It’s also a time when many families get caught up in the excitement of it all and make choices that can seriously undermine their financial security and well-being for years to come. By that, of course, I mean taking on large amounts of debt to fund an undergraduate degree.
I’m not exaggerating when I say that student debt is a terrible burden for many families, one that jeopardizes the future of many a college student and the retirement hopes of way too many parents. Here’s a recent PBS news report on the issue and people who find themselves unable to retire due to their own or their children’s college debt.
Obviously, this is something families should try to avoid as much as possible, but sometimes parents and students arrive at the college stage of their lives without the necessary knowledge or tools they need to make informed decisions.
And occasionally, they’re even given wrong or ill-considered advice.
The information available can make it very difficult for parents to navigate the complicated process of college searches and applications, and to know what’s right for their families and their child.
I’d like to help a little with that. I’ve traveled this college path already with each of my four sons, as well as with many other young people I’ve mentored and taught over the years, and I’ve learned a few things along the way that might be helpful to families just starting out. I hope so, anyway.
Here are some of them:
Middle school is not too soon. Seriously. It’s the time to start informing yourself about the finances of college and prepping your student for the realities of the whole money side of things.
I cannot stress this point enough. It is far, far too common for students to blithely move forward with a college search and application process in their junior and senior year of high school without the slightest clue about what they can actually afford.
And their parents, wishing to avoid disappointment for their child, agree to help with financing, even though it will often stretch the family resources beyond what is even remotely reasonable or prudent.
Avoid this scenario by starting the process and informing yourself early.
This crucial action applies no matter where your student is in the process, whether it's 8th grade and just beginning to think about college, or 11th grade, and on the verge of starting the search in earnest.
Really, it's essential to do this before you do anything else.
The reason is that for most families, finances and college affordability absolutely must be a major factor in making a college decision. And the only way to know where you stand in terms of financial aid is to fill out the FAFSA worksheets.
In doing so, you will find out your Expected Family Contribution (EFC). That is the dollar amount that the government and many colleges think you can afford to pay for college out of your own pocket in any given tuition year.
You will be expected to cover those costs each year that your child is in school, either out of pocket, through loans, or through scholarships.
That EFC number often comes as a big shock to families. In many cases, they might discover that they are considered affluent enough to foot the entire tuition, room and board bills on their own, and do not qualify for any grant money at all. Or only for minimal amounts.
On the other hand, some families might find out that they will be eligible for more aid than they realized, bringing college within reach when they did not think that was possible.
Either way, knowing your EFC is invaluable and essential when making college decisions.
If you want to take it a step further, you can also fill out the CSS Profile that many private colleges use to determine financial aid needs.
The worksheet for FAFSA can be found here. The information about the CSS Profile can be found here.
If you are like most of us, you will probably see that the EFC is one thing, but actual ability to pay that EFC is another thing altogether. It’s a far cry from what most families feel they can actually afford.
So don’t be surprised if the number that pops up makes you gasp just a little. It can be a very jarring experience that has you redoing the worksheet to double check that you didn’t make a mistake somewhere.
When I filled out the worksheet the first time when my oldest was in 8th grade and saw the EFC number, I nearly had a panic attack. While we had never had a huge income – and not anywhere close to the $180,000 that now qualifies families for needs-based financial aid at some elite colleges – we had always been big savers.
That’s because, like many Americans, we’re not covered by any kind of pension and are responsible for funding our retirement on our own. So the lion’s share of our savings and assets – even the ones not in designated 401K, 403B, or IRA retirement accounts – were and are primarily earmarked as income for our senior years.
The bottom line is that the vast majority of our assets were not intended for college.
But here’s the thing.
ALL savings and assets in non-retirement accounts are factored in when determining the EFC.
As a result, our EFC number was truly mindboggling to me and amounted to more than my entire teacher’s salary. It almost made me feel that 4-year college might not be an option for my boys at all.
But having the information proved to be exactly the dose of reality I needed to get a true picture of what lay ahead. It forced me to take a hard look at the numbers and decide what we could realistically pay for each boy.
Needless to say, we determined that it was a fraction of the EFC number. That called for some sobering adjustments in our expectations.
Once you have the financial information and have determined what you contribute to your child's college education, communicate that to your child.
Be honest and clear about the cost of college and what you are able to pay. As I mentioned above, the best time to start doing this is the earlier, the better. But in any case, it should be done before any student gets their heart set on a particular school.
Unfortunately, I hear students talk like that a lot - dreaming of attending one school or another.
That’s fine if it’s something the family can afford. If not, to put it bluntly, the student needs to adjust his or her dream to line up with reality or figure out a way to make it happen without loans.
There’s simply no merit in allowing your child to be set up for disappointment – or lifelong debt.
Bear in mind that the vast majority of students end up loving whichever school they attend, and they will thank you as adults for refusing to allow them to forget the practicalities of finances in making their college decision.
After all, it’s very common to hear many a student express great regret about taking out major loans to finance college, but I have yet to hear a single student express dismay or disappointment at having a minimal debt load or being debt free when they graduate.
A debt-free degree is a gift that allows them much more freedom in work and life choices. So parents are actually doing their children an enormous favor when they put their foot down about college costs.
I said it so often that it sank in, and they actually listened. The worked hard in school, and three of them did, in fact, receive such grants that paid full tuition and even more.
The 4th did not receive any scholarships, but accumulated so many college credits in high school through community college classes that he was able to graduate from our flagship state university in 3 years, saving a full year’s tuition and room and board in the process.
(He also lived off campus to lower his room and board costs, then worked as a Residential Advisor in the dorm to pay his room and board, and worked 10-20 hours a week to further help offset costs.)
With our help, they all graduated entirely debt free. And we did it without jeopardizing our retirement finances. But that might well not have happened if we had not had the information early on about the true college financial situation.
Knowledge is power. So take the time to get the facts about your particular financial situation and college payments and talk early and often to your student about the realities.
NOTE ABOUT FOR-PROFIT COLLEGES: Please be aware of the slick marketing campaigns of for-profit colleges. Avoid these schools like the plague. Seriously, they are often little more than diploma mills with questionable credentials that take your money, but offer few chances for real jobs.
There are so many non-profit options out there, that there is simply no reason AT ALL, to attend one of these expensive, highly suspect, and even fraudulent schools. Most of the programs they offer at such places are available for a fraction of the cost at community colleges and public universities, or private, non-profit schools.
Focus Your Search on Colleges That You Can Afford
Once you know the financial realities, focus your college search on the schools that you can actually afford, or that offer the kind of scholarships your child will need to get through with as small a financial burden as possible.
There are hundreds of colleges in the U.S., and there is a wealth of information out there about them, so there's no need to waste your time applying to schools that are out of reach financially.
Search engines such as the private College Board website, or sites run by the U.S. Department of Education ( College Navigator and College Scoreboard) allow you to focus your college search, using certain criteria you choose and enter. So you can narrow the list of schools based on things such as areas of study, size, geography, etc., and, of course, available financial aid.
Make the most of those tools to find colleges that offer the programs your student is interested in, but also offer the kind of aid you need to pay for it.
Many colleges have generous merit-based scholarships besides their needs-based ones, so if your child is a good student, there may well be a financial grant that they can apply for.
And by all means, think beyond the typical 4-year college scenario. As I mentioned above, one of my sons earned many college credits in high school through community college classes he took to cut more than a full year from his time at a more expensive 4-year institution.
Now there's no doubt that all this research takes some time and effort, but it’s one of the best things you can do for your child’s future. Approach it with an open mind and your feet firmly planted on the ground.
Many parents these days consider a trip (or two or three) to visit college campuses a necessity. It's almost become a rite of passage in the spring and fall of junior and senior year to do so.
And yes, my oldest son and I did the college tour thing ourselves the spring break week of his junior year --- before I knew any better.
The trip turned out to be exhausting, expensive, and ultimately useless. All the tours blurred together after a while, and he ended up applying to none of the schools we visited.
So I skipped almost all of the process with all my three younger sons, and it worked out very well.
In terms of visiting colleges that are far away, it can be an extremely pricey proposition when you calculate all the associated costs, such as mileage, gas – or airfare - restaurants, hotels, meals out, etc., etc.
It’s simply not necessary or even very helpful, and just because it’s become the expected thing to do does not mean you have to do it. In this day and age, college websites include 360 degree views of the campus and provide all the relevant program, facilities, and financial information you need to compare and contrast different schools.
So go ahead and visit colleges in your local area if you want, but for everything else, I recommend simply doing your homework via the internet, using those ample on-line tools.
Narrow the options down that way, using the financial information you’ve already gathered to determine affordability and any other criteria about majors, geographic location, size, etc. that can help make a determination.
Once you have that college list compiled, you can proceed with the actual applications, confident in the knowledge that you are pursuing only feasible options.
Then, once your student is accepted to colleges, and you have a clear picture of the financing, plan a visit.
Many, if not most, colleges offer Accepted Students Weekend or overnight visitation opportunities. These visits will offer a far better sense of what the college has to offer and what kind of a fit it will be for your student than any 2-hour college tour will.
So, unpopular as this advice may be, I recommend strongly that you pretty much skip the college tours, and save you and your family time and money.
Most people, including some guidance departments, do not even know about these programs that offer in-state tuition rates for out-of-state students in certain cases.
They are definitely worth checking out. Of course, the programs have restrictions and can be competitive, but the savings can be huge over the usual out-of-state tuition charges.
These are typically regional arrangements among colleges in certain geographic areas for specific fields of study and majors.
They may be arrangements among several states, or they may be more localized between one or two states (Minnesota and Wisconsin, and Colorado and New Mexico, for example).
In New England, it’s called Tuition Break, and it’s sponsored by the New England Board of Higher Education (NEBHE). Here’s the link to their page. In the Midwest, it’s the Midwest Student Exchange Program. Some of the western states collaborate under the aegis of the Western Interstate Commission for Higher Education, and some 15 states offer deals under the Southern Regional Education Board.
These low(er) cost options exist. They are not the biggest name schools, or the ones closest to urban centers, but they can offer savings if your student has their heart set on going away to school, and/or your local flagship university is one of the more expensive ones.
Check out schools in South Dakota, for example. Or some of the regional campuses in less expensive areas of the country, such as the South, Midwest, and some states in the West. You might be surprised by the low costs many of these areas offer and the bargains they can represent, even if you have to pay for travel back and forth. Here's a link to get you started on research for that.
I know what you’re thinking. What the heck is she talking about? Studying abroad is a luxury for the rich or affluent, right?
But what many people don’t realize is that some excellent European public universities are tuition-free -- yes, you read that right!
Or they charge a mere fraction of the tuition fees that U.S. universities do, meaning under $1000! That's a bargain by any U.S. measure, even if you take into consideration the price of airline travel back and forth and the higher cost of living.
Of course, you would have to already speak or be prepared to master the language used at the university, which is no minor consideration.
And the application procedures and admittance criteria can vary widely from country to country, with sometimes intimidating amounts of red tape. This calls for a fair amount of determination and research to figure out and get through the process.
Still, it’s a perfectly valid option for any U.S. student with a sense of adventure and foreign language capabilities, and a willingness to navigate the initial complexities of applying overseas.
I know students who've done it, in fact.
In most cases, they have already spoken the language of the country where they studied because their parents spoke it at home. But I also know of individuals -- including yours truly -- who've managed to master the language they need in 15-18 months of very intensive study.
It can be done. You can learn more about European options at this European Union link.
The same applies somewhat to Canadian universities. While nowhere near as cheap as European options, their costs for international students are often about the same as many flagship state universities in the U.S. And they're a real bargain when compared to U.S. private colleges.
Check out some of these Canadian tuition rates here.
NOTE: I've just learned about a wonderful program that France offers graduates of community college. It's a full scholarship, 4-year program in engineering including language learning. Check out the article here about it and the one here.
So there you have some strategies to use and explore to ensure that college stays in the realm of affordability for you and your student.
It’s an exciting time for families and young people, but that’s no reason to let it become a time of unwarranted risk for anyone’s financial well-being.
Forewarned is forearmed. Good luck to you in this