Sense & Centsibility Blog

Should Parents Pay for College?

Stressed Student

At first glance, that may seem like a loaded question. “Of course I should help my kids get a college education,” you may be thinking. But before you decide to give your kids a free ride, you should be aware of some rather disturbing information.

Do you have extra money to help your kids?

Before I start discussing numbers, this post assumes that parents have the financial ability to pay for college. I’m not talking about borrowing money for your child’s education which is another matter entirely. If any of the following situations apply to you, think about whether you can really afford to help your child.

  • Are you living on a fixed income that barely covers your own bills?
  • Have you been saving enough for emergencies?
  • Do you have a retirement plan that you should be funding to prepare for your future?

If you answered “yes” to any of these questions, find other ways to help your kids with college. The bottom line – you can’t afford to borrow money for someone else’ education!

Where did this information come from, and why should I care?

In August, Liz Weston of MSN Money wrote an article called “Why parents shouldn’t pay for college.” Beneath the title, a summary stated “Students with skin in the game are likely to party less and achieve more, research finds.” I was immediately intrigued! Weston’s article was very compelling. She focused on the research of Professor Laura Hamilton, assistant professor of sociology at the University of California, Merced. Hamilton interviewed some angry and bitter parents who spent tens of thousands of dollars for their children’s college educations.

What these parents got in return were lousy grades and degrees in worthless majors that wouldn’t interfere too much with their kids socializing (read partying).

Hmmm – not much of a bargain for the parents! Hamilton’s research was published in a book she co-authored called “Paying for the Party.” Weston points out that Hamilton did not rely on mere anecdotal information. She also looked at data collected by the National Center for Education Statistics to determine just how parental support affected college outcomes.

What she found was that students who had financial support from their parents were more likely to graduate, but with lower GPAs (suggesting that students could likely have focused more on their studies.) Another study by Public Agenda supported this conclusion by finding that students without parental support had higher dropout rates.

I found the next conclusion really interesting - Hamilton’s study also showed that similar to parental help, student loans were linked to lower academic achievement. On the other hand, students with scholarships, grants, and work-study were associated with higher achievement.

Advice to parents for protecting your investment:

1. Don’t assume just any college suits your kid.

All college educations are not equal. A more expensive college education does not necessarily mean a better college education. And such colleges may cater more to wealthier students with advisors who know little about how first generation students should work the system. “First generation students” refers to those whose parents didn’t attend college.

If your child falls in this category, Weston suggests requesting information from the admissions office about graduation rates for first generation and minority students. If those numbers are low or even worse, unavailable, this school may not be right for your child.

2. Make sure your child is helping financially (has skin in the game).

Money for school

Even if you can afford to fully cover your kid’s college education, think twice! A part-time job can lead to a more responsible student with better time management skills. Your kid will also be more aware of the actual costs of a college education.

Besides, many employers are more impressed with graduates who can demonstrate a work history during their college career rather than being handed everything.

3. Be very clear with your expectations.

Talk with your child early and often about the true financial costs of a college education. Make sure they know the sacrifices you have made to help them achieve their college degree.

For example, set a projected GPA that is reasonable and attainable according to your kid’s abilities. Then, stick to your guns! If you make empty threats, your kid will catch on quickly there are no true consequences for letting grades slide. Consider taking away your financial support or transferring to a less expensive college.

Hamilton talked with parents who told their daughter if she didn’t maintain her grades as promised, they would transfer her to a local college where she would live at home. This student apparently kept her word and graduated with honors.

Keep in mind that mediocre grades for less advantaged students can lead to a gloomy financial future compared to wealthier students whose job prospects depend more on the right family connections than a stellar GPA.

4. Stay involved with your child’s college roadmap.

student loan calculator

Don’t expect the college advisors to properly direct your child to the best majors that actually lead to jobs. Many colleges lack adequate advising services and don’t have the personal investment you do as a student’s parent.

Therefore, help your child pick a major where jobs are available to enhance future job prospects and earning potential. Your child may also need help picking the right courses to get there in the most direct path.

Another Resource:

As a parent who wants the best for your kids, you have the power to guide their college career. Work together to research and gather information. Talk about what you each want out of this education experience and really listen to each other. The idea is to partner with your kid, not just tell her what to do.

For more information, you may want to read my post called “Mastering Student Loans” for other ideas how to prepare your kids for the right college education.

Navigating the cost of college can be overwhelming. Give us a call and we can help you create a budget and see what options you have to help your student. Call us at 888.577.2227 or visit our website at Or, do you work better on the computer? If yes, do our online counseling. Click 'Time to Start' below and enter in your information online and a financial counselor will get back to with a plan in 2-3 business days.

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Author Barbara Miller is a Financial Counselor at LSS who specializes in Bankruptcy Education.