If you are a parent of a high school student, it is likely you will oversee completion of the FAFSA and loan paperwork. That can be an eye-opening experience about college affordability. Having a conversation with your teen about how to pay for college is an important part of planning for higher education. Mike Brown, Knowledge Director at Nitro, offers some great advice about when – and how – to talk to your child about paying for college.
What’s your experience with having the money talk with your own kids before they applied for college?
I have three kids – a daughter who is a college sophomore and two sons in high school – so yes, I’ve already had “the talk” with two of them and the third will probably be tired of hearing about it when it’s his turn.
Was it easy?
Absolutely not! I think for any parent, talking about how much money you make, how much the mortgage is, all that stuff that you have to include in the FAFSA is tough. So is setting an expectation of how much you can and cannot afford.
When’s a good time to have the talk?
It’s critical that you talk about affordability before your child applies to any schools. And there are two natural times that occurs: when they are taking the PSATs and when you are driving to look at college campuses.
You advocate ‘knowing your number’ before having the talk. What does that mean?
You have to have an idea about how much money the family budget can apply toward the cost of college. You think about the savings you have for college, the amount you could budget monthly over the length of your child’s college career, and how that money will be divided to pay for college for all the kids in the family.
But what if that number is less than the sticker price of the schools your child wants to apply to?
It’s likely that number will be less. That number is the foundation. From there, you think about Advanced Placement classes your child could take in high school, which will cut tuition costs. You think about grants and scholarships and set an expectation of the amount your child needs to secure through that route. And you think about the amount of money he or she should contribute through part-time job earnings.
What about student loans?
Loans are the third part of your number strategy. How much debt are you, as a parent, willing to take on? Once you know that, you can look at student loan options. The Stafford federal student loan is a good option that many students are approved for. But if student loans will be part of your number, you have to talk to your child about what that means.
How did you talk to your kids about student loans?
I had them think about what it would look like once they graduated and were earning a salary. We did the math together. If they were making a $40,000 annual salary, we figured what their monthly take-home pay would be. We started subtracting monthly expenses they were already familiar with, like their phone bill, a car payment and insurance. Then, we talked about how every $10,000 in college loans would require about a $100 monthly repayment. So if they were considering a loan every year for four years, that would be about a $400 payment every month. It was eye-opening.
Did that example change their thinking about what schools to apply to?
It did. Talking about money coming out of their paycheck is a great motivator. All of a sudden, options like two years at community college or a branch campus become much more appealing. Staying closer to home instead of incurring travel costs for an out-of-state school became reasonable. And taking on work-study or a part-time job at college was much more enticing.
Any final advice?
Don’t put off knowing your number. You do absolutely no favors for your children if you encourage them to apply to the “dream” school or the “right” school or the “prestigious” school before you know what you and they can afford. And don’t allow them to apply to a school that does not meet your number.
Are you filling out the FAFSA? Check out Nitro’s FAFSA Question Guide for helpful tips on how to fill out each question of the application.
|Mike Brown, Nitro Knowledge Director
Mike is responsible for the editorial and marketing direction of Nitro. He has a history of helping people thru his educational background – first as a teacher at the Pennsylvania State University and then through 15 years of development and marketing of education programs.