How to talk to your kids about college costs
ASSOCIATED PRESS
Experts say it pays off for parents talk with children early and often about how to cover higher education costs.
College tuition may be daunting, but so are the conversations about how to pay for it.
Experts say it pays off for parents talk with children early and often about how to cover higher education costs. Here are a few of their tips:
START EARLY: Start talking to your kids as young as possible, said Judith Ward, a senior financial planner at T. Rowe Price.
Casual conversations at an early age about where you went to college and that you are saving for their education helps sets the expectation that they will go. As they grow older, she suggests talking more specifically about how much is being set aside.
BE SPECIFIC: Keith Bernhardt, vice president of Fidelity’s college savings program, said that by 9th or 10th grade those conversations should still be positive but more specific in terms of available funds. By 11th grade, talk about schools of interests and look closer into costs and aid options together. Get your financial aid application in early in their senior year and make sure they understand the pros and cons of all options.
Be clear about what you expect them to contribute, too. Bernhardt points out that by getting kids engaged in conversations about college costs early, it’s easier to get them involved in saving too, setting aside allowance, portions of gifts or money from jobs.
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“Help them to value the idea of going to college by making them part of the process to help pay for it,” he said.
SET PARAMETERS: T. Rowe Price found in its research that most kids expect their parents to cover the cost of whatever college they want. However, most parents say they’ll only be able to contribute toward some of the expenses and feel bad about it.
It’s important for kids to know that they don’t just have a blank check for college, Ward said. She suggests setting parameters around what you can contribute and what that realistically can pay for
DISCUSS OPTIONS: Instead of looking at what isn’t possible, talk about what is.
An in-state school might offer as competitive a program as an out-of-state choice at a fraction of the price. Or a student may benefit from living at home or attending a local college for a portion of their time.
“It doesn’t have to be whatever college at whatever cost,” Ward said.
It’s very likely that the student, the parent or both will consider taking out loans. Bernhardt reminds people to look closely at the terms of various loans and be wary of taking on too much debt. That can impeded a child’s start in life after college or a parent’s own plans, including their retirement.
6 responses to “How to talk to your kids about college costs”
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This very good advice. Having the child talk to counselors who can help scholarship opportunities also helps. It is an investment in the childmby the parent and college bound student involved. BTW be patient, it is stressful!
Actually of limited usefulness. Talk all you want but the reality is, especially for Hawaii where Asian culture puts tremendous emphasis on education, parents are going to have to come up with a big chunk of change. Both my sons graduated from Mainland colleges and to fund it, it required savings from 20 years of putting money aside. including into 529 savings plan, as well as refinancing our home loan about 4 times to take advantage of historic low rates and tax breaks. For most of us who don’t qualify for much subsidized student loans, rates on unsubsidized loans are ridiculously high. To add to the burder, both our sons went to private schools here (as many others do)
Post 911 GI Bill provides 36months of tuition, fees. $1k/yr book stipend and a location dependent housing allowance….for Oahu it is approx $2700/ mo. Awesome program for those that can qualify for military service.
“Help them to value the idea of going to college by making them part of the process to help pay for it,” he said.” When my son applied for financial assistance, I clearly reminded him, “These are your student loans. Dad’s not responsible for them”. I paid for some while he attended college. He was extremely fortunate to land a job in his field, four months after graduation. I still write the check for his student loans, using money that he deposits into our joint savings account. We’ve shared this account since he was 10 years old.
College tuition is absolutely outrageous. Most families that send their kids out of state can look forward to over $250,000. It’s ridiculous, especially when you look at the number of graduates that aren’t employed, or are employed at entry level high school jobs. College has become a complete rip-off.
Expensive for sure but a degree in a field like engineering, accounting, or many others is a path to a good career, none of which is possible without a degree. Unless a young person goes into military or gets certification in a trade, there are no other options. For most parents (including us), being able to provide means for the children to attend college is of paramount importance. Don’t tell us it’s a rip-off. We are fortunate that both of our sons could attend Mainland schools, graduated, and well on their way to having successful careers.