College tuition has steadily been increasing over the past several decades. In the last five years alone, it has skyrocketed by 28.9 percent.
While the four-year cost for an in-state university was around $42,000 in 2021, the price tag is projected to be around $350,000 in 18 years – which is just after the time my two kids will be college-aged.
As I take a deeper look into my financial plan, I’m torn. Should I be diligently saving for their education, or should I be investing my extra money into my own retirement account?
There Are No Loans for Retirement
There Are No Loans for RetirementI’m well aware (hopefully, you are, too) that there are no loans for retirement. But as someone who is very much anti-debt, the fact that my kids might have to take out several hundred thousand dollars worth of loans to get a degree is pretty mind numbing.
As a parent, the last thing you want is to send your children out into the world on the wrong foot. The reality, though, is that there are student loans available for college while there are no loans available for retirement. Compared with your child having to carry the burden of financially supporting you, them carrying a financial burden for their own education is much easier for them to mentally handle.
In my opinion, your priority should always be to save enough for your own retirement before stashing away money for your children’s college education.
Alternative Ways to Pay for School
Student loans are not a necessity. There are countless people who have worked their way through college while never taking on debt.
While this is usually the exception rather than the rule, it can be done. Here’s how:
Scholarships: By getting good grades in high school, students have a better chance of qualifying for college scholarships. There are thousands of scholarships available – and while filling them out can be time-consuming – the rewards are worth it.
Work study programs: Work study programs can help students pay for tuition, room, board, and other college costs. What makes work study programs so great is that they don’t affect financial aid eligibility.
Part-time jobs: While working and going to school might mean slightly lower grades and a longer time to graduate, the pros can far outweigh the cons – especially if the majority of the income is put toward tuition. Having to work for money also gives your kids a chance to understand the effort it takes to make a dollar and the value of money and hard work. If this teaches them to be more disciplined with spending, then their paycheck is worth far more than the dollars shown on the pay stub.
Community college: Community colleges can be a cost-effective way for students to get their first two years of schooling. It’ll also give the student more time to figure out exactly which field of studies to pursue.
In-state college: It costs more than triple to go to a private college. According to The College Board, the average cost of in-state tuition in 2021-2022 was $10,338, whereas private college was a whopping $38,185.
To Pay or Not to Pay?
I’d really hate for my kids to graduate with a ton of student debt. At the same time, I want my kids to learn the value of money and hard work. I believe that having to pay part of their way through school could teach them that. Not to mention, I also want to ensure I have enough saved up for my retirement.
In an ideal world, I’d love to pay the majority of the bill while guiding my kids to pay off the rest. Until then, I’ll take it day by day and do the best I can to save for both my retirement and their education.
How do you feel about saving for your kids’ college education? Is it a priority?
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