The cost of college tuition is rising fast. From 2002 to 2012 to average cost of tuition and fees for full-time undergraduate students rose 37% from $8,760 to $11,960. Grant and financial aid disbursements also increased during that period. In 2002 the average grant aid and tax benefits covered 55% of the cost of tuition and fees. In 2012 the average grant aid and tax benefits covered 63% of tuition and fees. Even though grant aid and tax benefits cover a higher percentage of tuition and fees, the rising costs have increased out-of-pocket expenses for students. On average, students borrow about $5,000 per year to cover their out-of-pocket expenses.
Should Parents pay for their Children’s College Education?
The majority of college students get some kind of financial help from their parents, but the number of college students getting financial help from parents is decreasing. Fully 77% of parents in a recent University of California survey said they would provide financial support to their college student. This is a decrease from the 80% of parents willing to provide financial support in 2013. Financial support from parents may come in the form of helping pay tuition and living expenses or paying the entire cost of college. Although most parents provide some type of financial help, very few parents pay 100% of the cost of a college education for their child.
The University of California study found that the more financial support parents provide for their college student, the lower the grades their children earn. Another study published by the University of Michigan found that affluent students tend to waste their time and miss opportunities in college because they are partying or engaging in socializing. Students who didn’t socialize because they are working suffer socially, but are likely to finish college with a better education than their wealthy classmates.
Before parents go rushing to turn off the cash tap, the study also found that students who received some financial support from their parents were more likely to graduate within five years. Students receiving no financial support from their parents are more likely to drop out of school because of the high cost of education and difficulty balancing work and studies.
What this points to is that parents shouldn’t pay the entire cost of a college education for their children. Students who invest in their own education achieve higher grades and value their education more than their classmates who have no investment in their education. College is the first time your child will be away from home and learning to make financial decisions independently. The best form of support a parent can give their child is to prepare them for financial independence by talking to them about money before they leave for college and linking financial support to goals. Let your child know how much you are willing to help them financially and that if their grades are poor they will not receive any financial support.
For more on this check out our other articles on why enabling self indulgent children is not good parenting and why parents need to learn how to not spoil children.