As I mentioned in previous posts, I’m currently going back to school for a Masters in Accounting. Using the online tuition estimator for my school, and adding in the costs of books and other fees, I expect the program to cost roughly $20,000 over the next two years. It’s a big expense, but definitely a worthwhile one for me. It will give me the qualifications to earn my C.P.A., and I will more than make up the tuition amount in increased salary within 1-2 years. Actually, after looking into salaries in my area, it’s very possible I can double, maybe even someday triple, my current salary! But if you’ve seen my Net Worth, you know I’m not exactly flush with cash right now. Which means finishing my degree program will necessitate the use of student loans. So, a couple of weeks ago I took the first step in financial aid, and completed the FAFSA.
FAFSA stands for Free Application for Federal Student Aid, and is required for any student, graduate or undergraduate, who is looking for Financial Aid or Student Loans to help pay for education. Basically, you fill in the financial information from your tax returns (and/or your parents’ tax returns), and the government runs it through a formula that then computes how much you can afford to pay towards your education. They send this information along to your chosen school(s), who use the information to compute what combination of loans, grants, and need based scholarships you are eligible for. There are Federal and State deadlines for when the FAFSA should be filled out, but more important is the deadline set by your school. Schools have a limited amount of funds (grants and scholarships) available, so most set a deadline in February/March for the following school year, and pass out their available aid from there. If you miss the school’s deadline, you’re likely to only be eligible for loans, regardless of how much “need” you have.
The FAFSA is a less than perfect system, for many reasons. First off, even if you are paying for your own education, if you are under the age of 23, your parents must provide their financial information. There are some exceptions, but they’re pretty rigid. Then there is the fact that there can be a large discrepancy between what the government formulas say you should be able to pay, and what you actually can afford to pay. Which brings up a question: Should parents be responsible for paying for their children’s education?
I’ll be honest, it was a struggle for me as an undergraduate to pay my own way through college. The hardest part was that I didn’t realize I was going to be solely footing the bill. Yes, I knew I’d be taking out the basic Stafford Loans each year. And luckily, I had some merit (i.e. grade) based scholarships to help. But my Dad made a lot of money, so I didn’t qualify for any need based aid, even though he wasn’t paying the bills. I worked multiple jobs, gained more scholarships, and was really creative to pay my way through college. I’m not going to lie, it was really, really hard at times, and had I known going into it what it was going to involve, I probably would have made very different choices. I was hurt, and angry, and often felt abandoned by my parents. It was a life changing 4 years. So, do I feel that parents should step up to the plate and pay for their child’s college education? Well… not necessarily.
I’ve read countless articles discussing why parents should or should not pay for their child’s education. And there are merits to both sides. But I think people over simplify the issue. Yes, paying for your child’s education could alleviate some stress, so they can focus more on their studies. Or maybe they won’t appreciate something they don’t have to work for, and won’t take full advantage of the opportunity. If they have to pay for it, maybe they’ll value it more, and work harder in classes. Or, maybe they’ll decide it’s not worth it, and not even go. And remember, not every child will react the same way, even within the same family. Take my family: My older sister thought her education was going to be paid for, and she still refused to go. I thought my education would be paid for, picked an expensive school, and then struggled for four years to pay my way through. My younger sister knew going into school that she would have to pay her own way. There were many people willing to help her out, but she still never finished a semester. And the youngest, my brother, joined the National Guard, yet only took advantage of the tuition benefit for one year.
Every family’s financial situation and values are different. Every child has their own personality, their own ambitions and motivations, and unique opportunities. Only you can decide what works for your family, and what works for your child.
That being said, I do think it is important that parents not jeopardize their own financial situation for their child’s education. Loans for college are easy to come by. Too easy, in fact. But you can’t borrow your way into retirement, or out of bankruptcy. Sure, you may alleviate Junior’s stress at school by not making him worry about the cost. But, if in the process you ruin your own financial situation, you’re just replacing one stress with another. Junior will be equally as stressed if you lose the house, or if he has to support you later in life. Probably more so.
Coming Soon: College Costs and Big Decisions