Warning: Parental Help May Lead to Lower GPA

As parents we always want to do the very best for our kids and helping them pay for college is up there on the list.  But what if too much help is a bad thing? Sometimes the best of intentions can have unintended consequences.

According to research highlighted in “Paying for the Party” written by Professor Laura Hamilton of University of California – Merced, parents willing to shell out thousands to support their students in college may actually be contributing to their failure.

After digging through data from the National Center for Education Statistics, she concluded that parental help invariably leads to lower GPAs though higher graduation rates.  On the other hand, a study by Public Agenda for the Bill and Melinda Gates Foundation found that college dropouts were more likely to be paying for their own education without parental support than their peers who actually graduated.

The Public Agenda research noted that students dropped out not because of college costs but because they tried to juggle school and work more than twenty hours a week.  Working during school to help bridge the gap in financing a degree tended to result in dropouts with too much debt and no degree or graduates with a degree and saddled with too much debt.

My interpretation of her research:  Too much of a good thing is not a good thing.  Too often affluent parents or those willing to sacrifice their own financial health end up paying for college probably making it too easy for their kids to spend time socializing instead of studying. And on the other hand, those without parental support may end burdened with loans that make it difficult to launch into adulthood.

Graduating with No Debt

When I earned my degree from a public university in the early 1980s, colleges didn’t cost anywhere near what they do now.  States were more likely to provide higher support to the colleges allowing them to have lower tuition.  This made it relatively easy for me to work twenty-hours or so each week to earn enough to pay for my tuition, fees and books and still have time to study for two majors.

My parents weren’t well off.  Their help was limited by their means. But having been instilled with the value and expectation that college was a ticket to middle class success, I persisted and juggled both.

With the astronomical costs of college today, this kind of no debt story is not as likely.  And Professor Hamilton’s and Public Agenda’s research bears this out.

So what’s a well-intentioned parent to do?

Have a Plan and a Conversation

I think it’s important for parents to understand how much college will cost and how it may affect their other financial goals.  Going into this blindly may have terrible outcomes for parents and students alike.

  1. Get a handle on what your retirement will cost so you know how much you may actually be able to afford for parental help if you choose to offer it.
  2. Talk with your student and discuss how paying for college will impact the family finances. Unless you’re major is Partying, we’re talking serious money and college is a serious business.
  3. Set ground rules and expectations for your financial support.  If you’re providing funds from the Bank of Mom and Dad, then they should expect and understand that there are strings attached.  Whether that is a minimum GPA or a maximum amount of cash outlaid, that’s up to you.
  4. Help your student determine an economically viable major that aligns with their interests and values.  You may be better off working with an educational consultant and taking a couple of tests to measure this (Myers-Briggs or Birkman Method for example).  Finding the right major now will lead to less frustration, less time to graduate and overall lower costs – out of pocket now or in loans later.