For many of you who have a high school senior, by now you may have had your fill of reviewing college applications and making college visits. Although it’s a very exciting time in our lives as parents, helping your child make what may be a life-changing decision can be very draining and stressful.
As a Junior Achievement classroom volunteer for the last several years, I’ve had many opportunities to discuss managing personal finances with junior and senior high school students, specifically the impacts of personal debt. Unfortunately what I have found is that many of them, even the brightest students, are uneducated about managing finances. These are the same students who are now making their decisions on where they will go to college and how much debt they will accumulate to achieve their dreams.
In a recent survey of 2013 college graduates conducted by Fidelity, 70% are graduating with average debt of $35,200 and 39% would have made different choices had they understood the total cost of college. Another alarming statistic, half were surprised by the amount of debt they had accumulated by the time they finished college. What this tells me is that we as parents are not spending enough time educating our children about finances, especially during the college decision-making process.
Make sure your child is aware of lower cost options, such as community college or living at home and attending a local college, if possible. When you put the numbers on paper after financial aid, scholarships, and college savings plans, you will at least help them make a more financially educated decision.
We all become captivated by the beautiful college campuses, the state-of-the art libraries, and the newest college dorm rooms that are bigger and more luxurious than my first apartment. After all, colleges are just as good at branding as any Fortune 500 company. But as parents, we have to keep our heads out of the clouds and help our child understand the impact of college debt and how it will affect their life for years to come. It probably won’t be a pleasant conversation, but it’s a necessary one.
ABOUT THE AUTHOR
Mary Kay Toth, CPA
Mary Kay is a Senior Manager at Brown Schultz Sheridan & Fritz with more than 20 years of public accounting experience. Mary Kay consults with a wide variety of small business clients, assisting them with their financial and tax needs.