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As your kids get older, there are important discussions to have with them, including “The Talk” about paying for college.
For most parents, this topic is deeply personal and emotional. You’ve been telling your child all their life to chase their dreams, including their dream school. But they probably don’t know how much you’ve saved or what price tag is affordable or not.
It’s time you gave them that missing information, before it’s too late. Here are some tips to make that talk less painful and more productive.
Telling your child how much you’ve actually saved for their education can be a hard discussion.
You probably had the best of intentions when they were born. I’ll start saving right away and pay their way through college! But as we all know, life can get in the way. Fast-forward to today when you’re faced with the reality of paying for college.
Sharing how much you’ve saved for your child’s education will ultimately impact their college decision, so it’s important that they know the reality of the situation.
Start the conversation at the beginning of their junior year. By that time, they probably have a sense of where they want to apply and what degree they want to pursue — all of which helps the discussion.
To start with, lay out how you could pay for their dream school. Let’s say it’ll cost $25,000 per year to go to the school and you currently have enough saved in your 529 to cover $5,000 every year. Then, let them know you could make additional payments of $500 per month for 10 months while they’re in school, which is another $5,000 each year. But where will the remaining $15,000 come from each year?
This dilemma is exactly why “The Talk” is so important. It enables your child to control their own college destiny.
After being armed with this financial information, do they still want to go to that expensive private school? If so, work together to put together a plan around how to make up the difference. Maybe merit-based aid is needed; your child is bound to be more motivated to prep for the SATs and ACTs if a high score could make the pricy private school financially feasible. The same goes for improving their GPA.
If not, there are a number of other places to search for scholarships as well. Your child might also qualify for FAFSA free aid or work study. The rest will likely come in the form of federal and private student loans.
The truth is, most college students will have to take out some amount of student loans. College is too expensive to realistically expect your savings, need-based aid, in-school payments, grants, and scholarships to cover the full cost each year.
With that in mind, make sure your child knows how much is too much when it comes to student loans. That way repayment isn’t too burdensome after graduation.
As a parent, it’s your job to help them make an informed decision. Through resources like College Scorecard, you can have this discussion using real numbers, not hypotheticals. That way you can compare their expected post-grad salary against the amount of debt they’ll likely have after graduation. They’ll also learn how manageable or unmanageable the loan payments will be, and how that will impact other goals like moving into an apartment, buying a new car, or traveling.
If they still decide to go to the expensive school after looking at the numbers, at least they’ll know what to expect after they graduate.
At the end of the day, you want what’s best for your kids. Hopefully that means sending them to their dream college. Have “The Talk” early enough so you can work together to make their dream school a reality.
We are committed to helping you reach your potential. Get more information about student lending here. You can also call 1-888-411-0266 to speak with one of our Student Lending Specialists or stop by your nearest Citizens Bank branch.
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