Monica Dwyer, a CFP with Harvest Financial Advisors in West Chester, Ohio, encourages parents to have frank conversations about college costs and how much they’re willing to contribute. She and her husband told their five children (the three oldest are in college) how much they have in college savings and have helped them figure out their options.
“The deal was we would buy them computers and they could stay in our house and eat,” she says, “but we’re not going to cosign loans.”
She didn’t tell her son who wanted to attend college on the beach in Hawaii that he couldn’t, but he figured out he couldn’t afford it.
Dwyer asks her clients where they think their children want to go to college, helps them do the math and gently dispels false ideas they may have about financial aid. She may share bits of her family’s college decisions, depending on a client’s situation, but “I don’t want them to feel like I’m judging them on their money beliefs,” she says.
A client recently asked Mark Wernig, a lead advisor and principal at San Diego-based Dowling & Yahnke, to weigh in on two graduate programs his son is considering. The retired financial professional will pay for his son’s master’s degree and wanted to know which program (basic finance or data analytics) would be a better return on investment. Both programs cost about the same.
“I like to begin with the end in mind,” says Wernig, who scours school websites and Salary.com for data on job placement and salaries. It’s important to consider not just the price tag and starting salary, he says, “but also where a student wants to build a career and a life.”
The data analytics program, which is “specialized yet broad,” he says, is very relevant and shows a faster return on investment and good career prospects. His client’s son is very excited about it.
Megan Coval, vice president of policy and federal relations at the National Association of Student Financial Aid Administrators, encourages families to ask school financial aid offices what kind of need-based and merit aid they may be eligible for. Once a grant or scholarship offer is received, ask if it’s renewable and also what the terms and conditions are. It’s also “never too early to ask what life might look like in repayment,” she says.
Students should check in with their college’s financial aid office at least once a year to ensure they’re on track, she says. If family circumstances change during an academic year (if, say, one of the parents loses his or her job), ask if it’s possible to modify an aid package.
Free tuition offerings are expanding. The University of Chicago guarantees it for families with income below $125,000. So does the State University of New York system (SUNY), for in-state students. A new endowment at the University of Texas at Austin covers all tuition and fees for in-state students whose families earn up to $65,000.