Apr 6, 2010
Paying for Your Children's College (Carole)
This family had 6 children. They were not wealthy by any means, but every one of their children received a bachelor's degree, without taking out student loans. The basic concepts were:
1. Children are expected to attend a university or community college that has a reasonable yearly tuition (meaning, your student can earn enough money during a summer to completely pay for the following year's tuition)
2. Children are expected to pay their own tuition and books for the full four years
3. Parents will pay for room and board (either dorm or off-campus housing) through all four years of school
This wonderful family did not broadcast this plan, but as we interacted with the parents and their children over a 10 year period of time, it became obvious that this was what they were doing. And it WORKED.
And so did those kids. :) From the time they were 15 or 16, these kids had jobs. They babysat, worked at local businesses, and even had their own family-run summer business. Most of this money was saved for their future college educations. When these kids left for college as freshmen, they had considerable amounts of money in their bank accounts, which meant that even before they moved into the dorms, they had earned some serious financial experience and education. It was amazing to chat with these young college students when they came home for a visit, because they knew EXACTLY how much each college credit was costing them and they knew how much they needed to save each summer to pay for the next year's tuition (to replenish their savings accounts and keep a comfortable money buffer a.k.a. Emergency Fund). In addition, they were highly motivated to get and keep scholarships since this could save them a whole ton of money each semester. And lastly, they kept on track. They didn't want to spend one more semester than was necessary to get that college diploma!
Talk about teaching your children some life skills!! Like I said, each of them are college graduates -- and at least a couple have graduate degrees.
College should be a FIRST STEP into adulthood for your children -- Controlled Freedom is what I like to call it. To have parents pay for everything (tuition and room and board), in my opinion, delays your children learning some valuable financial lessons of adult life and prolongs the free-ride high school mentality -- hardly preparing your children for real life after college. On the other hand, to expect your children to get a college education with no financial help (or very little) from you the parent, is just asking for them to drop out or take on oppressive student loans. This is too much financial responsibility to ask of a teenager who has just left high school. And, I personally think it is a bad idea to accrue student loans for just a bachelor's degree. Graduate degrees, however, are a different financial animal.
We followed this simple program with our children. Both Janssen and Merrick received their bachelor's degrees this way (I must mention here that when J and M each got married while still in undergraduate school, we no longer paid for their housing or food -- I'm very proud of them and their exceptional husbands that they still finished their degrees without any debt, completely independent of our financial help) and daughter #3 is a senior in college (unmarried) following the same plan. Child #4 knows already, at age 14, that this is what's ahead. He's already saving money!
What a relief to us as parents to not have to save $60,000+ for each child's college education. This simple plan allowed us to have a solid strategy for our children's educational futures, but to also take care of the other important family financial needs as they were growing up -- like paying off the house, saving for retirement and many great family vacations.
What a blessing to have inspiring and really smart friends to show you the way!