Young people need financial knowledge

By Jason Edwards

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This time of year is always exciting for students. Pre-schoolers attending kindergarten round-up, fifth-graders preparing for middle school, eighth-graders excited for the beginning of high school, high school seniors sending graduation open house invitations, or college graduates finding that career or “real job.”

However, for a high school counselor, this time also presents a quandary. With the rising cost of a college education, what information is necessary to provide to students and families on post-secondary options?

Our educational system is expanding from a K-12 focus to a K-college focus. Students are continually reminded that a high school diploma is not enough and everyone should plan on doing additional course work or training after high school. Along with this message is the reality that the average cost of attending a college or university is higher, many students graduating from college are leaving underemployed and deeper in debt, and the world that awaits these graduates looks much different than it used to.

In spite of this somewhat bleak reality, I remain hopeful that education is the key to a better life.

In this optimism, the question still remains: What do students and families need to know in order to make an informed decision about the future?

Now more than ever, young people need to be informed on financial issues. Not just, as my father educated me, that money doesn't grow on trees, but things like what is a federal unsubsidized Stafford Loan versus a subsidized Stafford Loan. What is a Parent Plus loan? What is the difference between a variable and fixed interest rate, how much money do my parents make a year, how much did my parents pay in taxes, and what is my expected family contribution to my college education?

The Net Price Calculator is a tool all colleges and universities must provide to families of undergraduate students. It estimates the cost of attending said college or university, as well as financial aid they may qualify for. It is important to reinforce that these numbers are just an estimation but do allow families to get an idea on just how much it will cost to attend the school of their choice.

Many of the questions for the Net Price Calculator require families to provide information on their financial situations. Students who may be searching on their own, without the assistance of a parent or guardian, must have knowledge of their family's finances in order to complete the questionnaire.

However, many students using this tool do not complete the necessary steps because they lack the necessary information. This fact reinforces that families must educate their children on finances within the home.

There are many resources available to families with specific questions about this process. The Iowa College Access Network, I Have a Plan Iowa, college admissions and financial aid offices, and your high school counseling office all have individuals who are there to assist families with a process that may be intimidating.

Including young people in family conversations about taxes, mortgages, and other bills also provides an opportunity to educate students on factors that will be considered when looking at the price of post-secondary education.

When should this education begin? As early as possible. I have a kindergartener with whom we talk about the importance of being responsible with money. She also is learning that Mommy and Daddy are saving for her to attend college.

And yes, I have occasionally reminded her that money doesn't grow on trees.

Jason Edwards has been a school counselor at Cedar Rapids Jefferson High School for the last three years after working at McKinley Middle School as a school-community liaison. Comments: coachp08@aol.com