How to pay for college is an issue that keeps parents awake at night, and students, too. As a college planner, one of the things I encourage students and their parents to do sooner than later is to have a discussion about, “Who’s paying for what and when?” when it comes to college. College money talk causes the most stress and is one that can be the most difficult to talk about. But it doesn’t have to be.
Here I’ll share some models for paying for college with varying degrees of responsibility on the student versus the parent, and with a range of pros and cons. In my college planning business, I’ve come to realize that there are nearly as many ways to slice and dice college payment models as there are colleges in the US. I’ll also give you some questions to use at home for a discussion about who’s going to pay for what and when in your home. Here are models for how to approach who pays for what and when for college.
Options for Deciding Who Pays for College and When
- Parents cover all costs without conditions, expectations or restrictions. This one does happen, but I don’t know of many families who could pull this one off without some challenges, confusion or unspoken expectations along the way.
- Parents cover all costs with conditions. (Provided it’s in-state; provided tuition is less than $XX per year; provided you achieve XX GPA; provided you graduate in four years, etc. etc.)
- Parents cover part of the cost and the student covers the other part. (50-50; 80-20; first two years/last two years, etc etc.) This is what our model is. We’ll cover tuition. Our student will cover room and board. This reflected our priorities of wanting to provide Jack with ample freedom of choice in the college decision, and our priorities around having him appreciate what college costs.
- Parents cover most costs. Student helps when and how they can but without clear communication about how and when.
- Student covers most costs. Parents help when and how they can but without clear communication about how and when.
- Student covers all costs.
When our sons were little, my wife and I had lengthy and “spirited” discussions (cough-cough) about how we were going to approach the “who pays for college” question. Her family had done things differently than mine when we were growing up, so it took some effort for us to agree on what we would do as a family for our own children. This was an important decision for us to agree on as a couple as we started the college savings process. It’s central to the question of how much you are going to need to save. Regardless of when you have this discussion or what your decision is, the point is, HAVE THE DISCUSSION. As uncomfortable as it might make you, and as spirited as your discussions might become, you will feel a sense of relief once you’ve reached agreement. I promise.
Our next step was to save according to our plan. And when it was appropriate, to include our sons in the discussion. When our oldest son Jack was in sixth grade, we sat down and talked about college, and shared with him what our agreement was for who’d pay for what and when, and why we’d agreed on that.
The conversation went something like this, “Jack, helping you cover the cost of college is really important to us, and we also want you to feel like you have ample choice of where to go to school, whether that’s in-state or out-of-state, public or private. But we also want you to have some skin in the game and we want you to have an appreciation for what college really costs. So our plan is to cover the cost of tuition for up to four years of college no matter where you go. And we’ll expect you to cover the cost of room and board, which is roughly the same price anywhere you go, but is still a significant cost.”
We then shared with Jack how much room and board would be each year, roughly. And since then, when he has been ready for more information, (like when he got his first job as a high school freshman), I outlined a savings plan for him based on his earnings which could produce his first year’s room and board by the time he graduated high school, if he diligently saved.
So that’s how our conversations started, and there have been multiple conversations since then about paying for college. Many of them have involved Jack attempting to negotiate a sweeter deal, and so far, us holding firm.
The most important thing is that we’re openly discussing one of the most critical aspects of preparing for college: preparing to cover the cost. The more we talk about it, the easier the discussion becomes. It didn’t start out that way.
Different families have different ways of approaching the college cost equation. None of them are better than another. Whatever you choose, it should be discussed openly among student and parents, well in advance of submitting college applications.
A downside I’ve seen to NOT having the clear conversation is the anxiety that arises when no one knows exactly what’s expected, so everyone’s worrying about it. Mom or Dad says, “We’ll help you pay for college.” But no specifics are discussed, so Junior doesn’t know if he should be prepared to pay for most or only a few college costs. Perhaps even more dangerous is saying, “Don’t worry about the costs of college” to your student without explaining what you mean. Do you mean, “Don’t worry, we’re covering the entire cost no matter where you go?” Or do you mean, “I have no idea what we’re going to do but that’s not your concern. That’s ours.” Or do you mean, “We’ll split the cost and we’ll help you so it’s no an overwhelming burden for you,” which means the student should be prepared to cover SOME costs. It’s a phrase that sounds good at the time, but leaves a lot to be desired in its specificity.
Here are a list of the questions you and your student can use to generate some discussion around the question of “who pays for what and when?” As uncomfortable as you believe you might be in discussing this, I can almost guarantee you’ll be glad you did. And based on my experience with students, I KNOW your student will be.
Questions To Discuss When Deciding Who Pays for College, How Much and When
- What are our priorities as a family and how should these be reflected in how we approach college costs?
- What expectations do we have for how the student will “make good” on the college investment, and how do we make these clear while talking about college costs?
- How does an intended major impact this question, i.e. am I as a parent more willing to support a future anesthesiologist vs. an anthropologist? Or vice versa?
- If a student delays admission by taking a “gap year”, how does that change things?
- Who gets “credit” for merit scholarships?
- How about study abroad?
- What stipulations are there for semesters beyond the traditional four years?
- How does a possible journey into grad school factor in to all of this?
There’s a reason why money is among the short list of taboo topics in most social situations. It’s touchy. It’s tough to talk about. It usually generates emotion. But for all those reasons, it’s a conversation you must have early on in the college planning process. Because in my experience, the money talk only gets touchier, tougher to talk about and more emotional the longer you put it off.
If you’d like input approaching the money talk with your student, give me a call. Or schedule a complimentary consultation anytime. The first hour’s on me, so you can learn more about how OnCampus College Planning can help you streamline the path to the college of your dreams.