A new survey reveals that half of affluent parents won't pay for their kids' college on principle.
I’ll admit it: I got a completely free college education. The savings of my professor parents and my working-class grandmother, whose Depression-era mentality helped her tuck away an extra six figures during her lifetime, were enough to pay nearly all of the bill for my tuition at Wesleyan (a private school that's one of the most expensive in the country). The $15,000 they couldn’t cover was paid for with student loans, but after I graduated, my parents picked up the tab on principle. The money I earned from summer and school-year jobs was for my personal spending and savings. “You should be able to concentrate on your education,” my parents said.
It’s been a huge relief to navigate my post-graduation years without massive debt. But don’t feel bad if you’re thinking I’m a spoiled brat; you aren’t alone. According to a new survey from Bank of America, just under half of Americans with assets of more than $250,000 said they won’t pay the entire tab for their children’s college education. Twenty-nine percent said making their kids pay for it themselves will help teach them financial responsibility.
I’d always felt sort of guilty about my family coughing up $160,000 to educate me. After I saw the survey, I started thinking: Would I do that for my kid if I could afford it? Is my fancy education worth that much?
“This is really an indication of how expensive college has become, the fact that even affluent parents are finding it to be too much,” says Anya Kamenetz, who writes about Generation Y, personal finance, and education. “A few decades ago, it was par for the course to save up for your kids to go school. Now parents don’t feel like it’s worth the price, and they’re seeking out other options.”
But when I asked GOOD's community about it, I learned that many people have the former attitude, particularly those who have been saddled with serious debt. “I paid my own way and will pay back my loans 200 dollars at a time til I am 60,” Lesley wrote. “I hope I can help my kids big time.” Sara forks over a quarter of her salary every month to student debts, and she wouldn’t want to put her children in the same boat. “[Financial responsibility] is a lesson I feel I could teach a child by example, with less strain on their lives,” she told me.
Megan sees the difference between her life and that of her boyfriend, who has no student loans. While he has been able to take risks with his career, she has struggled with a huge amount of debt—and is still 12 credits shy of graduating. During school, she almost failed some classes because she was “working too much […] and I didn’t have the option to take time off because loan repayments would make it impossible to finish.” She wouldn’t want her children to have the same experience, she said.
Of course, there’s a huge difference between tuition fees at private and public colleges. “A good rule of thumb is that students shouldn't borrow more than their starting salary”—anywhere from $30,000 for liberal arts students to $60,000 for engineering students—Kamenetz says. If you take on more than that, she warns, “you're counteracting the benefit of going to a private school. The kid will be hindered by their debt for the next 25 years, and both the parent and the student should understand that.”
Some parents give their kids an ultimatum. “My parents said, ‘Go to a state school or pay the difference,’” Ashley, 28, told me. The choice was between Boston University and UMass-Amherst, which, she says, “seemed basically the same on the tour except BU was prettier and fancier. I’m really glad I don’t have crazy loans now, though.”
Jessica, 24, knew she was paying her own way, so she purposely looked into cheaper schools. She got through the University of Illinois by working multiple jobs, and even though “it was tough not having money at your disposal like the rest of your friends … [working during school] teaches a lot of responsibility.”
Working 15 hours a week or less while going to school has been shown to keep students engaged and focused, but any more that can put them at a disadvantage academically. Just 15 hours of pay usually won’t make a dent in tuition costs—even for state schools, where tuition costs an average of $7,600 a year. So some parents who want their children to be partly or solely responsible for their educations loan them money out of their own pockets, often interest-free. Jessica’s sister was admitted to MIT, a school that costs almost $40,000 a year, so her parents were her "personal lending group."
As tuition costs rise exponentially and salaries stagnate, students and parents need to think long and hard about whether certain schools are worth their price tags, or whether higher education is even the right choice for everyone. Parents shouldn’t be bankrupting themselves or digging into their retirement—that’s why low-cost student loans and state schools exist in the first place. My dad insists that the reason my parents agreed to Wesleyan was not only because they thought it was an excellent school, but because it didn’t put them or me in financial jeopardy.
“Otherwise, I would have pushed you to go to the University of Wisconsin or SUNY-Binghamton or something,” he told me. “There’s no reason to put either of us through that hardship.”
The ideal situation, according to Kamenetz, is shared sacrifice. Ultimately, she says, “we’re going to need to figure out how to share this burden between generations.”