Do Your Homework Before Your Children Head to College
Are you ready to let your child make a $60,000 decision? Or a $100,000 decision?
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?
For many parents, the need to please their child is strong because we want to let them spread their wings. So, if Junior decides to make a bad decision and pick the wrong college, his parents often sit back and let it happen.
Don’t get me wrong. A student needs to be involved in the process, but a more collaborative process will lead to a better outcome for the entire family.
How Important Is Cost?
I have the pleasure of doing some guest teaching gigs for high school students. I like to ask students what factors are important when deciding on a college. I typically get some good answers such as major, location, Greek life, social activities and cost. Cost is usually somewhat 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, and they don’t understand how difficult it is to pay for college.
An average 18-year-old has difficulty visualizing their future self. When they sign off on their loans, how many of them have mapped out how they are going to pay for them? Heck, very few adults are good at planning for the future.
I don’t need to write about how expensive college has become. However, there are many choices out there and there is 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 had better be ready to excel in school, get scholarships, etc.
- If your child is accepted into their dream school, but you can’t afford it, don’t be an enabler. 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. Set your children up for success and they’ll thank you later.