Parents make countless sacrifices for their children. And now that college is more expensive than ever, they’re jeopardizing their own financial futures to try to secure their kids’.
That’s led more than 60% of parents to need to go “above and beyond” typical financing options like 529 plans and federal loans, according to the Citizens survey data.
“It’s coming from a place of love and a desire to protect their kids from the burden of student debt—but it’s also very risky,” Krueger warned. “These choices can set parents back in a way that’s really hard to recover from.”
Part of the problem is the disconnect between college admissions and financial planning, according to Citizens. Survey data showed one in five parents admitted they just focused on getting their child into college without thinking about how to pay for it. And it’s such a touchy and embarrassing topic for parents, almost 50% of survey-takers said they would rather talk to their children about drugs and alcohol.
Still, “the earlier you begin saving, the more time your money has to grow through compounding,” Durkan said. “Even small, regular contributions can add up significantly over time.” Plus, any funds that aren’t used can be transferred to a sibling, cousin, or back to yourself, meaning no wasted money—and it stays in the family, Krueger said.
But if it’s too late in the process—like if your kid is already in high school—an alternate strategy is needed. Krueger said this requires open and honest communication with your child about what you can actually afford.
“Sit down with your child and talk openly about what’s realistic. Explore schools that are generous with merit aid or have transparent pricing,” Krueger said. “And look at the full cost—not just tuition, but room and board, books, travel. Sometimes the ‘big name’ school isn’t the best financial fit—and that’s okay.”
Still, “the expected cost minus savings minus free money will likely still leave a gap,” Safdari said. “Once we have that number, we can start figuring out how to fund it over four years, while minimizing student debt and leaving enough money to retire.”
