Every student-athlete needs to learn how to exercise financial responsibility in college. Have you talked to your child about how to keep their finances on track while in college? Many students blow off financial responsibility during their college years. They don’t see how it is affecting them. They look only at the immediate and it appears they are doing just fine. It is often a facade. On the other hand, practicing financial responsibility in college will prepare your child for a great future.
What does this have to do with athletes and recruiting? Practicing financial responsibility begins during the recruiting process. You’ll continue to make enormous financial decisions for the next four or five years. Finally, your child will be making daily decisions that reflect their overall financial responsibility. Start talking to your child right now so they make good choices when they’re on campus.
Financial responsibility during the recruiting process
The cost of college will be one of the biggest factors to consider as you and your child choose a university. You’ll be weighing athletic scholarships versus over-all cost. Award letters will arrive in the mail, and you need to understand the categories: grants, loans, awards, or scholarships. Understanding the burden of student loans should be knowledge you pass on to your kids. I guarantee most of you will need to have some hard talks with your athlete. As much as your child loves sport, athletics alone cannot be the basis of your decisions.
The single most important choice you can make to set your child up for success is to choose a college you can afford. Forget the dream school – if it’s out of your price range. Is there a program your child would be proud to compete for? Or a coach who’s desperately recruiting your child? However, those good feelings and pride are going to disappear after college if your child is crushed under student loans. Instead, keep looking for other schools, other programs, and other coaches. They’re out there. Find an option you can afford.
Include your child in financial decisions
Also, be sure to include your child in the decision-making process. Your child is on the cusp of adulthood and this is a great opportunity to learn financial responsibility. If you’re worried that every in-and-out of the household budget is too much information for your child, don’t share those numbers. Just tell your child how much money you can contribute toward the cost of college every year and work forward from there.
When our son was choosing a school, his top choice came in ten thousand dollars a year higher than his second choice school. We didn’t have to tell him which school he needed to choose – he could look at the two award letters and immediately knew. And, he’s happy at his second choice school. Seventeen-year-old kids are old enough to understand this stuff!
Watch out for student loans
Today total student loan debt is at an all-time high, over $1.5 trillion in 2020. U.S. student loan debt is higher than credit card debt or auto loans. The news regularly calls this a student loan crisis. Politicians are addressing it. While at the same time students continue to borrow.
Colleges are quick to offer student loans. In an award letter, you’ll see several types of loans mixed in with grants and scholarships. Read the letter and accept each item very carefully. Here are some of the things your child can look forward to if you are not careful:
- Experian reports average student loan debt per borrower is $35,359.
- Careerswiki.com reports 44.5 million people have student loan debt.
- “Nearly 48% of borrowers cannot make a dent in their balance due to interest.” Careerswiki.com
Financial responsibility begins by making wise choices about student loan debt. Your child may need some loans to get through school, but make every effort to make that debt as small as possible. I’ve coached plenty of athletes who used “extra” loan money to buy clothes and go out to eat. Have the tough talk with your child that this loan money is only for tuition, room, and board. Other than that they are a broke college student. These choices affect your child’s financial future.
Financial responsibility means saying “no”
Your child is going to be out on their own for the first time. They’ll have freedom and a whole bunch of new friends. Nobody wants to sit home alone in their dorm room on Friday night.
Talk to your child ahead of time about how much money they’ll have to spend on weekend fun. They might need to be a little radical. They might need to find friends who are doing something else for the weekend. There will be other kids on the lookout for free or cheap fun.
Maybe your child misses out on the Spring Break trip. It’s okay!
Help your child say no to expensive activities and keep their eyes on long term goals!
Positive steps toward financial responsibility
There are many positive choices your child can make in college that will change their financial outlook for the future. Athletes have a more demanding schedule than other students. But athletes are also excellent time managers. They accomplish more than ordinary students. Teach your children to put their heads down and work hard. No excuses!
Tell your kids to:
- Work all summer and over Christmas break. Do whatever it takes. It doesn’t have to be a dream job. Put in the work to find a job. They are out there.
- Consider work-study or part-time jobs near campus, especially in the off-season.
- Athletic scholarships can be a solid part of the financial package. Put in the work necessary to keep your scholarship, even after you have been awarded one.
- Keep your grades up, even in season. It will mean sacrificing free time. First, you will maintain eligibility and keep that athletic scholarship. Second, you won’t risk losing academic scholarships.
- Avoid private loans. Private loans tend to have higher interest rates and usually come with fees and charges.
- Apply for internships related to what you want to do after graduation. If you have a summer or two of experience with companies before you graduate, you will be more likely to get interviews. Employers care more that you can do a job, than that you have a degree. You must separate yourself from all the others just like you.
Financial responsibility prepares your child for life
Your child will have just a few more years of athletic competition. Then, for almost all athletes, their sports career will come to an end.
It is important that both you and your child understand college finances. Pick a school your family can afford. Whatever your child borrows will have to be repaid. Loans are not free money. And be creative to get through school with as little debt as possible. Talk to your kids about making good choices every day.
Use the college years to set your child up for a great life.