3 Mistakes Parents Make When Planning for College


Planning for college is a huge financial decision. There are also many emotional components tied to this endeavor, whether it be the students desire to attend school with your friends, attend their parents’ alma mater, or to be accepted into their dream school (even if this school comes with a significant price tag!). Because of the way many parents approach college planning, sometimes these emotions can dictate our decision, which leads to unwise financial decisions that can negatively impact both the parents and the student. What are some ways to avoid these mistakes in planning for college?

  • Get Pre-Approved for College
    • The typical college search process usually involves the student attending college fairs, taking college visits to schools that match their wish list and desired major, submitting applications and evaluating where to attend based on where the student has been accepted. This process can lead to frustration, for if the student chooses a school with a price tag the parents cannot afford, this involves the parents having to possibly sacrifice their future goals to fund this college choice. Conversely, if the parents have to tell the student they cannot attend the college of their choice, the student will be devastated, and the time spent on evaluating and applying will have been lost. This is why it is best to evaluate how much you are able to afford, which schools are appropriate given the budget, and then make visits and submit applications based on schools that are options. Many parents are surprised to find that sometimes the most expensive schools on paper are actually the most affordable, as they may be able to meet need through the use of grants/scholarships/aid that other ‘less expensive’ schools may not. Each school’s website should have a ‘Net Price Calculator’ which will help determine the net cost to attend. Please use these resources to aid in your college search.


  • Reluctance to Utilize Student Loans
    • Student loans have gotten a bad reputation, and when used incorrectly they can be quite burdensome to your financial future. But when used wisely, they can help a student acquire the skills and knowledge necessary to earn a lifetime income that far exceeds the cost of borrowing, thus creating a high return on investment (ROI). This does require some thought and forecasting, however. For example, if a student wishes to become a teacher, they can reasonably determine what their projected annual salary will be once employed. In Georgia, this is around $40,000 (in 2020). Knowing this, it would not make sense to take out more than your projected first year earnings, or $40,000 in loans (this is maximum). This type of information can help filter out schools which may offer education degrees but will require the student to take out more loans than what is advised. So don’t refuse to utilize student loans (particularly federal student loans as they offer many features such as loan forgiveness, deferment, forbearance, and a multitude of repayment options that are not available with private loans) because of what you may hear or read about in the media. Be wise and understand that higher education is an investment. If your financial situation aids in avoiding having to take out loans altogether, that is amazing! I am not advocating for borrowing if not required, but sometimes if borrowing is necessary to acquire additional skills which increase lifetime earnings, doing so in a prudent manner can be advantageous.


  • Sacrificing Retirement to Pay for College
    • We touched on this briefly in the previous bullets, but as the saying goes “you can always borrow for college, but you can’t borrow for retirement.” Many parents feel the need to fully fund college for their children because they don’t want them to be burdened with debt when they graduate. And while this is a noble gesture, if this threatens to put them in a precarious financial position in the future, which may result in their children having to support them down the road, have they really provided any benefit to the child? Many retirement accounts offer flexibility when it comes to paying for college, but be sure you understand the tax and penalties associated with retirement withdrawals and the effect it will have on your overall plan before moving forward.


Key Takeaways
  • College is a large financial investment, and the search process can be further complicated by the emotional aspects surrounding this decision
  • Help avoid frustration by knowing what schools you can afford and are viable options for your student before beginning college visits
  • Take some time to understand both public and private student loan options and how when used wisely they can be of great benefit toward increasing human capital
  • Don’t sacrifice your own goals to pay for college. This can be a tough choice, but remember, you must put the safety mask on yourself first before helping others!


If planning for college has you feeling overwhelmed, please feel free to reach out to us at  FivePointsPlanning.com we would love to see how we can help.

Andrew Langdon is a fee-only financial planner based in Peachtree City, GA serving clients in the Greater Atlanta area.  FivePoints Financial Planning provides financial planning and investment management services to young families and pre-retirees who are looking to achieve financial freedom.  Services are offered on a project or ongoing basis.

Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Andrew Langdon, and all rights are reserved. Read the full Disclaimer.