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A college education is one of the biggest expenses any individual will ever have. It is also one of the best investments you can make. Unfortunately, the traditional age for college students starts around 18. That means it’s unlikely that they will be entering into this financial commitment with enough money experience. It will be hard to handle it independently and make responsible decisions. The cost of college is not something that you should avoid discussing.
As a parent, you get to decide if you are helping to foot the bill or not. Either way, you owe it to your kids to start these money talks long before they reach application age. Providing your child with enough time and information to be able to start college with a healthy financial knowledge base. You can help them develop the habits necessary to handle this type of responsibility upon graduation.
Talking to Your Kids About the Cost of College
Knowing What to Expect
Waiting until your child is near college age to talk with them about who will, or will not be, contributing to their college education does not leave a lot of room for planning. If your child is expected to contribute to their own education, living expenses, or any other cost of college, you need to be open and honest with them about those expectations from the start. Perhaps your child will have an opportunity to work in high school to be able to save money towards college, but even if that is the case it is likely that student loans will be a large part of the plan.
Be Clear About Loans
Sit down as a family and go over the different types of loan options in detail. Highlight for your child exactly what to expect from the application process all the way through to the start of the repayment period. Giving them an opportunity to see figures on paper can help them understand how these loans can also impact the decisions they make about which school to attend as well as living costs during their tenure. This is an example of a way you can invest in your children’s education if you cannot physically contribute money to their education.
Two of the most common types of borrowed funds for students are federal loans and private loans. Each has their own unique set of pros and cons which will be helpful to discuss with your child since ultimately, they will be the one responsible for obliging to the terms. You can take out a student loan from a private lender in order to pay for college to achieve more flexible terms, but it is important to teach your child that qualifying for private vs federal loans are two unique processes.
Share Your Experiences
Keeping the lines of communication open and fluid between you and your child is one of the best gifts you can give them in terms of education. Sharing with them tips you have learned along the way, helping them to set goals, and serving as a guide when they have questions teaches them that money is not an off-limits topic in your home. By fostering this type of environment your kids will be more likely to come to you in advance of big financial decisions which can lead to a decrease in costly mistakes that will follow them long term.
Talking to your teen about the cost of college shouldn’t be skimmed over!
It’s important that they realize the price they’ll be paying for years and years to come.