The question of whether parents should pay for their children’s college education is a complex and multifaceted issue. It involves not only financial issues (namely, can you afford to?) but also ethical and personal considerations. While many parents aspire to pay 100% of their children’s college expenses to allow them to graduate debt-free, others feel that it’s important for kids to have some skin in the game.
If you’re weighing this issue, you’ll want to consider both the reasons for and against paying for your kid’s college education. Here’s a closer look at both sides of the argument.
Why Parents Pay for College
Some parents feel it’s their duty to cover the cost of their child’s college education. Here’s a look at some arguments in support of that viewpoint.
Giving Your Child a Head Start
The average student borrows over $30,000 to pursue a bachelor’s degree, according to the Education Data Initiative. That’s no small sum. Students who graduate debt-free generally have a leg-up on achieving their professional and financial goals. They can consider taking a job based on their career aspirations, rather than the one that pays the most. They also have the freedom to put all of their financial resources into other goals, such as building an emergency fund or buying a home.
Helping Your Child Stay in School
When you send your child off to college, you likely expect them to emerge with a bachelor’s degree. But recent research shows that only 62% of college students graduate within six years. Among those who leave school, a significant number cite financial reasons for their decision. Taking the college bill off your child’s plate may help them stick to the program.
Allowing Your Child to Focus
Getting a job can help your child cover some of their tuition costs, but if they have to work too many hours, it can make it difficult for them to focus on their studies. Paying for their education can give them a better chance of getting good grades and possibly qualifying for academic scholarships. They may even be able to take on a bigger course load every semester and graduate early.
Why Parents Don’t Pay for College
While many parents believe they should pay for college, others feel that students should be responsible for investing in their own education. Here’s a look at some reasons why parents shouldn’t pay for college.
It Could Threaten Your Retirement
If you can afford to save for a healthy retirement and pay for college, you’re in good shape. But if you feel like you have to choose between the two, paying for college and not saving for retirement could force you to work longer or leave the workforce with less money than you might need.
There are many different types of student loans available for college, but there’s no such thing as retirement loans to help you get by.
It Builds Responsibility and Accountability
Having your child contribute to their education through part-time jobs and loans can help foster a sense of responsibility and ownership. They may value their education all the more — and work as hard as they can — knowing how much this opportunity costs.
It’s a Good Teaching Moment
Helping your child figure out their college financing and teaching them good financial habits now can help them continue those habits after they graduate. If you cover everything for them, they may have a difficult time transitioning to life after college and may end up coming back to you for help.
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How Parents Paying for College Can Get Financing
If you’re interested in footing some or all of the bill for your child’s college education, you have a few different funding options. Here’s a closer look.
Savings
One way to help students pay for college is to put some money aside each month in a 529 plan. Even if your child is already in high school, you can still open a 529 plan and take advantage of the federal (and sometimes state) tax benefits. Money in a 529 account grows tax-deferred and withdrawals are tax-free when used for eligible educational expenses. Any amount saved for college will reduce your child’s future student loan debt.
Parent PLUS Loans
The U.S. Department of Education offers PLUS Loans for parents that you can qualify for as long as you don’t have an adverse credit history. Parent PLUS Loans give you access to certain benefits, including the option to defer repayment while your child is enrolled at least half-time and for an additional six months after your child graduates. However, these loans also charge relatively high interest rates and upfront loan fees.
Private Student Loans
If you have excellent credit and a strong, steady income (and your child doesn’t get enough federal aid), you may want to explore getting a student loan for parents with a private lender. Typically, you can get prequalified with a soft credit check with many lenders online to see what rate you qualify for and compare it to other lenders and Parent PLUS Loan options.
Financing Options for Your Child
If you’ve decided that you can’t or don’t want to fully pay for your child’s college education, here are some ways that your child can get the funding they need.
Grants and Scholarships
By completing the Free Application for Federal Student Aid (FAFSA ®), your child will automatically be considered for many federal, state, and institutional grants and scholarships. Scholarships are also available through private organizations and companies. To apply for these, your student will likely need to fill out a separate application for each one. To find more “free money” for school, your student may want to use an online scholarship search tool.
Part-Time Job
One good way to pay for school, especially if your child has a full or partial scholarship lined up, is to work part-time while in school. This can help pay for living expenses, books, or possibly even tuition. Working full-time during the summers can help to pay for the next year’s worth of expenses.
Student Loans
College students have a choice between federal and private student loans. In general, federal loans are better-suited for undergraduate students because they don’t require a credit check, have relatively low-interest rates, and offer access to income-driven repayment plans and loan forgiveness programs. Your child can apply for federal student loans by completing the FAFSA.
If federal student loans aren’t enough to cover your child’s full cost of attendance, however, private student loans may be another option. Just keep in mind that you may need to co-sign the loan application to help them get approved.
Carefully Consider All Your Options
There’s no right or wrong answer to the question of whether parents should pay for their child’s college education. It’s important to carefully consider both the benefits and drawbacks, as well as how much you can realistically afford to put towards your child’s college expenses.
The good news is that a school’s “sticker price” (published cost of attendance) often isn’t what you actually pay, since it doesn’t account for financial aid or scholarships that your child may receive. The actual amount students and/or parents need to pay is typically much lower than the published price. Students and parents can also tap federal and private student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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5 budget-friendly ways to increase your home’s value in 2024
If you own a home, you probably always have a list of improvements you’re considering. Maybe you desperately want to replace those dated kitchen appliances that scream year 2000, or you want to focus on ways to lower your energy bills, whether that means some strategic air sealing or adding solar panels.
Chances are, you also want any upgrades you pay for to increase the value of your home. You want to know that if and when it comes time to sell your place, you’ll recoup a good percentage of what you invested.
So, whether you have the cash saved up for home investment or you are looking to borrow for your next home project, consider these wise investments.
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We get it: You’re not going to invite friends over to see your new attic insulation.But it’s one of the best ways to increase your home’s energy efficiency.
You’ll not only profit when it’s time to sell, but you’ll also see immediate savings from the ongoing energy efficiency this upgrade provides. A properly insulated attic, combined with sealing air leaks throughout your home, cuts an average of 15% off your heating and cooling costs, allowing you to pocket the savings month after month. And who doesn’t want a lower energy bill?
Cost: $600 to $1,200 for blown-in insulation for a 1,000-square-foot attic. You may also need to rent the machine that blows in the fiberglass if you’re a DIY type. If you hire a pro, labor will run about $40 to $70 an hour.
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New windows can do double duty. Not only do they update a room’s tired appearance, they can also have energy-efficiency benefits. Depending on how many windows you replace, this can be a very big-ticket item. The average cost for a vinyl window replacement is $850, and a whole-home job can ring in at $20,091, according to Remodeling magazine. (Wood windows are pricier still.)
But here’s some good news: Replacing those windows adds value to your home. Typically, to the tune of 69% of the cost of the window-replacement project.
Cost: Anywhere from $850 per vinyl window to $20,000+ for the whole house. Again, if you go for wood vs. vinyl windows or need custom size ones (or several French doors), the price can ratchet up significantly. In that case, you might want to look at home improvement loan options.
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You and likely anyone who might buy your home in the future will love what a deck can do, lifestyle-wise. Weather permitting, you can have your AM coffee there, type away on your laptop during the day, and host friends, read, or just listen to the birdsong during off-hours. Here’s another nice thing about adding a deck: Your ROI is typically around 68% of the money you pay.
Cost: A new wood deck will cost on average $16,766. A composite one can cost more; on average, these are $22,426.
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Who doesn’t love a beautiful new bathroom, whether your style is sleek and all white or if you prefer a warmer country cottage vibe? A bath remodel will cost, on average, between $6,627 and $17,494, according to Angi, the home renovation site. While an updated bath can definitely add to your home’s value, keep in mind that the sky’s the limit with the price tag. If you move the fixtures around and add one of those egg-shaped soaking tubs or a spa shower that has half-a-dozen mist settings, you may go well beyond the average range of costs.
Also, keep in mind that if you do something really singular (say, you pick tile in a super-bright shade), it may be harder to get your money out if and when you sell your property.
Cost: The average cost is $11,944, with cabinets and shelving accounting for 25% of the total, the shower and tub eating up 22% of costs, and your contractor’s fees usually being about 13% of your total expense. Of course, you can do a small bathroom remodel, perhaps repainting, adding some new artwork and a fresh shower curtain.
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If you’re stuck with outdated appliances or hideous cabinets, a kitchen remodel is likely high on your list of improvements. It’s a great way to refresh your kitchen’s style and function.
But increasing home value with a new kitchen can fry your bank account: A remodel typically runs $14,612 and $41,392 according to Angi, but can cost much more if you move appliances’ position, opt for marble countertops, or fall in love with custom cabinetry. On average, you’ll recoup about 60% in ROI.
To update for less and wow your kitchen in a weekend, make some wallet-friendly upgrades: fresh paint, a new faucet, updated lighting (pendant lights are a good choice), and new cabinet pulls.
Cost: While you could just swap out cabinet pulls, which start at about $2 each, and repaint (plan on around $200), a larger kitchen remodel averages $26,849. Again, however, it’s worth noting you could spend multiples of that, depending on how large a project, how luxe the details, and where you live (cost of living can impact the price of goods and services in your area).
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Even budget-friendly home improvements can set you back quite a bit. If you haven’t set aside the budget to bring more value to your home, you don’t necessarily have to dip into your retirement account or pay less on your student loans each month. You might want to consider a personal loan.
This article originally appeared on SoFi.comand was syndicated byMediaFeed.org.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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