Calling all parents of high school seniors!
It's now time to take on a not-so-fun parental duty. It's time to have "the talk" with your senior: that uncomfortable discussion about college costs and their future ability to repay their student loans.
In almost every article I read these days about student debt, there are a few anecdotes about students who spent thousands upon thousands of dollars on college, only to find upon graduation that their salary is completely out of whack with their debt load.
I'm always left wondering if the student either: 1) had no idea of the earning potential in his/her chosen career; 2) knew the earning potential but just didn't realize how that would translate in a practical sense; 3) just chose not to think about finances at all until it was time to pay.
It's easy to understand why 18 year-olds would have a tough time understanding how their salary translates in the real world. That's where parents need to step in during the college-selection process and give the following short, but pointed speech:
I know you're very interested in attending "Really Expensive College," but we're going to have to consider what kind of financial aid package they offer you. Because you plan to study XYZ, you'll probably start out at a salary of around $25,000. Once we see your financial aid package, we'll have to figure out how much money you'll need to borrow, and what your monthly payments will be once you graduate. If it's going to be too much to handle on your salary — and I can help you figure that out — you're going to have to consider "Less Expensive College
."
Of course, the discussion may not be that simple — especially if your child is very attached to the idea of attending an expensive school and following a career path that doesn't justify the price tag. But hang in there, parents, and keep them focused on financial reality. They'll thank you one day.
Parents: are you talking with your kids about college costs?
Great topic Caroline; this is a topic that many students do not consider.
It is important soon-to-be college students remember the ‘real’ reason they are going to school. When I ask “why are you going to college” to high school and college students across the country their first answers are: to get a degree, to get a better job, to get an education. After a little digging these are NOT the reasons young adults go to college.
The ‘real’ reason most choose to get a higher education is so they can live a better lifestyle. They realize with a degree they are able to earn more thereby affording the lifestyle they truly desire. Lifestyle is the motivator.
When evaluating school choices the ‘lifestyle after graduation’ part of the equation should influence your decision. What would life be like with $50,000 in college debt and a degree from a top school? Would you reach your lifestyle goals faster?
Unfortunately many young adults do not have the proper financial education or guidance to make a well informed decision and many are finding themselves burdened with debt may years after they graduate.
Vince Shorb creator ‘Financially Free by 30 - Financial Education Course for Young Adults.”