How to Have an Honest Conversation With Your Kids About College Costs

Those inevitable talks about the birds and the bees, dating, and peer pressure are like rites of passage between any parent and their teenage son or daughter.

But having a heart-to-heart about paying for college may be one of the most awkward, challenging conversations anyone can have with their kids. It’s difficult enough for most teens to know what they want to do for a living when they’re 16 years old, much less where they want to go school and what to major in.

And with little to no financial experience under their belts, teens may not recognize the huge sacrifice it takes for Mom or Dad to put them through four years of college. It’s a lot of adult stuff to understand; overwhelming them about the real cost of college, the dynamics of borrowing student loans, and the consequences if they’re left unpaid can leave parents and kids on different pages.

Make the conversation about college — and college costs — honest and real. Start with these tips.

1. Impart the value of attending college.

Before any money talk enters the picture, pique your child’s interest early in going to college. Make it a date: Instead of sitting them down for a lecture, go out for lunch or dinner and start chatting about it in a relaxed setting.

Help your child understand that college is not the same as high school. By now, you’ll know your kid’s interests. Do they excel in one subject in school? Do they have a passion for one topic in particular? Knowing their strengths can guide you both in learning what they might want to major in, and where it makes the most sense to attend school.

If your daughter is an honors student with a GPA competitive enough to be accepted into the best private schools, it sets the template to start looking at scholarship and grant options before venturing into student loan territory.

If your son is unsure what to study, don’t force 4-year university on him just because his peers are college bound. Is community college the right decision for the time being? It would help preserve your expenses without taking a huge financial leap.

2. Know your own limits.

How much is your family able to afford or borrow? Of course, you want the best for your kids, but be realistic about your finances before picking schools. Plenty of affordable colleges and universities across the country may offer the perfect academic program for your son or daughter without breaking the bank.

Configure your budget and set a limit on how much you can reasonably pay out of pocket for college costs. There are an assortment of federal and private loans to pursue, so prepare a picture of how much debt you can take on yourself before over-borrowing or getting your son or daughter involved financially.

3. Set aside time to talk about basic costs.

Make a conversation about the costs of college empowering for your kids. Do they want to live on campus? Get them excited about the prospect of being independent and living on their own, away from home. Be honest, not overbearing, with them about the real costs of attending.

Many teenagers (myself included at 16 years old) don’t fully understand the value of credit. Take this as an opportunity to coach them about borrowing money and the value of compounding interest.

Paying for college will cost tens of thousands of dollars, if not more, and your child will need to borrow the money and pay it back, with interest, whether they graduate or not.

Try putting it into a context they can understand. Does your son or daughter have their eye on a new car? College tuition, tell them, will cost at least as much as those wheels do.

Always manage to give them the choice of what they want. Perhaps they may express an interest in attending a local college and commuting; this can cut down on the costs of living in a dorm and the costs it entails. But everyone — parents included — should keep in mind that on-campus living may entail other fees and costs, like travel, joining a fraternity or sorority, and school supplies.

4. Get them involved financially.

Give kids an active role in their college journey. Look at schools and tour campuses together, but determine which ones are the most affordable. Tell them that it would be a great help if they could contribute to paying for college, even just a portion for now.

Start a college savings fund. It can be as informal as a money jar or as sophisticated as a 529 savings plan they can add to. By junior and senior year, they may be working a part-time job. Can they devote some of their earnings to their college plan, and continue to do so as an undergrad? You might even consider a sort of contract to put your agreement in writing.

In time, it becomes easier to set clear expectations with them about how much they’ll pay initially towards the cost of college. Make it clear that after they graduate, they’ll be responsible for paying off the money they’ve borrowed. But the more they save up now, the less they’ll need to borrow in the future.

5. Make paying for college a team effort.

Make college and all it costs a team effort between you and your children.

In addition to helping them find the right school and determining the cost, always be there if they have any questions for you. Fill out their FAFSA forms with them. Giving your child an active role without throwing them in the financial deep end can make college more appealing to them.

Also address the idea of cosigning when loans are involved. Don’t guilt-trip them, but do educate them on what this means. You’ll put both your names on the loans your child is taking out, so if they hit a financial snag, you’ve got their back and can help. But if your son or daughter fails to pay back the money over time, their credit and yours will both suffer.

Taking a “we’re in this together” attitude in every way possible, from the first conversation up until your son or daughter graduates, will ensure that you support them academically and financially, saving money and staying out of debt.

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