The Struggle and Sacrifice of Parenthood

It was not infrequently that, during my teenage years or whenever I gave my parents a run for their money, my mom would loudly exclaim, “I hope you have six kids that are just like you!” I think her intent, and one that is shared with each generation, was that I would understand her feelings, experience countless sleepless nights, a fair amount of worry, far less appreciation than I deserved, and moments of behavior that I would never have imagined. All this would serve as suitable payback for the years my mom (and dad) spent raising me.

I have three children, and so the retribution I faced was only half of what she hoped, but I learned the lesson. Raising children is not for the weak of heart. Parenthood is a lifelong commitment, where one is constantly uplifting, teaching, accepting, worrying, preparing, protecting…I could continue with this list and fill a page.

There are no instructions when it comes time to bring your newborn back to your home. New parents – while seeking suggestions and advice from friends and family – must figure it out as they go. From their first diapering and feeding until they grow older and move out into the world, parents help guide them along the way.

The Cost of Raising a Child

Since 1960, the US Department of Agriculture has tracked the cost of raising a child. They collect data from almost every source to determine the cost of food, shelter, and other necessities in order to provide a “middle-income” outlay. By 2020, the USDA had determined that a “Middle-income, married-couple parents of a child born in 2015 may expect to spend $233,610 ($284,570 if projected inflation costs are factored in*)…to raise a child through age 17. This does not include the cost of a college education.” The College Board’s Report, Trends in College Pricing 2019, found “Average total tuition and fee and room and board charges in 2019-20 [in the public four-year sector] are $21,950…Average total charges in 2019-20 [for private nonprofit four-year institutions] are $49,870.”

Consider this scenario: Mom and Dad, currently in their mid-40s, are both middle-class and hardworking individuals, and have been dreaming of sending their children to college. they’ve been told their entire lives that being successful in the United States depends on one’s ability to get into, attend, and graduate from a university. For the past 18 years, they’ve reiterated this message and ensured their children understood the value of education.

For kids, the goals are clear, but they don’t realize that achieving them will cost their parents dearly and cost single mothers and people of color even more. Caitlin Zaloom, author of Indebted – How Families Make College Work at Any Cost, describes the moral conflict parents feel as they try to honor what they see as their highest parental duty – providing their children with opportunity.

The results, due to the bewildering labyrinth that is the financing of higher education, often include financial instability and debt. College education may present “opportunity,” but graduates and parents pay the price.

How Do American Families Pay for College?

It’s an understatement to suggest colleges are not particularly forthcoming when it comes to furnishing parents with information about prices or borrowing. Financial aid is always welcome, but the offers are often confusing and typically leave a gap. Scholarships, grants, federal direct subsidized, and federal direct unsubsidized loans may cover half of the expense for tuition, room and board, but aid packages frequently include the line “Direct Parent PLUS Loan,” and here’s where it gets interesting.

When one receives the financial aid offer, there are a series of options to pay the remaining costs for tuition, room and board. These options include:

• Making one annual payment for the full amount still owed (use of a debit or credit card will often require an additional 2.75% ‘convenience’ fee).
• Make payments each semester
• Make monthly payments (for which there is often a fee)
• Take out a Parent PLUS Loan and pay the annual balance due.
• Take out a private loan and pay the annual balance due.

Needless to say, paying for college comes more easily for wealthy families than it does for the middle-class or for households that fall below the poverty line. At present, the US Department of Health and Human Services’ Poverty Guidelines, defines a family of 4 with a household income of less than $26,500 as being impoverished. Undergraduate students within this segment of the population can receive Pell Grants to help pay for college, and students may be able to borrow up to $12,500 per year in federal student loans.

While these measures undoubtedly benefit those that receive them, there remain millions of students who either don’t qualify or owe more than federal student loans can cover. When one acknowledges the underlying pressure to send children to college in conjunction with rising tuition, it should come as no surprise that many turn to private loans or federal Parent PLUS Loans to cover educational costs.

Parent PLUS Loans and Other Educational Debt

In our next post, we will take a deep dive into Parent PLUS Loans – how to apply for them, how much a parent can borrow, what are the interest rates and affiliated fees, when does repayment begins and what can you do about them. For now, I offer a brief synopsis. Parent PLUS Loans are offered by the federal government through the US Department of Education and are made to parents or legal guardians to help cover the cost of a student’s education. A Parent PLUS Loan is not a loan to the student, it is not a co-signed loan, and it is not a private loan. They are loans undertaken solely by the parent for the benefit of the student. Other, similar, types of debt include:

• Private loans – these loans don’t have the same advantages as federal loans (i.e. forbearance and deferment options)
• Shadow debt – not considered student loans, these predatory offerings are high-cost, high-risk financial products extended directly to students and parents by for-profit colleges.
• Home Equity Loans – home equity loans can have interest rates lower than those offered for private student loans.
• Loans on Retirement Plans – money borrowed from a 401K must typically be repaid (with interest) within 5 years.

A Noble Calling

We all want the best for our children, and we hope they see tremendous opportunities in the future. From the moment they draw their first breaths we feed them, clothe them, and drive them to Girl Scouts, basketball, or soccer practice. We try to teach them right from wrong and we aim to instill the value of education throughout their lives, but most of us are not spinning straw into gold, and what seems like the proper choice to pay for college may not allow for a fairy tale’s happy ending.

Parental borrowing has more than tripled in the last 25 years and now comprises 23% of our nation’s student loan debt. Now, more than ever, parents are putting their plans and dreams on hold to help their children. Retirement, home renovations, travel – all placed on the back burner as parents pay off student loan debt incurred for their kids. Just as there’s no absolute manual to direct new parents through the process of raising children, there isn’t a guidebook to shepherd older parents through the years spent repaying student loan debt.

The cost of raising children may be exorbitant, but I’ve learned that the rewards can be priceless. The author, John Steinbeck, once said, “Perhaps it takes courage to raise children.” He is right, and I’m sure my mom would agree. Maybe we parents have more courage than we’ve given ourselves credit for, now if we only had the fatter wallets and deeper pockets to match.