Pay for College or Retirement?

Posted by: Meredith K. | Jan 15,2008

Suze Orman says this:

"Q: We have two young children we want to start college funds for, but we can't afford to save up for their school costs and continue to build our retirement funds.

A: Focus on your retirement. There are plenty of ways for your kids to get help with college costs -- loans, scholarships, etc. -- but there's no help if you find yourself without enough money to live on in retirement."

That’s a pretty bold answer.  She’s basically telling the parents to put themselves before their kids.  I tend to agree with this as there are a whole host of avenues for people to pay for college.  There are private and public loans, scholarships, grants, and the like. Retirees have Social Security, that’s about it, aside from money they raise themselves.  Maybe they can apply for a loan, but they’re not going to get the kind of money to sustain a long retirement.

What this should tell younger people is that they shouldn’t rely on mom and dad.  You’re not always privy to exactly what your parents’ bank account looks like.  If they’re not able to afford college, this may not be because they’re selfish, but because they have to prioritize.  Still, I could imagine a young person being pretty peeved that her parents chose retirement, which may be two decades away, over a college education that’s starting next year.

Entering college is all about learning self-sufficiency.  It’s about being away from home for the first time, managing a bank account and credit card accounts, and making it on your own.  While student loans are a burden, they’re also an introduction to how the real world works.  On the bright side, student loans can ultimately establish a strong credit rating early.  All in all, don’t be furious if your parents cannot afford college tuition, as parents have to look after their own financial needs in addition to their children’s needs.  

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