In March 2008, the Vatican came up with a new list of seven deadly sins to go along with the “original” deadly sins.
To refresh your memory, the original sins are: pride, envy, gluttony, lust, anger, greed and sloth. And the new sins include: genetic modification, experimenting on humans, polluting the environment, causing social injustice, causing poverty, becoming obscenely wealthy and taking drugs.
In the spirit of the Vatican’s new list, I’ve put together my own list of “sins” that I see parents make each year.
1. Thou shall not pay for college at the expense of your retirement. Now is the time to save and invest for your future retirement needs – while you are healthy and have employment. You don’t have same time on your side to grow your retirement savings, as your student has to pay off any student loans. Keep in mind there is no financial aid for your own retirement. If you do not honor yourself by saving and investing for the future, retirement may mean working well into your 60s and 70s.
The truth is your student can always borrow what is needed to complete their education or work to support their educational goals.
2. Thou shall not apply to schools without knowing if they are good financial partners. Not all colleges that your student is applying to will be able to meet all of your financial need. Know where your student will fits into a potential freshman class and the types and amounts of financial aid typically offered to a student with a similar profile.
3. Thou shall not apply to schools without knowing your Expected Family Contribution (EFC). It does not make sense to wait until the 11th hour to know how much you will be expected to pay for college. Do not go into this very expensive investment with no idea what will be expected of you.
4. Thou shall not push your child to apply to certain colleges because you want to relive your past (or want to brag to friends). Going to college nowadays is hard enough without completing applications for schools they don’t want to attend for your ego.
Help them in the college application process, but always remember it is your son or daughter attending college – not you.
5. Thou shall not borrow more than you can afford to pay back. With the average debt of college graduates at $17,000, a recent College Board study says that 70% of parents and students have not tied the amount they borrowed to their income after graduation. Too often both parents and students are borrowing more than they can comfortably pay back.
Know how you will pay back your borrowing and the impact on your family finances and cash flow.
6. Thy shall not short change thy other children in their college experience.
Remember you have multiple children to educate. You cannot afford to use all of your college savings on one child at the expense of your other children’s futures.
Plan your finances so that you are able to spend roughly the same amount for each student’s education.
Don’t assume that the “smart” student is going to get a full academic scholarship based on merit or the athletic student is going to get a full ride based on their ability to play sports.
7. Thy shall identify and apply for scholarships (both large and small). I’ve volunteered and served on boards with a number of organizations over the years. One of the constant refrains I hear from them is “students are not applying for their scholarships.”
You’ll have less competition applying for $250-$500 scholarships and have a better chance of receiving a scholarship. Some sources of smaller scholarships are: fraternities, sororities, service organizations like Elks, Kiwanis, Eastern Star, churches. Also get lists from guidance counselors of scholarships received by recent graduates.
Now that you know the sins of college funding, make sure you do not commit them when applying for colleges.