How to Talk to Your Teen About Paying for College

As your teenager approaches graduating from high school, you might be wondering about how to pay for college — and that’s not a question to settle alone. When you’re figuring out how to save money to cover college expenses, consider it a great moment to bring your teenager into the conversation. 

Talking about tuition, housing and other college expenses will help your teen learn about financial responsibility and the true cost of their education. It’s the time to decide how much you may be able to afford and how much could be covered in other ways. 

Here are some questions to ask as you talk to your teen about college.

If you’d like to talk to an agent about covering your family’s needs at every stage of life, reach out to Farm Bureau to see how we can help.

How Much Does College Cost?

Of course, the cost of college varies widely, based on the tuition at your student’s institution of choice, where they live, what scholarships and financial aid may provide and whether your student goes to a public or private school.

Understanding the potential costs and available funding sources can help families prepare for the financial commitment of higher education. Talk with your teen now about what they may be responsible for paying to ensure that everyone has the same expectations about college expenses.

Where Will Funding Come From?

The way people pay for college can differ based on their household income and the cost of the college their student is attending. If you claim your child as a dependent on your taxes, the information reported on the FAFSA is used to calculate a Student Aid Index (SAI), a number colleges use to determine a student’s eligibility for need-based financial aid. The SAI replaced the Expected Family Contribution (EFC) beginning with the 2024-25 academic year. 

Your SAI is calculated using factors such as income, assets and family circumstances reported on the FAFSA. The SAI is not the amount your family is expected to pay for college, but instead it serves as an index that schools use when evaluating financial aid eligibility.

What Strategies Make the Most Sense for Our Family?

Every family’s situation is different, so the choices you make and the conversations you have may depend on how you respond to three key questions.

Question #1: Will We Pay for All of Your Costs?

Do you intend to fund 100% of college costs? If you do, it may be practical to set expectations now, so both you and your child are clear about what you will each be held accountable for.

For instance, you may want to talk about how many semesters you will pay for, whether your student will live off campus or in campus housing, what extracurricular activities will be acceptable, what grade point average your student will need to maintain and what consequences (if any) there will be if these expectations are not met.

Question #2: Will You Contribute to Your Own Expenses?

Do you intend for your child to contribute to the expenses of going to college? Perhaps you feel it will motivate your child to feel more invested in their education if they have a financial interest in doing so. 

If you expect your child to contribute, you’ll need to define how. For example, you may want to establish a rule that a percentage of every cash gift or earnings your child receives be contributed to a college savings account. Or you could set the expectation that your child needs to participate in a work-study program or obtain outside work during college years to help with expenses.

Question #3: Will We Be Taking Out Student Loans?

Will any money need to be borrowed? If so, how much and in whose name will the loan(s) be obtained? The amount to be borrowed may affect the type of college your child applies to — public or private, bigger or smaller sized, and so on. Student debt can follow a college graduate for decades, so be sure to have clear conversations about this now.

Communicate Now and Avoid Surprises

Communicating these expectations up front can help you and your teen avoid unpleasant surprises and help you both better prepare for the college experience that lies ahead. It may also increase your student’s awareness of the financial burden you are undertaking on their behalf, as well as the financial burden of loans, and contribute to greater scholastic and economic effort.

Moments That Matter

This is just one of the many big life moments that you and your family may encounter. Talk to Farm Bureau to make sure your covered for all of them.