College

Important College Considerations and Conversations

Important College Considerations and Conversations

I believe most parents are united in a common goal to give their children the best life possible, which often includes the desire for them to attend college. Long before they even begin filling out college applications, we start saving money for their higher education and dream of who they might become.

Now it’s time to take off those rose-tinted glasses we parents sometimes wear and take a step back. A college education can be a great investment or a crippling burden to you and/or your child. This isn’t for the faint-hearted, but then again … neither is $30,000 worth of student debt.

Not Every Teenager Is College Material

We see college as the road to a better life, but not every child is ready to start the journey at 18. The United States has the highest dropout rate in the industrialized world, according to the Organization for Economic Cooperation and Development, with just 56 percent of college students completing four-year degrees within six years (Reuters 2012).

Some questions you need to ask yourself:

Some people fear if they don’t send their child to college immediately after high school, they will never go. This is a possibility and one that understandably scares many parents. As a Mom, I do not even want to think about my girls not going to college. There can be a sense of failure if they do not attend for both parents and children.

However, it is important to assess whether your child is ready for college as there is no rule that they have to attend at age 18. If you have any doubts, talk to your child and work together to overcome your concerns. You may be surprised how quickly they change their behavior to prove that college is the right choice for them.

College Cost Should Be Relative to Future Potential Earnings

This is why I think there is SO much student debt. It has become a social expectation to send your child to the best college possible without consideration of debt to future earning potential. I strongly encourage you to crunch the numbers with them before accepting an offer. Calculate what their student loan payments will be in comparison to what they will likely earn. It may not look too bad at first, but after you include—rent, car, groceries, entertainment, phone, etc.—the picture may change drastically. Few kids know how much these things even cost, so this can be an eye-opening exercise for them.

Ultimately you may have to make a difficult and unpopular decision for your child if their dream school is cost prohibitive. I sympathize, but don’t kid yourself that avoiding the fight now is the better choice. Letting them take on unsustainable debt is far more cruel and has long-term financial repercussions for them as well.

Please note: there are only two ways to eliminate student debt—pay it off or die. Harsh, but true. Bankruptcy will rarely absolve them from paying back their student debt (thanks to changes in 2005 that made it very difficult to prove undue hardship in regards to student loans).

Start Talking about College Early to Set Expectations

I recommend you start talking to your kids about college as soon as they enter high school. Find out how interested they are in attending, where they want to go and why. Share with them the rules to qualify for parental financial aid, such as:

Your goal is to make sure you are on the same page with your child and work together to make sure college is a good investment for both of you.

College Is a Privilege, Not a Right

The reality is college costs money and not everyone has the luxury to attend. It is not four years of non-stop partying paid by you or their student loan. You and/or your child are ultimately footing the bill, so make sure they understand the responsibility that comes with this privilege, so they can look back at their four years in college with great fondness, rather than regret.

Next Monday, we’ll examine different ways to save money for your children’s college education.

Shannon

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May 13, 2013  •  53 Comments  •  College

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  1. Monday, May 13th, 2013
    I went to college because I had good grades and my parents would not consider anything else for the next five years. I learned stuff but would never had gone into debt for it, and rarely use my college skills today (micro-economic algorithms, unable to write them anymore!). At least I never lost a year and didn't cost my parents a penny.
    There were so many kids with me who just vegetated there, looking for inspiration, changing majors, dropping out after six years with no degrees... but as parents you want your kid to go to college, some think learning a trade is not for smart kids, and forget you will only thrive in something you are good at, not all personality types are good for college.
    • Monday, May 13th, 2013
      Given how you think about your money - it makes a lot of sense that you studied micro-economic algorithms and at the same time I can't imagine you actually working in that field. :) College is often considered a rite of passage and place where kids begin to figure out who they are - which is fine, but given the price tag - it also needs to be more than that too.
  2. Monday, May 13th, 2013
    I fully agree that kids should have some sense of direction before going to school, but like you said that can be really hard psychologically as a parent and a child. For the same reason many kids really aren't ready to take advantage of a college education, they really aren't ready to do a cost-benefit analysis of that education. Don't get me wrong, I absolutely think it's a great approach and as a parent I believe the goal should be doing what's best for the child, not giving them everything they want, I'm just acknowledging that it's difficult.

    Personally, I wish it was more normal for kids to get a year or two of real-world living and working experience before they went to school. If they actually had experience managing income and expenses, I feel like they'd be more likely to really take advantage of the things a college has to offer.
    • Monday, May 13th, 2013
      I completely agree, Matt. These are difficult, emotional conversations and it wasn't easy for me to write too. Kids have no idea they should do a cost-benefit analysis and most parents don't think to do one. But is important and eye-opening. It can lead to some great conversations as kids really see the price of being an adult and understand the effect their students loans will have on their life. I agree that kids need experience managing income and expenses prior to college, which is why I highly encourage parents to start having their teenagers manage some budgets and get some experience under their belt before they head off to school.
  3. Monday, May 13th, 2013
    I have been saving for my kids college since they were babies. I really hope that they go, just because it gives people more options in life. But, if they aren't college material I'll help them find something else!
    • Monday, May 13th, 2013
      We've been doing the same thing, Holly. I certainly want my girls to go college too, but also want to do what's right for them too.
  4. Monday, May 13th, 2013
    Very big topic, and obviously one that is close to my heart. I think degree inflation has been making the problem worse for decades and the recent financial downturn completely accelerated it as those who had already graduated found themselves without jobs and others used school as a way to wait out the crisis -- with or without a plan for afterward
    • Monday, May 13th, 2013
      I agree, Mario. Recent graduates are entering a perfect storm of rising tuition and a poor job market. Coupled together a lot of people are struggling. And you are spot on - people don't have a plan and they need one for good times and bad times.
  5. Monday, May 13th, 2013
    This is definitely a great post for all parents to read as they make college plans for their kids.

    My oldest daughter wanted to go to school for medical billing and coding. We went back and forth with that and she convinced us that she would get more out of it this vocational school than college, so we supported her. Just as she was about to begin her internship, she dropped out and now we're stuck paying for something she will never use.

    My 19-year-old just flat out told me husband and me, save your money mom, I don't want to go to college right now. I was about to go into why he should when I thought about my daughter and backed off. He's got a warehouse job but I still talk to him about college when I get a chance.

    The two younger ones are college bound and are preparing for it already. They know the schools they want to attend and even keep up with their grades and GPAs, something the two older ones didn't do...a great sign for parents to tell how motivated they are about school.

    Thanks for putting this post together for us :) Have a great week Shannon!
    • Monday, May 13th, 2013
      You're welcome, Corina! I think every parent's natural instinct is to send their child to college. And I think more and more parents are finding out the hard way that they should have sat down beforehand to make sure they were on the same page and ensure their kids were prepared to handle managing their finances. It's great your son had enough self-awareness to realize now wasn't the right time for him to attend college. Continue letting him know it's an option and someday he may be ready for it. Or not. :) But either way, it sounds like he's doing his best to be a responsible, productive adult. And yes, kids who keep their grades up and know what they need to do to qualify for their college of choice are good signs that college is a good choice for them. You have a great week too!
  6. Monday, May 13th, 2013
    I think we will probably encourage our children to apply for as many college scholarships as possible. It takes a lot of time, but every little bit pays off! Jacob and I both got our undergraduate degrees with a scholarship, and it has made our lives SO much more stress free.
    • Monday, May 13th, 2013
      Absolutely! Scholarships can make a huge difference and are something everyone should take advantage of.
  7. Monday, May 13th, 2013
    Great post Shannon, you hit the nail on the head! While we want college for our kids, we have to realize that it may not be for them. I think it does come down to making an informed decision and not viewing college as a 4 year party. I think many do feel it's a right, but in fact a very costly privilege many times.
    • Monday, May 13th, 2013
      Thanks John! I definitely want my girls to attend college but I also want them to understand that it is a privilege they need to appreciate and respect. As it is with most things, I think it's important to start talking to them about college long before they ever start filling out applications. Make sure they understand the cost, so they take full advantage of the opportunity offered while still having fun. :)
  8. Monday, May 13th, 2013
    I think that making sure that the cost of going to school is relative to their potential earnings is extremely important. Too many people overlook that when deciding which courses they will study and which program they will pursue. And yes many do attend simply for the party atmosphere and a chance to move away from home at a young age so that they can do whatever they want. Others attend because it is a family tradition or because the parent's tell them "you will attend, or else", and not because they have a vested interest.
    As a kid my parents really didn't get involved in my or my older brother or sister's choice of education. It was completely up to us to decide what we wanted to do and how we were going to pay for it.
    • Monday, May 13th, 2013
      I think not looking at the cost of college against potential earnings is one of the biggest oversights of most parents. I know there is always a certain amount of guesswork, since their child could change majors or work in an entirely different field than their degree, but it's so important to do a cost-benefit analysis. Once your child sees how much of their income goes towards non-discretionary bills, they may decide a more affordable college is the better choice.
  9. Monday, May 13th, 2013
    You are right College and University is not a right it's a privilege. I don't see anything wrong with getting teenagers involved with tours of the schools, talking to other uni/college students, job fairs etc... jump in, ask questions to employers, school advisors. If we encourage teenagers to educate themselves about education it might motivate them to think more about their future and potentially want to volunteer in areas that interest them. Saving for school is very important and maybe that will also motivate them to get a job and save especially if they understand the meaning behind money including budgeting and savings.
    • Monday, May 13th, 2013
      I agree, Mr. CBB. We need to help them expand their qualifications beyond fun (which I understand) but to more importantly consider how their college education affects their future. Most don't worry about the cost or repaying back student loans until they are hip-deep in debt. If they understand all their options, then can make better choices.
  10. Monday, May 13th, 2013
    I am saving money for my son's education, but if he chooses another path, then that will be ok. I would rather pay the penalty for withdrawing my money after the fact then not have any saved up at all. My brother comes to mind a lot when this question comes up because he hated school. He dropped out of high school because he wanted to become a mechanic. He has done very well for himself as one and owns his own shop. Now, he not only owns a shop, but also works in a power plant making very good money. He has made his own path.
    • Monday, May 13th, 2013
      We're saving for our girls' education too because we'd rather be prepared and able to help out. I really think it's important that parents talk to kids to make sure college is something they want to do and makes sense with what they want to do. It's become such a social norm that parents and kids feel pressured to take that big expensive step when it might not be right one. Your brother is great proof that people have to follow their own path.
  11. Monday, May 13th, 2013
    I always enjoy your thoughtfully written posts. I do admit I went to college because it was my means to "escape" a town I didn't really feel I fit in. Thankfully I made decent grades to earn some scholarships and grants, though I would have probably looked into colleges with more practical degrees (i.e., accounting, nursing, business), rather than the research-focused one I attended. Hopefully with more PF blogs and resources available, both parents and kids can make wiser decisions when it comes to higher education choices!
    • Monday, May 13th, 2013
      Thank you, Anna! I appreciate your kind words!! I think many people use college as way to "escape" and propel their lives forward and onward. I don't think there is anything wrong with that as long as they take advantage of the opportunity to build themselves a better life, which it sounds like you were able to do. It's my hope too that with all the PF blogs, etc that parents can find this information and take the time to figure out what's best for their kids.
  12. Monday, May 13th, 2013
    56% is an incredible statistic. I had no idea it was so low.
    • Monday, May 13th, 2013
      I was a little taken a back when I saw it too. I suspect few parents know this as they would probably take things a bit slower before they would either make the investment themselves or allow their kids to take out big student loans.
  13. Monday, May 13th, 2013
    Another great post by the awesome Shannon!

    When I was headed off to college back in the mid-90's, there were schools that I wanted to attend that would have required me to take out student loans. Thankfully at the time, my dad convinced me to go to a Cal State school instead of a private university. He could help me with my tuition (along with my full-time job paying part of it). I graduated with my BA, and never had to pay any student loans. I'm glad I listened to my dad :)
    • Monday, May 13th, 2013
      Oh, you flatter me, Mackenzie! Thank you for your kind words! I appreciate them. Dads are great. :) Being able to start your adult life without student debt is a huge gift. I think parents have gotten into a bad habit of green-lighting whichever school their child wants to attend, without looking for similar but more affordable options. Debt has become such a normal state of being that everyone accepts it as the status quo.
  14. Monday, May 13th, 2013
    To play the devil's advocate, the student loan system (in large part because of the federal government) has made it so absolutely anyone can access enough capital to attend college. Our society treats it as a right, not a luxury. With that being said, there is a lot of demand for careers that do not require college. Think plumbers, electricians, etc. There is definitely a lot less people opting for these career paths, though they may be more stable and consistent than some of the work that can be outsourced or is highly competitive. Great post, though, and I definitely would like to be an active participant in my children's college plans (whenever I end up having kids, haha).
    • Monday, May 13th, 2013
      Oh, I don't think you're playing devil's advocate, DC. I agree. :) Student loans are tricky. Two students attending the same college but with different career goals - one with a high-paying potential and one not - can get the exact same amount of money. I don't believe people should chose their degree based on the amount of money they will earn, but they do need to make sure they are not taking on "too much" loan for their potential earnings. And it's up to them to figure this out because no one will do it for them. There are many great paying jobs that don't require a 4-year degree and parents need to sit down with their kids and figure out what's the right path for them. Before you know it - you'll be setting aside money for your kids education. :)
  15. Justin
    Monday, May 13th, 2013
    I believe that most college students should consider community schools. These are, in my area at least, on par with state run universities and many even have satellite campuses for the big schools.
    By doing this, students can see if school is for the and will cost less if they decide to change majors etc...
    • Tuesday, May 14th, 2013
      It seems like more and more people are taking a closer look at their community colleges, especially for the first two years of general studies. I think it's another good option to help lower costs and give a chance to see if college is right for them.
  16. Monday, May 13th, 2013
    i want my kids to certainly have the option to go to college.... But you make some really good points, Shannon.. If my kids are struggling with their grades and work ethic in high school, their habits will likely not get any better with me there to remind them how important their grades are..
    • Tuesday, May 14th, 2013
      Thanks, Jefferson. I want my girls to go to college too and be suited to do well there too. Sometimes we overlook those things because we love our kids and they are good kids overall, but that isn't enough to help them make it through school. But if we notice these things early and address our concerns with them, we can help them be ready to succeed in college and make it a great investment for everyone.
  17. Tuesday, May 14th, 2013
    Finally, somebody said it! "College is a privilege and not a right." Amen to that. Also, Broke Millennial had a great post not too long ago about making the choice to go to a cheaper college, and how in the long run she was SO glad she chose that route, even though she was upset in the beginning. Right now our oldest has no plans for college, but she does have a back up plan for how she's going to earn income. Although the thought of her not going to college makes me a bit nervous, the fact that (through us working with her) she's got a plan in place right now for life without college is, to us, a great start.
    • Tuesday, May 14th, 2013
      Thanks, Laurie! Yes, Erin's post was great. Here is a link to it (I avoided the millennial curse) in case any parents who need to have a similar talk with their kids wants to read it.

      It's great that you and your husband are working closely with your daughter, so she has a plan to earn an income after she graduates from high school. College may not be right for her now, but that may change in the future too. I think the most important thing any parent can do - is help their child figure out what's the right path for them and help them succeed in their chosen path, whether it includes college or not.
  18. Tuesday, May 14th, 2013
    Great article! I completely agree with you that college costs should be relative to future potential earnings. But count me in as one of those that fear if they don't send their child off to college, they'll never go. Even though it's eons away for my child, I know quite a few high school friends who took up jobs at grocery stores, because they didn't know what they wanted to do and hung on because they got promoted early. Was a great salary when we were 16-17. Not so much now. Not everyone knows what they'll want do at that age. Heck, I'm still trying to figure that one out. But rather than sit on the sidelines, because we haven't found our 'dream job' yet, waiting for something to happen isn't helping either. I still like to think that there is a earnings benefit to having an education, regardless of where you got it.
    • Tuesday, May 14th, 2013
      Thanks, Anthony! I share your fears too. :) College is tough. You want to give them the opportunity it provides, so they can create the best life possible for themselves. At the same time you need to make sure they're ready to take advantage of that opportunity. Some kids would do better to wait, but then that fear of then never going to college creeps in so we pressure them to go now. It's a delicate balance and why I encourage parents to start talking to their kids about college as soon as they enter high school. Good communication can help alleviate fears and set expectations.
  19. Greg@Thriftgenuity
    Tuesday, May 14th, 2013
    All very true. I wonder if the "stigma" of not going to college will fade as crushing student debt continues to be an issue. Look at a job like plumbing - the pay is good, you don't need the degree, and people will always need them. How many young people with college degrees can say they have a job like that?

    Luckily for me, I was just as cheap in college as I am now and went where I was awarded the most money and worked as much as I could to limit my total debt after school.
    • Wednesday, May 15th, 2013
      I do think some of the stigma will fade because of the burden of student debt, not only puts out of reach for more children, but it also lowers the benefits of going. There are many great professions that don't require a 4-year degree and parents need to figure out what's the best course of action for what their child wants to do, rather than automatically sending them to college. I wouldn't say you were cheap, Greg - you were smart to go to a school that made it affordable for you to do so. Leaving school with little debt is a huge win!
  20. Tuesday, May 14th, 2013
    I believe parents have to take charge in the college decision process and educate their kids better. They should not let the soon to be high school graduate blindly dictate where they want to go. The 18 year old really has no idea how much is too much for college and how going into debt will hinder their life going forward. I was just having a conversation the other day in class with a student who wants to attend a college here in the south that costs almost $45,000 per year. She didn't think that was a lot of money for a year of college.
    • Wednesday, May 15th, 2013
      Oh my. $45,000 for one year of school? Wow! I don't know her situation, but that is a lot of money and it makes me a little nervous that she doesn't feel that way. I agree that parents need to be in the driver's seat when it comes to choosing where their child goes to school. Debt is such a foreign concept to kids and they don't understand how it can hold them back from doing the things they really want to do. Parents want their kids to attend school for the opportunities it provides, but too much debt can greatly diminish those opportunities too.
  21. Wednesday, May 15th, 2013
    I was always pushed towards going to university by my parents as my grades were always above average and I wanted to get into either Engineering, IT or Finance. I'm glad I did take that part, but I agree that it might not be for everyone.
    • Wednesday, May 15th, 2013
      I think parents are always going to want to send their kids to college and in many instances it's right for the child too. For me, the biggest mistake I see parents make is sending their child to a school where the cost far exceeds their child's earning potential. Now their kid has this debt to carry and didn't full understand how heavy it was until it's too late.
  22. Wednesday, May 15th, 2013
    My husband went to college the first time because he thought that was the thing to do, although he had no clue what he wanted to be in life and got more interested in the party scene instead of studying. He dropped out with a less than 1.0 GPA. He went back in his late 20's and was a Dean's list student. You are right that some kids are just not ready for college at age 18 or ever. It took him a whole year at community college to retake the failed classes from the first time before he could start on his degree. If you aren't ready, don't waste the time or money.
    • Wednesday, May 15th, 2013
      Unfortunately, I think that happens a lot. It's hard to know who you want to be when you're 18 and freedom is fun! :) But when your husband was ready, he took it seriously and did incredibly well. It can be so hard for parents to put college on the back burner, but if your child isn't ready, then the best thing you can do is help them figure out what they want to do with their lives.
  23. Saturday, May 18th, 2013
    Hi Shannon
    This is my first visit to your site - your article is great! It's realistic, thorough, and helps people separate "parental expectations" from "what's the reality here"?
    I don't regret my education or my student debt (while, maybe a little) but it definitely would have been better if I waited. I plan on using these steps with my own daughter who is sixteen. She is highly motivated to go to University but she struggles with some of her core subjects.
    I believe having an honest conversation with about doing some extra course work at a local college (I think they're called junior colleges in US) before taking the whole University plunge might be the best thing. Setting her up for success and saving some cash! Win and win!
    • Sunday, May 19th, 2013
      Hi Lindsey,

      Thanks for stopping and commenting; I really appreciate your kind words. You're definitely on the right track with your daughter—open communication is key. There is nothing wrong with attending a local community college before jumping to a University. As you said, it can be a real win-win and ultimately, your child receives the education she wants at a more affordable price, so everyone ends up happy.
  24. Monday, May 20th, 2013
    These are all really good things to consider. Taking a year off to mature and experience the world isn't necessarily a bad thing. Another thing I think families should discuss and recognize when they're considering going into so much debt is that college is not necessarily the Holy Grail pathway to a career. There's lots of ways to earn money, and there are other options to obtain relevant training.
  25. Tuesday, May 21st, 2013
    I agree with needing to think about your future earning potential when choosing college. It makes no sense to go to a small private school with a $30-40k a year tuition if you are destined for an avg salary in the business world. Getting $200k in debt for the name prestige of the college seems silly when a state school costing 1/4 of that will get you the same college degree and coursework.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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