How to choose the best college for your child—and your budget

One of the most important decisions parents and children can make together is choosing the right college. There are many factors to consider, including the quality of academics, athletic options, campus culture, and the size of the student body. But perhaps the most important factor is that of cost. From a financial perspective, how do you choose the right college? Here are some critical points to consider as you make your decision.

Have a candid conversation with your child about finances

Parents would like to send their children to their college of choice regardless of cost, and kids would like to pick a college without worrying about money. But for most of us, that isn’t possible; college is too expensive. So, it’s best to be proactive and raise the topic before teenagers set their heart on a school you’re unlikely to be able to afford.

How do you do this? Try a straightforward discussion about your financial condition. Talk transparently about your income and savings and whether you’ve managed to put money aside for college. Discuss how the cost of college could affect your lives, including your retirement. Share your financial decisions and explain what financial commitments you expect your child to make. (Should they take out loans? Get a part-time job while they’re at school?)

If your child understands how seriously you take this issue, they may be more likely to embrace that thoughtfulness as they approach their decision. Then you’ll be able to have more informed discussions about the available choices, such as the pros and cons of going to a state school rather than a more expensive private one.

Crunch the numbers

When discussing college expenses, don’t be afraid to get into the details. Tell your child what you’ll be able to contribute. Then, look at the remaining costs of the college of their choice. How do you navigate the distance between Point A (what you can contribute) and Point B (what it’s going to cost)?

Be realistic. Beyond tuition and housing, what additional fees and expenses can you expect? It’s easy to put these in a separate category and think you’ll worry about them later, but they’re really part of a larger cost picture. Plan for them now so you don’t have to worry about them later.

Follow the money

Once you’ve determined the true cost of college, itemize potential sources of financial support. What scholarships and grants could be attainable for your child? Researching and applying to them could be a joint project. Even if these are relatively modest amounts of money, every little bit helps—and engaging in the process is valuable training for your child.

Take a good look at the student loan options available. Think about the different loan sources, what it will take to pay back the loans, and how much of a loan burden a particular college will justify. It’s an imperfect science, but college is an investment, and not every college justifies an equal investment.

Many parents and children want the ideal college experience, but paying for that experience requires pragmatism. What loan burden can you pay back? What are your child’s income expectations? A child who wants to work on Wall Street might feel more comfortable taking out larger loans than one who wants to be an artist.

Choose for the right reasons

Consider that your child may be passionate about a particular college for a reason that might not stand the test of time. Perhaps they want to major in engineering and the college has a great engineering department, but the school wouldn’t be their first choice otherwise. If they changed majors, would the school still be the right one?

To protect your investment, do your due diligence. Try to understand why your child wants to attend a specific school. Even better, make sure they’ve thought through the choice in depth. If there’s uncertainty, you might consider a stint at a community college, which can help young people determine their long-term interests before committing to the greater financial expenditures of a four-year college.

After all, choosing a college is an expensive decision. But choosing the wrong college is an even more expensive one.