Student Loans

USA Today reported that more families are considering cost when choosing a college:

The survey by Discover Student Loans, to be released Thursday, found that nearly half of adults are limiting their child’s college choices based on price. And with rising student loan debt and a job market that continues to greet college grads with not-so-open arms, the ability to find employment has become a top factor in deciding what to study. The number of adults who say earning potential is more important to their child’s education than what they major in is up, at 42% vs. 38% last year, the survey shows.

All I can say is: What’s going on with the other half that cost isn’t a factor? I can’t imagine all those parents have the savings necessary to fund four or five years of undergraduate study. (And even if they do, they probably shouldn’t foot the whole bill…more on that in a minute.)

The idea that economic considerations shouldn’t sully the college decision process is absurd. If you aren’t borrowing money to pay for school, then maybe your employment prospects can take a back seat to the joy of learning. If you are borrowing, though, it’s crucial that you pick a) a school you can afford and b) a major that will resort in gainful employment that pays more than what you would have made had you skipped college. You want to ensure your investment of borrowed money gives you a return that’s worth the cost.

I’ve written a lot about how important it is that your kids get post-secondary education in a world where there’s an increasing divide between those who have college degrees and those who don’t. (For more, read “Ignore the talk: college is vital,” “Should you pay for kid’s college?” and “Should your kid skip college?“) And I’ve argued that parents need to help pay for this education if they possibly can, since letting your kids try to go it alone is often setting them up for failure (read: no degree and tons of student loan debt).

But there’s evidence that giving kids a totally free ride is a bad idea. Parental help is associate with higher “completion” rates–kids actually get the degrees they go to college for–but lower grades. The column I wrote about this has a somewhat misleading headline (“Why parents shouldn’t pay for college“), since refusing to help if you can puts your kid at a severe disadvantage.

Still, the column hit a nerve. It was the most-shared article on MSN Money yesterday. It should provide some comfort to parents who can’t afford to pay the whole bill for college–but I hope it doesn’t provide comfort to those who can help, but won’t.