September 2004  Email this  Print this
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MONEY-SMART KIDS
Who Pays for College?
by Janet Bodnar Despite all the time families spend worrying about how to pay for college, they often neglect two issues that can produce even bigger headaches: who should pay and how much. Many parents will literally mortgage the roof over their heads to send their kids wherever they want to go (not necessarily a good idea if you are planning to live under that roof in retirement). On the other hand, one high school sophomore wrote to me to complain that although his parents were "extremely rich," they refused to pay for him to attend anything other than a state school. When I published his letter in my online column, it prompted indignant responses from several parents. "Since when did paying for college become a parent's responsibility?" wrote one. "I paid my own way." Just as important as opening Coverdell accounts and 529 plans is sitting down with your kids and leveling with them about how much you're able -- and willing -- to pay. Although we parents generally don't have a legal obligation to pay for college (unless there's a court agreement, such as a divorce decree), it's my view that we have a moral obligation to contribute. We aren't obliged, however, to pay full freight, nor should we.
"Paying for yourself makes you more responsible and gives you more motivation as a student," says Jessie Ormsby, 27, a Northeastern University graduate. Ormsby has no complaints about paying off her $30,000 in education loans.
Family affair
So, think of paying for college as a joint venture, with kids pitching in to give themselves a stake in their own education. Even if you're financially able to pick up the whole tab, kids should at least be expected to earn their spending money.
Teens need to know your financial situation before they start applying to college, and they need your help to make some realistic financial decisions. "If your child wants to be a social worker making $45,000 a year, it's better to go to a less expensive school than to take on $120,000 in debt," says Gary Carpenter, executive director of the National Institute of Certified College Planners. That's not something your average 18-year-old is likely to think about.
You also owe it to your kids to give them some guidance on how to come up with the cash if you are not going to pay. For example, you still need to fill out federalfinancial-aid forms (although if you are "extremely rich," your kids probably won't be eligible for aid, even if it's up to them to pay the bills). And forget about having your child qualify as an independent student. To do that, kids have to meet strict criteria: They must be at least age 24, or be married, or have a legal dependent. "The only way I can get financial aid is to get pregnant or marry someone unable to support me," grumbles one student.
Covering the costs
Actually, kids don't have to do anything that drastic. They can, for example, get a degree for a fraction of the cost by attending a community college for two years and then transferring to a four-year school. My daughter, God bless her, goes to school in Canada, where her expenses at McGill University, in Montreal, are equivalent to what she'd pay in-state at the University of Maryland.
I've known students who graduated a year early by combining high school advanced-placement credits, extra courses and summer school. I've also known students who qualified for significant merit-based aid, as well as students who received full-tuition ROTC scholarships.
For your kids, figuring out a way to pay for their education is a lesson in itself. If the young man whose parents are "extremely rich" takes them up on their offer to foot the bill for an in-state college, he could graduate debt-free -- and be in a great position to go elsewhere for graduate school.
Janet Bodnar, columnist and executive editor, is author of Dollars and Sense for Kids. To order her book, call 800-280-7165. | 
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