College readiness: Financial factors to consider as your child navigates high school

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Pondering the future? Remember your financial readiness.

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Your child may impress you with their college readiness, plowing through high school classes and acing the SAT. But as you wrestle with the idea of paying for college, you might wonder about your financial readiness. The good news: Even if you haven’t been able to save enough, it’s not too late to help your student receive a good education without getting crushed by debt.

Although kids go through plenty of hoops building their academic and extracurricular records, parents have their own brand of pre-college anxiety. Much of it, unfortunately, revolves around money, and often depends on decisions you made when your teen was a baby. If you began saving for college early with a 529 savings or prepaid tuition plan, you may be able to pay for at least part of a college education for one or more of your kids.

If you started late, don’t be hard on yourself. Just prepare for a rougher road, including the need to manage expectations—your own and your teen’s. More than half of college graduates finish with at least some debt, averaging about $37,090 as of 2024. Although a little debt can be manageable, it will be a drag on your child’s financial future until it’s paid off.

Don’t wait to talk to your child about the tough choices ahead. The earlier they’re aware of financial limitations, the better. There also are important steps you can take to make college more affordable. But first, the talk.

If you’re worried about college costs, here are some questions to discuss with your child a few years before high school graduation. Once you get the dialogue going, you’ll learn what your child wants and can begin to set expectations in line with your financial reality.

How much does a state college cost? What’s the cost of a community college?

In 2024, tuition averaged $11,300 per year at public four-year colleges and about $41,500 at private nonprofit institutions. But even public colleges in the same state can differ. For example, estimates for in-state yearly tuition at the three University of Illinois campuses for 2024–25 range from roughly $12,000 to $18,000, based on previous year tuition changes. Meanwhile, a solid community college can cost less than $4,000 a year for in-state tuition.

Tuition accounts for most of the cost of attendance (COA) of college, but COA also includes room and board, books, and fees. Down the road, your expected family contribution (EFC) subtracted from the college’s total COA helps determine financial aid.

Also consider distance. Do you need to pad an airline CEO’s bonus? A local college saves money. So does having your child live at home the first year or two, if feasible.

Consider tuition prep your homework assignment, but keep your child informed. Check costs versus what you think you can afford, any college savings, and your household budget.

While you explore tuition and budget, your child can up their financial game.

AP credits. Most colleges and universities provide credit for students who take and excel in high school advanced placement (AP) courses. Your child’s counselor may already have discussed this with you, but if not, make an appointment.

Strong AP test scores can provide advanced placement at some colleges, allowing students to skip introductory courses. That’s free college credit that may also reduce the time it takes to complete a degree.

Community college credits. Some students get ahead by grabbing “dual” credits at a local community college while still in high school.

Creative counseling. You and your child should be best friends with the high school college counselor. A good one can identify the colleges most likely to give your child a discount, including which ones tend to seek students from your specific school or your area.

Although this applies more to smaller colleges than big ones, many competitive schools—state and private—seek diversity in their student bodies. Having a talent, being from a certain part of the country, or participating in the right extracurriculars can bring a generous financial offer.

Yes, getting your child and your finances into college readiness mode isn’t a cakewalk. And it’s not over yet, because once your child starts applying to schools, you’ll have to get ready to cash those 529s, apply for financial aid, and narrow down the choices. The good news is, your high schooler is nearing the homestretch.