The planning guide for parents sending their first child to college

Sending your first child off to college runs the gamut of human emotion. There’s excitement, sure, but also some sadness, plenty of stress, and probably some panic mixed in.

Am I doing everything I should be doing? What big step am I forgetting? How are we going to afford this? Is my child ready for college?

Don’t be alarmed — these panic attacks aren’t a bad thing. They show that you care! Still, if you want to cut down on the chaos, reference this study guide — crafted with the help of college expert Jean Chatzky — throughout your child’s high school years so you know what to do and when. That way, you’re ready to take on the college challenge.

Good luck!

This is a great place to start. So much of the college conversation can go toward finances that we forget how important it is for your child to beef up their college application from day 1 of high school.

“Their job, right now, is to get good grades, participate in activities, and start to build a résumé that will make them attractive candidates to schools that might want to give them money to attend,” Chatzky says.

Beyond just doing well in school, make sure your child is signing up for the proper courses. And, as you probably know, extracurriculars are an important part of college applications. Encourage them to join a club, try out for a sports team, volunteer, or participate in other activities that colleges will find valuable. Often schools give merit scholarships to students who have extra high grades and/or SAT scores.

Filling out the Free Application for Federal Student Aid (FAFSA) is a critical part of sending your child off to college. What if you could try it out first before submitting it for good?

Expect Family Contribution (EFC) Calculator can estimate your eligibility for federal financial aid.

“If you’re not doing this at least once a year, you should be,” Chatzky urges.

Why does this help? Because it’ll give you a better understanding of how much you’ll be expected to contribute.

Grandparents or other family members might be willing to help you cover the cost of college.

Figure out who might be interested in helping out and how much they may be willing to contribute. This will enable you to factor those funds in with your own college savings and give your child a clearer picture of which colleges are affordable.

“There are a lot of grandparents these days who want to help,” Chatzky says.

Nearly 70% of college students from the class of 2018 took out a student loan. However, not all student loan options are the same.

Do some research. Some questions to get you started:

• What are the differences between federal and private student loans?
• Which option offers you the best interest rate?
• Does the loan have origination fees?
• Is the loan in the student’s name or the parent?
• Does co-signing the loan give the student better rates and terms?
• What choices will you or your child have when it comes time to repay?
• What options do you have to take out a student loan for your child?

Get the answers to all of your loan questions now so you’re ready to make the best possible decision for you and your child.

No, not that talk.

Have an open and honest discussion with your son or daughter about paying for college. Tell them how much you have saved and what that will realistically cover. Inform them of any family funding that might contribute to the cause, as well as what you’ll be able to afford to pay each month while they’re in school (see “Take a FAFSA Trial Run” above).

Compare that with the expected cost of attendance of the colleges your child is considering. Then let them know that any leftover cost that needs covering will have to come from financial aid such as grants, scholarships, work-study, or student loans.

How does this help your child? It puts them in the college driver’s seat. Is their heart set on the expensive private school? They can research what score they’ll need to get on their SAT or ACT to get the grant they need to afford it. If you didn’t have this talk, your child might get this information too late, affecting their ability to qualify for the funding they need to make their dream school a reality.

Chatzky commonly hears from college kids who wish they had better understood the impact of how much they were borrowing in student loans before they made their college decision. Don’t let this happen to your kids.

“Get concrete with them about the fact that for every $20,000 they borrow, they’re going to have to pay approximately $250 per month for the next 10 years,” Chatzky explains. Student loan calculators can help with calculating loans and future payments. “That, depending on what they want to do with their life, may prevent them from living independently and doing different things.” For instance, they may have plans for graduate school and want to minimize their undergraduate debt burden to keep their options open after graduation.

Help them understand that the more they borrow, the harder it will be to afford all the exciting opportunities of post-grad life, like moving into their own apartment, finally upgrading their beat-up car, or being able to say “yes” to exciting vacations with their friends.

This, Chatzky admits, is easier said than done.

“One thing that we know about humans is we’re present focused,” she explains. “We like immediate gratification rather than delayed gratification. So, this is not a one-and-done conversation. This is a continuing conversation that you’ll have over the course of your life.”

Maybe you’ve been saving for your child’s college education since they were a toddler. And that’s great. You’re ahead of the game. And if you have a 529 college savings fund or other investment account, your portfolio was likely heavily allocated toward stocks in an attempt to chase high returns with plenty of time to make up for any losses. But now that they’re trying out for varsity sports and getting their license, it’s time to take a different approach.

Chatzky advises parents to take on less risk — more exposure to bonds or even cash than stock — with their college fund as their child enters high school.

“What we don’t want to see,” Chatzky says, “is people who’ve got money in aggressive portfolios really suffer a loss right before the first tuition bill comes due.”

Your child will be doing plenty of college searches in their free time to find the right one for them. So, what can you do to help? Encourage them to cast a wide net with their search.

“Sometimes, our children grow up with blinders on. They think, ‘Oh, my parents went to this university. That’s where I should go.’ Or, ‘This is the team I’ve supported my whole life. That’s where I want to go,’” Chatzky explains. “They come at various price points.”

“So, have them look at a variety of small, medium, and large schools,” she continues, “as well as those in the city and not, who may want a child like yours for their program and will pay them a lot of money to attend.” Consider schools outside your geographic range. Some schools are looking for geographic diversity and are willing to accept — and even provide extra aid — for students in underrepresented locations.

College offers a lot of challenges. One of the sneaky obstacles for college kids is managing a semester’s worth of money.

Start teaching them about budgeting now so they’re ready to roll when they arrive on campus. Maybe there are some items that you’ve always bought for your kids — clothes, gas, their cell phone bill, and so on. Gradually start to make some of these expenses your child’s responsibility, especially when they have their own job, so they can start to make tough decisions on how to spend their money.

And if they spend their entire paycheck in a few days’ time? Don’t bail them out.

“The goal is for kids to grow comfortable managing a growing sum of money,” she says, “so that by the time they get to college, they don’t blow a month or semester’s worth of money in a week, which happens.”

Chatzky tip: Before your child goes to college, have them transfer a semester’s-worth of spending money to you. Leave enough money in their account to cover them for the first week. Then, make automatic transfers every week to their account from their pool of money. That way, they don’t risk going through their entire budget for the semester by Halloween. As they prove they’re able to handle it, you can loosen up a little and give them more control over their money.

College is expensive, everyone knows that. But because of the cost, you want to make sure your child is maximizing the value of the college experience. You can do that by giving your child some “skin in the game” when it comes to paying for their education.

This can be tackled in a number of ways. For example, Chatzky was fortunate that her parents paid for her tuition and room and board; all extracurriculars were her financial responsibility. The point is to give your child some financial ownership of their college education so they don’t feel like they can slack off without repercussions.

“Skin in the game is really important,” she insists. “We want kids to take this time on campus seriously.”

A lot of parents get caught off guard by the first tuition bill. “The first bill hits and people go into a panic about borrowing,” Chatzky says.

Don’t let that happen to you! The first tuition bill is usually due in late July or early August for the fall semester. Start researching student loans much earlier than that so you can gather all the appropriate information and have the time to make the best decision for you and your child. Also, it’s a good idea to apply for loans as soon as the tuition bill comes so you don’t get caught with late fees.

Note: Come up with a plan for withdrawing 529 funds, too. There are multiple ways to withdraw from a 529 and some schools have a preferred payment method. Go to your child’s college’s financial aid website to learn more.

There’s a lot to learn about the college process. Don’t be afraid to admit what you don’t know. There are plenty of resources available to help answer your most pressing questions. And if you have a friend or family who’s sent a child off to college? Reach out to them to see what they did right and what they would’ve done differently.

A private Citizens Bank Student Loan lets you choose from competitive fixed and variable interest rates, as well as repayment options that give you the freedom to pay back your loan on your schedule. And with Multi-Year Approval, you can get the money your child needs for all your college years — with only one application. You apply the first year just like any student loan and in year two and beyond, the application is simplified. After a soft credit check, you simply request your funds for the upcoming school year, saving you time and providing peace of mind that costs are covered.

Learn more here!