Can I afford to pay for my kids’ college on my $140,000 salary?

A Reddit user is concerned about his ability to pay for his children to attend college.

He’s 47 and making $140K per year, but has $900 per month in alimony to pay, as well as $20K in student loans outstanding from his own education, and a $2350 monthly rent payment to make. When his 18-year-old child applied for financial aid, the poster said he was offered an $18K Parent PLUS Loan, and he’s extremely concerned that the loan will derail his finances. 

So, what should the Redditor do about the student loans he’s being asked to take out, and is it feasible for him to afford to pay for college for his kids — particularly since he has two other children who are 16 and 13 who will also need help with college tuition sooner rather than later. 

Can you pay for college on a $140k salary?

The reality is that it is possible to pay for your children to go to college with a $140K per year salary. In fact, it is possible to pay for college for your kids even if you make less than $140,000. However, you usually cannot do this if you have not started saving when your children are younger. 

If you start saving for college when your kids are pretty young, you have time for compound growth to work for you. You can put aside a little bit of money per month, you can invest that money, you can earn investment gains, and paying for school won’t be a huge financial burden since you’ll be working towards it a little at a time, and your money will also be working for you.

However, it is a huge financial burden to come up with $20K, $30K, or $40K per year to pay for college all at once when you haven’t invested early– especially if you have three children you are going to have to do that for.

Since it seems like the Redditor missed the boat on saving early on, that’s no longer going to be an option for him. His choice now is whether to take student loans or not, and, unfortunately, the answer most likely should be that he says no to the $18K Parent PLUS Loan — especially given that he has to think about the long-term.

If he takes an $18K loan this year, he’d probably get stuck borrowing again the next year — and the year after that, and the year after that, and then for the next two kids as well. 

This quickly becomes unsustainable and will make it impossible for the poster to cover the bills, much less save for his own future. Rather than getting into this situation and letting his child get started on something he may not be able to finish — or finding himself helping one kid but not being able to help the other two — the poster is going to need to come up with an alternative plan from the start.

That’s especially true because while his kids will have time to recover if they have to take out student loans, he may end up in a very bad place financially if he commits to loans he can’t afford and ends up being unable to build a retirement nest egg.

How to help kids when you can’t afford to pay for college

Ultimately, if you are in a situation where you didn’t save for college, you can’t compromise your financial stability to help. Student loans exist to allow young people to pay for school, but retirement loans to fund your retirement aren’t an option — so you need to prioritize investing for yourself. 

You can help your kids in other ways, though. You can encourage them to find a cheaper school where they can get scholarships and more financial aid. You could also help them apply for scholarships and grants through private organizations or your state. If worst comes to worst, you can also guide them through smart borrowing so they can fund their degree without getting in over their heads and truly understand the implications of their borrowing choices. 

You can also talk with a financial advisor to make a financial plan of your own. Your advisor can help you determine how much help you can reasonably provide given the circumstances, while ensuring you don’t overcommit and end up with a disaster on your hands.

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