Expecting our first child has forced Travis and I to have some lively discussions on topics I maybe spent 10 minutes thinking about in the 30 years prior to getting married. I've previously written on our decisions regarding vaccinations, feeding our child meat (since I've been a vegetarian for nearly a decade) and blogging about our kids. Last week, I wrote about budgeting, and how we are planning on saving $30k per kid for college related expenses. Apparently, the decision on whether or not parents should foot the bill for college is a hotly debated topic. Go figure - another issue parents can argue over!
My college experience
When I graduated from high school in 2002 I had a 100% scholarship to any college in the state of Florida thanks to my ACT scores, gpa, and volunteer hours. I lost that scholarship by my second year thanks to staying out too late, and not taking college seriously.
I ended up dropping out of college before I even finished my Associates Degree. I spent a year partying, drinking 4-5 nights a week, gaining 50 pounds, and working for minimum wage at a combined video rental store/tanning salon (such an odd combination.)
Eventually, I realized that's not what I wanted to do the rest of my life so I went back to school to finish my AA in one semester (I had about 17 credits left.) I completed my AA in 2006, my BA in 2007, and the coursework for my MA in 2009 (finally finished my thesis and graduated in 2010.)
As an undergraduate I lived with a boyfriend at the time, so I did not have to pay for housing costs. I did take out loans to cover my tuition for the remainder of my AA, through completion of my MA. Once I started graduate school said boyfriend and I were history, and my parents graciously offered to pay for my housing and utilities for two years. I worked 2-3 assistantships a semester (either teaching or doing research for 10 hours a week, per assistantship) and used that money for all other monthly expenses.
When I graduated in 2010 my grand total student loan debt was just shy of $25,000. For most students, that's on the low end. In 2013 69% of graduating seniors had student loan debt. The average loan debt was $28,400 per student (for just a Bachelors degree.)
When I started my first 'real' job post graduate school I was working as an academic advisor at Pensacola State College. I made $14.50 an hour with no benefits. I stayed there for three years, all the while looking for a better paying job (with benefits.) I ended up going uninsured from the ages of 19-30. I had to put my loans into forbearance for three years because I simply could not afford the minimum payments while making $2100 a month (before tax.)
Despite the late start in repayment, I've been able to pay about $10,000 of those loans off, and should have them completely paid off within the next 8-10 months. That's 6 years ahead of schedule! I've taken every job I could possible get to make extra money to put completely toward my loans. I live below my means, drive an 11 year old car that's worth less than my teeth (seriously - I've had a lot of dental work done) and have a spouse who is on board with living as frugally as possible to be debt free as soon as possible.
My experience as a college instructor
Do I think my parents should have paid my tuition? Absolutely not. I've always thought that students who have more 'skin in the game' financially will take college more seriously. As a college instructor for 8 years some of my best students were those who were working their asses off to pay for classes, and took those classes very seriously. I've also had students who had to work to put themselves through school drop out because of missing too many days due to scheduling conflicts, or not being able to pay tuition in time. I have students who had parents pay 100% that goofed off in classes, partied all the time, and didn't even care what they were majoring in as long as the checks kept coming. Of course, I had similar students who didn't have to pay for school devote every waking moment to studying and being the best in the class as they took being a student as their job.
I've seen both sides of it. That's why our approach will be to pay for some of their educational costs.
What do we plan to do with our kids?
If tuition rates continue to rise 6.5% a year then the average public university will cost $44,000 annually in 2030 - just in tuition.
We are starting a 529 account at Vanguard with $3,000 for our son as soon as he is born (not sure what a 529 plan is? Here's a great website to start.)
We will contribute approximately $50 a month to it and, assuming a 6% rate of return, that initial investment of $13,800 will turn into $27, 100 by the time he is going to college. We will encourage him to attend community college for his first two years, and live at home. After that we will have the GI Bill to use that we can split between two kids to pay for their final two years of schooling at any 4 year university they would like to attend. The GI Bill even includes housing, so we are very, very fortunate to have that available for our children.
What does research say?
This Wall Street Journal article had good points on both side of the argument.
For parents paying for college:
- Education is an investment in your children's future, and by extension in your own. It shouldn't end in high school.
- When parents pay they send a strong message to their children: College matters.
- Those who argue for children paying for their education say that they can work their way through school. But students who do this often find it hard to concentrate on either work or school, potentially affecting their grades and their postgraduate prospects. They typically take longer to graduate.
- The debt they accumulate delays by years the ability of many graduates to save for goals like home ownership or starting a family or a business, much less putting anything aside for their own retirement.
For students paying for college themselves:
- The simple fact is that most parents can no longer shoulder the bill for their children's college education without putting their own futures at risk (tapping into their retirement funds, not saving enough to begin with, etc.)
- It isn't just the cost of college that has risen, but the cost of raising children as well. Expenses for day care, sports, music lessons and cellphone, not to mention putting food on the table, are stretching already precarious family budgets. Let's not add tens of thousands of dollars of debt to the burden of parents whose "kids" are over the age of 18.
- Some say paying for their own education puts an unfair burden on college students, many of whom graduate with huge debt. But it doesn't have to be that way. If students are responsible for paying the bill, they will become smarter consumers. They will choose less extravagant programs, perhaps opting for community college first instead of a four-year university, or combining work with study. They will be likely to choose more-practical majors, perhaps forgoing that art history degree.
- Let's not extend adolescence beyond high school. Many parents have done too much for their children already. Too many young men and women have unwittingly developed attitudes of entitlement, expecting parents to cover them financially well into adulthood.
Finally, a study discussed in Forbes found that students who had parents foot the bill for college had worse grades, and spent more time participating in 'leisure activities', but did have higher graduation rates.
Is there a 'right' answer? Absolutely not. I think a lot depends on the personality of the child. If I raise a kid who is an uber nerd, and spends all of his free time in high school studying, conducting science experiments, and generally being awesome at life than I'll get a second job if I have to just to put him through school.
Travis surprised me by saying he thinks it is a parents obligation to pay for college entirely. I think this mentality is part of the reason why we have a new age category now for 'emerging adults' (those 18-25.) Back in my grandparents day people that age were married, had a salaried job, and were popping out babies already. Granted, our economy has changed ones ability to do those things without a college degree, but I still think we are enabling 18-year-olds to have this period of extended adolescence after high school that may be very detrimental to them in the long run.
What do you think?
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Side note: I asked my mom to send me any photos she had of my 5th and 12th grade graduation since I didn't participate in the graduation ceremonies for any of my college degrees (which I absolutely regret!) She found this one of me in 5th grade (I'm on the far left), but didn't want to send it as, and this is a direct quote, "you look like a hot mess; hair all jacked up and face looking weird."