Help Your Student Make an Educated Decision About How to Fund College
For many families, the joy of college applications and future dreams is starting to form as your students fill out applications, complete college visits, and make lists for next year. Despite all of the joy, it’s not uncommon to feel anxiety or worry about how your family might be able to pay for college. The reality for many students and families is that they’ll likely be paying something out of pocket in order for their child to attend college. Even with generous scholarships and grants, sending a student to college can sometimes put an extraordinary burden on a family’s financial structure. The question naturally arises about how much a parent should be expected to pay for their student’s college degree. That is why the college money talk is so important!
Before accepting any college offer, it is crucial to have a frank financial discussion with your student. Have an open conversation about the family’s financial situation, and then discuss the costs of college together. Money talks are always tough, so…
Here’s 5 points to cover during your college money talk with your student!
What it could cost to attend the colleges on your student’s list?
Not all college costs are created equally! Sit together and review the Net Price Calculator for each college, to determine what the average student is likely to pay out-of-pocket. Then, add in all the miscellaneous costs such as travel, food, entertainment, and data plans. If you don’t have financial resources to cover these amounts, you might have to rely on student loans and it’s important to see the full picture.
What kind of budget will your student have?
When chatting about college finances, discuss now how much money you will be able to supply for your student’s living expenses. Keep in mind that you still have to run your own household. You don’t want to rely on credit cards to cover ongoing expenses and your student shouldn’t float a credit card either. Take the time to lay out what their extra funds might look like during college.
Will your student work during college?
Some students might have to apply for the federal work-study program, or find a job on their own. While many students can juggle work hours and class time, some students have difficulty achieving a workable balance. They might also need to work during the summer and various breaks, while their peers are enjoying great vacations. However, if you’re trying to create extra money in the budget for college costs, a job can be a great option.
Can you find any scholarships?
If your family does not have sufficient resources to cover college costs, make sure your student is searching for every available scholarship to help defray some of the costs. There are scholarships available year round from private and public organizations. Don’t forget to look for scholarships every year during college – they aren’t just for freshmen! Scholarships are money you do NOT have to pay back, so they’re invaluable to close the gap between your funds and payments.
Who will repay student loans?
I recommend that families have the discussion of who is responsible for which parts of the student loans now – not after graduation. There are some fantastic student loan calculators to determine what future payments might look like, so that you can have an educated conversation about the funds needed to repay any student loans borrowed. This part of the money talk can be tough but it’s an important reality that students should understand before agreeing to take on any loan.
If the numbers don’t work, it is best to make hard decisions now about which college to attend, rather than waiting until your student starts attending classes, and the bills become overwhelming. This is such an exciting time, but it’s important to remain grounded and honest about what your situation is so that everyone can make an educated decision about the future.
More about Jodi and College Financial Aid Advisors
Jodi helps with the financial aid process, from completing the FAFSA and completing the CSS Profile to reviewing the SAR, responding to requests for verification, comparing financial aid offers and understanding student loan options. Schedule a 15 Minute Power Chat to learn more about finding ways to pay for college.
Still Want More Help?
Get more information on financial aid in my book, Secrets of a Financial Aid Pro – it makes a great holiday gift! You’ll find information on everything including admissions deadlines, financial planning, filling out the FAFSA, award letters, searching for scholarships, and comparing student loan options. Order it now, and get the information you need to successfully navigate the financial aid journey.