Apr 19, 2018

Tips
Budgeting for Your Child's College Visits
Learn how to budget for college visits to the campuses on your child's list. Discover Student Loans shares tips for to help you plan a budget for college visits.
If the day your child first stepped into the high school hallway seems like yesterday, and if your head is reeling a bit at the thought of your teenager now headed for college, you're not alone.
But before your student leaves for campus, it's time to have those sometimes tricky conversations. It's time to talk about college finances.
While money talks can be difficult at any age, this is probably not the first, and certainly not the last one, you'll have with your child. In fact, according to the sixth annual Discover Student Loans survey released in 2017, about one-third of parents have had more than six conversations about paying for college with their child.
As you prepare to dig in, here are three important topics to discuss, with pointers for what you may want to cover.
For parents and children alike, college finances can be overwhelming if you look at the total cost. Instead, break down the expenses to figure out the cost by year, semester or quarter, which can make it easier to comprehend the numbers. Try to include everything from tuition, fees and estimated costs for room and board, to money for books, food, travel and fun. Using a spreadsheet to compile all the numbers lets you quickly see how different living arrangements, spending one less semester at school or other choices may affect your total cost.
Although 74 percent of parents in the survey said they would help their child pay for college, many students will still need to pitch in. So, you'll also want to add up scholarships and grants your child has won as well as family contributions (including yours) to your child's education fund. The difference between this sum and the expenses laid out above is the gap that you and your child will need to fill to pay for college.
With this data as a starting point, consider asking your child these questions:
The cost of college should be an ongoing dialogue as financial aid, and your child's goals or interests, may change over time. Make a plan to reopen the conversation at least once a year, or more frequently after significant changes, such as the decision to switch majors or study abroad.
You'll be among the majority if your family plans to use student loans to pay for school. According to the annual survey, parents report that almost half of students plan to take out student loans and 55 percent of parents are somewhat or very likely to help their children pay back those loans.
When discussing loans as they relate to college finances, the primary point you want to make is that it's best only to borrow only what you need. This may require your child to consider their needs versus wants — a healthy financial habit at any point in life.
Try to cover:
Starting the conversation about student loans early can be especially important because college students often don't have a lot of experience with debt. You could use your own experiences with student loans or other debts to emphasize your points.
Credit cards are another hot item to discuss as children leave the nest. You may add your child as an authorized user on your credit card account to use for emergencies, or your child may be enticed to open a credit card once they're on their own. Having a financially sound plan for using credit could help keep your child out of money trouble. Here are two main points you can stress:
In 2016, Equifax, a national consumer credit bureau, commissioned a blind study of 600 college students. It found that more than 70 percent of the students pay their bill in full each month. Not only is this good financial behavior, but you can also tell your child that paying in full is the norm among their peers.
Paying for college is one of the largest investments a young person makes. While there are significant benefits of a college degree in the long run, many students don't have a strong financial education or real-world context to help them make decisions about such a large amount of money. As a parent, you can lead important conversations about financial literacy, such as how to prepare and pay for college, and make a point of revisiting topics as circumstances change.