I brought in Dan Bisig, coauthor of The College Entrance Game Plan, to teach a class for my coaching clients, called “Avoiding the 7 Costliest College Mistakes.”
The reason I was super excited about this class is that I have seen the financial aftermath of these mistakes for both parents and students.
I’ve seen young couples starting out their married life carrying an enormous burden of student loan debt that’s preventing them from qualifying for a mortgage. It hurts my heart to see couples starting out their married life in the hole by $50,000 or more in debt. It’s very stressful, especially if they are having trouble finding a job in their field.
I’ve also seen parents in their 40’s and 50’s blow through retirement funds and wrack up mountains of debt in order to put their kids through college. This is even worse than the first scenario, because the parents have fewer working years ahead of them to rectify the situation. They run the risk of running out of money in their elder years, which means those kids they put through college are going to have to take care of them financially.
I’m not going to reveal all seven of the mistakes that parents make during the college process, but I want to highlight several things that I learned and will be passing on to my coaching clients with high school kids.
First, what you don’t know about the college testing, application, and admissions process will hurt you financially. Many parents and students assume they know how the system works. And we all know what happens when you assume. Different colleges have different processes and benchmarks, and they can change them at any time. Even if you already have one child at a university now, things may change by the time your high school sophomore is college bound. Consulting an expert and attending classes or seminars on these timely topics is vital for parents of high school students.
Second, waiting too long to act will hurt you financially. You need to calculate your family’s expected college contribution as soon as possible. What you might think they can afford, and the government’s calculation of what your family can afford, might be worlds apart. And it’s not going to be a pleasant surprise. You need ample time to prepare, save, and make decisions. Also, waiting too long to act may cause you to miss deadlines for testing and applications, which could lock your child out of their school of choice.
Third, and finally, I think Dan Bisig’s wisest words were these: “Parents, do not allow your teenager to make a $40,000 to $260,000 decision for your family.” Think back to how impulsive and emotional you were as a 16 to 18-year-old. Were you in any position to make such a financially momentous decision? I know I sure wasn’t.
I remember being 17-years-old, my parents freshly separated, and having the college talk. I really wanted to go to Miami University in Oxford, Ohio, and live on campus. I fell in love with the campus when I went there for a high school retreat. Unfortunately, Miami University was four times the price of Northern Kentucky University, and I had a two-year scholarship to the latter. I graduated with honors from NKU, and it was a great educational experience, however, at 17-years-old, I cried and told my parents it was “no fair” and they were “mean” for ruining my dreams of an idyllic university experience. I am firmly convinced that my parents made the right call by not letting me make that decision.
Sometimes a little tough love and discomfort can save you and your child tens of thousands of dollars. Thanks to this wise decision by my parents, I was fortunate to graduate with my accounting degree debt free. (Thanks Mom and Dad!)
Want to have Dan Bisig of College & Beyond help your family make wise college choices and minimize loan debt? You can contact him here.
Christine Luken is the Financial Lifeguard and a veteran Meal Planner. She helps individuals, families, and entrepreneurs design a financial road map to help them arrive at their Preferred Financial Destination. You can find Christine’s blogs, podcasts, and videos on her Financial Lifeguard website and her Meal Planning Monday blog.