Let’s Talk About Money: 6 Conversations Families Should Have Before College

Speech bubble with text: parents and students should talk about moneyNobody really likes talking about finances and budgets, especially when things are tight. Money discussions between parents and their college-bound students navigate several delicate issues. Students may have their heart set on attending their ‘dream’ school. But what if mom and dad just can’t afford the high tuition fees? Should their child give up on their dream and consider their other options? Or is it worth taking on massive student loans to make it happen? Having a talk about money, while perhaps uncomfortable, is crucial.

The best time to have this important money discussion is before starting the college search. This will save you time looking at colleges that are simply beyond your budget.

These are 6 vital discussions families must have before college.

1. The Student’s Goals & Expectations

Asking your student what they are looking to get out of college is a great way to start this discussion. Getting a higher education is important but it’s also expensive. Understanding a student’s goals and expectations does help to curtail unnecessary expenses.

Do they have a particular major in mind? What are their career goals? Does the major match their personality and their career goals? Being uncertain about their ‘why’ can lead to waste of time and money as they change majors or even change schools mid way.

A discussion on goals and expectations can help parents and students make smarter academic AND financial decisions.

2. The Cost of College

Families rarely pay the full listed sticker price. How much you actually end up paying will depend on a variety of factors. The student’s academic and extracurricular activities play a huge role in influencing how aid money they earn. The more money they win, the less you have to pay towards college expenses. The family’s financial situation is another factor that influences how much a student is offered by way of need-based aid.

To determine the actual cost of college for your family, you need to calculate the net price. This is what you will actually pay after deducting the amount received through scholarships, grants, other institutional financial aid, and federal aid. 

College Raptor can help you find an accurate net price estimate to any 4-year college in the US! Simply create a free account, fill out your information, and you’ll be able to see your personalized net price estimate to the colleges on your list. You’ll also be able to see helpful information like acceptance rate odds, estimated debt upon graduation, and academic match.

Sallie Mae logo.

3 Repayment Options

Variable rates from 6.37% - 16.70% APR with auto-debit

Learn More

3. Federal Financial Aid Expectations

Federal financial aid includes grants, work study programs, and federal student loans. Eligibility for any of these aid options depends on several different factors. One of these is your EFC or Expected Family Contribution. This refers to the amount a family should be able to afford to pay towards college from their own pocket (not that you necessarily will pay that amount). The size of your family and the number of children in college simultaneously are two of many factors used to determine your EFC.

To pursue any type of federal or institutional aid, students must file the FAFSA. Everyone should file the FAFSA. Even if you think your family won’t qualify for any aid, file anyway. You may be surprised. Additionally, many outside scholarships require that the student has filed the FAFSA to be eligible. 

4. Parents’ Contribution & Student’s Responsibilities

This is no doubt one of the most difficult topics that families have to discuss when it comes to paying for college. Should parents pay? How much should they pay? Is it a loan or a gift?

There are no right or wrong answers. Different families deal with this aspect differently depending on their situation. Some parents may just not have that type of money. Others may want to save it for their retirement. Some parents may decide to gift the entire amount to their student so they get a fresh start after graduation. Others may decide to pay only part of the cost, to teach their student financial responsibility.

Whatever the decision, now is the time to lay the cards on the table and talk about money. This helps students understand what sort of plan they need to make, such as how much they’ll need to borrow in student loans if they attend a specific school. If their preferred schools are way out of their affordable range, they know they have to consider less expensive alternatives.

5. Exploring Affordable Alternatives

Private 4-year colleges are often expensive, but they’re not the only option out there. Think about whether it is worth getting into debt just to attend a fancy big-name college. Keep in mind, brand-name isn’t nearly as important as attending a college that’s a good fit for your student

There are several other ways to get a good education at a fraction of the price.

Starting off at community college and transferring to a 4-year university is one way to lower the cost of college. It’s a tactic that’s growing more and more popular. Community college is an important topic to bring up during any money discussion related to college.

Another option is to consider an in-state public university. Does it offer the major your student is interested in? If it does, it’s definitely worth looking into. In general, in-state colleges have lower sticker prices. This is because the state pays a percentage of the fees for students who are residents of the state.

For students who are interested in pursuing a career in the military, there’s the ROTC. This program pays a significant portion of the college tuition for students who qualify. In return, students must commit to some level of on-campus participation. Students who avail of this benefit must also commit to completing a minimum of 3 years of active-duty service.

6. Managing Debt After Graduation

Whatever decisions a student makes at this stage will have far-reaching consequences. It will affect the amount of money they borrow and ultimately the amount of debt they have to pay off after graduation. Students must understand that what they are expected to pay back will be much more than what they borrowed. This is because the interest keeps accruing from the time the money is disbursed to them.

One way to make an informed decision is to consider the average starting salary for people graduating in the student’s chosen major. Will that bachelor’s degree open doors to a higher paying job opportunities? If it does, paying off the student loan debt may not be as overwhelming. Some bachelor’s degree lead to lower-paying career paths. In that case, you may want to look at schools with lower tuition fees.

Even before attending college, or taking out the loan, sitting down and having this talk about money and expectations can help the whole family make a plan. Having a plan reduces the likelihood of making financial mistakes.

Families Should Talk About Money

Having money discussions about college is important. It helps prevent families and students from getting into potential disastrous financial situations. Don’t wait to schedule the talk about money for the last minute. Do it even before or during the college search process.


Lender Rates (APR) Eligibility
Citizens logo.
6.97%-15.03%* Variable
5.99%-14.00%* Fixed
Undergraduate and Graduate
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
Credibe company logo.
4.98% - 16.70% Variable
4.07% - 15.66% Fixed
Undergraduate and Graduate
Lendkey company logo.
6.07% - 11.31% Variable
4.39% - 10.39% Fixed
Undergraduate and Graduate
Ascent company logo.
6.22% - 16.08% Variable
4.09% - 15.66% Fixed
Undergraduate and Graduate
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
Earnest company logo.
5.62% - 18.26% Variable
4.11% - 15.90% Fixed
Undergraduate and Graduate
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.