I try not to project my dreams or goals onto my children. Yet, when my high schooler mentioned his interest in attending my husband’s alma mater for college, I was thrilled. I could picture it: fun parent weekends, hearing stories about campus life. We had a plan! Of course, he’s only a freshman, but what could go wrong?
If the last year has taught parents anything, it’s that “planning” doesn’t always align with reality. In addition to outside forces (hello, pandemic), teens’ interests seem to shift with the wind some days. How do you prepare for those curveballs or a total change in college plans – especially when there is so much financially at stake?
“It’s really a matter of educating yourself so you have realistic expectations. What you think is feasible for your child isn’t always what happens, but with the right plan in place, you’re ready for any curveball,” advises Tim Gorrell, executive director of the Ohio Tuition Trust Authority, which manages Ohio’s 529 Plan, CollegeAdvantage. “Planning is key.”
Planning starts not only with working through the possibilities — but, just as importantly, eliminating some of the common misconceptions that exist when it comes to financing college.
3 Misconceptions About Paying for College
If any of these are your Plan A, you might want to start working on your Plan B:
Misconception #1: “Everyone graduates with $100,000 in student loan debt.”
This is one that Cass Wright, CEO and founder of My Readiness Coach, hears a lot. His organization helps families prepare for college decisions based on their interests, goals and budgets, and this includes navigating financial aid and scholarship considerations. “Having a plan for college admissions and financial aid is important because many families are somewhat shocked by the sticker price of a college or university.” This often happens because families don’t always consider the total cost: not only tuition but also room, board, travel expenses, books, computers, technology fees and more.
Gorrell’s work with OTTA makes him an advocate for overcoming this misperception through solid savings strategies that start early — but also are realistic. “Families assume that college is too expensive so saving will be impossible and loans are inevitable. But every little bit adds up; even saving $25 a month will help offset needing to take out loans.”
Misconception #2: “If we save too much we’re not going to get financial aid to help pay for college.”
Cass hears variations of this one often — as does Gorrell, who says that savings only reduce your financial aid award by 5.64%. “With the complexity of paying for college, navigating the financial aid process can seem challenging,” Cass adds. “Parents need to gain a complete understanding of the total process of financial aid in the state in which their child will graduate high school.”
Gorrell also points out that having money saved to pay for college is never a bad thing. “If you’ve been putting savings in a specific college fund and wind up saving enough to pay for four years at a public school, it’s always a win.”
Misconception #3: “A full ride means zero expenses.”
According to Gorrell, only 1% of actual scholarships are true “full rides” — covering not only room and board but also ancillary items. “Even if your child gets an academic scholarship, it likely won’t pay 100%. You still have a computer…supplies…books. And what about room and board or off campus housing? If you save, then you are able to fund those purchases using a 529 account.”
And if you do get that golden full-ride athletic or academic scholarship? Your savings can still benefit you. “There’s no shelf life to a 529. You can get your undergraduate degree and use your savings to continue on to get a master’s degree or other advanced degree,” Gorrell says.