If the financial situation is steady, if there is some money for college, if you have a very good student who is likely to have some merit options, I think it is possible to have ‘the talk’ and have it have meaning. I told my kids about how much I could contribute but it really had no meaning because they didn’t understand college financing, that my cost might be the same at a private school with merit or other scholarships as a flagship, that some schools don’t offer merit, only need based aid. They knew I didn’t want them to take out loans and that I wouldn’t take out loans. They knew many schools weren’t going to happen even if they had the grades just because of finances. They also knew but didn’t understand how it would affect them that my job was ending and the financial picture from one year to the next was going to be very different. I still had to steer them to affordable colleges. I still had to show DD1, once on a napkin at a restaurant, what all the costs were and how she would have to meet them. She nodded and agreed, but it really didn’t sink in.
The other had so many different sources of money that it was very difficult to say “you can afford a $25k school but not a $50k one.” She could afford the $50k one if it was instate, because of state scholarships. She really needed athletic money if she was going OOS, so that took out the D-3 schools - unless they had big merit money for her academics. She could go to any instate school, but then couldn’t play. When the financial offer came from the school she chose, it was $5k less than we’d anticipated, and that was almost a deal breaker. Her grades were very good, but not superstar level.
So did I tell my kids how much I could afford? Yes. Did it sink in or were they able to apply it to the financing of college? No. They still needed a lot of help. They still wanted to try for the schools they wanted because they wanted them. And both schools worked out when I wouldn’t have thought they would just by looking at the sticker prices.
It should be done before application time. My parents keep most information to themselves but they give us the basics necessary. I would like more, but you get what you can. At least I know they are paying for it and have been saving for years.
My kids are 9 & 11 and are already sick of us telling them we can’t afford some new gadget because we’re saving for college. I believe in 7th grade the our district has mini class in career and college planning, which is great for the kids and the parents and probably when we’ll have our first real “talk” about money/affordability.
When I discussed with my D on the schools to apply a couple years ago, I did mention how much we can afford which is around the EFC. So she applied to couple reach schools that have good need based aids. The other schools she applied she had a chance to get merit aids that might be within budget. It does not makes sense to apply to any school that is obviously unaffordable.
We told both of our kids “We can afford X per year” before they applied to colleges. We allowed them to apply to any college that they wanted, with the understanding that if the total out-of-pocket cost was more than X, then it would be off the table. We also told them that we would not co-sign for any loans above the sub Stafford loans.
For grad school, both kids know that they are on their own. D has gotten a fully-funded PhD program with a generous stipend. S will have a bit harder time. While he may get full-tuition scholarship, he will have to pay all his own living expenses. But he knows that (currently soph at undergrad) so he is working and saving $ now.
I believe that it is important to always be upfront about finances with your kids. We started when they were very young - discussing needs v wants, setting budgets, etc. My children have worked since they were in elementary school (acting/modelling). Most of it was set aside to pay for lessons, etc. but some of it was invested and we always made sure that they knew about their investments and saw the summaries every quarter. When it came time for college, they knew how much money was available.
We told my kid we will fully support his education till getting his undergraduate degree. If he gets any merit scholarship, he can have it and save it for graduate school.
We talked about it since middle school when our daughter started taking the high school level and for credit math and foreign language. We naively emphasized the relationship between grades and the potential for scholarships. With only one exception, all of the schools she applied to had some level of merit scholarship. She got a scholarship offer at every school that she was accepted to. These also increased in relative value with each acceptance, the last one being full tuition to a private school (and a pleasant surprise). She was prepared to love every school on her list. She will be attending the one with the full tuition scholarship.
We did not have any “money” talks, the kid did not plan to apply to any of expensive for her schools at all, she had different criteria, the assumption was that there are plenty of colleges that will satisfy her criteria and will offer her Merit awards. At the end it was strange that the college that she liked the most also offerred her full tuition Merit scholarship.
We “talked money” though when she was choosing her Med. School. But our talk was in opposite direction of what most families are talking about. We had to convince D. to NOT choose the cheapest option, but rather choose the place that fits her the best.
I’d like to repeat a couple of points from prior threads on this topic.
First, before you have the money talk with your kids, make sure you know what you are talking about. Don’t set arbitrary limits or make arbitrary announcements. Think them through and have some logical justification for them. For example, if you are only willing to pay the cost of the state flagship, why is that, exactly? If you are not willing to absorb any debt for college, why is that? Can you justify refusing all debt for college if (say) you go into debt for a new car every three years? If you are willing to absorb some debt, how much, and how did you arrive at that figure? If this is supposed to be a mature, adult discussion with your kid, “It’s my money” is not a logical reason for specific limits. So think about your overall level of debt, your preparation for retirement, needs of other kids coming along, etc… Do some of the calculators. Talk to a financial advisor, if you have one. Be prepared to answer your kid’s “why” questions.
Second (and I know I harp on this), if your kid is academically accomplished enough to consider applying to very selective schools, he or she WILL, almost certainly, be able to obtain very generous merit aid at good state schools, and some other schools as well. Make sure you’ve discussed in detail with your kid what will happen if this occurs. This is especially important (in my opinion) if you are likely to be full pay at the more selective schools your kid is considering. If you’re going to make him take that merit scholarship at the state flagship, then why let him apply to schools with no chance of any aid? Discuss this before the list is made–and if you decide that the full pay school is worth it when you are deciding in advance, this will protect you from remorse after the fact.
Of course, this means that parents need to evaluate their household finances so that they actually know how much they can afford to contribute, while leaving enough for other financial needs, including younger kids’ college costs if applicable.
It would not be surprising if the parents who have the spendiest debt-financed habits are likely to be among the ones in the worst position with respect to college costs – and their kids may naively assume that there is plenty of money evidenced by the spending but not realize that it is mostly based on maxed-out debt.
“She was prepared to love every school on her list.” This is what I hope for my child as well. If half of what I hear about “negotiating” financial aid is true. then it’s a complete unknown until we know what her acceptances are. So why limit it now? I’m going to let her create a list she loves – of course including a couple of financial safeties. Then when the time comes we’ll know who wants her, and how MUCH they want her, and take it from there.
Limiting schools to the ones the family can afford will make a process enjoyable. However, if “enjoyable process” is not the goal here, then there are no reasons to limit. I am still smiling when remember D’s college applications. It was a great fun and allowed her more choices later when applying to Med. Schools.
Love this discussion! I think given the different responses - it is clear - everyone’s situation is different.
A lot of parents have said that they don’t know how much financial aid/merit money they can expect. That is not the parent’s fault for being in the dark until late in the game - it is the fault of the system. That’s why so many college applications go out - everyone is playing the numbers game! However, all parents owe it to themselves and their children to roughly determine what they can/cannot afford and inform their college applicant of this fact. The parents should provide a conservative range and say something along on the lines of, “this year I got a lot in overtime so I know I have more to provide, but no guarantees for next year. I expect I can provide 10-15K for your education annually, but no more.”
Also what parents/children MUST do - is educate themselves about the process and the true cost of college. Many parents mistakenly believe they can’t afford a school because it is ~60K (don’t know about the merit aid fairy). Similarly, many parents let son/daughter apply to same school believing the merit aid fairy will sprinkle magic fairy dust and the school will in one poof cost $20K.
It is critical that parents take a cold hard look at the test scores/GPA because they are the main determinants of aid. In our case, DS test scores = excellent. GPA = not so good. Conclusion: smart slacker. We could pay for a good education at a fair price at a state school or pay full boat for a private school to make up for his less than stellar grades. We chose the former and have no regrets.
We had it before applications - long before. Cost is an issue and both kids were aware of the role it was going to play in the list and the final selection.
While there are many discussions on this website that kind of make me feel sad about what kids have to go through to really achieve at a high level in the college admissions process I will be forever grateful for what I have learned about financing a college education from this website. There are endless discussions regarding cost versus prestige, but the reality is that even if your child is meritorious of a prestigious education, many of us can’t afford it because we fall outside of the need based catchment even at the most generous schools, but below the ability to easily fund that $65,000/year education that keeps going up each year. There are some regulars on here who are particularly skilled at helping us more newbies with this financial aspect here on CC and I thank them. It is the biggest reason that I refer some of my friends about to embark this process to this site. The bottom line is very important, it makes the difference of being able to go or not. And isn’t that the ultimate goal, to be able to go to get that education wherever that may be?
We talked about finances with both of our kids, throughout the process. We didn’t understand as much with our first and were lucky - it was harder because he had a clear idea of his first choice, and just followed his counselors’ ideas for his other applications. Some were great, others not so great. We assumed that he would be going to the state flagship. He was admitted to all schools, had financial aid all over the place, which was confusing for us at the time (hadn’t found CC) but we were still able to run the numbers with the financial aid packets in hand. He knew what we could afford, and we ran the numbers with him with every school. After graduation, he wanted to “pay off his loans in 10 years.” In that scenario, his top choice would have cost him (after our contribution) more than we pay in mortgage and one car payment a month, when you break it down into monthly loan payments. His jaw dropped, and he moved on. He made the choice that he didn’t want to have those huge loans. He made a great choice for himself, and ended up choosing a school which gave him a great package, and had much of what he wanted. He is happy there. He also knows that in order to stay there, he needs to work hard to keep his big scholarship. Win, win.
It was easier having an idea going into the process with our D, because I knew more about the finances. I did a lot of digging this time to find a school with a good fit which also met more need than the other schools which would have her major. She also applied to schools which did not meet need, and applied for scholarships as well. We have spoken with her about money from the beginning, and she responded in a really mature way - when people asked about her “first choice” she stated that she liked all the schools that she had applied to, but that she didn’t want to get too attached to one until she had her acceptances and FA packages in hand. She didn’t want to be disappointed.
We have had a couple of adults surprised at this, and say that they didn’t want their kids to worry about the money. My thought is that this is a great learning opportunity about money. I am glad that this first “big” money talk is with us, while we can help talk out the consequences of choices. Their pre-frontal cortexes are not developed yet, and they need time to process all of that information. Leaving discussions about money until the last minute doesn’t give them the chance to process the information in different ways - it becomes more “a parent telling them ‘no’” instead of us enabling them to come to the right decision for their individual circumstances. (We have never said “You can’t go here!” - we have said that x will happen if you choose to go to y" - it has worked for us.)
@MazeArtCrew, I know you said the second time was easier for you, but I’m very impressed how you handled the college cost issue with your son. You’ve done a great job with both children.