Paying for Tuition: The Hard Conversation Parents and Children Should Have

If your children are in high school, you’re only a few short years away from sending them off to college. Even if you’ve been saving assiduously since the day they were born, odds are you don’t have enough to foot the entire bill, especially if your children have their heart set on a prestigious school. While this may seem a little unnerving, don’t panic. Whether you have a significant amount of money to put towards your child’s tuition, or whether you have little or none, it’s important that you and your child discuss their educational future and how it is financed. The sooner parents and children have honest conversations about the realities of higher education, the better.

The College Conversation

First, it’s critical to have conversations about why a college education is important. It’s likely you’ve been stressing this point for some time, but it probably seemed like something far off in the distance, akin to thinking about retirement while you’re in the prime of your working life. Soon, however, you and your child will have to make some serious choices about their education. Much depends on the individual. If your child is a good student, academically bright, and in the running for significant grants or scholarships, it’s likely you’ll have less to stress about. But if your child is an average student, unlikely to receive much in the way of financial aid that doesn’t require repayment, that’s another story. In either case, you must talk about what your child plans to do with his or her life, and many high schoolers haven’t got a clue.

A four-year college isn’t the way to go for every child. Some students may do better—and save money—by going to a community college for their first two years and then transferring to a state school. The degree they receive is from the latter. If your child really wants to go to a particular school, and odds are good for their acceptance, break down the annual tuition, board and related costs and have that honest discussion about finances. If they must take out student loans to achieve this goal, explain how such loans work, including the reality of interest payments. Many times, parents can help pay for some of their child’s student loans, but let them know for what percentage they will be responsible.

Paying for College

Let your child know how much you have saved for their college expenses and ways they can contribute. For example, if you have saved $25,000 toward their education, perhaps that will pay for one year of college if they choose a moderately-priced institution. How will they finance that other 75%? Rather than take out loans for the whole amount, discuss part-time jobs during high school and working during the summer while in college. Another alternative is taking a year off before going to college and earning some money. With discipline, most kids can save some substantial funds toward tuition.