Stock investing for dummies – Should Parents Help Pay for Their Children’s College Education?

Stock investing for dummies

stock-investing-for-dummies As a kid you think that your parents have been socking money away for your future college education. Then you grow up. And chances are that magical fund that you thought existed, doesn’t.

When you head off to college you really aren’t worried about things like student loans. You don’t even grasp what debt can really do to you. You just go with the flow and take out as much as money as you can in order to pay for school. In fact, it’s incredibly easy to get a student loan you might not even think much of it.

After a couple years you smarten up and realize how much debt you’re now buried in. And you wish your parents would have helped you cover the cost of your education. Or, do you?

Reasons Parents Should Help Pay For College

The average student loan debt for the class of 2016 was $37,172. And that’s just the average. Many students have found themselves buried in a much, much larger amount of debt. As a result, the average net worth of millennials is negative!

As a parent, the thought of my daughters starting their young adult lives out with that much debt is scary. I want to do everything I can to help!

Here’s why parents should help their college aged students financially:

  • So kids don’t have to start their adult life’s making monthly payments
  • Students can focus on education therefore improving their GPA instead of working full time
  • Students can complete college quicker when they aren’t working full time

Just as there are advantages, there are also disadvantages to parents paying for their children’s educations. And each parent has to make their own decision when it comes to paying for college.

Reasons Parents Shouldn’t Help Pay For College

I’ve got to admit I’ve always felt that kids should bear the burden of paying for their own education, until I had kids, that is. However, financially, it typically does make the most sense for students to pay for their education (not parents).

While student loan debt is a burden, at least students can get loans. As a parent, you can’t get a loan for retirement – so if you blow all your savings (or even worse, take out Parent PLUS loans), you could be struggling to retire. You could even become the financial burden on your children you were trying to avoid.

Furthermore, I’ve seen so many friends and family members change majors three or four different times, take a minimal amount of courses each semester, and act so self-entitled when their parents pay for their education.

Then I talk to someone or read a story of student who’s paid her own way through college, excelled academically, and come out on top. And I think that’s the way to go.

Here are some reasons parents shouldn’t help pay for college:

  • Students learn more responsibility and gain more real life skills
  • Students remain more focused on education rather than party life
  • Students learn the value of money and are therefore more prepared when they hit the “real world”

And I think if a student’s willing to put in the work she can find creative ways to help minimize the amount of student debt she needs to take out.

Meeting In The Middle

There are huge advantages to both helping pay for a student’s education and letting college students fend for themselves. Perhaps, the better solution is to meet somewhere in the middle. We’re huge advocates of financial balance with pretty much every financial decision. This decision doesn’t have to be “either/or”. It can be “and” – meaning that you can help pay for some college (maybe a set amount each year), and the student pays the rest. There’s no one size fits all here.

But by teaching children money management at a young age, parents can prepare their children to make smart decisions – like only taking out student loans for education rather than financing their lifestyle. And parents can still pitch in to cover the cost of education and leave a smaller portion for their college aged kids to pay.

It’s important to remember though: if parents don’t have the capabilities to help their children financially, they shouldn’t. But parents should have open and honest discussions with their student early on, so that there are clear expectations come senior year of high school.

What Do You Think?

I’ve always steered in the direction that it was best that parent’s do not help pay their children’s education. I’ve had to take care of myself starting at a pretty young age and I think I’m a better person because of that.

At the same time, I now have two young children. I want them to succeed. I want them to get an education and I don’t want them to start their young adult lives buried in debt. Which is why I’m thinking meeting in the middle is a better choice.

What do you think? Should parents pay for their children’s college educations?


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