Most would agree that college is a good investment. But as with all investment vehicles, some perform better than others. The same is true for choosing a college and a career. No matter who pays for your child’s college education, you can help your child make an informed decision.
First, talk with your child about choosing a major. What are they interested in? What kind of careers are they thinking of pursuing? Sketch out some possible career options they might follow. Have your child go to salary.com and look up the average starting and peak salaries for each career option. Also have them research what degrees are necessary for each career.
Next, compare financial packages at the schools your child is applying to. Help your child calculate the total cost of their four-year degree, plus any additional degrees they will need for their career choices. You might want to exclude any financial aid that is contingent on maintaining a certain GPA, since many freshmen struggle with the transition and lose their scholarship.
Talk with your child and clearly define how much (if any) financial assistance you will give them. Help them calculate how much loan assistance they will need to cover the entire cost. Help them calculate how many years that debt will take to repay and how much the monthly payments might be.
Finally, put it all together. Compare their potential salary with their potential debt service. Most kids haven’t dealt with such large dollar amounts before, so help them relate it to your own family expenses. If you have a family budget, share it with your child. Discuss how a salary must cover the basics of food and shelter, plus debt service. If there are big financial differences between several schools or careers, talk with your child about the lifestyle they will be able to afford immediately after graduating, and ten years after graduating. Discuss the trade-offs of each option, such as stress, freedom, and fulfillment. Keep the conversation friendly and work as a team – remember, the goal here is just to become informed.
This is not meant to say that anyone should choose a college or career based solely on the financial rewards. However, this exercise can help your child make an informed financial decision when choosing between several school and career options. Sharing your life experience and gentle guidance can help your child make the best choice.