Getting a good education is one of a parent’s top must-haves for their children. But, for how long should parents keep paying?
As a parent, do you feel obligated to pay for your child’s tertiary education? Or, do you believe your child should pay for their own tertiary education?
Opinions differ among parents and children, in fact even between parents.
Since no view is right or wrong, and each has its own advantages, let’s explore some real opinions by parents.
Opinion 1: Parents should pay the full cost of tertiary education
According to an independent consumer research report published in NST in 2017, most Malaysian parents (93%) contribute towards their children’s university education.
Are there benefits or advantages of parents taking full responsibility for the costs of their child tertiary education?
Here are eight reasons why:
1. No student debt. Parents do not want their kids to start adulthood with heavy student debt which may likely take a long time to clear.
2. Focus solely on studies… instead of worrying about mounting debt. For example, students who split their focus on working part-time to offset the debt, or students who worry about how many subjects to cram into a semester due to costs.
3. Uninterrupted study. Provided your child’s grades are good, they can take on as many subjects as they like and graduate on-time or even earlier. There’s no need to worry about how many subjects they can afford or whether they need to split time with working.
4. Show the importance of getting a tertiary education. This sends an important message about getting oneself an education. This is an inspiration for the child to study hard and avoid disappointment.
5. Chances of dropping out or failing exams are much lower. A 2013 study on “Parental Financial Investments during College” by American Sociological Review found that “Parental aid decreases student GPA, but it increases the odds of graduating”.
If your children have to support themselves during college, it may compel them to drop out of college because they can no longer afford to pay the expenses.
6. It allows the parents a tax deduction… on the fees paid up to RM7,000.
7. A parenting responsibility. This sets your child up for success, by giving them the opportunity to get a degree for a basic professional career before “releasing” them into the adult world.
8. Investment in your child’s future… so that they have greater career opportunities and options.
Though all these are solid reasons to fund your child’s higher education, it is only relevant for those with adequate savings.
On the flip side, there are views that parents should not pay for their children’s education.
Opinion 2: Parents shouldn’t pay the full cost of tertiary education
Taking a loan would be a financial disaster if the parents are still struggling to manage daily expenses while saving for retirement.
Here are five reasons why:
1. No desperate measures needed. Parents who are already financially struggling need not resort to dipping into their retirement fund, emergency savings, or cut down on basic daily expenses, etc.
2. Student loans are easily available in Malaysia. On the other hand, a retirement loan is not.
3. Your child learns to value their tertiary education more. Rather than taking it for granted, your child will realise the value of working hard to fund their education or studying hard to get a scholarship. This is a wise option if you have a child who is mature enough to see value and have determination to complete their tertiary studies.
4. Your child learns to multi-task and divide their focus. They may need to pick up side jobs, spend time looking for scholarships, and balance their own budget to determine what they can afford to study/eat.
With parental guidance and emotional support, this could better prepare them for adult life.
5. Make financially responsible kids. Students who have to deal with their own expenses in university are better prepared for adult life.
Opinion 3: Can parents and children share the costs?
In this third opinion, the responsibility of paying college fees should not be an “either/or” decision but a “and” decision.
Instead, both parents and children work together to decide the fair amount and proportion, leveraging on both the pros and cons hashed out in the previous two opinions.
One important point to note. If the parent truly cannot afford it, then they should not be doing this. Please discuss it early on with your children to manage expectations and plan ahead to get alternative financing.
Opinion 4: Conditional payment – parents pay only if child graduates
There are two ways to go about this interesting opinion.
1. You tell your children your conditions. Then, they know what to expect and need to live with the consequences whether they do well or otherwise.
2. You do not tell your children your plan. Aha, the trickster method! You let your children fund their own education while you quietly put aside money for them. Then, when they graduate, you can gift the money to them.
Either way, you are rewarding your child for succeeding in their education. Sounds good, right?
Deciding to pay for your children’s college education is not an easy task for most parents especially with the question of affordability. Your decision may depend on:
• Your current financial health
• State of your education fund for your children
• How many children you have
• What your children’s career plans are
• Your child’s readiness for college life – academically and emotionally.
• Availability of alternative ways of paying. Do you or your children qualify?
This article first appeared in https://mypf.my
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