May, 2022
The application has been accepted, the deposit is paid, and the grad cap and gown are ready to go. Before you head out to stock up on extra-long twin sheets and blue Ikea bags, let’s talk about 7 things to consider before your graduate heads off to college:
- Expenses – If you haven’t already, take time to talk to your child about the costs you expect them to be responsible for. Will they help pay for tuition, room and board or are they responsible for extras such as entertainment, Greek life dues, club fees, textbooks, cellphone bill, etc. Be sure to initiate this conversation early so they have enough time to start saving money from summer jobs or find a job on campus.
- Budget – Start each semester with a lump sum of money. Whether provided by you or generated from their savings, knowing how much they have allotted for a specific amount of time will help your student learn to budget their money rather than just reacting to each cost as it arises. Be sure to come up with a plan for unexpected bills that their lump sum might not cover.
- Scholarships – Apply for scholarships like it’s a job! Applying for scholarships shouldn’t stop once they get into college. In fact, once enrolled is the perfect time to ramp up applications and prepare for the coming years. Many scholarships are made for high school seniors or enrolling freshmen since those groups make up the largest demographic. However, there are opportunities available even once a student has committed to a school. Students can:
- search for scholarships based on their major
- look for scholarships in their local community
- search for scholarships based on age and qualify for “adult scholarships.”
- Have a plan for Cash and Credit – Students rarely use cash these days so if they don’t already have a mobile payment app like Apple Pay or Venmo, set that up and link to either to their own bank account or to a joint account that you can both access. Some banks offer a student checking account with no minimum balance requirement and will equip them with a debit card. Keeping in mind that not all venues will accept debit cards, signing up for a low-limit credit card can be an opportunity for them to start establishing credit in their own name. Be sure to explain the mechanics of how these credit cards work! Suggest automatic payments that come out of their bank account and make sure they know that the interest rate is and how late payment fees work. Alternatively, you can add your college student to your credit card; just bear in mind that as the co-signer, you take on the responsibility of the payment if they fall behind.
- Talk to them about investing – It’s never too early to start saving. When they start to earn some money from working, they can contribute to a Roth IRA. Teach them that retirement accounts and personal savings accounts should not be treated the same. Even with very small contributions, the money can grow significantly by the time they retire, and this will provide them experience with investing which creates a solid foundation for their post-college saving habits.
- Involve them in the Student Loan Process – Particularly if your student will be responsible for paying back student loans, get them involved and make sure they understand the way their loans work. Fill out the FAFSA, have them review it with you before you submit it, and make sure they understand when interest will start accruing and when repayment must start. You and your student will need to do this once a year. June 30 is the last day to apply for federal student aid for the previous year, however, FAFSA reopens for the upcoming academic year on October 1 and the earlier you file, the better your chances are for a greater amount of aid.
- Legal forms – once your student turns 18, they are considered an adult and, unless they give you permission, mom and dad no longer have automatic access to their health or financial information. Some forms you to get filled out and notarized before they head off to school are:
- Power of Attorney for Health – gives parents the authority to make medical decisions for their adult children, should they get into an accident, or just want help discussing medical decisions with their doctors
- Power of Attorney for Finance – these forms designate who is authorized to handle financial decisions in an emergency or when a child gets in over their head
- HIPAA Release form – if your child is going away for school, or even just leaving the family doctor to find one of their own, you’ll need a new HIPAA release form if you as the parent are to have any ability to be involved in your child’s healthcare decisions or medical care
Note that if your student is heading out of state you may need to fill out multiple versions of the same form as laws differ from state to state.
Additional resources for some of the tips mentioned in this article can be found here:
www.scholarships.com or www.collegeboard.org
www.Mamabearlegalforms.com
www.studentaid.gov
If you have any questions about this article or you would like to discuss your financial situation, please contact us.