4 Ways To Tell Your Kid You Can't Afford His Dream College

The College Board reports that a “moderate” college budget for an in-state public college for the 2015–2016 academic year averaged $24,061. Some private schools are pushing the envelope with annual costs of attendance at upward of $70,000. The result has been crippling student debt and, as some would say, a crisis of common sense. The U.S. Department of Education puts the national average for student loan debt at $29,400. A Citizens Bank survey found that average student debt for millennials is much higher — roughly $41,286. And the really scary part is that 15 percent of the grads surveyed said they didn’t know their total student loan balance and 37 percent of graduates reported being clueless as to their loans’ interest rate.

Almost half of all students who start college don’t graduate within six years, reports the Department of Education, and the consequences of taking on debt but never receiving a meaningful degree can be harsh. Students who borrow for college but never graduate are three times more likely to default.

So how do you let your kid know that he needs to adjust his expectations. Here are a few ways to start:

1. Show them, don’t tell them.

This may be the college version of “a picture is worth 1,000 words.” Show them your savings account or 529 plan balance. Show them the school’s estimated cost of attendance. Ask them to divide by four. What is the annual shortfall and how will it be bridged? How much of that will be evil loans?

Trot out the numbers on loan defaults, monthly payments, return on investment figures for colleges. And then ask them what makes the most sense to them. Remember, you can always just say no to co-signing a student loan. Write out the word “no” too.

2. Show them, don’t tell them ― redux.

Living within your means used to be cool. Then a lot of us got caught up in the culture of consumerism. We borrowed against equity in our homes to take vacations, bought new cars when the old ones got dirty, and basically never thought about the day when the chickens would come home to roost.

If your student has dreams about going to a fancy college that you can’t afford, chances are you were his role model. It’s never to late to mend your ways. Talk openly about the financial stress you had during the Great Recession, how your retirement savings and home values plummeted, how you got the wake-up call but it may have come too late.

Pattern your spending along the same guidelines you want your student to adopt. Show him how it can feel good to be a saver.

3. Beg and steal, but try not to borrow.

When relatives ask what your student wants for his birthday or the holidays, the answer should be: Money for college. Students have as much responsibility to set money aside for college as their parents do ― some would argue, even more.

Look for ways to cut expenses and senior year activities. Is it really necessary to participate in every single activity planned? Prom tickets, clothes, limo, photos; senior breakfast, senior dinner, senior class gift to the school, senior yearbook, senior pictures, senior field trip, senior beach party, senior grad night programming. It can literally cost thousands. Whatever your student can skip is money that goes into the college fund. And maybe if enough kids start skipping the multitude of events, the school will get a little more realistic about the costs involved.

Your student can also find a part-time and/or summer job. We know kids who pulled in $3,000 just from babysitting during the summer before college.

One of the best ways to motivate your student is to open a bank account in her name and tell her that whatever she earns is her spending money for the year ― or that she will be buying her own textbooks.

The point is: Get the student invested. This isn’t only on parents.

4. Take advice from The Rolling Stones.

Mick sang it best: “You can’t always get what you want, but if you try sometime, you find you get what you need.”

There is an uncomfortable days-of-Hell period between May 1st (generally when college deposits are due) and mid-June (high school graduations) when students and their parents strut around bragging about where they are going to college. For those six weeks, no one wants to be the kid who says he’s living at home and going to the local community college. That’s too bad because frankly, those may be the smartest kids in the lot.

Here are some realities: Lots of kids who start college wind up coming home. Their reasons are varied but some studies put the number of freshmen drop-outs at 30 percent.

The Organization for Economic Cooperation and Development said that only 46 percent of Americans actually complete college once they start, making the U.S. the worst among the 18 countries it tracks. As The Atlantic wrote, “We’re behind Slovakia. Slovakia.”

So all this hand-wringing, fretting, time spent on applications and taking SATs ― it might not even matter anyway.