Who Should Pay for College Expenses?

Podcast Who Should Pay for College?

Do you think the student should pay for their own college expenses?  Or is it the parents’ responsibilities?  This is a tough question!

Sasha Grabenstetter and I discuss this in the latest Family Financial Feuds podcast, Who Should Pay for College?. Take a listen and see if you agree or disagree with us.

We talk about aspects of this question including:

  • Does skin in the game matter?
  • Does the major the student chooses influences who pays?
  • How much in student loans is okay?

Plus we offer strategies to keep costs low overall!

On a related note, if you have a student packing for college, now’s a good time to have a conversation about  money. Talking about money can be really hard. However, misunderstandings about financial expectations can lead to conflicts – it’s better to talk be clear before students start college. Here are some conversation starters:

  1. Who is expected to pay for which expenses? Different families have different expectations about college expenses – what’s your family’s plan?  Will the parent keep paying for items they paid for before, for example: clothing, toiletries, auto insurance? Or is now the young adults responsibility? And, what about new expenses like textbooks?
  1. What strategies can be used by the student to keep living expenses low?  For example, for Fall 2019, University of Illinois at Urbana-Champaign estimated costs for an undergraduate show living costs (housing, food, etc.) to be very close to the cost of tuition. Students can manage their living costs to save money.
  1. Talk about how you feel about borrowing money. Is it something to avoid or do you see it as a financial tool?  And, in what situations? You may also want to discuss interest rates and how the Annual Percentage Rate tells us how expensive a loan is. For example, a student loan may have an interest rate of 6%, a credit card – 18%, and a payday loan, up to 99%. A vehicle title loan may be even higher, for example, 265%. If your student feels like they need to borrow more money during the year, what would you like them to do?