How much of your child's college costs are you willing to cover?
Few financial decisions a parent makes are as significant -- or as expensive -- as figuring out how much to pay for a child's education.
And with tuition costs rising faster than the rate of inflation, and more and more students graduating with staggering loan debt, it's a decision that can create financial and emotional strain for even the most affluent families.
Recently, Morningstar Advisor quizzed investors on how much of their child's college costs they paid or plan to pay and why. Readers shared stories about how they funded their children's educations and just how far they were willing to go to help them get ahead.
Many viewed covering all of their children's college expenses as a parental duty, particularly because their parents had done the same for them. They were also anxious to unsure that their kids started their working lives without having to worry about paying loans.
Others simply couldn't or can't afford to pay all college costs, especially for multiple children. And, even for those that did, it was important that their children bear some of the burden and have some "skin in the game."
"We paid 80% of undergraduate," says one proud parent. "Kids were responsible for 20%, which they could pay from working in high school, obtaining scholarships, work study while in college, and/or loans."
This worked well, apparently: "They had enough of their own sweat equity in it to assure that they worked hard while they were there, yet graduated without a mountain of debt."
How much of your child's college costs are you willing to cover? Do you work off a set percentage? Are all siblings treated the same?
By Gordon Powers, MSN Money
Posted by: BMIA | Jan 16, 2022 12:04:24 PM
We're making full use of RESPs. So that will be the starting point. Depending on how the funds perform that should be at least $58,000 (principal only including government contributions) per child.
Posted by: John | Jan 16, 2022 1:10:08 PM
100% for all my kid's university tuitions and living expenses.
Posted by: CJ | Jan 16, 2022 1:17:24 PM
I'm aiming for a 50% contribution for both my children.
University is not a free ticket to party.
Posted by: Bob | Jan 17, 2022 5:55:37 AM
I feel we as parents should pay for first year and partially for the other years. Especially if we take the tax deductions for their tuition and time in school credits. That may be all we can afford to do for them. Both of us never received a dime from our parents but were allied to live at home free of rent or board as we worked during the summers.
Posted by: Terrie | Jan 17, 2022 7:11:17 AM
100% for both children.They are the future, must pay it forward. They love school and have been getting good grades along the way.Future Nurse and Social Service Worker.
Posted by: JR | Jan 17, 2022 8:21:09 AM
In our house, we pay tuition and rent costs during the school year (about 70/75% of total costs) -- the rest is supposed to come from summer jobs, scholarships, bursaries etc. Two children graduated with $$ in the bank and one was about even as he elected to travel a bit rather than work one summer. Money well spent, particularly as our parents didn't have the $$ to help out when we were young.
If you can, you should.
Posted by: had tuition paid for | Jan 17, 2022 8:54:26 AM
To the parents who are proud that they have paid their child's tuition, think twice. I am an adult now but was raised in a well-off home. When I reached those post-education years, I didn't know what to do yet with my life. No problem. I was told to just go to University. I did. My parents paid. However, it was regretted afterwards as a huge waste of $$. I did fine and I graduated. However, like someone said earlier, I also partied too much. I did graduate, but then asked myself "Now what?" I never did use my degree and do not have near the good job I should have for the $$ my parents put into me. Now, I have children of my own and wouldn't dream of putting one dime into their education. I figure, if they really want a degree, they will work for it, and it WILL be appreciated when they eventually graduate, if that's what they choose.
Posted by: MR | Jan 17, 2022 9:11:13 AM
My Husband and I pay for half, her half can include any scholarships, bursaries etc show really she doesn't have to pay full half, she earns teh shcolarships and bursaries so...
studies show that kids that have a vested interest in their education tend to fare better in College or University, if there is nothing for them to lose, they party etc, I work in a financial institution and I if there is any advice I can give to young parents it is to start an RESP as soon as possilbe, your mortgage, car loans etc are long term debts, work at putting RESP's away, where are you going to get 20% return on an investment?????
RESP's are helping us big time, we have not had to struggle to pay our half of our tuition etc, it was alreayd there.
Posted by: fely de leon | Jan 17, 2022 10:02:06 AM
My husbasd and I paid for all our childrens' university expenses including tuition fees. They worked few weeks during the summer months after school, but that's for their miscellaneous personal expenses. I felt it was my obligation because my parents did send me to unversity with their own money. Both have their degrees now and occasionally, they deposit money in my bank account although I'm not asking. These is how they show their appreciation for all I did for them. I sometimes joke, "pay back time?". I have two grandchildren now and I have RESP for both of them. I believed education is a passport to better life in the future.
Posted by: JS | Jan 18, 2022 6:28:12 PM
We are maxing on RESPs as we had our son in our mid-40's. We are both well established so the investment is not a probelm. We will both be on retirement incomes by the time our little guy goes to university so we prefer to save in advance realizing assisting at that time may be more challenging. Happy we are in a financial position to assist him, our educations have assisted in our success so why not pass that gift along; mindful that there are no guarantees he will follow in our footsteps!
Posted by: Reality Bites | Jan 19, 2022 12:18:13 AM
Well, it's like this; I would love to be able to pay 100% of my children's post-secondary education, but I won't be in any financial shape to do that. Divorce sucks that way.
I'm hoping the Other Parent steps up to the plate when the time comes, but who knows?
If my kids really want it, they will find a way. There are student loans, grants, scholarships, etc.
I'd rather they graduate with debt related to their education than debt related to credit cards, cars and other frivolous items.
Not having an education handed to you on a silver platter is not the end of the world.
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Posted by: mcom | Jan 19, 2022 8:55:37 AM
My parents didn't pay for my post sec education even though they could afford to. The deal was I could stay home and not pay one cent for living expenses while I was in school it will be the same deal for my kids you don't fool around or fail classes when it's on your dime.
Posted by: Mary | Jan 19, 2022 11:36:13 AM
Why do financial advisor scare families about how much post secondary school will cost...my parents had 6 kids and No they couldnt help any of us and that was ok...we all went to university or college and are successful without debt...we did it on our own and I am grateful that I did because I knew how important and hard it was to be smart about money. I have 2 kids of my own now and I want them work for it like I did and not let them know I have $$$ set aside for them. They mean the world to me however I want them to appreciate hard work and determination if they want something so bad...a great future!
Posted by: Debbie | Jan 19, 2022 11:40:29 AM
We have 3 boys, and the deal is, they can live at home free, but take out student loans for university. Then if they finish and graduate, we will pay the loans off. If they drop out, they have to pay for it themselves. Now there is an incentive!
Posted by: linda | Jan 19, 2022 2:03:31 PM
Managed to save about half of what our kids need; they can live at home for free as long as they're in school full time. I refuse to go into debt so my kids have free education; would't be very smart of me, now, would it. One is finished (without debt), the other should finish with little or no debt, due to summer jobs, smart/disciplined spending, bursaries, scholarships, grandparents help.
Posted by: AM | Jan 19, 2022 3:57:48 PM
Mary - how long ago did you go to school? I too paid for my own univeristy tuition. In 1989, my tuition was only $1500. That kind of money was easily made with a summer job and working part time during the school year.
The problem now is tuition fees have skyrocketed and there is no way kids can afford it on their own.
It's fine to want kids to appreciate things but most parents are willing to pay for their kid's cell phones, high tech gadgets and fancy label clothing. Personally I would rather teach my children to pay for those things themselves as they are not necessities whereas an education is.
Posted by: LM | Jan 19, 2022 6:28:27 PM
My parents had an RESP (which didn't cover tuition past the first year) and they have allowed me to live at home while completing my undergrad. I'd love to not have debt, but I've had to get a job and manage my time wisely in order to do well. Many of the people in university whose parents pay for their education have little sense of the real value of money nor do they necessarily have any drive to succeed. I'd say that they can be less equipped to deal with the problems of real life since they've had little need to form the drive to do well, and their reliance on their parents to 'smooth out the waters' can be of real detriment when it's time to find a job that pays in a manner that they're accustomed to living.
Posted by: G | Jan 19, 2022 7:29:57 PM
We managed to pay for our kids' tuition from RESP's (we never earned enough to max them out). They both worked part-time before & during post-secondary, & contributed for rent (would take too long to use transit twice daily from our place) & other expenses. One daughter had a bit of OSAP, & paid it off just a few months later, then saved up toward a car - paying for it herself & her insurance too. We believe it's important for the kids to learn how to be responsible with their money. Having everything just handed to them too easily doesn't bode well for their financial success in the future.