We are considering holding back some of the funds in her 529 plan, possibly rolling it over to one of her younger siblings. This is leading to conflict between us that I wish we could avoid at what should be an exciting time in her life.
What should Karen do?
It is certainly reasonable to guide a young adult toward a practical career when you are paying the bulk of the bill. New college graduates face a challenging employment landscape and should do whatever they can to increase their chances of finding productive work once they complete their degrees.
Parents do not “owe” their offspring a free college education, but those who have saved for college often understandably want to help their kids avoid as much debt as possible, and savings in 529 plans must be used for educational expenses to avoid tax penalties.Karen's first option, paying the bills regardless of her child's concentration in college, preserves the right to say, “I told you so,” but should only be embraced if she believes that there is a way to turn just about any subject into a viable career. If she's scrimped and saved for years and honestly feels that her daughter is dumping money down the drain, there is no reason to passively accept that fate. Karen could explain her concerns about the choice of major and insist that her daughter augment her education with coursework that Karen feels is appropriate. She might offer to pay for tuition, books, fees and living expenses in proportion to the practical courses studied each semester. The student would be expected to work and/or borrow to cover the proportion of expenses related to studies disapproved by Karen. Ideally, Karen and her daughter will come to an agreement on a major that Karen doesn't mind financing. Whether that involves her daughter convincing her mother of the value of a film studies major, or both parties agreeing on some other course of study, doesn't matter.