Hey Kids, We Don't Plan On Paying For College. Love, Mom And Dad

With the rising cost of college and the sad state of college savings rates nationwide, here’s another thing to consider: Parents aren’t talking to their kids about who’s going to pay for college.

This statistic came to light in a recent survey of teens and parents (of teens) by Junior Achievement USA and the Allstate Foundation. In it, they found that almost half of teens think their parents are going to help them pay for college. But lo and behold, only 16% of parents report that they’re planning to pay for post-secondary education.

Uh oh.

“That data point was a huge surprise,” says Stephanie Bell, a spokesperson for Junior Achievement USA. “We have done this survey for the last 16 years but this is the first year we’ve surveyed parents in addition to teens. The low percentage of parents who were planning to pay for college was a real ‘Ah ha’ to us.”

It’s certainly not good news that parents aren’t communicating with kids about college costs and who’s going to front them. Even though 84% of teens say they look to their parents for advice on how to manage money, 34% of parents report that their approach to financial matters is to “let kids be kids” and not discuss finances with them.

The problem with that approach is that it doesn’t prepare kids to handle finances at all, and parents miss an opportunity to help their kids learn about money while they’re still in the house. “At the end of their time with you, you want them to be independent, or know how to be independent,” says Patricia Seaman with the National Endowment for Financial Education. “You’d much rather have them make mistakes while they’re still under your wing, while you can still guide them toward better choices. You don’t want them doing that the day they leave home.”

One way to accomplish this: Let teens in on the household budget. When teens are old enough to keep your money numbers in confidence, show them what really goes in and out of your bank account every month. Ron Lieber, author of The Opposite of Spoiled, tells a story of one father who withdrew his monthly salary in $1 bills, dumped it on the dining room table and sorted it out by monthly expenses. You don’t have to go that far, but running the numbers with your children—how much comes in and where it all goes—can make a big impression. “They should know what it actually costs adults to create the life they are enjoying at that moment,” Lieber says.

The good news is that teens aren’t completely oblivious. When asked whether they’d changed their college plans based on rising college costs, 39% said they want to go to a college in their home state to save on tuition, and 29% said they would go to a local community college instead of another college or university, according to the survey.

“So there is some kind of planning going on,” Bell says. “But it doesn’t appear to translate to those specific conversations about who’s going to pay for it.”

“I would encourage parents to start thinking about this as early as the seventh or eighth grade,” Seaman says. That’s because as your kid gets into middle school, you’ll start to get a feel for whether they’re going to stay in state or not, and how they’re shaping up academically and otherwise.

“Are they scholars? Are they athletes? Where are some potential sources of money?” Seaman asks. “By the time they get into ninth or tenth grade both the parents and students should be talking about this.”