No money saved for your kid's college? Here's what you should and shouldn't do.

Written by
Peter Dunn

It’s nothing short of shocking how quickly your child’s bus rides to elementary school turn into a heart-wrenching drive to drop them off at college for the first time.

The time flies by, and you wouldn’t be alone if you reached the end of that period with nothing or close to nothing saved for the next (hopefully) four years.

But here’s the strange thing about facing a college with no money saved: Students and their parents are often provided blank checks to solve this heinously uncomfortable conundrum. These blank checks can feel like a lifeline, even divine intervention, yet they’re nothing of the like.

Blank checks written by families with no money saved for college often lead to students and their parents saddled with debt, living under one roof post-graduation, struggling to find stable financial ground for years to come.

If you find yourself with an unaffordable college education knocking at your door, there’s a right way to open the door and there’s a wrong way. And knowing the difference is key.

Let’s begin with what to do.

Complete the FAFSA:

No matter how much money the household earns, you should complete the Free Application for Federal Student Aid (FAFSA). By applying to see what federal need-based aid you’re eligible for, you'll know more about what college choices are affordable. Don’t interpret your aid package as the exact amount you should spend on an education. Take it as a suggested ceiling for what you might spend when combined with what you have set aside. It should not convince you to spend more than what is prudent.

Next, make price an issue – a major issue. There are consequences to not having enough funds to pay for college. They aren't punitive but more of a reality check. By making price an issue, you'll be forced to look at options like community college for the first couple of years to complete general education requirements.

A colleague of mine recently helped a single mom and her daughter decide to complete the first two years at a community college and avoid $26,000 in additional borrowing. That’s real money.

Some don'ts:

Which brings me to a "don’t." Don’t chicken out and passively decide to figure out what to do after you’ve borrowed the money. Not only will that lead to more student loan debt for the student, but it can also create copious amounts of debt for the parents. It’s one thing for a student to leverage their future income to justify their education expense; it’s a whole other ballgame for a parent to borrow to help generate future earnings for another adult.

And now we’re at the big don’ts. The solution isn’t for parents to compromise their current and future financial stability to buy an education. Yes, parenting and the sacrifices it requires are as old as time. But don’t make a bad problem worse by kicking the college funding can down the road to your future self. You know, the future self which is getting precariously close to cutting-off work income permanently.

Don’t let the loans stack up with the idea you’ll deal with them later. Do your best to pay as you go, and ensure your student is generating some income to pay for their living expenses.

Additionally, be sure to project how you will pay for each year of school. One of the biggest mistakes you can make is to enter school with a plan to pay for the first year and no reasonable strategy to pay for years two through four. Refusing to have a plan for all four years can lead to an abandoned attempt at a degree and copious amounts of student loan debt. And of course, the student moving back in with their parents.

Selecting the right college path and creating a sustainable funding strategy will be one of the hardest things you do as a family. But understand the struggle should purposefully be placed at the beginning of the process and not dismissively assigned to deal with later.

This article is published courtesy of USA Today.

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