I have a lot of opinions about a lot of things. And because I’m a reasonable guy I keep most of my opinions limited to Twitter. But today I bring you my opinion unburdened by an attempt to give advice. Actually I will give advice, but I give it knowing it’s never going to happen. My topic of choice is the relationship between student loans, the government, and parents of college age students.
We can all agree 18 year olds are adults. They can drive, vote, buy homes, and get married. But according to the government they are still under their parents financially. Specifically as it relates to paying for college.
“Whether you like it or not, in the eyes of the Federal government, you are at least partially responsible for paying for your adult child’s (18 to 23 years old) education. This has long been the case. The Department of Education, college and universities, and the rest of the federal government also need you to know, that if a student wants to borrow money on their own to fund their own education, without the help of their parents, the parents will still likely be required to fund a portion of the education.” (courtesy of the Indy Star)
This gets irritating and frustrating when parents’ financial situations change. A settlement from an insurance company, an inheritance, or any change in income can result in a change in financial aid coverage. Mostly likely in the form of parents owing more money.
“I believe it should be a parent’s decision whether or not they want to pay for their adult child’s education. I plan on paying for my kids’ college costs, and have saved quite a bit to make sure that goal becomes a reality. My parents paid for my education, and I want to provide the same gift to my kids. But given the nature of retirement planning today, it doesn’t make sense for a parent to be forced to spend money on another adult’s education. By the time a parent of a college-age student reaches, well, college, the parent will have approximately 10 to 20 years left to make sure they’re able to fund the rest of their adult life. That’s not a lot of time, especially if you’re throwing in $100,000 for someone else’s college education.” (courtesy of the Indy Star)
But even this isn’t the most frustrating part. The most frustrating part is that the education isn’t leveraged by the parent but the student. Parents may work themselves to the bone to fund college for their kid, and then see no economic benefit from it.
There is a way around this. A parents’ financial info can be excluded from the student’s FAFSA and that’s if the student is married, has a child of their own, they are in the military, or they are legally emancipated from their parents. Yep, emancipated. It’s ridiculous.
“So here I am, arguing that a parent shouldn’t be forced to pay for their adult child’s education, in spite of the fact that I believe a parent should plan to do so, and despite the fact that I plan to do so. I’m suggesting that parents’ financial information no longer be included on FAFSA forms. If my child is old enough to go to war, buy cigarettes, and get a tattoo depicting how much they love me, then they can fund their own education.” (courtesy of the Indy Star)
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.