5 Money Questions to Ask Before Applying to College

Answer These Key Questions to See How Much You Can Pay for College

Mother helping daughter fill up a college application

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When deciding how much a family can afford to pay for college, there needs to be a very clear understanding of the money involved. Ideally, parents and their aspiring college students have discussed college finances for many years, so the student has a realistic expectation of what the family can afford to pay.

While extremely important to an informed decision making process, such conversations could be tough. Talking about family finances, college affordability, and financial trade offs may be awkward, embarrassing and challenging. To help alleviate the burden of beginning the conversation, here are five essential money questions to ask before applying to college.

Key Takeaways

  • Paying for college is expensive, families should attempt to put away money and discuss financial implications of a child in college as early as possible
  • Affordability of education at a dream college is a hard conversation that families must have and consider lower cost options.
  • Parents should prioritize retirement planning ahead of paying for college, since there are other ways to finance a college education
  • Families can apply for federal, state or college-provided student aid programs, or the student could apply for scholarships and grants.
  • Private student loans can be expensive. Families should discuss who should take them out, whether parents should co-sign the loan and what burden the repayment would put on family finances

How Is Having a Child in College Going to Affect Our Family Financially?

A college education can be expensive. An undergraduate degree from a four-year institutions (public and private) cost $29,033 per year, per student for the 2020-21 school year in the U.S. And that's the biggest cause of concern for a lot of families where children are aspiring to go to college.


Have your child research the costs of attending college, and not just the obvious tuition expenses. Have them take into consideration other costs the family will have to bear, such as travel, data plans, food, and entertainment expenses. It’s not real until there is a final number.

"Families need to start with number crunching a budget before the college search starts," said Melissa Brennan, a Certified Financial Planner (CFP) with ARS Wealth in Texas. While high school counselors can help the student by narrowing suitable dream and safety schools, said Brennan, what happens when the child gets into an unaffordable dream school?

"That's like telling a student to go to a car lot and test drive three cars — one car they know they can easily afford, a model up that is affordable, and a premium model. The student may be able to get a loan for each of the cars, but qualifying for financing and making the payment are two different things. Once you've introduced that premium model, it's difficult to take it off the table, because the future payment is conceptual. Its better, and less heartbreaking, for the unrealistic choice to never be part of the equation," said Brennan.

On the flip side, a college education can improve employment and earnings potential. According to the Bureau of Labor Statistics, among workers 25 years and older in 2021, those with a Bachelor's degree made $1,334 in median weekly pay compared to $899 in median weekly pay for those with high school diplomas. Unemployment rates for those with a Bachelor's degree was 3.5%, much lower than the 5.5% seen by those with high school diplomas.

Keeping that in mind, the family can have an honest discussion about whether the student's career choice demands a college degree and whether attending an expensive school is worth it.

Families can also consider other lower cost options, such as attending a community college initially and transferring to a larger university after 2 years, said Kevin Brady, vice-president at New York-based Wealthspire Advisors. "The eventual degree from the larger school will look the same on the student's resume as someone who attended all 4 years," said Brady.

How Much Money Does Our Family Have Available to Pay For College?

Before arriving at a number for how much the family is considering paying for a child's education, think about whether the parents are able to chip in or are they not in the position to do so.

"Parents should decide how much of college expenses are they willing to pay, 100% or do you want your child to have some skin in the game?" said Vida Jatulis a Certified Financial Planner with California-based MainStreet Financial Planning.

That's an important decision is because most financial planners would recommend parents prioritizing their retirement planning over paying for their child's higher education. The reason is simple. "You cannot take a loan out for retirement, but you can finance college expenses," said Jatulis.


Parents could offer to pay a percent or a dollar amount towards their child's college expenses.

That number would depend upon your financial situation, specifically, if you've put away to pay for college using 529 plans.

"A starting point recommendation I have used before is to aim for 1/3 of the cost from 529 plans, 1/3 from current income, 1/3 from scholarships, fellowships, or student loans," said Brady.

One way to go about estimating college costs is to look at net price of college, which is the college expenses left over after any financial aid or grants are taken into consideration said Danielle Miura, a Certified Financial Planner at California-based Spark Financia.

"There are no right or wrong answers for determining whether or not parents should help pay for college. If you decide to help pay for your child's college costs, now is the time to lay all the cards on the table and have a money talk. This will help students create a plan to pay for the difference," said Miura.

Miura also recommended working with the student to help them come up with a plan to pay towards their education. Families can discuss if the child can work, how many hours they could work and how much they could contribute towards their college expenses.

How Much Financial Assistance Can We Expect to Receive?

There are distinctive types of financial aid available from the federal and state governments, as well as the institution itself. You may able consider applying for scholarships or grants to help pay for some of your college costs.

Federal aid may depend on the family’s financial capabilities or what is termed as Estimated Family Contribution (EFC). It is calculated based on the information you provide on your FAFSA form.


You can use this Federal Student Aid Estimator Tool before filling out your FAFSA form to understand the the extent and options of financial aid available to you.

Colleges themselves may offer financial aid to students but there may be substantial differences from one college to the next. Although you cannot get exact figures until you complete the FAFSA and each school presents its financial aid package, you can get a rough idea of the amount of money most students have to pay.

How Much Will We Have to Borrow in Student Loans?

Families must be very clear as to how much debt they can shoulder through federal and private student loans. Don’t just take the maximum amount offered and use the money for living expenses, as this tactic can backfire in the future.


The Consumer Financial Protection Bureau (CFPB) recommends that students limit borrowing for education to the average annual salary they expect to make in the first year after they leave school.

Think about alternative methods of paying for college so that you can borrow as little as possible.

What Impact Will There be When We Have to Repay Student Loans?

Determine who will be making payments before taking out any student loans. Parents and children need to be clear about who will be responsible, so they can project future payments against estimated income potential. If family members are asked to co-sign on student loans, it can have a negative effect on their credit rating.


You could use the repayment estimator from the Federal Student Aid site to calculate what borrowing thousands of dollars every year for four or more years will entail on a monthly basis.

The Bottom Line

Having a family discussion about paying for college can reveal some painful truths, but it also leads to more informed decision-making. The college-going child and parents can then move forward based on knowledge, and not assumptions or unrealistic aspirations.

Frequently Asked Questions (FAQs)

How do you estimate college costs?

Tuition is the biggest part of college costs and it depends on how long the program is, whether its a public or private college and if the student is in-state or out-of-state. Room and board is another significant category of typical college costs, along with books, equipment, transportation and other living expenses. There is no one formula to estimate college costs correctly, but you could use tools such as the Net Price Calculator by the U.S. Education Department that helps calculate cost of college after taking out any financial aid.

When should a family start planning for college?

The short answer is as soon as possible. Parents or other family members can start putting money away for children's education a little after they are born using 529 plans. Children themselves can be involved in the college planning process as early as middle school or junior high. You can use this middle school checklist provided by the government to get started.

Updated by Mrinalini Krishna
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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. National Center for Education Statistics. "Average undergraduate tuition, fees, room, and board rates charged for full-time students in degree-granting postsecondary institutions, by level and control of institution: Selected years, 1963-64 through 2020-21."

  2. U.S. Bureau of Labor Statistics. "Education Pays."

  3. Federal Student Aid. "What is my Expected Family Contribution (EFC)?"

  4. Consumer Financial Protection Bureau. "How much should I borrow in student loans?"

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