Managing College Costs: Tips for Parents

When a teenager leaves for college, life changes for everyone in your home. The house may feel exceptionally quiet without teenagers running around, playing video games, and blasting music. No one is asking for rides or extra cash. But there’s one change you may have thought you prepared for that brings unexpected consequences: college costs.

New data from Citizens revealed that 59% of parents start out confident when it comes to paying for college, but only 21% feel prepared when the bills start rolling in. The extra costs often lead to unexpected lifestyle changes. According to the survey, 62% of parents with kids in college said they expect to delay their retirement, with 40% expecting delays of one to five years. Meanwhile, 66% said they will cut back on major purchases or vacations and 26% paused their investment strategy. One-in-5 (19%) said they are taking on a second job to help cover college costs.

Chris Ebeling, EVP, Citizens head of student lending, said there’s a better way, even if you haven’t saved as much for college as you’d have liked. It starts with having an honest conversation with your high schoolers, looking for ways to reduce college costs, and sharing the financial responsibility.

“Parents sacrificing their own financial future can create long-term risks and potentially place future burdens back on their children. The healthier approach is a balanced one,” Ebeling said.

Understand the Real Costs of College

Ebeling recommended doing a “FAFSA dry run” each year to understand the true costs and how much financial aid you might be eligible to receive. He also suggested using tools like Citizens’ College Match at CollegeRaptor.com or the net price calculators available on college websites. “These will give you a much clearer picture of what schools will actually cost after potential aid, rather than just the sticker price,” he said.

Fill Out the FAFSA

Some families neglect filling out the Free Application for Federal Student Aid, assuming their household income is too high to qualify. But failing to fill out the FAFSA could mean leaving free money on the table. “Many aid packages consider more than just income,” Ebeling said. “Don’t assume you won’t qualify.”

Additionally, Ebeling said, the FAFSA is “the gateway to federal grants, scholarships and federal student loans,” so even if your child isn’t eligible for free money based on need, it’s a good idea to file the FAFSA to explore other ways to pay for college.

Search for Scholarships

Ebeling also recommended an “aggressive scholarship search” to help defray costs. “Every scholarship dollar is a dollar you don’t have to borrow or pay out-of-pocket,” he said.

While your child is still in high school, encourage them to work on what Ebeling called their “scholarship resume,” which includes good grades, extracurricular activities, and leadership roles within their school or community. “These can open the door to scholarships and merit aid, which are still some of the best ways to reduce out-of-pocket costs. Citizens’ Scholarship Search also helps identify schools where students may be more likely to receive aid based on their profile,” he said.

Consider Community College

Starting your child out at a lower cost community college can dramatically reduce the overall cost of their degree and give you a few more years to prepare for the bigger tuition bills from a four-year university. “Community college for the first two years can be an incredibly smart and financially sound strategy for families,” Ebeling said. “It’s a great way to reduce the overall cost of a four-year degree without compromising the quality of education.”

However, make sure the credits will transfer to the four-year school and degree program, especially if your child is seeking a specialized degree, Ebeling warned.

Pursue Student Loans Over Delaying Your Own Retirement

Your child may have to shoulder some of the college costs through student loans. “Student loans can be a necessary and responsible tool to bridge the gap between savings, scholarships, and the total cost of college,” Ebeling said. “The goal is to borrow only what is truly needed and to understand the implications of that borrowing.”

He suggested using a student loan calculator to show what a loan means in real terms down the line. “Tools like loan calculators can help your child understand how these monthly payments can affect their post-grad life, housing, car payments, or travel,” he said.

Most importantly, have transparent conversations with your child about expectations and what you can realistically contribute to their higher education as early as possible, ideally before the college search begins.

“Parents play an indispensable role in their child’s college selection process through guidance, financial contributions they can comfortably afford, and active participation in the planning process. But expecting parents to bear the entire burden can be unrealistic,” Ebeling said.