For Parents: Educational Financial Planning for College

For the students and families who are driven to begin college right away after high school graduation, and especially for students who are considering a highly selective college, often waiting until high school to create a financial plan for paying for college is too late. Many highly selective colleges come with a significant price tag, often upwards of $150,000-$250,000 for a 4 year Bachelors degrees. These Highly Selective schools are looking to fund students on a need based basis, that is, funding will be provided for families who make below a certain threshold, typically demonstrated by a combined family income of under $75,000 annually, although it is dependent on a variety of factors. For students who were high achievers in High School, and come from middle to upperclass families, there are often very few scholarships available at highly selective schools. All students admitted to a highly selective school, have already demonstrated that they are academically excellent.

For students who worked incredibly hard all 4 years of High School to demonstrate rigor, maturity, and involvement in their school and local community to earn an offer to their top college, it is so disappointing to be accepted only to determine with their families after the fact, that there is not enough funding to attend. Yes, there are student loans available, but there are rules that limit the dollar amount of student loans that a student can take on for a Bachelors degree, each year and across their lifetime, and these loan limits fall way under the cost for attending a highly selective college, leaving parents to pick up the remainder of the bill, or for the student to pay out of pocket for the remainder.

I have seen it be devastating for students who get accepted into their top choice college only to have to decline the offer because they do not have the ability to fund $50,000-75,000 a year each year for 4 years of college out of pocket.

I work with families who not only have children in high school, but their children may be 10, or 5 or just born, and they are already thinking ahead trying to find ways to save so that they can afford the price tag for college. There are many ways for families to save smartly early on, and invest their money, if they are wanting to fund some or all of their child’s education.

Thoughtful consideration of all options for college, as well as determining the highest number that you can contribute for your child’s education, is extremely important. A student may not need to know all factors of your financial situation, but giving them an idea of what you can afford to help them with year to year college expenses, will help them and you determine which colleges to consider.

There are many ways to make college more affordable, such as considering community college first, saving up, finding scholarships, and utilizing loans. A combination of options is also possible. Ultimately, I want each client and family to be fully aware of the financial implications of their choices, and to pursue options early on, that are the best fit for them.