow them to focus on their studies, while others prioritize their own financial security and believe it’s important for their child to have “skin in the game.” There are various financing options available for both parents and students to help cover college costs, so it’s important to explore all avenues and create a plan that works best for your family.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
FAQ
Are parents supposed to pay for college?
There’s no universal “yes” or “no” answer to this question. Whether parents pay for college depends on many factors, including their financial situation, retirement goals, the child’s academic performance, and personal beliefs about financial responsibility. Some parents feel a strong obligation to cover college costs to help their children avoid debt and focus on studies, while others believe contributing to education builds responsibility.
Do parents who make $120,000 still qualify for FAFSA?
Yes, parents making $120,000 may still qualify for financial aid, as there is no income cutoff for the FAFSA®. Financial aid eligibility is based on the Student Aid Index (SAI), which takes into account a variety of factors beyond just income, such as family size and assets. While a higher income can make it harder to get need-based aid, a student can still qualify for federal student loans and merit-based programs. Completing the FAFSA is always recommended to explore all available financial aid options. federal
Is it worth paying off your child’s student loan?
Paying off your child’s student loan can be worthwhile if you’re financially secure and it won’t impact your retirement or emergency savings. It can relieve your child’s financial stress and help them build a stronger financial future. However, if it strains your budget and limits your ability to meet personal goals, it may be better to offer partial help — like contributing to monthly payments — rather than paying off the entire balance.
How does a middle class family pay for college?
Middle-class families often combine several strategies to pay for college. These include applying for federal and state financial aid by completing the FAFSA®, seeking out scholarships and grants based on academic merit, talents, or specific backgrounds, utilizing 529 college savings plans, and having students work part-time jobs. Many also consider federal student loans, and sometimes private student loans, to cover remaining costs. It’s often a blend of savings, financial aid, and loans that makes college affordable.
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