Tuesday, September 11, 2018
A guide to talking to your kids about their college selection, associated costs, and their desired field of study.
Recent studies suggest that the average cost of a college education in the United States is around $58,464 per year, including associated costs like transportation, learning materials, and accommodations.
That said, if you would like your child to benefit from a well-rounded college experience, begin your preparations early and implement a solid savings plan like a 529. Planning ahead will offer your college-bound child a wealth of choices and opportunities when the time comes.
529 College Savings Series
- Saving for College: What is a 529 Plan?
- When Should I Start Saving for College?
- Five Mistakes That Can Derail Your 529 Savings Plan
- 529 Plans: How to Plan for Merit Aid
- How Do Colleges Determine Financial Need?
- College Financial Aid: What Forms Do I Need to Fill Out?
However, without sitting down and having a constructive discussion with your son or daughter, outlining goals, desires, expectations, realities, and of course, budgets, chances are that they will not make informed, adult decisions regarding their college education.
To help you help your child make the best choices for their future, we’ve curated a college funding discussion plan so you can have that all-important talk before making a firm commitment.
The Big Picture: Putting College into Context
It’s time to drill down into the what, why, how, and where of your child’s college and course choices. To guide you through the process, here are some questions your child needs to consider:
- What would you like to study and why?
- Do you see yourself in a profession related to this field of study? What’s the earning potential?
- Where would you like to study and why?
- Why is this particular school best for you?
Asking kids to truly reflect on these questions and organize their thoughts gives them the opportunity to think more deeply about their core motivations, as well as the implications of perhaps the most important decision of their lives to date.
Setting the Right Budget
Once you and your child have reached definitive answers concerning their college education, you will be able to talk budgets. Discuss the allocated budget you’ve set for their college education and offer a brief introduction to the associated annual costs aside from their tuition fees.
To help you get the most from your 529 savings plan and set your budgets wisely, here are five mistakes you should avoid.
Now that you’ve gained momentum and started to cover costs, you’ll be able to dig deeper into tuition fees and room and board expenses, as well as the shortlist of colleges your child wishes to attend.
Doing so will give everyone an accurate gauge of how much each institution charges and, therefore, how feasible a choice each would be.
Asking kids to organize their thoughts gives them the opportunity to think more deeply about their core motivations
This official college tuition comparison tool will help you collect all of the information you need to get the job done.
Aligning Proposed Budgets with Real-World Expenses
By now you will have your college shortlist, the tuition costs of each institution, and a breakdown of your allocated budgets. Now comes the revealing part: a magnified look at the gap between your budgets and the cost of each college choice.
Alongside fees, researching the cost of accommodations both on campus and in the surrounding area, in addition to fuel (if applicable), groceries, possible field trips and excursions, and any other relevant expenses you can think of will give you an excellent indication of how far your budget will stretch.
You should do this, with your child, for each prospective college, and note each calculation in a budgeting tool or spreadsheet for reference.
If you don’t quite have enough to cover your child’s college education, read our crash course on filling out college aid paperwork.
Paying Off Student Loan Debt
From all of the above discussions and calculations, you’ll be able to ask your child these crucial questions:
- Based on everything we’ve discussed, are you happy with your choices and motivations?
- Will your proposed career afford you the kind of life you want?
- Will you be able to live comfortably enough while repaying your student loan (or loans)?
By revisiting the questions you posed at the start of your conversation, now fortified with a deeper level of knowledge and vision, your college-bound child will be able to make more informed and mature choices based on the facts, thoughtful consideration, and a greater understanding of the importance of the decision at hand.
Choosing a college isn’t something to take lightly. By having this discussion about college funding, you will help your child develop the autonomy and insight to make the best choices, and at the same time, reduce the risk of squandering your effort and money.
Brett Carolan, CFP® serves as an advisor at Brighton Jones.
Read other posts in our 529 College Savings series: