September 17, 2019 By Debbie Schwartz

How to Be Honest When Talking About College Costs

At some point, you will have to have “the talk” with your child.

No, not that one, the other one about paying for college. Don’t stress. The sooner you dive in, the better.

Why? College is expensive and a major investment, much like buying a house.

Making the decision about college isn’t something to take lightly or do overnight. It takes time – often more than you ever thought – to research colleges, calculate costs, decide affordability, apply for scholarships and loans, if needed, and even prepare psychologically for one of the biggest decisions your child will ever make.

“College is ridiculously expensive,” Pat Daly Francis, a parent of two, said. “I basically told both of my kids that college was too expensive to attend and not know what you want to do. My son, Jake, knew he wanted to be a nurse since he was 16 so taking on that student loan was worth it. He got a job before he graduated. Ellie wants to be a dentist so she chose a school that would allow her to achieve that goal.”

Francis frankly talked about debt, too.

“My kids know how much it costs because the loans are theirs,” she said. “I co-signed but it comes with expectations. Good grades, involvement, etc.”

College is a family affair. Everyone will be directly impacted, especially financially, when a child attends college whether they live at home, stay nearby for college or leave for an out-of-state campus. Being forthright about money can help guide your student to a college best suited for them academically, socially and, most importantly, financially.

It may be your child’s wish to attend an expensive, prestigious college. In fact, your student may have wanted it since childhood. But realistically, such dreams, if they do come true, can become disappointing financial nightmares for you and your child without smart planning.

Tips for Talking about College Costs

Most parents can’t outright pay for the cost of college. If you can’t, tell your student, even if they are still in elementary school, that higher education is expensive. Explain that there are options, and good grades can help them when it comes to applying for college even if that step is years away.

One parent used this example with her fourth grader: We can afford things from the mall, but we always check resale shops and garage sales first. If we still need a new item, we tend to actually purchase from a place like a big box store. The parent said that’s the way they would approach college – look at all options.

Fair or not, college choices often are decided based on parents’ incomes even if a student has good grades. If a child is a dependent (and most are), many forms of financial aid – the Free Application for Federal Student Aid (FAFSA), for example –is based on the family’s income.

How expensive is college? On average, a private school’s average tuition is around $35,000 per year, and public schools charge between $10,000 and $21,000 depending on in-state or out-of-state classifications, according to The College Board. Do the math and you may spend anywhere from $40,000 to $150,000 just for tuition over their college career. That doesn’t include, room, board, books or everything else connected to college life.  Do the math and you may spend anywhere from $40,000 to $150,000 just for tuition over their college career. That doesn’t include, room, board, books or everything else connected to college life.

Freshman Year

When your child is a freshman in high school, seriously discuss college – where they may want to attend, the costs and how to pay for it, and what they want to study. If they don’t want to attend college, take that into consideration, too. College isn’t for everyone. But if they do see college in their future, start the conversation about money and college costs early.

One of the first things to discuss? Clearly explain your financial picture – how much you make, any college funds saved, even retirement plans. These may be difficult topics for some families to discuss, but at a minimum it’s important to review how much you have saved for college.

Encourage your child to contribute to their education by getting after-school or summer jobs to save for college. That way, they can feel positive about helping themselves and their family.

Sophomore Year

When your child is in tenth grade, have them start researching where they want to attend. Ultimately, through research, help them pare their list down to 10-15 solid choices before their junior year that meet all their needs. If your child has good grades, it’s fine to keep a few more expensive schools on the list. A student with impressive grades can receive a merit-aid package and more need-based aid at a school that may seem out of reach.

Once your list is made, calculate the costs of each college. You can use the Net Price Calculator on a school’s website as a starting point to determine the college’s costs.

Junior Year

By your student’s junior year of college, have meetings with your child about budgeting realistically for college. You should have a clear picture two years before your student graduates high school about how to pay for college.

Figure out what you can afford, how much you need in loans, and if your student qualifies for financial aid. Walk your student through every step so they have a clear picture of every step taken to get them to college. Investigate whether they may qualify for any of the following: need-based scholarships, grants, outside scholarships, work study, and federal and private loans.

If you decide that loans are a part of your proposed college budget, you can use calculators like College Ave Student Loan’s calculator to figure out a monthly payment amount and the total cost of borrowing. Both of which are important numbers to know so students aren’t taking on too much debt. Tell them all the pros and cons of borrowing so that when the times comes you both can make a decision that’s right for your budget.

Many parents think their children can’t comprehend financial conversations or responsibility. If your child is smart enough to consider college, he/she should understand the costs associated with such a life-changing decision. From the beginning, make sure your student understands that loans will have to be repaid and who is going to be repaying them, either by you, them, or a combination of both of you.

Senior Year

Students apply for college during their senior year. That’s when the real decisions are made. Hopefully by this time, you and your student have had several discussions over the years about finances and have even created a budget to follow for college.

Some parents create five-year plans on Excel spreadsheets that explain every cost associated with every college – application costs, tuition, room and board, meal plans, travel costs, dorm expenses, extra fees, loan payments, etc. That way, the costs, which usually increase yearly, are in black and white to examine and discuss.

By doing such homework, even in increments over the years, college costs don’t have to be overwhelming.

Remember, college isn’t a status symbol. It’s for your child to receive an all-encompassing education that will help them find a good job and become independent. You can start them on this path by giving them a solid education in paying for college.