Embedding Financial Considerations in College Planning

Debates around student loan debt have been at the forefront of political campaigns and national policy dialogues for the past several years. With an awareness of the negative implications of saddling students with future debt, some elite colleges have taken on reimagining financial aid packages to eliminate student loans and replaced them with grants that do not require repayment. And just this past month, in an unprecedented act, President Biden signed into law a loan forgiveness program that granted debt relief to millions of Americans. In short, the United States has a student loan debt crisis with Americans owing $1.75 trillion in federal and private loans combined. 

College planning, all too often, does not take this reality into account. Many students view financing college as a future problem that is very far removed from current decision-making. They naively assume that when repayment is required, they will be making a sufficient salary and it will not heavily impact their lives. Families, as well, often delay saving for college with many feeling they do not have sufficient expendable funds, especially if they are unsure whether their children are likely to attend a 4-year institution. 

Students and families need to recognize that the financial decision they are making for college will affect them for the rest of their lives. As part of a focus on postsecondary success, counselors can help students and families consider the financial components of college decision-making as part of the college planning process. They can help students and families understand the financial ramifications of a particular college choice. And, counselors can encourage families and students to begin saving for college or thinking through options even as early as elementary school, when possible. 

8 Questions to Consider

While conversations around student and family finances can be difficult, counselors can encourage families to be open and transparent with their child and to discuss finance-related questions as they explore various college options. These guiding questions can help facilitate thoughtful and meaningful conversations as students plan for their future.

• What are the funding options available at a private institution and how do those compare to a public university option?
• Do different college options offer similar opportunities? Or, are there unique experiences that are critical to a student’s chosen path at one college or university?
• Consider using a college’s net price calculator to understand the entire cost of attending different schools. Beyond tuition, what will living expenses be? 
• What is the difference in cost between similar school options? Will one school match a financial aid offer from another college?  
• What, if anything, are families able to contribute? How does this impact the need for student loans and future student loan payments? 
• What is the 4-year graduation rate of the colleges you are considering? A high graduation rate implies that students will be better able to secure a job and pay back any outstanding student loans.  
• Will a student likely need to work during college to cover expenses, and how will that impact the overall experience? 
• How will financial aid change year to year? How will private scholarships affect a financial aid award at a particular college?

Supporting Students and Families With Resources to Finance College 

Well before a student is committing to a specific college senior year, counselors can provide information and expertise on college-specific savings plans, scholarship opportunities, and other decisions that can affect one’s ability to afford college.  

Counselors can inform students and families about the wide plethora of scholarship opportunities that exist. They might share access to scholarship databases early in high school so students get a sense of scholarship availability in regards to their interests, talents, and hopes and what might be required for applications. Some programs, for example, require a large number of service hours that are much more easily accumulated across four years of high school rather than in the final year.  Many states have scholarships for public universities within the state available to high-achieving students who meet predetermined grade, testing, course credit, and service hour requirements. Counselors can be sure that students and families are clear on these requirements as early as middle school to ensure appropriate planning and decision-making. 

Counselors of younger students can share information about 529 Plans, which are specific savings plans for future education-related costs including college tuition, apprenticeship programs, and room and board. These can be started when a child is young and provide tax incentives for account holders. For most families, saving a little each month over a long period of time is much more feasible than finding a way to make a large contribution when students begin college. This type of financial planning not only helps families start saving, it implicitly communicates to children that they can go to college.

A Central Component of College and Career Readiness 

These conversations around a family or student’s ability to pay for college can be personal and awkward. However, opening up a dialogue to deeply consider the many components of paying for college can be the difference between a stable financial future and decades of paying off student loan debt. 

And, these conversations with students and families signal to them that counselors care about a student’s quality of life beyond high school–that they truly are invested in a student’s college, career, and long-term success.