Approximately two out of three 2018 college graduates have some level of student loan debt, according to an annual report from the Institute for College Access & Success. The average runs nearly $30,000.

That’s a lot of debt, but the report does share an encouraging sign: Researchers found that while student debt is high, it’s growing more slowly than in the past, likely because of increases in state higher education spending and grant aid to support students. Still, the report says, “college affordability continues to be an urgent concern.”

Across the country, high school seniors and current college students are contemplating their next steps. The decisions they make this year could decide how much debt they might be saddled with four years from now as they embark on their own lives and careers.

That means it’s especially important for parents to have some open and matter-of-fact conversations with their kids about college. Here are the financial conversations you should have with your teen or college student.

4 Financial Conversations for Parents and Students to Have

Have you filled out the FAFSA?

FAFSA stands for the Free Application for Federal Student Aid, and it’s best to fill it out in the fall, as soon as it’s available for the upcoming school year. The form is required for students who are interested in qualifying for federal grants, work-study programs and loans. Whether you’re a senior about to graduate, or a current student in college, this form is required to qualify for financial aid. Some states, higher education institutions and private groups also require it as they dole out money for scholarships and other assistance.

The window to fill out the form runs from October to June or so, but it’s best to fill it out as soon as you can because some grants and funding opportunities run out and aren’t available to students who wait to fill out the FAFSA. We have more information about the form in our post about the 7 things families need to know about the FAFSA.

How much college can you afford?

Now is the time to be honest about how much money you may or may not have saved for your child’s college costs and how much you’re able to pay for their education. Do you have money saved up in a 529 college savings plan or another account? Did your child’s grandparents set aside any money for their grandbaby’s college costs?

These may not be easy discussions to have, especially if your child expected you to cover all or most of their college expenses. The hard facts may be that you’re simply not able. Regardless, now is the time to be upfront about what’s possible. That way, your child can make smart choices for their own future, such as deciding for themselves how much debt they want to wade into to get a college education and how they want to spend or save the money they may be earning from a job right now.

And, don’t forget: It’s never too late to save for your child’s college education. Whatever money you can start squirreling away now, when your son or daughter is a high school senior, will come in handy during the next four years.

How will you pay for college?

There are all kinds of ways to pay for college—from family money saved in a 529 plan to scholarships, low-interest loans, work-study programs and federal student aid. StudentAid.gov spells out all the different ways to pay for college. Your child’s high school guidance counselor also can help connect them with more information, including scholarships they may be eligible for.

Is this college the best financial choice?

Not every college will break the bank. Community colleges can be affordable options for students, even those who plan on eventually pursuing a four-year degree. And some small private schools have more scholarships to give out than a large public one.

The U.S. Department of Education’s College Scorecard has a comprehensive database where students can search for colleges, degree programs and more to learn about the annual cost of a particular institution and what their salary might be if they pursue a particular career path.

Talk about money is never easy, but, for college-bound teenagers and current students, these discussions are necessary to ensure they start their adult lives without a massive debt load that will take decades to pay off.

The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out, and stay out of debt.  For a free debt analysis, contact us and find out how we can help.

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