Talking points for Parents and Students: Navigating the Financial Cost of Higher Education

In this article, we will consider the impact of money management, financial support, and student loan debt alongside questions that students can ask themselves or discuss with their families as they make a financial plan for college.

By Heather Rech — February 13, 2023

Tags: financial foundation, financial habits, financial health, financial literacy, financial planning, financial wellness, loan repayment, money management, parents and students, student loan

Talking points for Parents and Students: Navigating the Financial Cost of Higher Education

"Do you ever struggle with money?" asked the interviewer to a panel of college students who participated in a YouTube video by "CUT" called "How College Students Spend $100 on Groceries". The exercise of buying groceries revealed more than just eating habits of college students, showing the larger impact of financial support, money management habits, and student loan debt on the lives of college students. One female participant who previously revealed that she didn't come from much money said, "Money is really the only thing I've gotten into fights with my parents about or felt really scared at times."

I can also relate to getting into big arguments with my parents regarding money and specifically related to paying off student loan debt. One big takeaway that I learned after paying off 95K in student loan debt was that I needed to take ownership over my student loan debt and have an honest conversation about money with myself and my family. Realizing the need for honest conversations around money and actually having those conversations can be difficult so I've created this guide to get the conversation started. In this article we will consider the impact of money management, financial support, and student loan debt alongside questions that students can ask themselves or discuss with their families as they make a financial plan for college. Finally, I will highlight a few videos that feature current financial advisors that highlight the realities of post grad life with student loans.

Money Management

If a family desires to support a student well in making the choice to go to college, they must also realize the large financial investment that the family or student will be making and ensure that the student is educated about that financial decision. If you as a family or a student have realized that you're not good with money, then there will need to be outside education in order to correct the family's natural money habits. If you're not sure about your family's money habits, consider asking yourself the following questions below. If you're finding that most of the answers to these questions are, "no" then perhaps you would benefit from looking into the additional financial resources found at the end of this article.

Does my family talk about money?
Does my family or I budget?
Is everyone on the same page regarding how to spend money?

Finding Financial Support

Financial backing to go to school should be adequately assessed and planned for but often students can dream and acquire thousands in student loan debt, only to start a college experience that can't finish and leave with thousands in student loan debt. A study by the University Professional and Continuing Education Association and Straighter Line found that 42 % of students dropped out of college due to financial difficulties. I myself went to my dream private college in southern California but left 3 semesters later when I realized that I didn't have the funds to continue with tuition at 24K a year. Shortly after deciding to leave that school, my parents were unable to co-sign any more student loans so I would've been forced to face my financial situation eventually. In hindsight, I wish I would've developed a concrete financial plan for how I was going to pay for college that could've revealed the gap in funding before I even started school.

There is no use shopping for the dream school if there is no way to pay for it. And if the family has an intention to provide some financial support then discuss exactly how tuition payments or support will be provided. It may sound too formal but put those agreements in writing! If you don't feel that you can put the agreement in writing, then maybe your family should reevaluate whether you can make that promise in the first place. Start to make your plan for paying for school by answering the following questions:

Do I have a financial plan to pay for college?
Do I have a college fund? Are there concrete plans and available funds to provide for college tuition?
Will I need to support myself (rent, food, etc.) during school or will I be receiving outside support (i.e. from parents)?
Will the outside support system like parents be co-signing loans and what is their financial capacity for co-signing loans?
Have I considered alternative ways to pay for school like scholarships, grants, alternative college credit programs, and continuing education work opportunities?

Student Loan Repayment Plan

Part of budgeting for school should be evaluating the potential earnings in your chosen field alongside the cost of living and other life goals that you may have post-graduation. For example, according to the U.S. Bureau of Labor Statics 2021 report, the starting salary in Ohio for a bachelor's degree in nursing was $73,250. I'm 10 years post graduate and the highest salary that I ever earned is 43K. In comparison, my husband graduated from a Physical Therapy Assistant program at a local community college with no debt and a starting salary of 50K. I say that because there is often a nonchalant attitude toward acquiring student loan debt that doesn't always align with the financial impact of repaying student loans. Unless your field of study can offer you a good living wage then roommates and ramen will be a part of your life long after you've graduated college. The YouTube channel "CNBC Make It" has a series entitled "Millennial Money" that features the personal and financial lives of ordinary millennials living all over the states. These videos are about 10 minutes long, feature a variety of cities, careers and salaries and are an excellent way for the upcoming generation Z to envision what their futures could look like. I especially like how detailed the financial breakdown is and doesn't gloss over the impact of student loan debt post-graduation. Consider the following questions if you'll be taking on student loans.

What is my projected student loan debt?
What does the job market look like for the degree that I'm pursuing?
What is my projected salary after graduating?
What is the cost of living where I want to live post-graduation?
What is the cost of delaying my student loan payments?

Finding Relevant Resources

An easy way to start learning about the realities of post grad life with student loans, or any debt for that matter, can be as easy as turning on Netflix. I recommend watching the Netflix documentary "Get Smart with Money" that features money experts alongside real families and individuals as they learn how to change their money habits and financial futures. Each expert featured in the documentary has their own cult following that I've linked here below. I personally have interacted with Pete Adeney's personal finance blog, who is also known as "Mr. Money Mustache", for several years now and have appreciated his innovative and non-traditional approach to finances.

Pete Adeney or Mr. Money Mustache personal financial blog can be found here: www.mrmoneymustache.com
Tiffany Aliche or "The Budgetnista" is an author of several books including New York Times Bestselling book, “Get Good with Money” and has several financial guides on her website thebudgetnista.com
Ross MacDonald, known as Ro$$ Mac, can be found on his show "Macanomics" linked here https://www.revolt.tv/show/2021-11-02/126994/maconomics/
Paula Pant of "Afford Anything" shares her financial tips via a blog, podcast and courses here https://affordanything.com/

In closing, one of the most practical resources for learning money management is by putting some of these principles into practice. Families can teach these principles by creating opportunities for future graduates to manage money by requiring that they have some kind of work experience and financial expenses. You can't value money or use it wisely until you actually have some money to manage!

Heather Rech

Heather Rech started her college journey at Biola University and graduated from Liberty University in 2013 with a multidisciplinary degree in Spanish & Religion.

View all posts by Heather Rech