One of the questions I frequently get related to paying for college is should my kids pay part of the bill? There is no right or wrong answer to this question. My general advice to the parents is that whatever decision they make should be consistent with their family’s values and the other financial decisions they have made up to this point.
Here is a short list of some of the reasons to have the children pay part of all of the cost of college:
- It will help your children take more responsibility over the cost of education and not take it for granted.
- It will help foster an appreciation for the value of education as they will better understand the relationship between work and pay.
- It will help them understand the value of money and pick a school that provides a quality education at a reasonable price.
- Your child can borrow money for college, but you can’t borrow money for retirement.
Alternatively, having the parents pay for college has its advantages:
- School should be a full time job for the student and not having to work will let them focus on their school work.
- It will allow the student to graduate debt free and make starting their working lives easier.
- Education is important and financing the education is your responsibility as a parent.
The next questions are how to save for college (such as prepaid tuition plans, college savings plans, UGMA (Uniform Gift to Minors Act) accounts, using an IRA, etc.) and actually paying the bills (borrowing money, scholarships, grants, tax credits, etc.) once your child graduates from high school. These, however, are other stories for another day. Stay tunes and I will be posting more information here and on my website with more information soon.