Worried about your college student and credit cards? Not sure how to sit your son or daughter down to explain how the cost of college is affecting the family’s overall financial picture?

Well, you’re certainly not alone, which is why The University of Minnesota Parent Program, University of Minnesota Extension Service (which has lots of good financial resources on its site, btw) and the Department of Family Social Science partnered to create an online seminar for parents about college finance. 

“If parents are well informed, they can help their children make thoughtful and responsible decisions when it comes to managing their finances,” said Jodi Dworkin, associate professor and extension specialist in the department of family social science at the U of M. Dworkin co-authored the seminar with Marjorie Savage, director of the University of Minnesota Parent Program, who wrote the book “You’re On Your Own (But I’m Here If You Need Me) Mentoring Your Child During the College Years.”

It’s definitely worth a look if you’d like to learn more about how to communicate with your child about money, are concerned about whether you’ll be able to identify problem gambling or overspending, or you just want to make you’ve covered your bases when having money talks with Junior.

And if you’re a parent with advice to share, comment below.

I wrote a column on this subject a couple of years ago, but I thought I’d revisit it because two new stories came out this week that are worth reading.

One is from my colleague Jackie Crosby, who profiled a young couple drowning in student loan debt.

The next is a story from the Chicago Tribune that suggests factoring in after-college earnings when deciding whether to head to a specific college, or any campus for that matter.

I’m sure you’ve seen the stats about how college grads make a lot more money in their lifetime than workers without a degree, but given the fast-rising cost of higher education, stagnating wages, and a tight credit market that’s making it tough for some to qualify for enough student loans to make it through, it begs the question.

When I recently shared my concerns with my husband about paying for college (we save a whopping $100 per month for our two small kids in a 529 plan), he said that he thinks something will give by the time our kids attend school. Either college inflation will be put in its place or some reforms will be made so middle class families like us will be able to send kids to college without mortgaging the house (c’mon, credit will have eased up by then I figure), making major sacrifices, or sending our kids into the world with six figures in college debt.

If not, he figures we’ll have swung to a point on the pendulum where college has become so expensive that enrollment numbers plummet. That’s hard for me to believe, but who knows?

What do you think? Is college always worth the cost? Anyone’s college plans been affected by the current economy, the credit crunch, or the recent stock market dive?

Some scholars released a report today outlining the changes they’d like to see in the complicated, expensive world of college costs. One of those involved is former MacalesterCollege President Michael McPherson, now president of the Spencer Foundation.
Here’s what the Rethinking Student Aid Study Group report suggests in a nutshell:

Get rid of the FAFSA, the cumbersome federal financial aid form that one must fill out to receive aid and get the information from the IRS instead.

Simplify the Pell Grant so it’s only based only on family size and adjusted gross income. Also, index the Pell Grant to the Consumer Price Index instead of going to Congress for increasees.

Create federally funded savings accounts for kids whose families qualify for the Pell Grant.  Age 12 was mentioned as an affordable date.

Combine the education tax credits into one single credit to eliminate weighing which credit or deduction is most beneficial, and allow the tax credit to cover non-tuition expenses. That way if you get a grant for tuition, you could get a tax break for the cost you paid for room and board.

Eliminate the subsidized loan during school and help students in repayment instead.

Discourage private loans by making money available for parents at low interest rates.

Little data was included in the report about the cost and savings that would result from such measures, but it’s interesting food for thought.

Finally, a study that confirms why I’m not concerned about paying for college:

Daycare now costs more than tuition at a public university in 44 states, including Minnesota, according to the The National Association of Childcare Resource and Referral Agencies. Here’s a study the group conducted on the high cost of child care that pegged MN as second in the nation for least affordable child care (although if quality and cost go hand-in-hand, this is a good thing in a way).

For example, the average cost of full-time preschool care in MN is $8,832. For infants it’s $11,796. So that’s where the mortgage payment for our bigger, nicer home is going.

If you can keep your lifestyle the same as your earnings rise and your kids grow, you can save that day care money, or at least some of it, once the kid enters grade school (assuming you don’t send them to private school or pay a lot for after-care programs).

I’m hoping we can manage to save at least half of our kid’s day care tab each year to pay for a combo of college and retirement.

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As if paying for college isn’t stressful enough. The lack of demand for student loans packaged for investors to buy is driving up the cost of funding for lenders, if they can raise the money to make the loans in the first place. Add that to lenders requiring higher credit scores for alternative loans and the fact that some families who are strapped were hoping to use now-dwindling home equity and collecting the cash for college is becoming an ever the more impossible endeavor.

This isn’t just hitting new students. Today, Student Loan Corp, owned by Citibank, announced it was no longer going to consolidate loans. Behemoth Sallie Mae made the same announcement last week. And that company is no longer paying the 1.5 percent origination fee for students.

Yikes! This is all stuff that higher education reporter Jeff Shelman and I wrote about in our student loan story that ran on the front page Saturday.

The New York Times had a similar story the same day.

How is this affecting you? Is this changing your paying for college strategy? For parents far from college, are you trying to save more now to ensure that your kid can go to school, even if it’s 100 percent financed by you?