Self-made millionaire to parents: Don't pay for your kid's college education

Why most people should skip college

Self-made millionaire Grant Cardone says most people should forego college.

"We have $1.3 trillion worth of college debt," he tells CNBC. "We have more college debt in America than we have credit card debt combined. It is a crazy program."

What's "insane times ten," however, is when parents cover the cost of college, Cardone says. "If the kids want to go to school, [have them] go get a job, get some money, save some money and go buy the school that they want to go to."

Self-made millionaire Grant Cardone.
Courtesy of Grant Cardone

As for his own children, there are only a couple of schools the self-made millionaire will pay for them to attend: "I personally told my kids they can go to three colleges" at which they will be able to network.

What matters, Cardone says, is, "Where are the Bushes going? Where are the Obamas going? Where are the power players going?"

"I want [my children] to go there not to learn things," he continues. "I want them to go there to meet people — to get connected with the power players. The old adage is: It's not what you know. It's who you know. That's still true today."

Parents saving for college hits an all-time high

At the end of the day, the decision of whether or not to pay for your kid's education is highly personal.

Keep in mind that many financial advisers will warn against prioritizing your kid's education over your own retirement. As certified financial planner Carrie Schwab-Pomerantz tells CNBC, "Don't derail your retirement for your child's college education when they can get a loan or scholarships."

If you don't set aside enough money for your own retirement, your child may have to support you in the future, she explains, which could end up being more expensive than student loans.

Once you're on pace for retirement, there are smart ways to save for college. A good start is to open a 529 savings plan, a tax-advantaged investment account that anyone can use to cover tuition, fees, and books.

Read about how to select the correct 529 college savings plan.