If you are the parent of a college-bound freshman, it is important to spend some time thinking about and planning for unexpected costs or for an emergency that might arise. This consideration will take some research and financial planning.
Before the summer begins to close, the parent should speak with his student about their financial responsibilities. A detailed plan that specifies expected costs should be developed. Some of the expected costs are: living expenses, travel, and entertainment.
The next step is to outline who will pay for what. It would be beneficial to set up a separate account for this spending.
The issue of insurance coverage should be looked at i.e.: health, car, renters and technology insurance that covers cell phones and computers. If the student remains on the parents insurance policies, the parent should decide who is responsible for payment. Parents should pay close attention to detail if the child seeks his own plan.
Parents can keep children on their health insurance plan until age 26. Some colleges do offer health insurance plans. If a parent decides to enroll in a college sponsored plan, make certain to compare the parent plan to the college plan.
Some colleges allow students to bring cars to campus while others do not. If a student is bringing a car to campus, the student will need car insurance. Rates can increase if a child is in an accident or if he receives a speeding ticket. Parents should research rates as some companies offer “good student discounts” which grant lower rates.
Credit card companies are notorious for coming to campus and marketing to students. If a parent decides to cosign for the student, he maybe left financially responsible if the student does not make appropriate payments on the card. If a parent does cosign for a credit card, he should establish clear financial responsibilities and expectations.
If the student chooses an off campus housing option and the parents cosign the agreement, the parents could be taking on a financial obligation should there be an issue with payment or damage done. Parents should be knowledgably about their financial responsibilities if this situation arises.
Parents should do their due diligence with regards to what they are continuing to be responsible for while their child is at college. Even though the child is away, there is a great deal of financial responsibility to establish and track. This is a real world learning experience for the new college student and he should earn a degree of independence if financially successful at the end of June.