PAYING FOR COLLEGE
My friend at work is pulling his hair out. His daughter has been accepted at Northwestern and has her heart set on attending the private school. But, she has no college savings and he tells me they can’t afford the $40,000 a year it will cost them without going into debt. Not many of us could! He’s stressed, upset, and feeling resentful that he may have to sacrifice so much for four years. Meanwhile, he also tells me he regrets not making his daughter start her own savings account sooner (sooner than halfway through her senior year).
Maybe you’re feeling the same pain. How to pay for college when there’s just not enough money? Is it worth going into debt? I think about the same things as we are in the prime saving years for our daughter, yet her college fund has dropped in value by 50%. I can only hope that the stock market will have recovered in nine years.
That doesn’t help families right now who are needing to make some important decisions. How much financial information should you share with your child? I can’t think of a better education than real life. As we prepare our children for financial independence, this is a great opportunity to partner with them about the realities of living within our means.
There are so many colleges and opportunities out there! Some students need to be a lot more flexible in their choices, for sure. College is what you make of it, no matter where you attend. Maybe a fancy name will get you in the door somewhere, but in the end, it’s your own performance that makes the difference. I don’t know about you, but I can count on one hand the number of times I’ve been asked about my college background. Most professional questions I receive are about my recent work or positions.
From listening to my friend, I can also hear how important it is to talk about how your family plans to pay for college. Set the expectations early. If you expect your child to pay for some of it, do they know that right now? How much money will they need to come up with? Is your family hoping for a scholarship? What happens if that falls through? Help your child open a bank account TODAY. There are a multitude of lessons that can be learned from making deposits and balancing a bank statement.
I hate to see my friend suffer so much over the anxiety of paying for college. The least I can do is to heed his advice so that the same thing doesn’t happen to me.