Should You Pay for Your Kid's College? It Just Got Harder to Borrow | Mia Samson

By: Mia Samson

As an LMU graduate, I've seen firsthand just how expensive higher education can be. My family used to joke that attending LMU came with an "LMU mortgage." Looking back, that joke wasn't too far off. Today, the estimated cost of attendance at LMU is approaching $99,000 per year. College costs have been climbing for decades, increasing at roughly twice the rate of inflation. That's one of the biggest reasons I encourage parents to begin saving early through tax-advantaged accounts like a 529 plan. More than half of bachelor's degree recipients graduate with student loans, and Americans collectively owe close to $1.9 trillion in student debt.

Beginning today, several major changes to the federal student loan system officially took effect. I recently listened to an excellent episode of The Daily from The New York Times breaking down what these changes mean for students, parents, and universities. Here's what actually changed:

Parent PLUS Loans are now capped at $20,000 per year and $65,000 total per student. Previously, parents could borrow up to the full cost of attendance, no matter how high. Graduate and professional loans are capped too, and the Grad PLUS program has been eliminated for new borrowers. General graduate students can now borrow up to $20,500 a year ($100,000 lifetime), while professional programs like law and medicine max out at $50,000 a year ($200,000 lifetime).

Federal aid is now tied to graduate earnings. This is the "outcomes" piece, and it's more specific than it sounds. Each year, the government will compare a program's graduates' median earnings, measured four years after they finish, against a benchmark: high school graduates' earnings for undergraduate programs, bachelor's degree holders' earnings for graduate programs. If a program's graduates fail to out-earn that benchmark two years out of any three-year stretch, the program loses access to federal student loans for at least two years. As an example, if a master's program in a lower-paying field consistently produces graduates who earn less than a typical bachelor's degree holder, that program could lose federal loan eligibility entirely, forcing students to find another way to pay or the school to shut the program down.

Repayment options are narrowing as well. New borrowers after today lose access to several income-driven repayment plans, replaced by a single new option called the Repayment Assistance Program (RAP).

The goal is to encourage more responsible borrowing while creating additional pressure for colleges to justify rising tuition costs and provide greater transparency around the value of certain degree programs.

Whether these changes ultimately lower tuition remains to be seen, but they're already forcing families to ask better questions, earlier. Is this degree worth the cost? Could another school offer the same education for less? If graduate school is on the table, what's the expected return?

That shift, from "how do we pay for it" to "is it worth it," is really the heart of everything else I want to say.From my perspective, when families have the financial means to pay for their children's education, it is one of the greatest gifts they can provide. Graduating with little or no student debt can give young adults an incredible head start as they begin building wealth.

That said, I often use the airplane analogy with clients: put your own oxygen mask on before helping others. Paying for college should never come at the expense of your own financial security. If covering tuition means sacrificing your retirement, taking on significant debt, or jeopardizing your long-term financial plan, it may be time to revisit the strategy. Your children have options to help finance college. You don't have the same options when it comes to funding retirement.

I also believe it's perfectly okay, and often beneficial, for students to have some skin in the game. Whether that's through student loans, part-time work, scholarships, or contributing toward tuition, having some financial responsibility can teach valuable lessons about budgeting, borrowing, repayment, and making thoughtful financial decisions. Those lessons can be just as valuable as many learned in the classroom.

I remain a strong believer in higher education. My college experience provided much more than a degree. It taught discipline, time management, critical thinking, and introduced me to relationships that continue to impact my career today. For most students, I still believe a college education is an excellent long-term investment.

At the same time, I don't believe college is the only path to success, and these new loan caps are only going to accelerate that conversation. Skilled trades and vocational careers can provide outstanding opportunities with significantly less debt, and for some individuals, they may be the better fit. The workforce is evolving rapidly, and so is the definition of what "school" even looks like. Take Alpha School, which The New York Times profiled last year: students spend just a couple of hours each day on core academics through AI-powered instruction, then shift their focus to life skills, entrepreneurship, and collaborative projects. It's not a fit for every family, and it comes with its own price tag, but it's a real example of how quickly the options are multiplying. Alpha is even opening a campus on Main Street in Santa Monica, just down the street from our office. Whether it becomes a serious alternative to the traditional model or just one experiment among many, it's a reminder that the same dollar can now buy a very different kind of education than it did a decade ago, and families are going to need to weigh those tradeoffs the same way they weigh a $99,000-a-year private university against a state school or a trade program.

To me, the biggest takeaway isn't whether college is "worth it." I still believe that, for most students, it absolutely is. The bigger question is how to pay for it wisely and make sure the educational path you choose aligns with your family's long-term financial goals.

Every family's financial situation is different. Every student's goals are different. There is no one-size-fits-all answer anymore. Whether it's building a 529 savings strategy, evaluating borrowing options, understanding financial aid, or balancing college funding with retirement planning, having a comprehensive financial plan gives families more flexibility, more confidence, and ultimately, more choices.

After all, the goal isn't simply to get your child through college. It's to put your entire family in the strongest possible financial position for decades to come.

Gerber Kawasaki Wealth & Investment Management is an investment advisor located in California. Gerber Kawasaki Wealth & Investment Management is registered with the Securities and Exchange Commission (SEC). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Gerber Kawasaki only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Gerber Kawasaki Wealth & Investment Management 's current written disclosure brochure filed with the SEC which discusses, among other things, Gerber Kawasaki Wealth & Investment Management's business practices, services and fees, is available through the SEC's website at: http://www.adviserinfo.sec.gov . 

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Mia Samson is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$4.09B billion in assets under management and advisement as of 12/31/25.  The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results." Every situation is unique and you should consult a tax professional and a financial advisor before making any decisions.