Should Your Kids Pay for College?


March 9, 2017



The Situation

The cost of a traditional college education has increased in recent decades, on that we can all agree. But who should pay the cost, the parent or the student? That is a more contentious question. We contacted Ellen J. Roberts, spokesperson for education loan company Sallie Mae, to help us answer that question.

The Back Story

In its 2016 study How America Pays for College, Sallie Mae reported that in 23% of families who had college bills in the 2015-2016 school year, the student contributed nothing toward them. And in another 23% of families, the parents contributed nothing.

A common argument for parents paying is that it lets the student focus like a laser on studies. On the other hand, the student may also focus on partying and fail to learn adult responsibility. A common argument for students paying is that it teaches independence and forces them to think about the value of their education. On the other hand, it may also create suffocating amounts of debt.

These are all valid points, which suggests a middle way—one in which both parents and students pay part of the cost. According to the Sallie Mae study, that is what happens in 40% of families.

What You Should Know

“Even when parents can afford to foot the entire bill themselves, asking the child to cover at least part of the cost can help the child build good savings habits, learn how to manage finances responsibly, and, ultimately, ease the transition to life after school,” Roberts said.

It may also make them feel better after graduation, knowing that their opportunity for higher education was not simply handed to them.

But how should parents and children divide the costs?

That answer will depend on your family’s financial situation. The Sallie Mae study found that parent income and savings paid for 29% of U.S. college costs on average. Parent borrowing covered another 7%. Student income and savings paid for 12%, while student borrowing covered another 13%.

Those figures, of course, are only averages.

“There are no hard-and-fast rules about who should shoulder what percentage of college costs,” Roberts said. “But parents will want to consider what the child realistically can handle and how that might change over the course of four or more years in school.”


Selecting a percentage of total costs that your child will be responsible for is also not the only approach to take. One parent I know of provided his son with a college fund. It was enough money to cover a four-year degree from the local public college, assuming the son lived at home. If he chose to live away from home, or go to a more expensive school, he simply needed to make up any cost difference with his own funds.

Whatever approach you take, it’s important to let your children know well ahead of time that you expect them to pay for part of their education.

“Regardless of who is going to pay, we encourage parents to involve their children in planning-and-paying-for-college discussions early on,” Roberts said. “They can set expectations together, explore factors that affect cost, such as program type, school location, and where the student will live, and be better able to make an informed decision about which path to pursue.”

One unsettling finding of the Sallie Mae study was that only 39% of U.S. families put together a plan beforehand of how to pay for college costs. Not surprisingly, these families reported experiencing more peace of mind than the non-planners. If you have trouble getting started, reach out to a trusted advisor. We want to be your sounding board not just for college planning, but for all your financial matters. To learn more, please contact Jim Waters, CFP®, at 713.964.4028 or