3 Huge Reasons You Shouldn’t Pay for Your Child’s University Education

By Joanne Poh

Most Singaporean parents want to pay for their kids’ university education if they can afford it. In fact, those who can’t might even feel a bit of guilt. After all, isn’t it better for the kid if he can concentrate fully on their studies instead of having to worry about getting a part-time job or repaying study loans when they graduate?

This year, Singaporean business students at NUS paid $9,250 for a year of studies. At SMU, they paid $11,100. With prices steadily rising, parents can expect to budget around $40,000 for a 4-year undergraduate degree—no small sum.

Unfortunately, if you’re already struggling to retire, taking on the financially taxing task of paying for your child’s university education might be the final nail in the coffin, resigning you to another decade of work even as you enter your twilight years.

But with the cost of living rising so quickly in Singapore, can you really sentence your poor, defenseless offspring to a lifetime of student loan repayment? Here are some reasons you can, and should.

1. You want to save them money. But does that money really get saved?

Many Singaporean parents make the mistake of thinking only in terms of dollars and cents when it comes to paying for their kids’ university education.

Four years at university might cost $40,000. By paying for it all, you’ll be saving your kids $40,000 plus interest—money that they can put towards something more worthwhile, like saving for a home. Right? Right?

The truth is, at the tender age of 19 or 21, few youths are mature enough to think about your financial sacrifice in such terms.

In fact, just handing them the money no questions asked is likely to turn them into one of those dreaded entitled brats who fall to pieces when they realise nothing else in life is that easy.

Janice, a 29-year-old editor, looks back at her university days with a tinge of shame.

“My parents paid for me to study in the UK. Although we weren’t that wealthy—both my parents are teachers and I grew up in a 3-room HDB flat—when I arrived in the UK I felt like I was living the high life. I shopped way too much.”

2. Your kid’s grades might still suck

Look at the typical university student in Singapore. Is he studying diligently since mum and dad have paid for uni in order to allow him to better concentrate on his studies? Probably not.

In fact, while there are many stories of students who managed to do well at uni despite having to hold down part-time jobs, kids whose parents hand them everything on a silver platter tend to actually get worse grades.

In fact, a recent study conducted in the US revealed that the more parents paid for their children’s university educations, the worse their kid’s grades tended to be!

Lynn, a 30-year-old marketing manager says, “I spent most of my university days drinking beer at the hostel. Exams were disastrous. Yes, my parents paid for my university fees. But that didn’t make me study any harder.”

3. Screw up your own retirement and your kids will have to look after you

The horror stories are true—one of Singaporean retirees’ biggest regrets is spending too much on their children. So younger parents might want to sit up and listen.

If you can easily afford to pay for your children’s university education and still retire comfortably, by all means help out.

But if you believe you’re forced to make a huge sacrifice on behalf of your children, you might want to seriously reconsider.

Overstretch yourself and screw up your retirement, and guess who might be the one struggling to support you in your old age? Yup, the very kid you tried to help.

To make matters worse, because young people these days have fewer siblings, the burden of caring for elderly parents falls squarely on the shoulders of one or two, unless you’re one of the few with a whole brood.

Arnold, 32, gives his mother at least 20% of his monthly salary, and has been doing so for the past ten years.

I’m quite a traditional person,” he says. “My mum is already 65 and still working, so as her son I feel it is my responsibility to help her out. She went through a lot to put me through university, even sending me overseas for a period of time.”

When asked if the financial burden is too great, Arnold says, “Everything in Singapore is a financial burden. If I weren’t giving the money to my mum, something else would pop up and take it from me anyway.”

This article was first published over at MoneySmart blog on 12 November 2014. It is reproduced with permission.

About The Author (Joanne Poh)

In my previous life, I was a property lawyer who spent most of my time struggling to get out of bed or stuck in peak hour traffic. These days, as a freelance commercial writer, I work in bed, on the beach, in parks and at cafes, all while being really frugal. I like helping other people save money so they can stop living lives they don't like.


6 Things You Should Know Before Taking an Education Loan

Tips on how to go to University for free

20 Things I learnt from University