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How Parents Can Help Their Children Avoid Regretting Their College Debt

November 8, 2017
By Jillian Berman

How Parents Can Help Their Children Avoid Regretting Their College Debt

Briana Casale normally looks forward to Christmas. This year, she’s dreading it.

Casale, a 21-year-old teaching assistant in Cranston, Rhode Island who graduated in May, will see her six-month grace period on her student loans end with the arrival of the holidays. That means a harsh dose of financial reality for the Simmons College graduate, who took out some private as well as public loans and owes about $130,000.

“The first thought was, ‘What did my parents do to me?’” Casale said of the moment she first totalled up her student loan balance shortly after graduation. “I had just been ignorant of it all. I didn’t really care to ask, but I figured that they were looking out for me and I didn’t have to worry about it.”

Spend enough time with a group of recent graduates and you’ll hear variations on the same theme: “I wish I knew more about paying for college when I signed up to do it.” (They often regret other aspects of their college decision, including their major and college choice, as well.)

This happens for a number of reasons, ranging from the cost of college to the confusing nature of the financial aid system. But there’s another reason often overlooked: family dynamics that can get in the way of students grappling with the true cost of the financial obligation they’re taking on.

Taboos surrounding discussing money with family members, as well as the pressure students and families often feel to attend the best college they can, regardless of cost, means that students often start college without a full understanding of what they’ve committed to financially.

Families sometimes want to shield their children from the cost of college, said Brendan Williams, the director of knowledge at uAspire, an organization that helps low-income students apply for financial aid.

Williams didn’t give much thought to the cost of college during his senior year of high school. He didn’t apply to any schools in his state and ultimately decided to attend Wake Forest University, which cost more than $51,000 for the 2017-2018 academic year. Williams found his professors knowledgeable and enjoyed the experience, but partway through his first year, he realized that he didn’t know what he wanted to study or the career he planned to pursue. That pushed Williams to crunch the numbers to see how much he was spending to pursue an aimless path.

Even with the help his parents offered, the debt load he foresaw made it impossible for him to continue, he said.

Instead, he dropped out, worked at Chipotle for six months and transferred to a state school the following year to save money.

“I had a very awesome childhood, and my parents wanted to provide everything for me,” said Williams. “But when it came time to apply to school, I was so unaware of what colleges cost because no one really talked to me about it.”

That’s an understandable impulse for parents, who typically want to do everything they can to provide the best opportunities for their children, said Kevin Fudge, the ombudsman at American Student Assistance, a nonprofit focused on helping students finance higher education.

“I’m a parent now,” said Fudge. “I understand that feeling that you’re not holding up your end of the bargain if you can’t provide your kid with the most full experience possible.”

Sometimes, however, “College on a bargain is what you need to do.”

In affluent areas where a sense of keeping up with the Joneses can take hold, realizing that you can’t send your kid to the best college they get into can be tough, said Andy Lockwood, a Jericho, Long Island-based financial aid consultant.

Often parents he works with feel as if “the college selection process is just an extension of how they brought their kids up their whole life,” he said.

And after months of filling out forms and writing and editing essays, families may be exhausted when the financial aid paperwork arrives. “It’s just one more thing in a very, overly complicated process,” Lockwood said.

But families can help students avoid regretting the financial aspect of their college choices. Here are a few suggestions experts shared:

• Families should talk together about what the student wants to get out of college and think carefully about whether students can achieve their goals by attending a less-expensive and even less-prestigious school, Fudge said.

Students should consider their goals before starting college and think carefully about whether they can achieve them at a less-expensive, perhaps less-prestigious, school, according to Fudge. He suggests that high school seniors reach out to adults in fields they’re interested in, perhaps having an informational coffee, to learn how they got there. In some cases, parents may be able to help facilitate those meetings.

That conversation could “demystify” their dream job and debunk the myth that there’s only one set pathway to a given career goal, he said.

• Parents and students shouldn’t be afraid to demand that their counselors, parents and even the colleges do whatever is in their power to help them address any source of confusion, he said.

“The financial aid process is a completely different language at times,” Williams, 30, said. “If you don’t understand something, ask questions.”

Families should also avail themselves of the resources available to them, like loan calculators and other tools that can help give students a sense of what they’ll be paying back after college, he said. Students taking out federal loans are also required to participate in entrance counseling and though schools and the government could provide more information in this process, students should try to take it seriously, Williams said.

• Families should also crunch numbers that go beyond the cost of school. An exercise that considers future loan payments, possible rent, car and other costs after college, as well as a realistic estimate for a student’s salary after they graduate, can help students visualize how the decisions they and their parents are making when they enter college will affect them when they leave school, Lockwood said.

According to Lockwood, that conversation could look something like: “I know you think you’re going to get out of college and make $500,000 in the first year, but let’s say you don’t get a job for six months after graduating. What does that look like?”

He said families rarely have these types of conversations both because of taboos around money and because parents feel pressure to provide the best for their kids. “When we force kids and parents to do that it’s like pulling teeth,” he said.

Casale says if she could go back now to when she was making decisions about where she was going to attend college, she would have taken a similar approach. “I wish that I had spreadsheets,” with data like future earnings and debt payments, she said. “I was so excited to go to school and have a career that I love that I just never thought about the financial part of it.”

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