What is Your Education Policy?

​When I was growing up, my father would constantly chastise me to “get a job, you need to pay for one-half of your college education.”  Although his education policy was clear, I found this approach tended to emphasize making money over extracurricular involvement.

As a result, I had an egg route at age 14.  A paper route at age 16 and worked at a Kroger in Indianapolis as a bag boy (or a Courtesy Clerk in today’s more politically correct world).  I later worked every summer during college including stints as a house painter, a bakery oven construction worker and a pizza chef for Godfather’s Pizza.   That is the same chain that the recently deceased Herman Cain was famous for turning around.
 
The emphasis in my case was purely on the money side.  On the positive side, it did help me limit my student loan debt to a mere $2,500 upon graduation.  Yes, I know the joke…what would that be in today’s dollars?  Ha ha!
 
With my kids, I was a bit less stern.  The idea was they would pay around half their education but with many jobs unavailable until 18 or after and the fact that my kids were not the entrepreneurs that I was, they were allowed to pay for their half with student loans and grants or scholarships.
 
What is your policy?

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Whether it was my education or that of my kids, in both cases, we were provided, or we provided, a clear policy towards college and post graduate education.
 
With so many kids approaching college, getting ready to head to college or just logging in for college, do you have an Education Policy?
 
Let me give you four (4) reasons why you should:
 

1. It provides a clear idea to your children of their part in paying for college or post graduate education.
2. It allows your financial planner to better pinpoint your true expected future cost for your children’s education and whether you can achieve your financial goals, whatever they may be.
3. It forces all parties involved to think through the cost benefit side of college and puts a more value on the college experience.
4. Depending on your policy, it could help teach your children the value of money and the high cost of such schooling.  This may in turn push some students to explore other alternatives like community college or trade schools.

 
What does a sample policy look like?
 
Here are a few examples, but I would encourage each couple or parent to develop their own policy for their own special circumstances.
 
Policy Example #1
 
When you finish high school, you are on your own.  Your parents do not have the resources to help you so you should focus your energies on getting the best grades you can so you can get as many grants and scholarships as possible or consider other alternatives, like community college or trade school, where you can work while in school to pay for those costs.
 
Policy Example #2
 
We will pay for 100% of your educational costs for a four-year degree from an in-state college or university, including tuition, fees, room, board and a monthly stipend.   We will only pay up to the cost of attending a four-year, in-state college or university, including the above items, should you choose to attend an out of state institution.  Essentially you will be responsible for the difference in the total cost over and above the total four-year cost of a similar in-state college or university.
 
We will not pay for any post graduate costs but will credit and pay for some of those costs up to the amount of scholarships or grants you earn during your undergraduate program at an in-state school.
 
Policy Example #3
 
We will pay for 50% of your educational costs for a four-year degree from any college or university, including tuition, fees, room, board.  We will also provide you a monthly stipend to cover any other costs.   
 
We will not pay for any post graduate costs, that will be your sole responsibility.
 
I can go on and on as there are lots of possibilities.  However, the key point is that it is important to develop such a policy that is uniquely yours and to make your children aware of such a policy as early as possible.
 
I know there are going to be those out there that say this puts too much pressure on a child, but I would argue it also provides clarity.  It allows the parents and the child to start discussing what might be the child’s responsibility and how they can prepare, such as work in high school or college.  Finally, it may incentivize the child to work harder in school to take advantage of all possible grants or scholarships if college is part of their plans.
 
Obviously, every child is different, and it is tough for most teens to know exactly what they want to do with their lives, but a well-crafted education policy will provide for a dialogue if nothing else.
 
Let me know your thoughts in the comment boxes below.

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