Making Smart Decisions About College
- April 3, 2017
- By: Greenpath Financial Wellness
Are you ready to let your child make a $60,000 decision? Or a $100,000 decision? There are many factors to consider when choosing a college, and the cost of college is one of them. It’s important to make smart decisions about college with your teen.
Think back to when you turned 18. It’s both an exciting and scary time. There’s a liberating sense of freedom. “You can’t tell me what to do, Mom and Dad! I’m an adult, now!” But were you ready to make important life decisions at that age?
What if Junior is leaning toward the “wrong” college? How will you handle it? Will you sit back and let him make his own decision, even if you disagree? Or will you question her and press her to reconsider?
We believe that there’s a happy medium. A student needs to be involved in the process. And a collaborative process will lead to a better outcome for the entire family.
How Important Is Cost?
When we ask students what factors they consider in choosing a college, we hear some great answers: major, location, Greek life, social activities, and cost.
However, cost is usually further down the list. This makes sense when you think about it. Most high school students do not have firsthand experience with running a household budget. They don’t understand how difficult it is to pay for college. And they have no frame of reference for what that payment will mean four (or more) years down the road when they graduate.
An average 18-year-old has difficulty visualizing their future self. Heck, very few adults are good at planning for the future. When your student signs off on their loans, how likely is it that they have mapped out how they are going to pay for them?
It’s a well-known fact that a college education has many advantages but that it is very expensive. There are many choices out there, and a huge range when it comes to cost.
Your Role As a Parent
So what can you do as a parent to help make this important decision?
- Start talking about the family’s financial situation early — ideally, by the time your child is 14 or 15. If you can afford to pay for some or all of their college education, let them know. But be clear about what your expectations are.
- If you are not in a position to pay for college, you have no reason to be ashamed. Set expectations early enough so your child knows that, if they want to go to college, they need to be ready to excel in school, get scholarships, etc.
- If your child is accepted into their dream school, but you can’t afford it, be honest about it, no matter what. Co-signing on a loan you can’t afford (especially a private loan) can have disastrous results.
- Help your child understand the implications of their decision. Discuss how they will pay for college and project how much they might be borrowing. Show them how this will play out in their budget.
Don’t worry about being the bad guy. It can be a tough conversation, but at the end of the day, setting your child up for success is what it’s all about.