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Going off to college isn't just a rite of passage for students. It's a big one for parents, especially first-timers.
How to handle this new set of challenges is the subject of Letting Go: A Parents’ Guide to Understanding the College Years (William Morrow, $16.99), just released in a revised 6th edition.
Money recently interviewed one of the book's coauthors, Karen Levin Coburn, senior consultant in residence at Washington University in St. Louis.
We asked her about some of the most common, and occasionally awkward, financial issues today's families face.
Money: You write that filling out financial aid forms is a good opportunity for a frank discussion about family finances. What should parents aim to cover?
Coburn: Many families would rather talk with their children about sex than about money. However, frank discussions about family finances can go along way in establishing mutual understanding and realistic expectations for students and parents alike. Although it falls on parents to fill out the financial aid forms, it’s a good idea for them to share the information with their child. As they look at the figures together, they can begin to discuss what the parents can afford to pay, how much debt they would be willing to assume, and how much the student might need to earn or borrow.
Q. Should parents try to initiate that discussion even earlier—say, early in high school?
A. Ideally the parents would initiate this discussion during junior year when discussions about college begin in earnest.
Q. How much do you think it's fair to ask a child to contribute toward college?
A. There is no set figure that fits all situations. But it’s helpful if parents make it clear that saving for college is a good thing. They can help their teenage children to set up their own college fund—depositing birthday and holiday checks and earnings from part-time jobs. Though the amount of money they accumulate may not go very far in paying tuition bills, the students will have begun to make an investment in their own education. Once it’s time to actually set up an expense budget for college, some parents tell students they are responsible for paying for extra meals and entertainment, or for books and supplies, or a portion of tuition.
Related: Proof Nobody Understands How Expensive College Actually Is
Q. How do you break it to your kid if certain schools are out of reach financially?
A. Parents should start out with a clear idea of what they are willing and able to pay without putting themselves into a risky financial position. Once that has been established, students should be encouraged to apply to a combination of schools—some that are high in cost but give significant aid, others that the family can afford even if significant aid is not forthcoming. Many of the private colleges and universities with the highest tuition rates also have the highest rates of financial aid. Parents should make clear right from the beginning that it’s not the sticker price that matters, but the actual cost of attending. Distance from home and travel expenses also need to be figured in as part of the equation.
Q. Is it better to give a college student a regular allowance or just pay for things as they come up?
A. It’s better to set up a budget with a regular allowance distributed either by month or semester rather than simply doling out money as things come up. That way, the student learns about budgeting and keeping track of expenses. Most schools provide guidelines about typical expenses so that parents and students can come up with a tentative budget. During Thanksgiving or semester break, parents and the student should sit down together and review the budget, discuss it, and if necessary make adjustments in spending patterns.
Q. Should you attempt to monitor your child's spending, such as reviewing bank statements, or is that too helicoptery?
A. Rather than checking students’ expenditures, it’s preferable for parents to ask students to keep track themselves and then to discuss together when reviewing the budget and making plans for the future. Students may realize that they spent way too much on pizza or that the art supplies they purchased at the beginning of the semester need to be replaced. This method provides students with a learning experience, an increasing sense of responsibility and independence, and confidence to manage their own finances.
Saint John’s University is a Catholic school for men that partners with a nearby women’s school, College of Saint Benedict, to share academic programs and campuses resources. Nearly 80% of students at Saint John’s graduate within six years, 12% higher than similar schools. FULL PROFILE Courtesy of St. John's UniversityRecently admitted CalTech students scored about 1600 on average on their SATs—higher than at MIT or Stanford. Professors are notoriously hard graders. The school boasts 34 Nobel laureates among alumni and faculty. Recent grads tend to get high-paying jobs. FULL PROFILE Courtesy of California Institute of TechnologyPomona is among the handful of schools vowing to meet student’s full demonstrated need with aid, so more than 70% of grads have no student debt. With 1,600 undergraduates, Pomona features close student-faculty relationships. FULL PROFILE Courtesy of Ponoma CollegeIllinois’s flagship university is among the top 15 public schools on the National Science Foundation’s list of high research spenders, and its strongest programs include accounting, engineering, and physics. Students also have access to the country’s second largest university library system. (Only Harvard’s is larger.) FULL PROFILE Courtesy University of IllinoisClemson was founded as an agricultural college, and while agricultural science is still a specialty, more general programs such as business are more popular today. Most every one at this rural campus is united by an enormous amount of school pride, especially around the football team. FULL PROFILE Courtesy of Clemson UniversityUCLA produces a lot of stars: professors like Internet pioneer Leonard Kleinrock, grads in show business like Ben Stiller, and others in pro sports like Kareem Abdul Jabbar. The school also supports ordinary students as well, with more than one third from low-income families. FULL PROFILE Courtesy of UCLALike most large public schools, the University of Maryland has some all-star professors. The faculty roster boasts three Nobel laureates, two Pulitzer Prize winners and, thanks to the campus’s proximity to Washington, D.C., leaders in major positions at federal agencies like NASA and the National Institutes of Health. FULL PROFILE Courtesy of University of MarylandWhile Virginia Tech is known especially for engineering, its business, social sciences, and agriculture programs are also strong. The campus Math Emporium houses hundreds of computers programmed with lessons that have boosted students’ math prowess. FULL PROFILE Courtesy of Virginia PolytechnicUC–Davis has made a reputation as an affordable school that produces results. About 43% of students are low-income, but its six-year graduation rate is a high 83%. The school is best known for its agriculture and animal science specialties. FULL PROFILE Courtesy of University of CaliforniaUC-Irvine shines in serving one of the most diverse student bodies in the country: More than 40% of students come from low-income families. Yet the school still boasts an 86% graduation rate—an impressive 41% higher than similar colleges. FULL PROFILE Courtesy of University of CaliforniaThe University of Florida is one of the biggest bargains in higher education, with tuition of just $6,300 a year for Floridians. For that low price, students get access to some of the world’s top professors, well-respected programs in fields as diverse as astronomy and journalism, and sports teams that often dominate their leagues. FULL PROFILE Courtesy of University of FloridaUC-San Diego is one of the top research universities in the country, with renowned science programs, especially in marine biology and oceanography. Like other colleges in the University of California system, the San Diego campus stands out for its comparative affordability for state residents. FULL PROFILE Courtesy of University of CalifoTexas A&M has one of the largest undergraduate student bodies in the country, with more the 40,000 students who graduate into an especially proud, loyal group of alumni. The college is well known for its business, agriculture, and engineering programs, as well as a recreation, park, and tourism management program. FULL PROFILE Courtesy of Texas A&MLike its fellow high-ranking Ivy League peers, Princeton and Harvard, Yale is highly selective. But for students who are admitted, the college promises a very generous financial aid package and courses taught by some of the world’s most extraordinary academics. FULL PROFILE Courtesy of Yale UniversityMIT is one of the best known and most respected science colleges in the world. It’s competitive selection process and grueling course load produces results, though—recent graduates boast one of the highest average salaries in Money’s rankings, according to PayScale data. FULL PROFILE Courtesy of MITStanford isn’t one of the eight members of the elite Ivy League, but it would fit right in. It’s the hardest school in the country to get into and has generous financial aid policies like Princeton and Harvard. But here’s a key difference: Recent graduates report average annual salaries that are $8,000 higher than those of Ivy League grads. FULL PROFILE Getty ImagesUVA boasts the highest graduation rate of any public university in the country, at 93%. The university’s academic strengths are wide-ranging, and the campus is the only U.S. college to be designated a UNESCO World Heritage Site, thanks its connection to founder Thomas Jefferson. FULL PROFILE Courtesy of University of VirginCooper Union is unique—a small, urban school that offers degrees only in art, architecture, and engineering. Though Cooper Union no longer has the free tuition policy it was founded with, it’s still much more affordable than other elite private colleges. FULL PROFILE Courtesy of Cooper UnionAn elite liberal arts college, Amherst is one of a small group of schools that will meet 100% of the demonstrated financial need of students. As a result, more than two-thirds of its students graduate without taking out loans. FULL PROFILE Courtesy of Amherst CollegeUC-Berkeley, or Cal for short, ranks the highest of eight University of California system schools that made Money’s rankings. In fact, Cal is one of the most selective public colleges in the country. More than 90% of freshmen graduate within six years, a rate well above even other elite public universities. FULL PROFILE Getty ImagesBYU-Provo is the main campus of a private college system specializing in educating members of the Church of Latter Day Saints. Non-Mormons can attend, but are charged more tuition and must obey the school’s strict code of conduct. The university has a high graduation rate at an affordable price for a private education. FULL PROFILE Courtesy of Brigham Young UniversityThe typical Rice student majors in engineering, economics, or biology, and the university is also well known in the field of political science. Graduates of the selective private school fare well in the workforce: Recent grads out-earn their peers from similar schools by 16%, according to salary data from Payscale.com. FULL PROFILE Courtesy of Rice UniversityHarvard may be the most recognizable college in the world, and it’s practically synonymous with the prestigious Ivy League. Like many of its peers, Harvard excels in Money’s rankings not only because of the outstanding education it provides but also thanks to its generous financial aid program. FULL PROFILE Getty ImagesThe University of Michigan accepts less than a third of the nearly 50,000 students who apply, and is nearly as popular with out-of-staters as with Michiganders. State residents who get in enjoy an especially good deal: Michigan is one of 11 colleges in Money’s top 50 where the average in-state cost of a degree is less than $100,000. FULL PROFILE Dave Lauridsen for MoneyPrinceton University's generous financial aid makes it, according to Money’s analysis, the most affordable member of the Ivy League. The school gives out such large grants to the six in 10 families who qualify (families earning less than $250,000 generally get some aid) that more than 83% of students graduate without any debt. FULL PROFILE Courtesy of Princeton University
Q. What kinds of financial trouble do you see college kids getting themselves into these days?
A. Credit card debt is a big problem for today’s college students. With easy access to multiple credit cards, too many students find themselves in trouble. It’s important for parents to teach their children about the pitfalls of abusing credit cards. Also, today’s students often use college-sponsored debit cards for everything from their meal plan to laundry and vending machines. This convenience makes it easy to lose track of spending. Some students report that they can download money onto their campus smart card from their parents’ account whenever they wish, and have no idea how much they are spending.
Q. So, a lot has changed since their parents were in college…
A. Parents of today’s students were more likely to have checking accounts than debit cards. Even if they did have charge cards, they usually just had one. They did not live in a basically cashless society, in which charges are effortlessly made with the click of a phone.
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Q. When should parents intervene, and when should they let their kids take their lumps in the hope that they'll learn something from the experience?
A. Parents should let students learn from their mistakes up to a point. It’s okay if they run out of money for movies and pizza and have to deny themselves some social activity at the end of the semester. However, parents should intervene when a student sinks into credit card debt or has large unexplained expenses. That may be a sign of drug or alcohol use or a gambling addiction.
Q. Are there particular expectations you think parents should make clear at the outset, such as graduating in four years, or who pays for grad school?
A. I think it is a good idea for parents to share their expectations right from the beginning. These may include graduation within four years, the option of one academic experience abroad, or a specific financial contribution that the student earns each year. Parents should not make payment for college contingent on the student choosing a particular major, or playing a specific sport, or attending specific religious services. Though parents are supporting their child’s education, it’s important for them to remind themselves whose education this is—and to support their student’s choices and path toward responsible adulthood.
