You are sitting at the kitchen table with your computer open. There are three tabs, each representing a series of confusing information. And now there is a second number in your head; this one is not loud but heavy. This number represents your potential retirement, rent, grocery bills, and the life you are currently struggling to maintain.
However, you don’t have to deal with everything at once. The panicked late-night hours don’t have to occur. You can take a slower approach to viewing the numbers. An approach that allows you to make thoughtful, rather than reactive, decisions.
The first mistake is focusing solely on the headline tuition price. While it may be frightening, it’s typically not the final amount.
Take a deep breath. Take some time. View the total cost of attendance (tuition, housing, food, books, transportation, personal expenses, etc.), then consider how many aids could potentially cut into this amount.
This is where the image may change. Scholarships, grants, work-study programs, family assistance, savings, and installment payments are all factors. The school that initially seemed most costly may ultimately provide better financial aid than the school that appeared cheapest. Conversely, the school that appears most affordable may have other hidden costs that would make it difficult for you to pay month-to-month.
You’re not searching for “the perfect” number right away. You are attempting to determine the actual difference between what college will cost and what you can reasonably afford. That difference is the figure that requires your attention.
Financial discussions surrounding college finances are challenging due to their infrequent reference to money alone. Discussions of college finances frequently involve feelings of guilt, pride, anxiety, parental expectations, and outdated perceptions regarding responsible behavior by parents and students alike.
Avoiding these discussions tends to exacerbate problems. Schedule a time when no one has anywhere else they must go. Explain to your children exactly how much of a contribution your family can realistically provide without causing hardship. Make it clear that loving your children is not equivalent to providing unlimited financial support. Your children should understand the costs of their choices.
As a student, ask your parents directly: What type of financial support can my family provide? Does this support a lump sum, is it provided on a monthly basis, or is it limited to specific costs? Do I need to obtain employment? Which college-related expenses will I be required to personally fund?
Although these conversations may seem awkward at times, they enable all parties involved to have a common understanding. A common understanding is preferable to silent speculation.
Some college financing methods are more effective than others. Many methods reduce financial pressures. However, several methods increase long-term economic burdens.
Generally speaking, the ideal sequence is first to identify monies that do not require repayment, such as grants, scholarships, bursaries, and savings. Following that, consider the types of funding based on income (e.g., federal and state work-study programs) that require repayment over time; part-time jobs; payment plans; and low-cost education alternatives (e.g., community colleges).
When using loans to finance your education, it is generally preferred to use federal loans prior to private student loans since federal loans may offer greater protection for borrowers and/or more flexible repayment terms. The goal is not to view loan availability as justification for borrowing immediately.
Each borrowed dollar is owed by a future version of you or your children. That being said, borrowing funds is not necessarily bad. Borrowing is bad only when done recklessly and with little regard for future implications.
It’s easy to fall in love with a big-name school. Sweatshirts, campus pictures, and finally having arrived at someplace important are all emotional considerations. But they shouldn’t overwhelm rational considerations.
Does the educational program in which you wish to participate have an excellent reputation within your desired field? Does it include internship opportunities, career services, transferability of classes, and local employment opportunities? May the same initial-semester credit hours be taken at a lesser-expense institution? Would residing at home for a year significantly alter your financial outlook?
At times, the optimal option isn’t the flashiest option. Rather, it’s an option that maintains the gateway to opportunity without exhausting you.
Although parents may believe that assuming all of the responsibilities related to the cost of attending college is best for their child (so that their child does not have to worry about school), such a decision is based on the love of a parent; however, there are potential negative effects of this action when compared to allowing students to develop personal fiscal accountability.
Students will benefit from being able to see dollar amounts related to the expenses of college. It doesn’t mean that the student has to live with adult levels of stress – but they do need to understand the long-term ramifications of their choices regarding dollars and cents.
Provide the opportunity for the student to research different housing options. Provide the opportunity for the student to complete scholarship applications. Provide the opportunity for the student to determine the cost of textbooks. Provide the opportunity for the student to evaluate what a meal plan, parking permit, etc., can add to total tuition and fees.
This is not intended to frighten your child – rather, it’s intended to help develop fiscally conscious children while providing them with continued support from you and others. There is a direct correlation between an educated student and adherence to a strategy.
Creating a college financial plan does not consist of completing the task once and hanging it on the wall. Budgets fluctuate. Aid packages can change. A student might decide upon changing his or her major. Unexpected expenses may arise for a parent. During peak exam periods, a student may find that he/she cannot manage a part-time job.
Review what was spent, what is scheduled for spending, and whether any adjustments need to be made (whether minor corrections or larger changes) during the meeting. Perhaps the existing budget is functioning well. Perhaps it requires a slight adjustment. Or perhaps a significant decision needs to be made before experiencing undue pressure. The sooner you recognize an issue, the more options you usually possess.
Planning for higher education doesn’t require forecasting your future. It requires reasonably accurate information; honest communication from all parties involved with your decision-making process; fair-minded, but reasonable decisions based on what will allow you to be successful in the long run without having to sacrifice that for the sake of appearing successful in the short term. You need sufficient courage to ask questions about something before signing papers; sufficient time to evaluate other options; and sufficient control over yourself to understand that there are usually many different ways to get to college.
College still has its excitement. College still holds great value. College still has the power to open doors. But when you start viewing college as a plan and stop viewing it as a last-minute exam, it feels a lot closer than you thought.
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