It’s time to talk to your teenager about the realities of paying for a college education. Yes, it’s hard enough talking to them about curfews, let alone discussing something which could have an impact on their education and their whole adult financial life. But that job does fall under your list of responsibilities as a parent, so here are a few tips which might make it a little easier for everyone involved:
• Fill Out the FAFSA Together: No, it’s not easy sharing the details of your financial situation with a teenager. You have actually tried to keep that information from your child for years, but there is no better time than right now to discuss the financial reality of your family. Let your teenager see how much money you earn, how much there is in savings, and how much you have saved for retirement. Use the FAFSA4Caster to estimate how much financial aid your child will receive, and then discuss what will have to be done to make up any difference.
• Learn the Financial Aid Basics: If this is the first time you have sent a child to college, it can be confusing to learn all of the jargon. Sit down with your child and learn about the various grants, loans, scholarships and work-study programs that are available so that you become familiar with the terminology. Two sets of eyes may be better than one in spotting something that might just help make the financial aid difference in paying for college.
• Help Your Teenager Learn to Budget: You are not necessarily doing your child any favors by not allowing him or her to learn how to handle money. Start teaching your children how to plan their income and expenses while they are still in high school, so they will have an easier time when it comes to preparing a budget for college.
• Discuss Student Loans: Even with all of the federal, state and institutional college financial aid that is available, you may still have to borrow some money for your child’s college education. Make sure you understand the difference between federal and private student loans. If you have to take out a PLUS loan, explain that this will have an impact on your family’s financial situation. Set out any expectations now about who will be responsible for making payments on any student loans.
• Hunt Down Those Scholarships: Scholarships are a great way to cover some of the college expenses, but you can’t receive most of them if you don’t apply. Steer your child in the right direction and make sure he or she spends some time each week pursuing this vital component of financial aid.
It may be another hair-raising session to try to talk seriously to your teenager about important financial matters, but don’t give up. Be persistent, and remember that you are providing a financial education to someone who will shortly become an adult who needs these very skills.