Talking about money is never easy. And it’s even harder when you have to talk about financial concerns with your kids. For most families, one of the biggest financial hurdles is how to pay for college. Having a clear and calm discussion about the cost of college at the beginning of the admissions process is the best way to avoid financial problems down the line. Here are the top 5 reasons you should have the college money talk with your high school student today:
Talking frankly about how to pay for college is empowering
Everyone knows that college is unaffordable for most families. But until it’s time for your child to start the admissions process, few families know or discuss actual numbers. Today, the average in-state cost for a public university is $25,890; out-of-state cost is about $41,950. A private nonprofit college costs about $52,000 and at some schools you can pay as much as $70,000. Having a clear discussion about how much your family can realistically contribute toward paying for college will put you in control and allow you and your student to make informed financial decisions throughout the admissions process.
You can plan ahead for potential financial shortfalls
It’s important to identify your family’s current financial challenges and anticipate future ones. If you plan ahead you can have a financial strategy in place to help your student pay for college. Savvy families can save thousands using a merit aid strategy to help decrease out of pocket college expenses. Merit aid is available to students regardless of financial need and can be awarded in combination with need-based aid. And merit aid isn’t only for straight-A students. You can easily find the colleges likely to offer you merit aid and their average merit awards here. If you think you’ll need a loan to pay for college, learn the difference between federal loans versus private loans and subsidized loans versus unsubsidized loans. You can find useful information about loans on the internet, but make sure you don’t rely on big loan sites (that want your business) for all your information.
You’ll avoid a college shortlist of unaffordable schools
Lots of students end up with a college shortlist that’s heavy on pricey and unaffordable schools. This is usually because they’ve never had a frank discussion about how much their family can afford to spend on college. More important than gaining admission into a name brand school is graduating with as little college loan debt as possible. There are plenty of amazing schools that will give you money to attend.
You can create a realistic student budget before college starts
Anticipating the cost of transportation, books and materials, social activities and other out of pocket expenses will give your student some time to see how they can contribute to the bottom line. Arguing about smaller amounts of money, like an UberEats bill for instance, is usually a symptom of the overall stress of paying for college rather than the actual cost of a dinner. A mutually agreed upon budget will keep your student on track and keep money arguments to a minimum.
Your student will learn the value of their education
Going to college has become a significant right of passage. But college is a financial burden for most families. Parents make huge sacrifices and take on personal debt to pay for their kids’ college education. On the flip side, students routinely graduate with student loan debt that will take them decades to pay off. Having an honest conversation with your student about the cost of college will lead to better decision making and hopefully, open the doors to honest conversations about non-financial college topics, aka the fun stuff.