Some Skin in the Game

We had an exciting collegiate weekend. My daughter and I went on our first college trip! Yes, she is only a sophomore and I know it’s early to be looking. However we combined the trip with a visit to see my very good friend and her daughter who moved from our town about five years ago.

Our first information session and tour was at the University of Pennsylvania and then we headed to the suburbs of Philly for the same sessions at Villanova University. (I’m not going to review our visits but if you want to read more about parenting your college bound teen – check out a friend’s blog Bound 4 College.)

From our college visits, I could see that there are two main concerns (besides how’s the food and are the dorms co-ed) – how to get in and how to pay for it! Going to college is a financial partnership between you and your child. So it’s probably a good idea if your teen has “some skin in the game.”

Last week, the Wall Street Journal’s article Before You Choose That College asked some financial advisors for some advice on this partnership. There were five interesting pieces of advice:

1. Encourage your teen to explore some careers choices first, then look at appropriate schools.
2. Don’t promise your teen that you’ll pay the entire tuition – with the latest economic downturn some parents have had to revise their promises.
3. If deciding between schools with different price tags, make your teen responsible for at least some of the difference if they choose the more expense school.
4. Make school their #1 priority, if they underperform then you’re not paying anymore.
5. Once your teen is 18 years old, you will no longer have legal authority to access their health records or finances – you will need the appropriate legal documents to address the unexpected.

While you may not agree with some of the advice, it is worth considering some of the ideas. Remember an education is an investment in your teen. By having them take some of the financial responsibility it may make them more committed to picking the right school and for them to work hard once they get there. The last piece of advice on getting the correct legal documents (health care directive, HIPPA release and power of attorney) can’t be overemphasized.

We still have a few years before we will be writing out the big tuition check, but I am already thinking about how to pay for it and how much “skin” my daughter will have in her college game.

In case you want to know, my daughter told me that she was energized by our college visits and is now excited about the whole college experience. That’s a good thing, because she’ll have to keep up her end of the partnership.