It is every parent’s brightest dream and darkest nightmare. You want your child to be able to attend the best college possible, but are not sure that you can afford it. What is a poor parent to do? Do you deny your child the choice of his or her college, or go into debt to try to make the dream come true? There are no easy answers to these questions, only answers that are right for your family. Here are a few suggestions that might help make the decision easier:
• Have an honest, open dialogue with your child: Let your son or daughter know exactly where you stand. Don’t try to hide the fact that the family might not be able to afford a particular college, so you can work on alternative scenarios together.
• Make sure you know what the costs will be: Each school, in addition to the federal government and other resources, offers college cost calculators. These can give you a general idea of what the costs and anticipated financial aid at any one school might be, but don’t take that as the final answer. There are always exceptions and different scenarios for different family situations.
• Know all the costs and set a budget: College isn’t just about the expenses you can visualize such as tuition and meal plans. It is also about the hundreds of other little expenses that can quickly cut through the family budget – the trips back and forth to campus, overages on data plans, books and fees, and out-of-pocket expenses. Set a reasonable budget and make sure your child understands that he or she will have to live within those constraints.
• Investigate all the options: If your child is intent on attending a particular institution that is just out of reach, you will need to investigate all of the options together. Has your child applied for every possible scholarship, is he or she willing to participate in the federal work-study program, or is an off-campus part-time job a possibility? Are there hard decisions that need to be made as a family about cars, trips or household items that can be forfeited to come up with additional income?
If student loans are needed to bridge the gap between costs and available resources, you must have a frank discussion with your child about repaying them before college classes even begin. Make it clear whether you will be help make payments, or whether you expect your child to shoulder this burden on his or her own after graduation.
How much your family should sacrifice is a question only you can answer. Should you take out a home equity loan, or dip into your retirement savings? There are possible financial planning, student aid, and tax consequences to each of those actions. If it is a good idea for your family, your child needs to understand what you have given up for the sake of their education.