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How do I talk to my child about how much our family can afford to spend on college?

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how to talk about college costs with kids

Most parents of high school students recognize the value of a college education and actively discuss the benefits of getting a degree with their children early on. Before their high school years even begin, parents emphasize the necessity of good grades, strong test scores, and involvement in extracurricular activities to make their student a desirable candidate for college admissions. Unfortunately, there is one aspect of the college process that doesn’t seem to come up in dinner-table conversation: paying for college.

Perhaps it is the parents’ desire to do what is best for their child that makes them avoid this discussion. It seems that many parents are afraid that their families’ financial limitations might negatively impact the student’s motivation. It has been my experience, however, that this conversation is a must for the college search and selection process to go smoothly. It is imperative that students and parents are on the same page financially.

After working with families through financial challenges over the last 30 years, I am convinced that so much of the angst that comes with the college process could be eliminated if parents and students were on the same page financially from the beginning. The worst scenario is when a student is encouraged to explore every college in the country, completes his or her search, and discovers around March or April of senior year in the award letter that their first-choice college is unaffordable. When this occurs, the student either goes reluctantly to a community college (thinking that all other options are off the table) or borrows excessively to make up the difference. Many families borrow so much money that the return on investment of a college education is significantly impacted by the repayment of the debt incurred. This debt could be the student’s, the parent’s, or both—the national average of of debt that families are going into to pay for college is now at $60,000.

Parents need to make it known from the very beginning that financial aspects—though not the only aspect of the college selection process—are important and should be a concern for everyone. I encourage parents to establish a reasonable borrowing limit with their child. I recommend that students limit their borrowing to a maximum of $30,000 for an undergraduate education. This will keep their repayment to approximately $333 per month for ten years. Parents, too, should systematically determine what they can afford to pay for college before the college search process begins. Explain to your student that it is important to search for colleges whose net price matches your family’s affordability threshold (the amount you can afford to spend on college without excessive borrowing).

Families that have this conversation will find that affordable college options are available. Finding these schools takes more research and planning, but it is possible to find them. With my Financial Fit program on College Countdown, you can calculate your affordability threshold and search for schools whose net price matches what you can afford. By working with your child to search for colleges that match your affordability, you’ll be one step closer to finding the perfect fit—the right college at the right price.

Discover how you can find the right college at an affordable price with the Financial Fit Program.

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Frank Palmasani is a Chicago area high school guidance counselor and former college director of admissions, and creator of Financial Fit. In 1985, Palmasani began delivering seminars on the college financial aid and planning process, and estimates that he has reached more than 200,000 people through his talks. He is a member of NACAC, IACAC, and the College Board. Palmasani has been featured in the Boston Herald, the Chicago Tribune, Yahoo! Finance, WGN-TV, WTTW-TV, CBS’s Monsters and Money in the Morning, and is the author of the forthcoming book Right College, Right Price (Sourcebooks, January 2013).

Palmasani is the founder of Financial Fit, which you can find in the College Countdown bookstore.