Dear Dave,
I’ve heard you talk about paying for college for your kids. Why is this a requirement? I’m not trying to shirk my responsibility, but I worked my way through college and so did my parents. My wife and I have talked about paying for their books and maybe rent. Am I missing something here?
— Thomas
Dear Thomas,
First, I don’t believe it’s a requirement that all parents pay for college for their kids. It’s not a moral issue, and you’re not an immoral person if you don’t or can’t do it. I’ve told plenty of single moms, single dads and parents who don’t earn a big income that their kids need to apply for as many scholarships as possible, learn how to work, and choose an inexpensive school if they want to continue their education.
As a parent, one of your biggest jobs is to give your kids a moral compass and the tools they’ll need to succeed in the real world. And one of the keys to being a successful adult is engaging in a lifetime of learning.
“As a parent, one of your biggest jobs is to give your kids a moral compass and the tools they’ll need to succeed in the real world,” Dave Ramsey wrote. “And one of the keys to being a successful adult is engaging in a lifetime of learning.”
If the last time you read a book was when you were in high school or college, and you’ve never done training of any other kind since, you’re probably not very successful. Never. Stop. Learning. If I’d stopped learning after getting my bachelor’s degree, do you think I would’ve been able to build Ramsey Solutions? Absolutely not!
Do you see where I’m going with this, Thomas? As an adult, learning is your job. An entire lifetime of learning is your job. And if you can encourage that in your kids with some level of help, financial or otherwise, then it’s your obligation to help them. You can’t expect a 17-year-old to figure it all out. They don’t have the tools yet.
The point is this: You don’t have a moral responsibility to pay for your kids’ college education. You do, however, have a moral responsibility to highlight the importance of knowledge, share what you have, and show them how to get more. If you can’t afford to help with money, do everything else you can. There are plenty of more important things than cash. If you want to help financially, that’s fine too.
Just don’t use debt to make it happen!
— Dave
FAQs
Paying for a kid's college isn't a moral obligation, Ramsey wrote, but teaching your kids to always be learning (whether they go to college or not) is a parental duty.
Should you pay for your kids to go to college? ›
Paying for your child's college can help them get started with less (or no debt), which can be a huge benefit for them. However, before you commit to paying for your children's college education, consider whether you can afford it and if it will impact your own financial goals, such as saving for retirement.
How much to put in 529 Dave Ramsey? ›
Ramsey said he should put in $20,000 at most, and he advised against overfunding 529 plans. “I would not overfund your 529. At today's world, I would underfund your 529 … The higher ed landscape is going to change so much in the next 18 years as the student loan epic failure debacle unfolds,” Ramsey said.
Why do parents pay for their kids college? ›
From better career prospects to opportunities for personal growth, obtaining a college education can open many doors for your child. These days, most parents pay for at least some of their kid's college, but there are a number of ways to source additional funding.
How do people afford to pay for their kids college? ›
Private Student Loans – Money that you have to pay back after graduation. College Savings – Any money saved before or while the student is enrolled in college. Part-Time Jobs and Internships – Money received from paychecks can help cover tuition costs.
How much does Dave Ramsey say to have in savings? ›
Ramsey's general recommendation in his Baby Steps has long been to start with having $1,000 saved in a starter emergency fund. If you earn under $20,000 a year, the post on Ramsey Solutions said you may adjust this amount to $500.
What percentage of parents pay for their kids college? ›
MILWAUKEE, May 1, 2024 /PRNewswire/ -- Among American parents saving for their children's college education, 95% expect to cover more than half of the cost for their children. While about one in three (36%) say they will pay for the full cost, two in three (64%) expect their child to pay something.
How many kids don t go to college because they can t afford it? ›
Based on research from ThinkImpact (2021), 38% of students admit to dropping out because of financial pressure.
How do parents afford college tuition? ›
Most families pay for college using some combination of savings, income and financial aid. Financial aid is money you receive to help cover college costs. Some financial aid, like grants and scholarships, doesn't need to be repaid. Financial aid can also come in the form of loans — money you have to repay.
How much is $250 a month in a 529 for 18 years? ›
For instance, if you opened a 529 account for a newborn this year and contributed $250 a month, Vanguard's college savings calculator estimates you'd have more than $113,000 when your child heads off to college in 18 years.
By superfunding your 529 plan with a lump-sum contribution of $50,000, in 18 years when your child is ready to enter college, your account balance will have increased to $120,331.
What's better than a 529 plan? ›
A 529 savings plan is generally an all-around good choice to pay for your child's (or your own) college, while a Roth IRA may be a better option as a backup account to supplement educational expenses.
What happens if parents refuse to pay for college? ›
If your parents are unable or refuse to help pay for college, you should complete and file the FAFSA as an independent student. Independent filers are not required to include information about their parents' income or assets.
What are the cons of parents paying for college? ›
Cons: Why Parents Shouldn't Help Pay for College
If a student does not have to be concerned with paying for college, they may not learn the value of money. A student may take financial help for granted, not taking school seriously. If a student is required to contribute towards expenses, they may learn responsibility.
What percentage of income are parents expected to pay for college? ›
The FAFSA formula doesn't expect students or families to use all of their adjusted available income to pay for college. The formula allocates 50 percent of a dependent student's adjusted available income to cover college expenses and anywhere from 22 to 47 percent of parents' available income.
How much does Dave suggest you have for an emergency fund as a high schooler? ›
Finance expert Dave Ramsey recommends prioritizing an emergency fund. He suggests starting with a small emergency fund of just $1,000. After becoming debt free, he believes you should have three to six months of living expenses saved.
Is a 529 the best way to save for college? ›
Susan Bart: Stacy, if you have children or grandchildren or favorite nieces and nephews who will be going to college, a 529 account can really be a great way to save for a college education. There is no federal income tax and usually no state income tax imposed as the funds grow in the account.
What is the best college fund for a child? ›
Coverdell accounts and 529 plans are the most popular options for college savings, but custodial trust accounts structured as a Uniform Gift to Minors Act (UGMA) or a Uniform Transfer to Minors Act (UTMA) are other possibilities.
How to afford college when your parents make too much? ›
What happens if your parents make too much money to qualify for financial aid? You may have to shift course a little bit, but there are other ways to get help paying for all of the expenses of college, including merit-based scholarships, non-need-based federal student loans, and private student loans.
