Talking With Your Children About The Cost of College
Every year, parents ask me how they are going to pay for this private college or that out of state public university. And, every year, I ask those parents, “Have you spoken with your child about what your family can afford to spend on the cost of college?”
The answer is most always, NO. No one wants to discuss finances with their kids. But, when it comes to college, it is so, so very important! Here are some key things to think about…
Do you have unlimited funds to pay for your child’s dream school?
If not, how much can you afford to pay for four years?
How is it best to use the money that you do have and, simultaneously, minimize debt? Perhaps the answer is to find schools offering merit scholarships. Perhaps the key is to attend a state university or a community college. Perhaps it is best for the student to work to contribute to the cost of college?
If need be you can take out loans for college. You CANNOT take out loans for retirement! So, will you need to take out loans to pay for college? Who do you plan will be repaying those loans? You or your child? Since every family is different, this answer will likely vary from one person to the next.
Is your child already planning to attend graduate school and do you plan to help the child with this added expense?
Are there other children that you will also need to send to college?
Now that I have you thinking... here is my underlying concern…
If you plan to take loans for your child’s dream school or any school, and if you expect your child to make the loan payments upon graduation, shouldn’t you have a conversation with your child about their college decisions?
Each decision has financial implications for their future. Perhaps your child will develop a cure for cancer and be rewarded financially. In that instance, the Return On Investment will undoubtedly be high when you compare the cost of college to their lifetime income.
However, if a student is planning for a different career path, suppose a teacher, which is a hard and well respected career, that person needs to pass a state exam and may not earn as lucrative an income. In that instance, the teacher may be better served by attending an in state public university, at a lower cost than a private, more expensive, university.
All of these considerations need to be weighed and discussed. If it is assumed that the student will be paying back their student loans, shouldn’t the child be included in the decision making and offered the chance to understand the financial impact of their choices. With this decision making opportunity, there is also the opportunity for financial literacy lessons that will well serve our children as they embark on adulthood.
College Financial Prep, in addition to working with parents as they prepare to send their children to college, offers student friendly financial literacy and adulting classes for high school juniors and seniors. Topics include:
When college loans need to be considered
Creating a budget
Why working part time while in college is so important
Identifying possible career paths
Developing organizational skills
Learning stress management techniques
Contact College Financial Prep today at 516-225-5224 as you and your family prepare for the upcoming transition to college. Our goal is to help you and your family save money on the cost of college through merit and need based aid, scholarships and student preparation while ultimately selecting the school with the best academic, social and financial fit.
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