Should You Pay For Your Children’s College Education?

Should you pay for your children’s college education?

By Scott Dawson, MS, CFP®

The question that many parents grapple with is whether they should pay for their children’s college education. The answer is not clear cut. Many parents feel it’s an obligation and will sacrifice their own retirement security. If you have looked into college expenses, public universities cost about $30,000 year and private universities about $60,000 including room and board. The cost of one year of public university is more than my first year salary out of college. Ouch!

Here’s my college story and maybe it will have you consider other options than picking up the entire bill for your child’s education.

I was the oldest child in my family and the first to go to college. When I was exploring colleges, my parents told me that they couldn’t afford to pay for four years of college for my brother, sister, and me. Their offer was to pay for my tuition and books at a public university or junior college. The cost of room and board would be at my expense, or if I wanted to live at home I could live room and board free. It was an appealing offer since I had worked since the age of 14 and knew the value of a dollar. Up to that point, the most I had ever made in a year was a few thousand dollars. At the time I was applying for college, tuition and books were about $500 a year at the local junior college and $2,000 at public universities. The cost of room and board was estimated at $10,000 year. The cost of room and board was multiple times more than I had earned in an entire year. I knew that paying for this from part-time employment would be challenging.

Also, I was raised to avoid debt and I knew that if I wanted to live on campus that I would have to incur debt, which didn’t make me feel comfortable. On the other side, after growing up in the Bay Area, I did like the idea of going to school in San Diego, living on the beach, and surfing daily. For those who don’t know me, one of my passions was surfing. I started surfing when I was 12 and had been getting rides to local San Francisco beaches and eventually driving myself when I received my license once I turned 16.

The choice my parents allowed me to decide was clear: was going to school in San Diego vs staying local worth the expense of taking a student loan? It was a major decision for a 17 year old to make but a valuable one. The choice was all mine and I was forced to explore my values. I had to think about all alternatives. Was an education in San Diego vs San Francisco area worth the extra cost to me? I had lots of friends in the area. I got along very well with my parents and siblings. My existing good life as I experienced it would continue. I had a good life and I had no desire to leave the home except for the lifestyle I thought I wanted to lead on the sunny beach in San Diego. Was the appeal to pack up and start new with a new experiences and friends worth the trade-offs that I had to make?

I finally concluded to stay local and bypass San Diego. I attended the local junior college for two years, even though I was accepted to multiple universities, and transferred to San Francisco State University a couple years later. I lived with my parents during my college years and enjoyed it. I continued to surf with my friends. As I think about it in hindsight, the decision was a win-win for everyone. My parents paid about $6,000 for my undergraduate degree, which was a bargain, and experienced another 4 years of time with me. I graduated from college debt free and since I worked while in college, my net worth actually increased. As I read about the student loan debt saddling recent college graduates, I value my choice even more.