Topics for Roundtable Family Discussions

• Is there a certain amount of money that you are willing to commit to a child’s education? If your ability to pay is more than your willingness to pay, you should put your cards on the table as soon as you can in the college admission process. Some families agree to pick up the tab on tuition and room and board, but expect their children to pay for books and personal expenses. This is a good time to work out the ground rules.
  
  
• Are there sources of financial assistance that you should be investigating? If a grandparent has always said, "I’ll be willing to help out when the time comes," this might be the time. Often, grandparents are eager to help out financially—for tax reasons as well as altruistic ones. If a grandparent pays tuition directly to a college, this money will not be treated as taxable gifts, and the grandparent would still be able to take advantage of making a $11,000 annual gift, reducing his or her taxable estate. Be sure to investigate specific scholarships through your church, club, and employer, too.
  
  
• What sacrifices are you willing and able to make as a family to pay for college? Vacations, new cars, and home improvements may be luxuries that you won’t be able to afford with children in college. If these decisions are discussed and made together, they are usually easier to live with. In addition, if your child has assets such as stocks and bonds, will any or all of them need to be liquidated to pay for school?
  
  
• Expect to borrow. The number of families borrowing for education continues to rise, and these days most college students and their families borrow from someone or from somewhere. It’s important for you to establish an idea of how much debt you are willing to incur. Make sure that your credit rating is healthy. If your family has not experienced any trouble with previous debts, you should be in good shape to borrow again.
  
  
• Don’t blackmail your children. Far too many parents insist that they will foot the bill only if their children attend a school of the parents’ choice or study a particular major. Janice unhappily enrolled at her parents’ alma mater, and only after being miserable for two years was she able to convince her parents to allow her to transfer.
  
  
• If parents are divorced, be certain that it’s clear about who will assume what college expenses. Paul, a divorced noncustodial father, paid all the bills for his daughter’s private college. Now his son is ready to enter college, and he’s asked his ex-wife to split the cost, since he hasn’t recovered financially from their older child’s bills. She has refused. The father plans to apply for financial aid this time around and may or may not qualify.