The rising cost of college has left many families grappling with the question: Who should pay for college—kids or parents? With college tuition inflation averaging over 4% annually and overall costs increasing by nearly 750% since 1963, the financial burden is significant. While there is no one-size-fits-all answer, there are compelling arguments on both sides. Let’s explore the various perspectives on this critical issue and discuss ways families can navigate this challenging financial decision.
The Cost of College
Before deciding who should pay for college, understanding the cost is crucial. Higher education has become very expensive. According to the Education Data Initiative, college costs an average of $35,551 annually. This includes books, supplies, and living expenses. However, the average costs vary based on the type of institution. For example, a two-year public in-state college averages $3,862 annually. On the other hand, a four-year private non-profit institution can cost up to $37,641 per year.
Many families cannot afford to pay these costs out of pocket. As a result, they have two primary options. The first option is student loans. The second is financial support from parents. Both options come with their own set of challenges. But who should ultimately foot the bill?
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Children Should Pay for Their Own College
Many parents, particularly in Western society, feel that funding their child’s college education is not their responsibility. A recent Discover Student Loans survey revealed a slight decline in parents planning to help with college costs, dropping from 81% in 2013 to 77% this year. Additionally, nearly one-third of parents now believe their child should cover most of the expenses, a small increase from 2012.
Some parents do not have the means to pay for the college tuition, some worry it could jeopardize their financial stability. Different types of retirement accounts like 401k plan are at risk, along with the possibility of additional debt. Therefore, some parents argue that students should cover their own education costs especially after they turn 18. This way, students take financial responsibility for their future.
Experts who support this viewpoint believe students gain financial responsibility by covering college expenses. They argue that contributing to tuition teaches valuable life skills. As a result, students are more motivated to make cost-effective choices. These include attending community college or working part-time. Some even dabble in having side hustles or passive income.
Additionally, choosing a practical major becomes a priority for many students. Now, they have to save money allocated for college years before they start going there. Moreover, these people also have to learn how to save money while in college.
Some critics argue it’s unfair to expect parents to cover college costs. Doing so could harm their retirement plans. Sarah Tippett, editor at Homeschool Base, explains this concern clearly. “Your child might handle college debt, but caring for parents adds difficulty,” she says.
Tippett and other experts recommend that parents focus on saving for retirement. After all, students can borrow for college, but parents cannot borrow for retirement.
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Parents Should Pay for College
On the flip side, many parents feel obligated to contribute to their child’s education as a way of setting them up for success. A survey by loanDepot found that 63% of students expect their parents to help with tuition, while 61% of parents acknowledge feeling responsible for contributing to their children’s college expenses.
There are significant advantages to parental financial support. When students graduate debt-free, they have more freedom to pursue career opportunities based on passion rather than the need to pay off loans. They can also focus on long-term financial goals like buying a home or saving for retirement. Moreover, students who aren’t burdened by the financial stress of paying for college can dedicate more time to their studies, which may result in higher academic achievement and a quicker path to graduation.
Parents who pay for college often view it as an investment in their child’s future, giving them the opportunity to pursue better career options with a reduced financial burden.
Commonly in Eastern societies, parents see their children’s college as part of their responsibility. Some parents also see their children as an investment. By providing good education to their kids, these kids can get a better job with more financial security. In turn, these children can help their parents once they get older.
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The Reality: How Americans Pay for College
Despite the differing viewpoints, the reality for most American families is a blend of parental support and student loans. According to Sallie Mae’s 2019-2020 report, parental income and savings cover 44% of college costs, while an additional 8% comes from parental borrowing. Students contribute through scholarships, loans, and personal savings, but most families rely on a combination of sources to afford the high cost of higher education.
Notably, parents are not legally required to pay for their child’s education, except in cases where a divorce agreement stipulates such an obligation. State laws generally state that parents’ financial responsibility ends when the child turns 18, but societal expectations often push families to reevaluate this stance.
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The Middle Ground: Who Should Pay for College?
For many families, the answer to who should pay for college lies somewhere in between. A compromise where both parents and students contribute to college expenses can offer the best of both worlds. Students gain the financial education and responsibility that comes with contributing to their own future, while parents can provide support to ease the financial burden.
This shared approach might involve parents covering part of the tuition or room and board, while students take out loans or work part-time to contribute. By having both parties involved, students can still focus on academics while learning valuable financial lessons. Parents, in turn, can help their children avoid the crushing debt that often accompanies full student loan reliance.
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How to Plan for College Costs
Regardless of who pays for college, early planning is essential. Families should start discussing college costs well before senior year and explore a variety of options to make education more affordable. Here are some tips:
Scholarships and Grants
Encourage your child to research and apply for scholarships and grants. These forms of financial aid don’t need to be repaid and can significantly reduce the overall cost of college.
529 College Savings Plans
When paying for college, a 529 Plan allows parents to save for college tax-free. Even small, regular contributions can accumulate over time and provide a financial cushion when tuition bills arrive.
Choosing Affordable Schools
Students should consider starting their education at a community college before transferring to a four-year institution. Additionally, public in-state schools often provide a more affordable alternative to private universities.
FAFSA and Financial Aid
Filing the Free Application for Federal Student Aid (FAFSA) is a crucial step in determining eligibility for federal loans, grants, and other financial aid. Be sure to fill it out as early as possible to maximize your options.
Student Loans
Student loans are a common way to finance college, but managing multiple loans can be challenging. The loan application process involves determining eligibility and exploring options like federal or private loans. Consolidating student loans can simplify repayment by combining them into one monthly payment. Additionally, some borrowers may explore secured loans, which require collateral, as an option for more favorable interest rates.
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Conclusion
In the ongoing debate over whether kids or parents should pay for college, there is no single correct answer. Every family must evaluate their unique financial circumstances, retirement goals, and the long-term impact of student debt. Whether parents decide to fully cover the cost, share the expenses, or leave the responsibility to their student, the key lies in open communication and careful financial planning.
By collaborating, parents and students can make informed decisions that lead to a secure financial and academic future. For more expert insights and tips, subscribe to Financial Daily Update to stay informed and prepared.
