Talking College Loans … With a Nine Year Old

Photo by Jason Bache

I blame Suze Orman. I read her Four Top Financial Lessons to Teach Your Kids yesterday and one of the points I took from it was the reminder (I’ve heard her loud and clear on this before) that parents should not pay for college with retirement savings or a home equity loan.

It was obviously on my mind when T asked from the back of the car a few hours later, “Mom, which college am I going to?”

Quite why a nine year old is thinking about college, I don’t know.  I certainly wasn’t aware of college at that age.  (In fact, I ended up being the first person in my family to get a college degree.) But it’s obviously important to him as he’s asked me about this at least twice before in recent months.

“Well, it all depends,” I said. “In nine years’ time, we’ll look at which subjects interest you the most …”

“Mechanical engineering,” he interrupted (which I think is nine year old speak for “building robots”).

“And then we’d look at which colleges have the best courses in that subject,” I continued. “We’d also look for which size of college is right for you. Whether you want to be on a big campus or a small one …”

“Small,” came the decisive reply.

“And where the college is and then we’d need to look at how much each one costs,” I said. Then I took a deep breath and opened the door to the How We Will Pay For College question.

“Dad and I have started saving for college for you already, but it might not be enough so you might have to take out a loan. We’ll see what the options are when you are getting ready to look at colleges.”

Silence from the back seat.

Was it too much information?  Had I scared him?  Had I disappointed him?

After a few minutes, his next question was, “Mom, can Cade come over for a sleepover?”

So, I guess I’d given him enough information for his level. It made sense – he’s well aware that Mom and Dad can pay for some things and not for others – and I had given him options.

I must admit I like the idea that I’ve seeded this thought early. We won’t be having a surprise conversation when he’s 18. And as college is obviously so important to him, we can talk over the coming years about how we are choosing not to spend our money on some things as we are choosing to save for college (and retirement).

I feel slightly guilty that we won’t be able to pay for college for our boys.  At the same time, I shuddered when a teacher told me recently that she planned to take out loans to pay for her daughter’s college tuition costs.  “But what about your retirement?” I asked.  She shrugged and said she felt this was something she had to do for her daughter and she would figure something out, probably by keeping working for longer.

For us, the best thing I can do is help the boys figure out the most cost-effective way of getting the best college degree for them. But that’s a few years down the track so for now we’ll concentrate on teaching them some of the fundamentals about finance.

Leave a reply