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When Parents Can't Afford College

Ologsinquito has learned to navigate the college application process with her kids and offers tips for others here.

The affordability of a college education is something families should discuss in advance of the application process.

The affordability of a college education is something families should discuss in advance of the application process.

Financing a College Education

College Confidential is one of my favorite online forums. That's because I have two teenagers, both interested in furthering their education.

Many of my preconceived notions about college, and the admissions process, were dashed when, a couple of years ago, I first began reading some of the posts. Most enlightening was the information on paying for college.

Somehow, even though my own children were already in high school, I was extremely naïve about the matter of financing an education. I had assumed it would all work out. If your family income was low, but your child was bright, the institute would help your child attend.

This used to be the case, for the most part. That was back when financial aid was more plentiful. Now, though, with endowments sagging, scholarships and grants are harder to come by. Loans, however, are readily given out to both parents and students.

Sometimes even the loans are not enough. The sad reality is that, if you don't have the money, your child may not be able to attend a particular school, no matter how much they want to go.

The Spring Awakening

Each spring, a new group of students and parents stumble upon College Confidential, moderated by a woman named Sally Rubenstone. As a former admissions counselor at an elite private school, she is very knowledgeable about the college admissions process and she is extremely generous with her time and recommendations. Many of the long-time parents who frequent her forum give excellent advice as well.

If someone cannot afford to go to a particular school, these forum veterans tell it like it is. No four-year degree, they say, is worth taking on $100,000 or more of debt. Some students may have landed a good package at a particular institute. But they might like another college much better, even if it will cost them tens of thousands of dollars more every year. They have typically steered these teenagers to the institute where they can graduate with the fewest loans.

There are frequent posts from students accepted to a number of colleges. However, there isn't one on the list that they can afford. In this case, they are either steered to a community college or told to either take a gap year and then apply to a wide range of schools next year, while retaining their freshman status.

Parents Who Now Need to Say "No"

Until recently, most parents assumed they'd be paying for their children's college education. If not in full, then at least for a large chunk of it. However, unabated tuition increases have destroyed that model for many families. With the price of a four-year degree at many colleges now exceeding $240,000, this has become impossible.

Even though we often hear that this is only the "sticker price," and that schools give discounts, even a 50 percent reduction in the tuition bill isn't enough to make it affordable. Most families still can't pay $120,000 for a degree, for each of their children.

Some of the students who ask for advice have very sad stories. One student posted that his mother couldn't afford to pay the amount she owed on this year's taxes. He wasn't sure what would happen to his financial aid.

Unless this person is a stellar student, it's apparent that no amount of financial aid is going to be enough to cover the cost of college.

Another soon-to-be community college graduate was thinking of transferring to complete a degree. However, this was coupled with the stark realization that his parents couldn't help him out. So, going anywhere was not a possibility.

A Glossary of College Common Terms

Expected Family ContributionFederal Student LoansParent PLUS Loans

Often called EFC, for short, this is the amount the federal government has determined you can afford for a child's college tuition.

These are government loans issued to students. Families who qualify, based in income, can receive "subsidized" loans that don't accrue interest until after graduation.

These are federal loans issued to parents to meet the costs of tuition, room and board.

What is an Expected Family Contribution?

The Expected Family Contribution, or EFC, is the amount the government believes you should be able to pay each year for education. This figure drops accordingly if you have multiple children in college. But it isn't halved for each child. Many parents find they'll have grave difficulty even meeting this figure.

There is also a widespread misconception that a school won't charge more than you can afford. Some colleges do claim to meet "full need," and only expect you to pay the EFC or less. Most other schools, though, don't reduce the bill so it's more in line with what you can afford.

At this point, if you decide to proceed with your plans to attend this institute, you'll need to come up with additional funding. If you don't have the cash, you may have to tap into your retirement account or your home equity line. You may also be able to take out what's known as a Parent PLUS loan, although these are risky because credit limits are very flexible, and you may be given much more money than what you can realistically pay back.

Talking about it beforehand can prevent disappointment later.

Talking about it beforehand can prevent disappointment later.

Preventing This Scenario

A growing number of parents seem to be having talks with their children beforehand about what they can afford for college. Some students are being given a set sum of money and told to spend it wisely (this is what we are doing with our children).

So, if a child chooses a very expensive college, he or she will have to find a way to make it possible to attend. Just getting accepted today isn't enough. The financial aid package also has to be in line with a family's financial status.

It must be heartbreaking for a parent whose child has worked hard in high school, and to then have gained admittance to an elite university, to have to say, "no, we can't afford to send you there." Or, even worse, having the child attend, but not being able to stay to complete their degree.

Having a talk with your child beforehand can prevent a lot of unrealistic expectations and inevitable disappointment.

How Much Can Students Borrow?

Students are eligible to borrow Federal student loans. But there is a cap. A freshman can borrow $5,500, a sophomore can borrow $6,500 and juniors and seniors may borrow up to $7,500 a year. Private lenders will usually not approve student loans unless a parent or another financially stable adult will cosign.

Defaulting on a student loan is serious business. If your name is on the loan, you are responsible, even if your child has promised to repay the entire amount. Student loan debt cannot be discharged in bankruptcy court. Even if you default, the interest will continue to grow.

This is a debt that will never go away and the lenders will always attempt to be repaid, even if it means garnishing your wages, tax returns, or your Social Security check.

Make Sure You Have a Safety School

Because of the uncertainties about how to pay for college, many experts recommend applying to at least two safety schools that are highly likely to accept you. For most people, this is a state college they can commute to if they don't receive enough financial aid that allows them to attend another school and live on campus.

Many students every year neglect to do this. Then, when they realize how much they have to pay to attend the school of their choice, they are left without any other options, aside from their local community college.

One of our best jobs as parents is to teach our children responsibility. Signing up for something that has little chance of being paid back is very irresponsible.

A college education has become increasingly expensive.

A college education has become increasingly expensive.


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ologsinquito (author) from USA on April 11, 2014:

Hi Suzanne, thanks so much for reading. It's such a dilemma because a college education is now the barrier to entry for many jobs, so a four-year degree is still needed. However, even though the value of such a degree has come down, the cost has become astronomical.

ologsinquito (author) from USA on April 10, 2014:

Hi MsDora, thanks so much for reading and voting. We seem to be caught in the middle of a new reality, where many students still believe that heavy debt is a good investment in their future. It's usually not.

ologsinquito (author) from USA on April 09, 2014:

HI DDE, thank you for reading. Your son is fortunate to have found a summer job. Good for him.

ologsinquito (author) from USA on April 09, 2014:

Hi Faith Reaper, thanks so much for reading and for sharing. Some people get upset when they hear this message, but people also need to know about what will happen if they get deeply into debt. There are very few jobs for new graduates in many of the fields. Thank you also for sharing your perspective and regrets. This will help a lot of people.

ologsinquito (author) from USA on April 08, 2014:

A summer job can definitely help. I hope my child finds suitable employment this summer too.

ologsinquito (author) from USA on April 08, 2014:

Elearn4Life, I have to remove those links, because I don't want links in my comments. But thank you for reading.

ologsinquito (author) from USA on April 07, 2014:

As long as people are happy with what they are doing, then they are doing the right thing. A college degree can open doors. People pretty much need one now to survive, unless they have a specific skill or trade.

ologsinquito (author) from USA on April 07, 2014:

Oh yes, in no way was I implying that someone shouldn't go to school. A college degree is more necessary than ever. However, there are many other options. Working hard in school to earn grants and scholarships is the best approach. What is frightening is the deep debt for a family that cannot afford it. The number one reason for students dropping out of college is lack of money.

ologsinquito (author) from USA on April 07, 2014:

FlourishAnyway, that's a good idea for an article. You are correct, it is not sensible to take on more debt than you can repay. Most borrowing has limits, but the limits are nearly nonexistent on these Parent loans.

ologsinquito (author) from USA on April 07, 2014:

I forgot to say thank you for reading. I always appreciate your insight.

ologsinquito (author) from USA on April 07, 2014:

Hi Eric, it does seem that way, but there is still great societal pressure to attend "the best" school. Many parents are finding it extremely difficult to say "no."