The College Funding Coach
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You want to help your child go to a great college.

But how much should you actually pay for it?

Should you cover everything if you can? Should your child contribute? Is borrowing against your home reasonable? Should you reduce retirement contributions for a few years? And how do you know when a college is simply too expensive for your family?

These are difficult questions because paying for college isn’t purely a financial decision. It’s an emotional one.

Parents want to give their children opportunities. But paying for college should not mean jeopardizing your own financial future.

The better question isn’t simply, “How much does this college cost?”

It’s:

“How much can our family reasonably afford to contribute to college while still protecting our other financial goals?”

That number is different for every family.

Start With What Your Family Can Afford, Not What the College Charges

One of the biggest mistakes families can make is allowing the college’s price to determine their budget.

Instead, determine your family’s college budget first.

Look at the resources potentially available to you, including:

  • Current income and cash flow
  • College savings
  • Other savings or investments earmarked for education
  • Scholarships and grants
  • Student earnings
  • Reasonable student borrowing
  • Other resources available to your family

Then look at what paying for college could mean for your other priorities, particularly retirement.

This gives you a much more useful starting point than asking, “How are we going to come up with $70,000 next year?”

Don’t Confuse Sticker Price With What You’ll Actually Pay

A college may advertise a cost of attendance of $80,000, but that doesn’t necessarily mean your family will pay $80,000.

The cost of attendance can include tuition, fees, housing, food, books, transportation, and other education-related expenses. The net price is generally what remains after scholarships and grants are considered.

That’s why families should investigate the potential net price of every serious college candidate.

A $75,000 private college that offers your student substantial institutional aid could ultimately cost less than a $45,000 school offering little assistance.

Don’t eliminate a college solely because of its sticker price.

But don’t fall in love with one solely because you assume financial aid will make it affordable either.

Do the research.

Decide What You Are Willing to Pay Before the Acceptance Letters Arrive

This conversation is much easier during sophomore or junior year than it is in April of senior year.

Imagine your child gets accepted to their dream school.

They’re excited. You’re excited.

Then you discover the school will cost your family $55,000 a year.

Now you’re not simply making a financial decision. You’re potentially telling your child they cannot attend the college they’ve spent months imagining themselves at.

Setting expectations earlier can help prevent that situation.

Parents and students should talk about:

What can we realistically contribute each year?

How much debt are we comfortable with?

Will the student be expected to contribute?

Are there certain colleges that would require too much borrowing?

What happens if scholarships or financial aid change after freshman year?

These conversations don’t limit a student’s opportunities. They help the family build a college list containing opportunities that are actually viable.

Protect Retirement While Paying for College

Parents often feel they should sacrifice whatever is necessary to pay for their child’s education.

But college and retirement operate on very different timelines.

Your student has many working years ahead.

Parents approaching retirement have far fewer years to replenish money removed from retirement savings.

That doesn’t mean retirement automatically comes before every college expense. It means the two goals need to be considered together.

Before reducing retirement contributions, taking large withdrawals, borrowing against assets, or assuming significant parent debt, understand what that decision could mean five, ten, or twenty years from now.

Paying for college is a four-year decision that can have financial consequences lasting much longer.

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