How to Talk to Your Child About Student Loans

Grace Lemire
Grace Lemire

Grace Lemire is a freelance writer and editor with over five years of experience in the personal finance industry. She has been featured on a variety of publications, including NPR, CNN, FinanceBuzz, Dollar Geek, Pangea, and True Finance. Her work focuses on the intersection of personal finance and technology. In 2023, Grace was nominated for the Best Personal Finance Advice award in’s FinTok Awards.

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September 8, 2022

Starting the conversation about paying for college isn’t always easy, especially if you anticipate being met with one big eye-roll. While tough to navigate, it’s an important discussion to have.

If you’re not quite sure where to start, here’s a quick guide on how to have the student loan conversation with your child.

Start the Conversation Early

It can be challenging for a teenager to conceptualize just how expensive college can be. So, it may take time for them to fully process and warm up to the idea.

If you can, start the conversation about student loans early. When your child begins to mention college is often an indicator that it’s an appropriate time to start the conversation. However, if you feel as though your child is ready earlier, lean on your own instincts. After all, you know your child best. 

Make sure to ease into the topic, approaching it with empathy and understanding. While you may have gone through the college process before, it looks quite different today than it did in the past.

Cover the Important Topics

To prevent the conversation from becoming muddled with extraneous topics, create a mental list (or a physical one!) of what you want to cover. Here are a few of the most important points you may want to go over:

The Cost of College

The cost of attendance has grown rapidly, nearly 213 percent since 1988 to be exact. Knowing that wages haven’t grown at the same pace, affording college looks quite different today than it did in the past. 

Allow your child to explore real data on the cost of collegeCollegeScorecard is a great place to start. Know that it may be shocking to see such large numbers, so be open to answering questions if your child has any.

The Short-Term and Long-Term Implications of The College You Choose

It’s important to acknowledge that it may be challenging for your child to comprehend just how much some institutions cost. However, there are real implications of such, both in the short-term and the long-term, that they should be aware of.

For example, attending a more expensive institution may require your child to work a part-time job while in school or attend school part-time to afford tuition. If your child isn’t willing to do so, it may be better to explore a more affordable option.

While optimism about post-graduate employment is valuable, it’s important to be realistic about it as well. Before exploring college options, encourage your child to research the expected entry-level salary for the field they intend to pursue. While attending their dream school may sound affordable, comparing their future monthly income to their monthly student loan payment may say otherwise. Getting real about what their future income may look like can help your child make more educated decisions about the financial aid options they choose to pursue —and especially the student loans they borrow.

How Much You Can Contribute

If you plan to contribute toward your child’s education, be upfront and honest about how much you’re able to provide and on what timeline. For example, if you anticipate contributing $5,000 out-of-pocket per year, given in two $2,500 chunks, let your child know. This will provide them with a better understanding of how much they’ll need to obtain in scholarships, grants, and student loans.

Financing Options

83.8% of first-year undergraduate students receive some form of financial aid. So, it’s important that your child understands what each type of financial aid means.

Students should always accept aid in the following order: Scholarships and grants (free money) → Work-study (earned money) → Loans (borrowed money)

While some forms of aid, like student loans, can be explored close to the institution’s enrollment deadline, others will need to be pursued proactively. For example, many scholarship deadlines are well before the academic year.

Make sure your child understands the options available, so they can be proactive about submitting any necessary financial aid applications.

How Student Loans Work

A student loan will likely be the first loan your child borrows. It might even be the first line of credit they open. So, it may be challenging to understand how student loans work.

Ensure your child understands the difference between federal and private student loans. Then, break down the process of borrowing a loan and what paying it back may look like. Discuss topics such as:

  • Why interest rates matter
  • How interest may accrue while your child is in school
  • What repayment may look like
    • How much their monthly payment may be
    • What different repayment plans are available to them
    • How long it may take to repay

This is a good time to utilize a student loan calculator to demonstrate how different loan amounts and interest rates will impact how much your child pays for their education over time.

Make it an Ongoing Conversation

The entire college process is overwhelming. Between campus tours, applications, taking the SAT/ACT, and paying for it, there’s a lot for your child to absorb. So, rather than squishing everything into one conversation, make it an ongoing discussion.

There’s a good chance your child will have questions, but they might not come up all at once. Let your child know that you’re there to answer any questions they may have, at any time.

However, know that you don’t have to have all the answers. It’s perfectly okay to say, “You know, I’m not sure what the answer to that question is. Why don’t we look into it together?” Being honest about what you do and don’t understand can create a comfortable environment where your child feels open to learning about the process with you.

Final Thoughts from the Nest

Talking to your child about how to pay for college can be challenging to navigate –especially when it comes to the student loan side of things. However, starting the conversation early and covering a wide range of topics can help make it easier.

When it comes time to begin the student loan process, know that Sparrow has your back. Our one-stop application allows you to compare private student loan offers from 15+ lenders at one time.

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