When and how should parents have the money talk about college?

Counselors: Share these tips with your families to help them talk it out together!

It’s time we had a little talk. Few of us look forward to hearing those words. But when it comes to paying for college, that little talk can help your family avoid surprises, minimize conflict, and make informed decisions.

Here are some tips for having the college money talk:

Push through the discomfort

Talking about money isn’t easy for everyone, but the payoff in this case is worth it.

Anticipate areas that may be especially thorny due to differences of opinion and face them head on. These might include tackling who is going to pay for college costs and how much, what amount of debt is acceptable, and what you’ll do if that dream college ends up being too expensive. There are no right or wrong answers to questions like these; families need to determine together what works for them.

Talk early and often

Talking about money early can also give your family more time to set goals and address differences of opinion. But don’t worry if you haven’t had “the talk” yet. Anytime is a good time to start.

As college becomes a reality for your family, it’s time to have more deliberate and specific conversations around money (see suggested questions below). It’s also important to revisit topics periodically, especially if metrics such as salary or savings account balances change.

Find trusted resources

Some common misconceptions our team has encountered in speaking with students and families:

1. We won’t get aid, so we’re not going to fill out the FAFSA. (Reality: the FAFSA is also your gateway to other types of aid, including scholarships).
2. College is too expensive for our family. (Reality: Most families don’t pay the college’s “sticker price,” and there are many ways to lower your costs.)
3. We didn’t start saving when our kids were little, so it’s too late. (Reality: Whenever you start, that’s more than you had the day before!)

To combat misinformation and equip yourself for success, it’s crucial that you find trusted resources. Families should also consider consulting professional financial planners when making decisions around paying for college.

Know what to talk about

Ready to have the money talk? Here are some questions to guide your conversation.

• Does your family have any money set aside for college? If so, how much? If not, do you have a savings plan?
• Who will be responsible for paying college bills? If the student and parent/guardian are working together, what amount or percentage of college bills will each pay?
• Along with money that’s been set aside for college, how much can the student and parents put toward college bills during the college years?
• What other costs should be included in your college budget? (travel, textbooks, spending money, technology, etc.)
• What will your family do if the student’s top-pick college(s) do not fit the family budget? (choose a more affordable college, start at community college, take a gap year, search for scholarships, take out loans, etc.)
• If the student needs to take out loans, are the parents willing to cosign? Are they able to cosign, based on their credit? Will they help with repayment?
• What is the expected return on investment in the student’s chosen career or major? How long will it take to pay off loans with the student’s expected salary?
• If graduate school is part of the student’s plan, will the parents help pay?

Need help covering a funding gap in your budget, or know a student or family who does? Learn more about our EdvestinU private student loan options.