Paying for College: Advice for parents


Did you ever think we would long for the good old days when getting our sons or daughters into college was the top preoccupation that kept parents of high school juniors and seniors up at night? With balances in college funds falling by double digits and housing prices continuing their decline, paying for college now may trump college admissions as the primary source of stress for parents of high school students. No longer is it sufficient for our children to limit their college consideration to those schools that are the right academic and social fit. The escalating cost of a post-secondary education, measured against a family’s dwindling resources, means that financial fit has moved up the college choice priority list. 

The good news, at least for the 2009-2010 academic year, is that many colleges and universities are committed to their existing financial aid programs.  These schools are looking for ways to reduce expenses elsewhere in the face of shrinking endowments, and many have instituted hiring and salary freezes, and have postponed building projects. Some colleges, in fact, are actually seeking ways to expand their aid to keep students in school, as unexpected changes in families’ economic situations have made it a challenge to pay tuition bills. However, sustaining generous aid packages beyond the next academic year may be a stretch for many colleges if endowments fail to recover soon. 

Even prior to the current economic crisis, it was not unheard of for students to gain acceptance to a college, only to face disappointment when the school’s offer “gapped” them, meaning that the financial aid package did not meet the full amount of demonstrated need. Perhaps worse, students often pin their hopes on a dream school and are later informed by parents, after acceptances have been received, that the cost is out of the family’s reach.  Some of this is due to expectation for more generous financial aid packages. However, all too often, the parents failed to communicate with the child early in the process just what he or she might expect in terms of parent financial support. An understanding among all family members with respect to the family finances, needs and values now must be the first order of business as students begin to explore their college options. This is the best way to avoid letdown and dashed hopes, which too often result when parents are not forthcoming with children and clear on the family financial situation and what is actually affordable.   This does not mean that students shouldn’t apply to expensive private colleges which often offer more robust financial aid packages. Applying to a range of schools with different costs and having a clear understanding about what is “affordable” will likely lead to a more favorable outcome.

It is in everyone’s best interest when the family engages early on in a conversation about college and openly discusses values, priorities, and affordability.   There is not necessarily one right answer to the “what is affordable” question, but each family must weigh all the factors given its unique situation. You may feel that an expensive private college education is worth it no matter what the cost. However, taking a realistic and holistic approach to family resources and to the prospects for your financial future may help clarify or even lead you to re-order goals and values. Parents are starting to question whether the pride in seeing the ducal of the prestigious, though costly private college on the car window is worth the price. 

The economic situation has forced us to re-examine our values as we move closer to our own retirements and try to guess what the future holds.  Many of us assumed we would be able to afford to send our children to the college of their choice, even if it meant borrowing a reasonable amount of debt.  Now we find ourselves asking these questions: Is attending the name college actually a better investment than going to a state or lesser known university that might be less expensive or more generous with merit aid? How important is graduate school to my student’s career plans? Am I willing to put my child and myself heavily into debt to cover the cost of attending an expensive private school, especially if other school options are available? What is my child’s earning potential after graduation, given the expected career path, and will his or her debt burden be manageable?

If affordability is high on your value list, the good news is that there are ways to attend college without depleting savings or taking on exorbitant amounts of debt. First, don’t get caught up with the rankings. There are still many gems that may not be household names, but which provide a high quality education and offer money to students they hope to attract.  Many people are often surprised to learn that only a handful of highly selective schools do not offer some form of merit aid.  Most schools use a portion of their financial aid resources to shape each class, hoping to entice students to attend who will help the college meet its enrollment objectives.  If your son or daughter is not a straight ‘A’ student or did not ace the standardized test, do not despair.  Not all schools are hoping to draw the super high academic achievers. That is why it is important to research the colleges to understand each school’s objective, its typical applicant, and how your child might compare. Students who are most honest with themselves about their true strengths and talents, and who are willing to research multiple options are most likely to uncover affordable opportunities that might not otherwise have been discovered. 

As aging Baby Boomers, many of us may be re-thinking our vision of college for our children, while we confront soaring college costs, diminishing asset values and our own looming retirements. Now is the best time to have that family conversation about college options so that values are understood and shared, practical choices are made, and disappointments are avoided. 

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