The cost to attend a university continues to increase: between the 2011–2012 school year and the 2016–2017 academic year, tuition and fees rose by 13% at private, nonprofit, four-year institutions, reaching an average of $33,479, according to The College Board.
If you’ve diligently saved over the years to help pay for your child’s education, now is the perfect time to bring him or her into the equation. When it comes to financing school, “students need to be involved in the process,” explains Tracy Green, a Life Event Services consultant at Wells Fargo Advisors.
By walking through the financial steps of paying for college together, you’ll help your son or daughter understand the overall expenses and learn valuable fiscal skills for the future, especially the importance of goal-based saving.
Green recommends following these five steps to get your child involved before mailing in that acceptance notification and deposit.
1. Start with a conversation
Before your child even begins applying for college, have a discussion about finances, suggests Green. A good time to have this conversation tends to be during the student’s junior year of high school.
When you sit down together, ask your child about his or her upcoming goals. Talk about expenses for school, as well as who will be covering costs or how they might be split. If you or other family members have contributed to a 529 plan, show it to your child and go through the details of how it can be used.
2. Set a budget
As a family, consider setting certain guidelines and limitations for the college experience. Perhaps you agree to cover the cost of tuition and room and board, but ask your child to pay for his or her entertainment expenses while on campus.
“Having those discussions may prevent future disappointment,” adds Green. If your son gets accepted into his dream school, for instance, but later learns the family won’t be able to pay for it and he doesn’t want to take out his own loans, the reality could be difficult to face.
3. Look at financial aid packages together
With your child, fill out and submit forms for financial help, such as the Free Application for Federal Student Aid (FAFSA). To identify additional types of financial aid that may be available, visit StudentAid.ed.gov.
Some universities have a net price calculator on their websites. With this tool, you’ll be able to see what the overall cost for the school is and then subtract any financial aid packages available to identify what your expected expenses will be. Once you start receiving acceptance notifications, go through aid packages with your child to compare and contrast them so that you and your child have a clear vision of what the bottom line is and how different aid options are treated.
4. Think about work
If you want your child to be responsible for paying for part or all of their schooling, a part-time job may be a good fit.
As a family, you’ll want to decide if it makes sense for your child to work while he or she is at school, or only during summer and winter breaks. “Some kids may have a heavy class load or extracurricular activities,” notes Green. If certain scholarships require your child to attain or keep a certain GPA, you’ll want to weigh the time spent away from academics against the amount of money your student will be earning from a part-time job.
In addition to helping cover college expenses, employment can offer other key benefits for your child, including the chance to manage an income, build a strong work ethic, and grow in self-worth. If working during the school year will put too much of a strain on your child, set savings goals together for his or her summer job.
5. Understand scholarship possibilities
If your child wants to attend a school that doesn’t fit into the budgeted amount you planned to spend, consider sitting down to talk about the situation. It may be time to look at other options, or your child may want to increase his or her efforts to identify and apply for scholarships to help cover some of the costs.
The site TuitionFundingSources.com, sponsored by Wells Fargo, provides a database of scholarships available. After looking through the options together, help your child set up a schedule to apply for ones that are the best fit, paying close attention to deadlines and other requirements. Some scholarships involve writing an essay, but the rewards offered could make the effort worthwhile.