“Look at the budget and what you can afford,” she says. “If you don’t, you are going to be in this perfect storm where you have to make [debt] payments on debt,” she says. If you’re feeling guilty, consider Holt’s philosophy: Parents can’t help their children understand options without first knowing their own limitations. College tuition wasn’t in your retirement plan Those over 60 with student loans struggle to cover basic living expenses and are more likely to have Social Security garnished for unpaid debt, according to a 2017 Consumer Financial Protection Bureau report. In addition, a 2021 NerdWallet survey conducted online by The Harris Poll found that 26% of parent PLUS borrowers say they’ll be unable to retire as expected because of their loan debt. Calvin Williams, CEO and founder of Freeman Capital, says he understands wanting to give your child the best. “But if you don’t plan and take care of your retirement, then you could be asking your child to take care of you in your later years. So in many ways, paying for your own retirement is putting your child first,” he says. Consider this: Paying that $788 a month toward college for 10 years instead of investing for retirement could leave you $128,000 poorer, considering a 6% return. You haven’t set boundaries Miller says many of his clients expected their child to help with payments – but it didn’t happen. The NerdWallet survey found that 22% of Americans with parent PLUS loan debt thought their child would take over the payments, but they haven’t yet. “It’s important that parents and students discuss how the cost of college is getting split in a way that’s realistic and comfortable for all involved,” Manny Chagas, vice president of Discover Student Loans, said in a press release. He suggested using free online budgeting calculators to start the conversation. Families should discuss what is important and be open about money, says Elizabeth Sterbenz, a licensed marriage and family therapist specializing in financial therapy. “You want to give your child the moon, but being really realistic about what’s going on really gives a lot of clarity,” she says. “We are all doing the best we can with what we’ve got.”
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