Why You Shouldn’t Pay Your Child’s College Tuition With Stimulus Checks
Written by
Cindy Lamothe
Edited by
Amber Barkley
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It seems like a brilliant solution to a problem — using your stimulus checks to cover the cost of your child’s tuition. But before you deposit those funds, experts ask you to think twice.
“Using stimulus checks for college tuition payments can create serious financial vulnerabilities for families,” said Gagandeep Saini, CEO of We Buy Houses in Central Valley. “I’ve seen many parents make this mistake — leaving themselves without emergency savings during unstable economic periods.”
Through his experience advising families on financial planning, he said he has learned that stimulus funds serve as critical financial cushions that shouldn’t be depleted for large educational expenses.
Below are experts’ top reasons for not using stimulus checks to pay your child’s tuition.
Limited Impact on Overall Tuition Costs
According to Patrick McDermott, executive vice president of Max Cash, the stimulus check or payment might cover only a small portion of your child’s tuition fees.
He said, “This means that you would still need to come up with additional funds to cover the remaining balance, which can be challenging if you are already facing financial difficulties.”
Better Use for Immediate Needs
“The purpose of a stimulus check or similar payment is to provide financial relief during times of crisis or economic downturn,” McDermott said.
While paying for your child’s education is important, he said it may be more beneficial to use the money for immediate needs, such as rent, groceries or medical expenses.
Uncertainty of Future Payments
It is important to consider that a stimulus check or similar payment may be a one-time occurrence, McDermott said. “If you use it to pay for your child’s tuition, you may not have access to this additional financial support in the future, if needed.”
That’s why he said it’s essential to prioritize and budget accordingly during times of economic uncertainty.
Potential Impact on Financial Aid
Depending on your child’s age and eligibility, McDermott said, using a stimulus check or similar payment toward tuition might affect their ability to receive financial aid in the future.
He explained, “This can ultimately result in higher out-of-pocket costs for both you and your child.”
Alternatives To Consider
Instead of using a stimulus check or similar payment toward tuition, McDermott said there may be other options available, such as scholarships, grants or low-interest loans. “It is important to explore all possibilities and assess the long-term impact before making a decision on how to allocate these funds.”
Saini agreed, adding, “I recently worked with a client who used their entire stimulus payment for their daughter’s semester tuition. Three months later, their HVAC system failed, forcing them to take on high-interest credit card debt for the repairs, since they no longer had savings.”
He said this perfectly illustrates why preserving stimulus money for emergencies and unexpected expenses is essential. “Parents should instead explore federal student loans, scholarships, grants and payment plans that are specifically designed for education costs.”
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