The Pros and Cons: Should Parents Help Their Children Pay for College?

From baby’s first gurgle or giggle, parents begin to dream of their child’s future and try to figure out how to handle the associated costs of parenthood. Some parents immediately dive into saving for their child’s education. Other parents may not start thinking about saving for college until their child gets older and they begin becoming aware of the cost of college.

Those parents in favor of helping pay for their child’s education believe by providing financial assistance, they are:

• Increasing the child’s chances of graduating. There is truth to this argument. In fact, 60 percent of students who enter college and do not finish cite the stress of having to balance work and classes as the main reason for dropping out. Easing that stress can help the child complete a degree and become financially independent.
  
  
• Reducing the child’s debt. Parents want success for their children, and helping them start their adult lives with as little debt as possible will help. Yet, 71 percent of today’s college students leave school with some amount of debt. Whatever a parent can do to help reduce the amount of debt that a student assumes will give the student more disposable income upon entering the workforce after graduation, easing the transition to adulthood.

Other parents may believe their financial responsibility stops once their student heads to college with thoughts such as:

• Money should be used to enrich the student’s childhood. It is certainly true that saving money toward college equates to having less money in hand while the child is younger. Some parents may believe it’s more important to use money to provide extracurricular options and personal experiences for their children during their early years.
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  The student will earn scholarships. A student who anticipates needing to help pay for college may certainly be more apt to put in the time and effort to obtain scholarships. However, while many parents dream of a child getting college scholarships based on academic, athletic, or other talents, not every child will. It is always good to encourage a student to apply, but not bank on receiving scholarships. If scholarships are offered, they certainly can help and both the parent and student will be glad to have extra resources to help pay college expenses
  
  
• Students will better appreciate their education. Some parents believe their children will be more likely to take school seriously and work harder at their studies if the child takes on the responsibility of paying for college. Having to find resources to help cover costs, they think demonstrates that the child understands the importance of obtaining a degree, rather than simply going to college because the parents say so.

So, where do you stand on whether parents should help a child pay for college? There are good arguments on both sides and the answer comes down to the word “help.” Students are most successful, during both high school and college years, when they think of paying for college as a joint effort of student and parent that can inspire personal and fiscal responsibility, while not hindering the student’s ability to excel in school.

Few families are able to cover the entire cost of college on their own. Most expect college to be a shared expense – of the student, the family, and possibly the federal and state government, colleges and universities, and community organizations. There are a number of ways to help pay for college – family savings and income, part-time jobs, scholarships, grants, and loans. In the senior year of high school, completing the Free Application for Federal Student Aid (FAFSA) may find the student qualifies for financial assistance, some of which may not need to be paid back.

By saving for a child’s college, parents still have the flexibility to weigh their options or change their minds down the road. Then, if they still decide not to help the child pay for college when the time comes, the money can become available for other purposes. But, if they’ve realized how much their savings may assist their child, they’ll be glad to have money put away for college.

So, give yourself and your child a choice. Open an NC 529 account early. Enrollment is easy with no enrollment fee and contributions as low as $25 – scheduled when and how you want them, occasionally or regularly, by check, automatic draft, electronic funds transfer, or other methods. Contact us at CFNC.org/Save or toll-free at 800.600.3453 if you have questions.