It’s never too early to start teaching children about money. For teenagers in high school who have their eyes set on attending college, learning about finances becomes a more pressing priority. By having a frank discussion about topics such as whether a personal loan may be needed to cover their expenses, parents and guardians can prepare their kids for the unexpected. Here’s a closer look at what teens need to know about college costs. 

Primary College Expenses

Make a list of the most common expenses at college, such as tuition, room and board, meal plans, and books. Compare the costs at the schools your teen is interested in attending.  Discuss how expenses may be higher than average at private universities or out-of-state colleges and lower at two-year community colleges. Knowing these figures beforehand can help determine whether the costs will be affordable.

How Student Loans Work

Many college students will typically need some type of financial aid to help cover their expenses. This includes scholarships, grants, work-study jobs, and student loans from a credit union or other financial institution.

Most of these loans have low interest rates and don’t have to be paid back until after college graduation. Some lenders may grant a grace period that delays the repayment process. Discuss how the ultimate timeline will work with your teen so their understanding is realistic regarding the repayment of the loan.

Your Teen’s Expectations

As your teen makes plans to attend college, parents should also discuss their role in helping to pay. This can include getting summer jobs to save for expenses. Talk about the possibility of getting a job while in college as well. It’s quite common for students to have a part-time gig to help pay for their higher education costs.

If a private student or personal loan is needed, most teens will need a cosigner for approval. As a parent or guardian, you’ll likely be that person. Talk about how you would be responsible for repayment if your teen fails to pay the loan back in a timely manner.

North Jersey Federal Credit Union understands the decision to attend college is an important one and is often guided by affordability. That’s why this community institution based in Totowa, NJ, provides parents with financial options such as personal loans to help fill in the gap. If you have a high-school teen who plans to attend college, call (973) 785-9200 to speak to a representative about resources. Learn more about loan choices online.