Paying For A College Education
A parent’s job is to protect, feed, clothe, educate and prepare our children to be successful when they grow up and leave the nest. In today’s world, a college education can make all the difference in their ability to get a job or career in a field they enjoy.
What I am about to share with you may be one of the best ways to help your child grow into a responsible adult and provide a financially secure beginning to life on their own. At times, it may go against the normal feeling to give and protect, but it works. This approach offers a balance. If you continue to do everything for your child, they won’t learn for themselves, may not appreciate what they are given and may struggle once on their own. On the reverse side, if you do nothing for them, they may achieve success on their own yet may start life with a pile of debt.
As early as you can, start saving money for your child’s tuition. Whether it is a savings account, a state sponsored prepaid tuition account, or another investment option, put money aside. Start well before college is even a thought that crosses their mind. Find a balance between saving for their college and saving for your retirement. I’m not an investment banker and everyone’s income is different, so do the best you can.
Involving Your Child in Financially Planning for College
It is important to involve them and set a realistic expectation with your children either shortly before or when they enter high school. The key to success is they have to be vested in the entire process. Sit them down, share the plan, have an open discussion all the while treating them as adults and allowing them to make the ultimate decision about college.
Here is a sample conversation:
We have put aside some money for you to get a college education. We feel that having a college education will open up more doors for you and provide more chances. Although we would like you to get a college degree, the decision is ultimately up to you.
If you choose to go, we have put aside $xxx [fill in the amount] for you to use. Depending on how you approach college may determine if this is enough to cover everything. The money is for college. If you decide not to go to college or drop out, you forfeit the money and it becomes ours. If you remain in school full time and graduate with a 4-year degree, whatever is left is yours to start your life with.
Our sole goal is for you to get an advanced education. As long as you are a full time student and working towards a bachelor’s degree, in addition to the amount saved, if you decide to live at home, we will cover your room and board and living expenses. If you decide to live on campus, you will be responsible for all living expenses.
It is possible for you to get out of college without being in debt. Here are some things you can do towards that.
Get the best grades you can. Get really good at a sport or activity that you enjoy. All might help get a scholarship to a good school.
Think about where you want to attend. Most in-state schools are far less expensive than an out-of-state college. Attending the local community college to complete required college courses may allow you to still live here. This will help you save money on room and board and cost of tuition. Once you receive your Associate’s Degree, you can transfer to a university to get your Bachelor’s degree.
Look into scholarships and grants. There are many available options that you can apply for that range from a few hundred dollars to a few thousand. If you apply, there is a good chance of getting a few of them every semester.
FOLLOW THIS LINK TO A PAGE WITH LINKS TO SCHOLARSHIPS AND GRANTS.
Get a part time job. Most universities offer credit for work programs or can help find a part time job with flexible hours.
Depending on the decisions you make and how much effort you put towards finding other ways to pay for college will determine whether or not there is enough to cover all your expenses. Again, the money we put aside is to be used solely for your college education. Anything left over after you obtain a 4-year degree is yours to do with as you want.
Providing a bit of direction, some options to consider and an ultimate goal (4-year degree and no debt), resulted in some very grown-up actions and decisions being made by our children. They researched the cost of schools, in-state and out-of-state, and weighed the good and bad about continuing to live at home. In the end, they made the decision on how they wanted to approach college and what was best for them. The end result was a 4-year degree with no debt.
Having your child involved in figuring out how to pay for college provides education on being financially responsible, living within their financial means and understanding where the money goes. Another area of becoming a financially savvy adult is having a checking account and balancing it every month. As soon as they start receiving money from relatives or from a job have your child open a bank account. If not done already, by the time they start college, have them apply for a credit card. Most universities partner with a bank to offer student credit accounts that have little to no fees. They need to assume responsibility for their own finances, pay bills on time and learn to live within their means. As a parent, teach your child the importance of establishing good credit and maintaining it.
With a 4-year degree, no debt and established credit, you have positioned your child for a healthy start to life on their own.
By Mike Parker