What to Do When You Don’t Have Enough College Savings


The moment parents wait their entire lives for is finally here; it’s high school graduation season, and your kid is heading off to college this fall. You couldn’t be prouder in this moment, except for one minor thing: you don’t have enough college savings to fully fund their education.

The guilt is in the pit of your stomach. You feel the agony hanging in the air, thick as glue, as you take proud pictures on graduation day with their diploma. You know that in just a few short weeks, the tuition bills will start rolling in (if they haven’t already) and that there are significant gaps between the financial aid package you received and the schools overall sticker price.

As parents, we often feel obligated to pay for our child’s college education, but there are many families who are not as financially prepared for college as they wanted or expected to be. Don’t let this journey lead you to financial ruin. It may be wiser and financially beneficial to empower your child to make calculated, smart decisions when it comes to financing their education.

So what can you do?

First, here’s what you don’t want to do: don’t automatically assume that your only option is to take out the remaining balance in parent PLUS and student loans. Before you sign on the dotted line, consider this; the U.S. student loan debt has grown from $1 trillion to $1.3 trillion in the last five years. While the class of 2015 is expected to earn $40,000 or more in their first year after college, graduates of 2013 and 2014 are only earning closer to $25,000. Additionally, the average Class of 2016 college grad is leaving school with $37,000 on average in student loan debt.

If you haven’t saved enough for college and you were planning taking out loans over the next four years that are greater than your child’s first year of potential earnings, you are already taking on too much.  Financially you will be placing either your future goals or theirs behind the eight ball.

Realistically assess your options: Even if this puts their preferred school on the line, there are numerous schools that offer quality education for far less than the price of a new 40 foot yacht.  This is a great time to deeply scrutinize needs versus wants. Your child may want to go Ivy League, but what they need is a quality education at the best price with a good salary outlook.

Uncover and eliminate the secret costs: Author Lynette Khalfani Cox provides hundreds of money-saving ideas to help students and parents reduce or eliminate the hidden expenses associated with the full price of college. Her book is entitled College Secrets: How to Save Money, Cut College Costs and Graduate Debt Free.

Tap every available resource: Research organizations in your community that help young people find scholarships like Seeds of Fortune in New York City. The organization’s founder, Nitiya Walker, funded her Babson College education with a $200,000 Posse Scholarship. Now she is on a mission to help more young people avoid the financial barrier of higher education as well, so they can graduate completely debt free.


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