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Imagine you’re a wealthy couple and your teenage daughter is eyeing the start of her college career. She has the grades to get into a good school, but falls short of earning a full scholarship.
You can afford to pay for her schooling, but have always felt that College costs should be your child's responsibility.
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You haven't saved up for your daughter's education, and believe taking out student loans and managing debt will build her accountability and financial smarts.
Is that true, or are you just throwing your child to the wolves?
How to prepare
It’s no secret that college costs in the U.S. are high these days. The average cost for undergraduate students — including books, supplies and living expenses — stands at $38,270 per student each year, according to the Education Data Initiative. Stripped down to tuition alone, the average cost of attending college in-state is $9,750, while out-of-state tuition costs $28,386.
Keep in mind, there are plenty of scholarships that don’t focus on grades or income. You could help your child explore awards based on community service, job experience and extracurricular activities to secure extra funding. Show them there are possibilities beyond having good grades.
Helping them find a part-time job to chip away at loan costs could also help them save money. This can start during the summer and be followed up with a student job in the fall. Even if your child isn't eligible for a federal work-study, many universities offer traditional part-time roles that can fit around their class and exam schedule.
And if your child does need to take out loans, consider opting for federal loans first before private loans, as interest rates are typically lower, and they often don’t require parents to cosign.
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Conversations about college
Conversations between parents and children about financial expectations for college can help prepare everyone to navigate expenses, and maybe save some family relationships.
Parents should be direct and honest about what help they plan to offer. Talk about what will be contributed, and determine if any of it will be expected to be paid back. Having this conversation ahead of time so everyone can prepare will lessen the strain and stress.
Make sure to ask your parents to help you fill out the FAFSA form. Even if their income disqualifies you from need-based aid, you may still be eligible for federal loans. Plus, it can be beneficial to have a FAFSA application on file if applying for anything else.
Federal student loans also don’t typically cover the whole cost of college — including your housing, food, utilities and more. In order to cover your entire tuition, consider a private student loan to bridge the gap between federal student loans, scholarships and any grants you may receive. College Ave can help you secure a private student loan at the lowest available rate for you.
Plus, it’s easy to apply. You can start the application and choose from a few options, like becoming a borrower as your parents’ dependent.
Parents can also sign on as the guarantor for your student loan. They can be approved with an instant credit decision, and the whole process can be completed in as little as three minutes — a major time-saving bonus considering how much planning, packing and shopping you’ll need to do before September rolls around.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
