Parents Please Help - How to develop teenager motivation to avoid big debt?

Parents Forum
1

I am welcoming any advice on how to develop a 16 year old’s motivation to choose schools and take on tactics that will help her avoid massive debt.

I am a relative helping a junior apply to college next year. Her parents will not be able to contribute anything to her college expenses. She is picky and in love with a list of her expensive dream schools (cross country expensive lacs with little aid).

I try to encourage her to augment her list with a mix of schools, such as affordable schools, public schools, in-state schools, local region interstate exchange schools, schools giving different types of great aid, etc., to little avail.

Of course one never knows until the aid package comes back but I can see the writing on the wall … she’s got a good chance of going massively into debt.

So far I’ve tried talking about the long term impact of debt and making her watch youtube videos of young people talking about the impact of massive debt on their lives after college, etc.

Still, I can’t really get her on board of treating “low debt” as a priority. If she likes a school she see no problem with signing up for debt that will give her big payments for decades.

At 16 she just has no concept of what this amount of debt would do to her longterm as she starts out in life. I don’t want to assist her in going down a path that will impact her negatively for decades.

At the moment, I just want her to find and add a group of “financial safeties” into the mix that she could be happy attending.

I’d love it if she got emotionally behind this process but this doesn’t seem to be happening and I think she won’t be bought into the application process of these schools.

I could play hardball and say I refuse to be a part of mentoring someone who is taking a course that I feel is harmful to themselves or just tell her “pick some additional schools from this affordable list”. However, I’d rather find a way to bring her around so she is bought into the process of choosing financially responsible options.

I don’t have kids and so don’t have much experience working with teenagers.

Any advice from seasoned parents on how to work with teenage psychology?

Thanks for your help,

havingfuntoday

2

If her parents aren’t contributing and no adult is available to cosign for a private loan, the amount of debt she could take on as an undergrad eis already very limited. The only thing you need to do or should do is make sure she understands that she can only count on borrowing $5500 for her first year, max. So she needs to find college that will be affordable to her with $5500 in loans+ whatever she qualifies for in Pell grants (probably no more than $5000) and whatever she can earn and save.

Beyond that the problem is not that she will take on “massive” debt, but that she simply won’t be able to afford to attend colleges she applies to, with or without loans.

I think many teenagers are under the impression that they can just borrow whatever they need. So you can help her by reframing the issue from what she “should” do to what she can do.

3

Take a few of the schools on her list and run the Net Price Calculators for them. You might have to guess at some of the figures (her parent’s tax returns for 2016, assets) but you might have a good guess. That will give you the numbers the school will expect her to come up with.

There are also loan repayment calculators on many websites (try CFPB.gov if you can’t find one). Put in the max amount for a student (about $30k with interest during the college years) and it will show her monthly repayments.

Now run the NPC for a few more affordable schools. Her public flagship, maybe a local LAC. Run a few for schools known to give good merit. Show her how much she’d have to come up with to go to Dream School, how much for the public, how much for the good merit school. Ask her where that money is going to come from.

I remember being at a fast food (oh, ‘casual dining’) restaurant with my daughter and writing the rough budget on the back of a receipt. “The cost is $XXXX. You have $XX from this scholarship, $x from this grant, etc.” She got it that the costs were bigger than the credits and that she’d have to work to pay the difference.

4

What Calmom said. Read more here: https://www.edvisors.com/college-loans/terms/loan-limits/#private-student-loan-limits

Stress to her that colleges with more selectivity give better aid. In other words…better grades can get you more funding.

Being a jet setting traveler is probably not on her horizon, either, since out of state schools tend to be considerably more expensive. (not always, but it’s the general rule)

Stress the importance of a part time job, and working summers, and saving.

Whatever you do…DO NOT…I REPEAT…DO NOT COSIGN A LOAN FOR THIS KID!

Unless she does a lot of growing up in the next two years and comes up with a realistic approach to her education…you will be stuck with that debt. Don’t go there. It will cause problems in your family. It’s not worth it.

For someone in her position, community college and a part time job might be a realistic goal. if she works hard and does well, she could get a transfer scholarship.

She could also get a job and work full time and save for a couple of years. it would be a good education about the value of money and give her a couple extra years to mature. What’s the difference between graduating at 22 and graduating at 24? Not much, really.

Two questions…

  1. What is she interested in pursuing? Is it realistic?
  2. Do you intend to financial help her?
5

Is the family actually middle to lower income, or is it high income but with spends it all and goes into debt without worrying about cost of whatever? Seems like if she has grown up in the latter environment, you may be fighting an uphill battle with respect to cost-consciousness (for college or anything else).

6

Post 1 is right on. I am also a fan of being blunt. I would give her the info in #1 above. I would then simply say “you will not be able to afford the colleges you are dreaming of. You need a new list of colleges you can afford. It is likely you will only be able to afford instate. Instate colleges cost about $25,000 a year. Your parents have no money. How do you intend to pay for this?”

It might be helpful to know what kind of a student she is. If she is a superstar, then there are more options. She might be able to get full tuition or even a full ride at one of these schools: http://automaticfulltuition.yolasite.com and http://competitivefulltuition.yolasite.com

Personally, I would cut and paste this thread and send it to her. Might be the wake up she needs. Far better for her to be upset now when summer is starting than in her senior year when she gets a rude awakening.

7

SHE has NO chance of going into massive debt unless someone plans to cosign the loans.

It would a lot,easier if the parents started their own CC account…and asked their own questions.

8

MODERATOR’S NOTE:
Closing thread. Student or parent needs too ask question. While I might err on the side of a relative helping a student, the fact that the OP opened a second account in violation of ToS gives me pause.