Getting Real: Revealing the College Fund
This post is the second in a series of conversations regarding paying for college. Read our first post, We Can’t Pay for College, here.
Last week, we dove into the all-too-familiar territory shared by 71% of American parents: telling their kids that they’ll need more than their parents’ savings to make it through college. Today, we’re discussing the other reality: the unique benefits and challenges known and felt by parents whose college funds are sufficient to pay for their kids’ education.
As trivial as it may sound to those struggling to pay for college, handing over large sums of funding to your children comes with its own challenges, such as ownership and accountability. But steps can be taken to instill a sense of having skin in the game, even when the financial battle has already been won.
One of the biggest risks associated with fully funding a child’s education is the potential loss of buy-in. While their peers may understand that every skipped class equates to $30 at a public school or $104 at a private school, they may view it as less valuable. One way to instill ownership is by requiring your student to fund certain expenses, regardless of available funds.
Some foundations, for example, require that scholarship recipients cover the cost of their own books. Others require a minimum amount of student contribution, which could be as little as a few hundred dollars per month. To you, it may sound like nothing. But to your student, that sacrifice could be the difference between hitting snooze and soaking up today’s lecture.
Making the Most of the Money
Just because you have the ability to cover your student’s bills in full doesn’t mean they can’t--or shouldn’t--search for additional resources. While need-based grants will likely be unavailable to your family, merit-based scholarships could still cut thousands from your monthly bills. If your fund allows, forge an agreement with your child that for every dollar in scholarship money they receive, they can pocket a percentage of the savings for a car or other life expense.
Next, remind your child of the opportunity before them that’s out of reach for so many: choice. Plenty of brilliant minds settle for less robust schools because their top picks exceed their budget. If money allows, encourage your child to look for a school that would challenge them and allow them to take advantage of this once-in-a-lifetime opportunity to learn.
Holding a Standard
When the applications are in, the acceptance letter has been received, and the van is packed, another challenge arises: keeping the main thing the main thing. In order words, holding a standard for academics. If your student makes it on the honor roll with ease, perhaps establishing a red line of a 3.0 GPA is appropriate. Whatever you decide, make it clear that your hard-earned savings aren’t to be squandered. Don’t think grades matter? Perhaps paying the bills yourself will change your mind.
For more on the debate over the value of a college degree, check out Biz Kid$ episode, College Bound.