In the lead up to college, many prospective students and their parents anxiously await decisions from top-tier educational institutions. While a rejection from a dream college might feel devastating, an acceptance can come with mixed emotions in the family and financial uncertainty.
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Alex watched his son Sam get accepted into his dream school abroad. While the flashy and esteemed film school in France sounds like an amazing opportunity to his son, the costs are going to add up quickly. Tuition fees alone will cost around $13,000 per year, and that doesn’t include the living expenses that his son is sure to incur.
This dad isn’t sure if he should support his son financially during film school. After all, covering the costs of this dream school would drain all of the savings he has set aside for his son’s education and then some. If his son ends up changing his mind about this career path down the line, Alex won’t have any extra funds to help his child pivot into a new career either. If Alex has other younger children, he also needs to think about being fair to them.
For Alex, the dilemma between paying or not paying for his son’s dream school is a heavy choice.
Weighing the return on investment
Alex wants to support his son’s educational aspirations and has set aside $25,000 for it. But he had a more traditional college approach in mind. As a successful lawyer, he had hoped his son would gravitate toward a “responsible” degree choice with a clear path to a financially stable career, like engineering, which provides an average annual salary of $118,350, according to government data
Naturally he’s not excited about the prospect of paying for an expensive film school in Paris. Instead, Alex was hoping to help his son pay for a proven degree at a state school.
Sam isn’t interested in pursuing a degree in engineering at an in-state school. Instead, he wants to attend a Parisian film school with the goal of becoming a screenwriter. According to the Toronto Film School, “on average, a screenwriter in the U.S can earn anywhere from $60,000 to $100,000 per year. However, for those at the top of their game, the earnings can reach into the millions.”
But, of course, landing a screenwriting job is notoriously difficult, so it’s possible he won’t break into the industry after getting his degree.
His son can attend a public in-state university of his choice in their home state of Florida, where average tuition is said to be $6,071 per year. Across a four-year degree, that would add up to around $25,000, plus living expenses. In contrast, Sam’s dream film school involves a three-year program with tuition of around $13,000 per year leading to a total cost of $39,000, plus living expenses in a very expensive city.
The choice to help or not will depend on how much money Alex thinks he can afford to spend and what his approach to parenting is. He needs to think about his own financial journey and ensure he doesn’t jeopardize his retirement in trying to make his son’s dreams come true.
According to a Citizens Financial Group survey of U.S. parents, 61% report needing to go above and beyond typical financing options, such as 529 plans and federal loans, to fund their child’s education, and 62% expect a delay in retirement for this reason, with nearly 40% anticipating a delay of 1-5 years.
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How to help wisely
It’s hard to predict the future, but it would make more financial sense for Alex’s son to pursue a degree, engineering or otherwise, at an in-state school instead of a European film school. But Alex can help his son consider all of the options.
He could start by laying out some different ways to achieve similar or multiple goals. For example, if Sam attended the right Sunshine State school, he could both obtain an engineering degree and earn a minor in film studies. Opting for a minor instead of full-blown film school could give him a better idea if that’s a career path he wants to pursue further or not.
Another option could be for Sam to pursue a degree in film at a Florida school. Alex can help with the savings he built for Sam’s education.
Alternatively, Sam could choose to move forward with plans to attend his dream school. If Alex supports his decision, that doesn’t mean he should derail his own financial future for this dream.
With that in mind, Alex should have a frank conversation with Sam. He should make it clear he really can’t spend more than the $25,000 without potentially dipping into the retirement nest egg he’ll need in a few years. Instead, it would be up to Sam to come up with the difference.
As Alex makes contributions to his son’s education, he might consider setting ground rules on what his expectations are. For example, he might set a requirement that Sam pass all of his classes each semester in order to continue helping paying for school.
Along the way, Alex can deduct tuition costs from his tax return.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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