A few years ago, a Money Talks News reader named Karen wrote in. Her oldest had just been admitted to a private college that cost $72,000 a year. Sticker price, no aid. She and her husband, both 53, had about $400,000 in retirement savings between them.
“Stacy, our daughter has worked so hard for this. We told her we’d make it work. We’re going to take out Parent PLUS loans for whatever financial aid doesn’t cover. Are we crazy?”
I wrote back the same thing I’ve told dozens of parents in similar spots over the years. Yes, you’re crazy. Don’t do it.
Here’s the line I’ve used for 30 years and still believe: Your kid has 40 years to earn money, refinance loans, or get help from an employer. You don’t. You’re 53. Every dollar you don’t save for retirement now is a dollar you may never recover.
This isn’t about loving your kid less. It’s about math.
Here are the six rules I’d give anyone in their late 40s, 50s, or early 60s who’s staring down a tuition bill.
1. Run the retirement number first
Before you decide what you can spend on college, you need to know what you’ve got to work with. Pull up your retirement projection — Social Security estimate, current savings, what you’re on track to have at retirement age, and what you’ll need.
If you’re already behind on retirement, the answer to “should I borrow for college” is almost always no. Borrowing for college when your own savings are short is the financial equivalent of a drowning person handing their life jacket to someone on the shore.
For more, see “5 Steps To Ensure Your Money Lasts Through Retirement.” Do that math first.
2. Have the honest conversation with your kid
This is the conversation many parents avoid, and it’s the most important one.
Sit your kid down. Tell them exactly what you can contribute, what you can’t, and why. If the dream school costs $80,000 a year and you can comfortably contribute $15,000, say that. If you can’t contribute anything, say that too.
Kids respect honesty. They don’t respect parents who quietly drain their retirement and then become a financial burden on them at 75. Your kid’s college choice should reflect what your family can afford, not what you wish you could afford.
3. Understand what Parent PLUS loans are
Parent PLUS loans are federal loans parents take out for a child’s undergraduate education. They sound friendly. They’re not, particularly.
The federal interest rate on PLUS loans is 9.08% for the 2025-26 academic year, according to U.S. Department of Education data reported by The World Data. That’s higher than most mortgages, most car loans, and most home equity lines.
And there’s no income-based forgiveness for the parent. The kid can have all the financial hardship in the world, but you’re on the hook.
Average Parent PLUS borrowing for a bachelor’s degree comes to about $55,000, according to the Education Data Initiative, with private nonprofit programs averaging close to $70,000.
Parents 60 to 70 owe billions of dollars on Parent PLUS loans they took out 10 or 20 years ago. Many will carry that debt into Social Security and have it garnished from their checks. Don’t be that statistic.
4. Optimize 529 plans, but don’t over-fund them
If you’ve been saving in a 529 plan, that’s terrific. The tax-free growth and tax-free withdrawals for qualified education expenses are a powerful combination, and many states throw in a state tax deduction or credit on top.
Two cautions, though. First, money in a 529 account only does its tax magic if it’s spent on qualified education expenses. If your kid skips college, gets a full ride, or finishes early, leftover funds can hit you with taxes and penalties unless you transfer them to a sibling, convert a portion to a Roth IRA (within current limits), or use one of the other escape hatches.
Second, don’t fund a 529 at the expense of your own retirement. The order should be: Get any 401(k) employer match, fund retirement to the recommended level, build an emergency fund, then fund the 529. Not the other way around.
Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 40 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.
5. Push your kid to make smart school choices
The cost difference between schools is enormous, and the outcome difference is much smaller than people assume. A kid who graduates from a $30,000-a-year state school with no debt is in dramatically better shape than the kid who graduates from a $75,000-a-year private school with $120,000 in loans.
Some smart moves to push:
Two years at a community college, then transfer to a state university. The diploma reads the same.
In-state public school, where tuition is often a third of out-of-state private.
Aggressive merit aid hunting — many private schools will discount heavily for strong students.
AP and dual-enrollment credits that shorten time to graduation.
A gap year of work or a co-op program that defrays costs.
The school’s name on the diploma matters less than getting the diploma without crippling debt. That’s true of your kid, and it’s true of you.
6. Let your kid borrow — within reason
Federal student loans for the student (not Parent PLUS) come with some real protections: income-driven repayment, deferment options, and partial forgiveness in certain professions. Parent PLUS loans don’t have those guardrails.
A reasonable rule: A student shouldn’t borrow more than the salary they reasonably expect to earn in their first year of work. A nursing student looking at $65,000 starting can probably handle $50,000 in total student loans. An English major eyeing a $40,000 first job should not borrow $90,000.
If your kid wants the dream school and you can’t afford it, the question isn’t whether you’ll borrow for them. The question is whether they’ll borrow for themselves — and whether that level of debt is sane given their career path.
Karen, by the way, ended up having a hard conversation with her daughter, who chose a state school where she got significant merit aid. The total parental contribution was about $20,000 over four years. Karen and her husband kept fully funding their retirement. Daughter graduated debt-free. Mom’s retirement is intact.
Sometimes the best thing you can do for your kid is refuse to wreck your own future for theirs. They’ll thank you later, when they’re not helping you make ends meet.
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