How Are We Going to Pay for College?

When parents and students talk about college applications, they consider a variety of factors, such as the prestige of the school, its location, even student life in the dormitories and campus food options. Too often, they avoid talking about money and the financial burden that comes with paying for college. This is a big mistake. It is a difficult conversation many parents never have with their college bound children. Yet, financing for college will have both a profound and long lasting impact on the financial futurity for both parents and their children. There is one important question that families need to place in the forefront of college conversations: How exactly are we going to pay for the next four years of your Education?

There are various reasons as to why parents avoid the subject of finances with their children. For some parents, the reason is because they may feel guilty limiting their children’s college choices. For others, discussing the family’s finances is a taboo subject matter. Parents may not want to get into the conversation about how much they make or how much they can afford to pay for college. Yet, it is too important to avoid this critical question. Families need to be more realistic about the financial responsibilities that come with attending college.

Parents should also determine whether or not students should help contribute by working a part time job while attending school. For students, working 15-20 hours a week is ideal, but beyond that, students risk failing grades or taking longer than four years to graduate, which will end up costing the family more money. If students and parents are considering borrowing money, they must also ask themselves, “How much debt can a student take on?” It is suggested that students should not take out more money than they anticipate they will make in their first year out of college. For example, if a student plans to earn an annual income of $40,000, then they should only take out $40,000 in loans.

It is also important for parents to find out the student’s true purpose in attending college. Parents should ask their children, “What do you want to get out of college?” For example, if we can narrow down that a student’s true purpose is to become an architect, then families can look into more expensive schools that offer a great architectural program or research more affordable colleges that offer competitive internships for architectural students. By helping students to establish and focus on personal academic goals, they are more likely to find a school that will support them in attaining these career aspirations.

Important questions to include in your college conversation are:

“How much are my parents able to afford?”
“How much have they saved?”
“How much can they contribute given their yearly income?”
“How much are they willing to borrow and how much is too much debt?”

Planning ahead and having the financial aid discussion as early as Freshmen year is a great way to prepare for the expensive price tag in attending a four year college. Every college website has an online Net Price Calculator (NPC). It is important to use the NPC to get an estimate of what the tuition fees will be like for your family based upon your financial background. Understanding the tuition fees will allow you to plan ahead, keeping in mind that college is an investment with a favorable return. Be realistic about your finances and begin this conversation early with your college bound child.