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By CHRISTINE HENSLEY
Iowa Student Loan Board Member

Before embarking on one of the most expensive journeys of a lifetime, your student should understand the complete cost to obtain the education needed for a specific career.

Why It Matters

* The total picture is important.

Although your student will receive financial aid notifications before enrolling in college or a certificate program, these only show costs and aid for the first year. Making a final decision based on only one-fourth or less of the necessary information is like agreeing to pay for a car knowing only the cost of the tires and insurance.

* It's time to plan for contingencies.

Your student, and your family, should understand the estimated financial picture for each year of a specific program. Each year, families of students one, two or three years into their college careers realize they don't have the funds to finish, requiring students to take one or more years off to earn money, transfer to less-expensive programs or take on crippling debt.

What Your Student Can Do Now

* Make a realistic guess about program length.

Will your student be able to complete a chosen program in four years, or is five years more likely? If your student's chosen path is a two-year degree or a certificate program or, conversely, will involve advanced degrees like a master's or doctorate, then your student should make adjustments to adequately plan financing for the appropriate length of time. Your student may take more or less time than the average based on previously earned credits, difficulty registering for high-demand classes and other considerations. Encourage your student to do a web search for the Common Data Set for each institution under consideration for average graduation timelines.

* Consider real-life earnings, savings and expenses.

If your student has been earning money for a while or making purchases, he or she should have a good idea of how much of each paycheck goes to savings versus ongoing expenses. Using this information, you and your student should be able to make a realistic estimate on how much can be earned and saved while focusing on education. Use this information to decide how to meet the gap between cost of attendance and available resources for each year of the program.

What Your Student Can Do Later

* Use a Net Price Calculator.

Net price is the amount a student pays to attend a higher education institution in one academic year after scholarships and grants are subtracted from the school's total cost of attendance. Often referred to as "the bottom line," students and their families must determine how that amount will be paid, whether from savings, college savings accounts, work earnings, loans, or a combination of all of those.

* Make a financially sound decision.

Using the results of the above exercises, your student should be able to determine which programs make financial sense without requiring unmanageable debt before graduation. One guideline is that total debt for all years of a program should not exceed a realistic estimated first-year salary.

* Continue to keep an eye on progress.

As your student progresses through a higher education program, periodic re-evaluation of current income and expenses as well as time to complete the program should help your student avoid some of the more severe consequences such as being forced to drop out for financial reasons. As one-year or other short-term awards expire, your student should be looking into ways to replace them with other non-loan funds.

What You Can Do

* Keep it real.

Much of this kind of financial planning relies on realistic estimations of actual expenses, earning and purchasing habits, and starting salary after education. Help your student work with actual attainable numbers based on data, not overly optimistic visions.

* Provide emotional support.

If your student's dream appears to be financially unrealistic, be ready to encourage your student to consider other ways of reaching the goal. Even if the program your student ends up choosing is not the first choice, a positive attitude and willingness to seek out opportunity will often lead to success.

Did You Find This Helpful? Sign Up to Receive More Information

You can receive information tailored to your student's grade level delivered directly to your inbox twice a month simply by signing up for the Student Planning Pointers for Parents service at www.sp3.org.

This free service offered from ISL Education Lending is for parents of eighth- through 12th-grade students to help them work with their students to prepare for the next step after high school.

Registered parents also have chances each month to sign up for quarterly random drawings for deposits into a college savings account.

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