06/27/2013 03:30 pm ET Updated Aug 27, 2013

Parents, It's Time to Have 'The (Money) Talk' With Your Student


Parents spend a lot of time having "talks" with their children. The first talk may center on whether Santa or the Easter Bunny are real. At some point, there is "the" talk about the birds and the bees. For children who are graduating from high school or already in college, it is now time to have "The Money Talk."

Some children dream about the school they want to attend or the career they want to pursue for years. Most parents don't want to introduce the harsh reality of money into dreams like that by telling their children they might be in for a lifetime of debt. It's not easy, but it's better to sit down now and face facts rather than let children be surprised when they can't pay off the student loans they've accumulated.

The Wall Street Journal's MarketWatch listed some of the best and worst career choices in relation to the debt required to obtain the necessary education. While it might not be surprising to find that advertising, economist and civil engineer provided a high return on investment, students thinking about becoming a veterinarian, reporter or marriage and family therapist might have a tougher go of it.

This doesn't mean you should discourage your child, but you all need to be realistic about the financial planning required. Make sure you first do some research on the topic, prepare your discussion strategy, and then sit down with your child. Try to keep emotions to a minimum, and focus on the facts:

1. How much you can help: It may be embarrassing to admit that you don't have the money needed to help your student attend the college of his or her choice, but it's better to go through it now than after your child has been accepted.

2. How much the college will cost: If your child has a certain college in mind, find out what the estimated costs will be for the necessary education. College Reality Check helps you determine each college's net price, which is what you'll pay after subtracting scholarships and grants.This gives you an idea of how much student loan debt might be required. Make it clear whether you will be able to help pay back the student loans or if you are expecting your child to make all the payments.

3. How to reduce the debt load: If your child is adamant about a college, talk about what else can be done to reduce the amount of debt. Work-study programs, summer jobs, making interest payments, and watching spending are all easier if students know why they are necessary.

4. Estimate how much the chosen career pays: The U.S. Department of Labor has information on earnings statistics by occupation, geographic area and industry.

5. Estimate the student loan payments: The U.S. Department of Education has a repayment estimator to help in this process.

The results might be surprising or comforting. If you estimate that the education might cost too much compared to income potential, as this Columbia graduate is experiencing, you can work with your child to develop an alternative plan. The career may not be out of reach, but compromises may be required about schools or other areas where you have more control.

It is also useful to consult with a professional college financial aid advisor who can help you work through the financial process and make sure you are receiving the maximum amount of financial aid available. Once you've gotten your child successfully through college, though, prepare yourself for the marriage and family talk!