Your student may be excited to experience all the college years have to offer, but many students are also quite concerned about the financial feasibility of obtaining a college education.
This summer Fidelity Investments released a survey of the 2010 graduating high school class. Their findings showed that:
- 70% of students felt “overwhelmed” by the current cost of college,
- 33% of graduating seniors did not know of any college savings that might have been set aside for them, and
- Nearly 1/3 of students listed paying tuition and other education-related bills as their top worry about the entire college experience.
While students are obviously feeling the pressure of those college bills, they are also showing a stronger desire to reach their collegiate goals. For example, the Fidelity survey also indicated that 80% of students felt a college education was the minimum requirement needed to secure a decent job. Considering the academic performance and both emotional and financial investments required to earn a degree, this can prove to be overwhelming for some students. Feeling the financial pressure on their shoulders, it is no wonder that 70% of students expect to have to hold down a job during their college years.
The “Small Bites” Approach
As an old saying goes, “You can eat an elephant if you eat it one bite at a time.” This is just the way you and your student should approach the college funding process: one step at a time.
For a brand new college student, the idea of taking on everything–from bill paying to laundry and handling all the academic work in between–can seem like an insurmountable feat. Breaking down your college funding plan into smaller steps can help make it turn into a manageable to-do list. I suggest spending some time talking to your student about the price of his or her education, and all that it entails. Here are a few ideas to get you started:
- How much will school really cost your student? Break down the cost of tuition, books, housing, food, and other necessities into a monthly or quarterly budget. Add in scholarships, contributions from you (the parent) or other relatives (be sure to talk about who will pay for what), and grants or tuition discounts to uncover how much of the bill your child will actually be responsible on a monthly or quarterly basis.
- How can your student pay his or her way? Many students feel helpless when facing their full share of the college price tag, but there are several ways they can contribute. Maintaining the “small bites” theory, generating part-time income during the school year can definitely make a difference for your child, and putting away extra funds during summer and holiday breaks can add up nicely. There are also the possibilities of scholarships, grants, work-study and paid internships, to name a few.
- What if your child can’t cover their full share? While it may not be as desirable as paying college costs in cash, students do have the option of borrowing student loans (make sure they know these 3 things before they borrow, though!). Federal student loans have low interest rates, and will allow your student to pay back the remainder of his or her debt after graduation.
Finally, make sure your child understands that you are open to discussing college finances, and encourage him or her to share concerns and ask questions. Simply being a good listener and providing loving advice can be one of the greatest gifts you give to your college-bound child.
All the best,