Here’s a little-known fact: There’s no law that says you have to pay for college using student loans. In fact, I encouraged everyone I came in contact with during their college tours to get as creative as possible as they carefully mapped out how to pay for college.
As interest rates drop, it’s natural to think that there may be other options to pay for college. Only one percent of parents used a home equity loan to pay for college, according to a 2015 Sallie Mae study called How America Pays for College.
But what if you did tap into your home equity to pay for college? It’s worth exploring! However, also know that it might not be the right fit for you at all. Let’s explore your options.
What is Home Equity?
The words “home equity” sound complicated, but it’s actually really simple — home equity refers to the amount of your home that you actually own. As you make payments on your mortgage, you reduce your principal, the amount you owe on your loan. As you do that, you build your home equity. You only own the percentage of your home that you’ve paid off. Your mortgage lender owns the portion of your home until you pay off your loan.
See, simple! Are you with me? Here’s an example:
Let’s say you bought your house for $100,000 with a 20% down payment of $20,000. You automatically get $20,000 in equity on closing day. Every mortgage payment helps you build more and more equity, as long as your home value doesn’t drop.
What happens when you’ve fully paid off your mortgage? That’s right — you’ve got 100 percent equity in your home, and that’s a beautiful thing.
How Do You Determine Your Home Equity?
Don’t know how much equity you have? That’s okay. I didn’t really know how much equity we had in our home, either, till we refinanced. The mortgage payment was one thing around my house that actually took care of itself — unlike our kids, garden and landscaping. We had it set up on autopay and it truly didn’t need a lot of attention. (I know, not the best approach. It’s always good to know exactly what your home equity is at any given time.)
Here’s how to figure out your home equity:
Log in to your lender’s website or call your lender to determine how much you owe.
Figure out how much your home is worth. Subtract your loan balance from your estimated home value. For example, let’s imagine you owe $100,000 on your home and you believe your home is worth $200,000. Subtract $100,000 from $200,000. This means you have an estimated $100,000 in equity in your home.
Keep making your monthly payments if you want to continue to build your home equity. Simple, huh?
Types of Home Equity Loans and Lines of Credit
Resist hitting the snooze button here. Let’s very briefly go over a few points on home equity loans, cash-out refinances and home equity lines of credit (HELOC).
Home Equity Loan
A home equity loan is exactly the same thing as taking out a second mortgage. You repay the loan with equal monthly payments over a fixed time period (just like you did with your original mortgage) and you receive the money as a lump sum amount. Your home is used as collateral to protect your lender in case you’re unable to pay back the money you owe and you default on your loan.
The amount you can borrow usually depends on your lender, but is usually limited to 85 percent of the equity in your home. The actual amount you’ll be able to get also depends on your income, debt-to-income ratio, credit history and the market value of your home.
Cash-Out Refinance
A cash-out refinance is different from a home equity loan. To put it simply, you borrow more than you owe on your mortgage and pocket the difference.
When you get a second mortgage, you add another payment to your list of payments every month. A cash-out refinance is different — you pay off your old mortgage and replace it with your new mortgage.
Here’s how it works. Imagine your home is worth $150,000 and you’ve paid off $50,000. This means you still owe $100,000 on your home. Let’s also say that you want to use $10,000 to pay for college.
A cash-out refinance lets you take a portion of your equity and add that $10,000 to your new mortgage principal. In other words, your new mortgage would be worth $110,000 — the $100,000 you still owe plus the amount you want to borrow for college. You’ll get the $10,000 a few days after you close on your new refinance.
Home Equity Line of Credit (HELOC)
A HELOC is a second mortgage just like a home equity loan. However, you don’t get your money in a lump sum like you do with a home equity loan. Instead, think of a HELOC more like a credit card. HELOCs allow you to draw from your predetermined loan amount as you need it.
You can draw from your HELOC between five and ten years and just need to pay interest on the money you take out. Let’s say you have $50,000 equity in your home. You can take out money as you need it for college during the draw period and will only pay interest on the money as you take it out.
When do you pay off the loan principal? Not until the end of your draw period. The repayment period usually lasts 10 to 20 years and you pay both interest and principal on the amount you borrow.
Another difference between HELOCs and home equity loans is that the rate is adjustable over time, which means it changes over time depending on the prevailing interest rate.
Mouse Traps
Ha ha, do you like that section header? I named it that because we currently have a mouse in our van and even worse, my husband can’t find it. I am driving a van that has a mouse currently living in it. I bet it has babies. I bet it has a whole brood of baby mice.
It’s horrifying. I keep expecting a mouse to jump onto my lap as I’m traveling 55 miles per hour down the highway. I’ll be holding a mug of tea, my mug will fly out of my hands and I’ll wrench the steering wheel in horror and crash into the ditch, sending the mouse and everyone in the car flying through the air with second-degree tea burns.
Anyway, I digress.
Cons of Tapping Home Equity to Pay for College
Even if a home equity loan offers a lower interest rate than private loans or even federal loans, a low interest rate isn’t the only reason to go after a home equity loan. Here are some major downsides to using a home equity loan to pay for college:
Your home is used as collateral. What happens if you can’t pay back the loan? Your house can be whisked away by the bank — just for a college education. That’s a pretty big risk.
Home equity loans don’t offer much flexibility. Federal student loans offer forbearance and deferment options. In other words, your student may be able to temporarily stop making loan payments. (The main difference between the two is if that deferment means no interest will accrue on your child’s loan balance. Forbearance means interest does accrue on your child’s loan balance.) In some cases, federal student loans can be completely forgiven — your child doesn’t have to pay them back at all.
Interest rates might not be lower. Compare student loan interest rates to home equity loan interest rates. Which ones are higher?
Pros of Using Home Equity to Pay for College
Ease. As long as your credit score and debt-to-income ratio is good, tapping into your home equity is fairly easy to do. Note: It usually takes 30 to 45 days to get a home equity loan, HELOC or cash-out refinance, though that depends on the lender.
Tax benefits. Interest is tax deductible on home equity loans, HELOCs or cash-out refinances.
Interest rates might be lower. They might be lower than private student loans. However, it’s worth looking into if a private student loan carries a 5.25 percent interest rate and you can get a home equity loan with a five percent interest rate. Even a quarter of a percentage can make a difference.
Other Things to Consider
Having a lot of equity in your home isn’t a guarantee that you’ll get a home equity loan, cash-out refinance or HELOC. You still need a decent debt-to-income ratio and credit score to be able to tap into your home equity and you’ll also need to get a home appraisal. I’ll briefly chat about debt-to-income ratio and credit score and how that can impact your ability to tap into your home’s equity.
Your Debt-to-Income Ratio
Lenders use something called your debt-to-income (DTI) ratio to determine how your monthly debt payments compare to your monthly income. Your DTI should be around 43 percent. You can calculate it yourself:
DTI = Total Monthly Debt Payments / Gross Monthly Income
Add up all of your monthly debt payments, including your primary mortgage, student loans, car loan, credit card bills, alimony, child support, etc.
Divide the sum by your gross monthly income (your income before taxes and deductions).
Multiply by 100 to find your DTI.
Here’s an example. Imagine all your debts total $2,000 and you earn $5,000 a month before taxes, your DTI would be 40 percent.
Your Credit Score
Lenders will also be interested in learning more about your credit score. Simply put, if you want to obtain a home equity loan, your credit score should be 620 or higher. However, if other qualifications (like your DTI) are higher, a credit score a little lower than this might be overlooked. However, the higher your credit score, the lower your interest rate will be.
Next Steps
Reach out to various lenders to determine whether one of these options are right for you. Ask about:
Closing costs
Annual fees
Home appraisal expenses
Taxes
How long it will take to pay off your loan
Length of time to get a home equity loan, home equity line of credit (HELOC) or cash-out refinance
Private student loan options
The total cost you’ll need to repay
You don’t need to stick to the same lender that provided your primary mortgage. Reach out to other lenders (challenge yourself to look into five!) because others might offer better interest rates and terms.
Determine Whether to Tap into Home Equity for College
I tell everyone who will listen that I recently refinanced my home. The interest rate I got was so low I couldn’t believe it — I didn’t think interest rates could possibly get lower than 4.25 percent — our original interest rate. Now I’m the proud owner of a 2.25 percent interest rate mortgage!
So. Here’s the problem. You might start snoring hard every time you hear the words “home equity.” But don’t! It’s easy to plod along, which is what my husband and I were doing until I heard a podcast host say, “You need to look into refinancing. It could change your life.”
I stopped, mid-plod. “Whaaaaa???”
Now, a refinance is different from a home equity loan. But the point is, it’s easy to get complacent and not look into all your options. If I hadn’t listened to that podcast, we’d still be stuck with an interest rate that wasn’t right for us.
Do some careful searching to make sure that tapping into your home’s equity is the right way to go. Sure, interest rates might be lower than private student loans, but remember, your home is on the line.
“My child’s going to be a … freshman/sophomore/junior/senior/eighth grader!”
Has this realization hit home multiple times this summer?
Does it feel like life is going at warp speed? If so, I hear ya. I mean, wasn’t it just May? Uh, and wasn’t kindergarten a week ago?
Now that the start of the school year’s almost upon you (are you as nervous as me?), you may be faced with an unsettling feeling that has nothing to do with germs.
Your internal voice may be saying something like this: I haven’t saved much (if anything) for college.
You’re not the one with a block of ice in your stomach. After all, there’s nothing like the start of school to make this paralyzing realization hit hard.
It’s okay. You can still save for college, even if your child’s going to be a senior. It’s never, ever too late. Here are your options for college savings strategies — and keep reading for a quick win!
Why Save for College?
It might be hard to gather the excitement and momentum to save for college if you haven’t been doing it since your child was a baby. You miss out on compounding interest over time when you haven’t saved for years. (Compounding interest is additional interest added to the principal sum of your initial investment. In other words, it means interest on interest.)
But remember, 18 years is actually a relatively short amount of time compared to 30, 40 or more years — a lifetime of working and saving for retirement.
Something is better than nothing at all!
Here are some great reasons to save for college, even if it’s only a year away:
It’s a great idea to get in the habit of pretending like you’re making installment payments toward college. Do you know that your regular earnings have great power and potential? In other words, you can do a lot to contribute for college with your regular paycheck. An installment plan is a monthly payment plan that helps you pay for college, typically during an eight, nine or 10-month period. Saving for college before you make installment payments prepares or when you actually need to start making payments.
You may be able to amass a nice chunk of change. Like your parents always told you, it’s amazing to see what you can do when you set your mind to something. Start with a goal in mind and watch it blossom into a tangible amount of money. It’s amazing how much power a little idea generates!
Family members might be able to chip in. Many 529 plans make it easy for family and even friends to contribute. Sometimes, it’s just a matter of giving friends and family a link and a code to your child’s 529 account. (We’ll cover 529 plans in a sec.) The dollars can really start rolling in when you tell your child’s grandparents, aunts, uncles, godparents, church family — who else can you add to the list? Make it a policy that now that your child’s in high school or approaching high school, clothes and video games are not acceptable birthday or holiday gifts. Ask for money instead.
You might have already saved more money than you think. Did you know that you can use money from your Roth IRA tax-free to make payments for college? And you can use money already collecting dust in your savings account for college. It’s a matter of reframing your intentions and building even more momentum so you can save even more. But don’t stop saving, even if you realize you’ve got more in the hopper than you realized.
It’ll help your child take out fewer student loans. The more you pay out of pocket, the fewer loans you’ll need to cosign or that your child will need to take out. That’s a pretty good reason all by itself!
Now, onto my super secret quick win!
1. Here’s the Quick Win!
Here’s how to get a quick, quick, quick win. Will you promise you’ll do it with me? Okay, great!
UNest is awesome because it literally is so easy. You don’t have to fill out mounds of paperwork. You can choose investments based on your child’s age, add your bank account and you’re done. It takes minutes.
Friends, it’s literally that easy to set up a 529 plan.
Okay, so I can hear the rebuttals now: But what if I don’t want to use a 529 plan for my kids? What if I want something with more flexibility? I’m scared. I don’t like to make decisions like this.
Taking action is the antidote to fear and inaction. I know how easy it is to put something off because you’re scared of the unknown. Open that account anyway, and here are the next steps you can take.
2. Determine how much you can save per month.
Saving is a delicate balance of filling all the buckets, isn’t it? You’ve got the grocery bucket, mortgage bucket, car payment bucket, and on and on. Now that you have the college bucket, how much can you put in it?
Sometimes it’s easier to start small and work your way up. Don’t pledge right off the bat to save for every penny. (Remember, your child may get scholarships.) Sometimes those unattainable goals or seemingly impossible goals make us quit before we’ve even started.) Don’t do that to yourself. Make sure it’s attainable!
Also, only take into account reliable income when setting your goal. If you need to adjust your goal, that’s okay, as long as it’s realistic.
Here’s a common tripping-up point: How much should you save? Save as much as you possibly can! Your goal of saving for your child’s education is an admirable one.
3. Write it down!
Why is it that we’re more apt to scrape and pinch and divert money from one source to pay a bill but we don’t do the same to pay ourselves first?
For example, in my own life, we just paid our taxes (at the very last minute) but I made sure we had enough money in our checking account over the last couple of weeks to make it happen. What if I applied that same kind of care to making sure I saved extra throughout the year?
Pretend like saving for college is another obligation — and write down your goals! There’s so much power in writing it down. It can look something like this:
“I plan to save $1,000 every month for my child’s college education. I will not stop until I have $24,000 in an account.”
Writing down a goal helps you:
Reduce the possibility of failure. Specific goals — written down! — mean you’re more likely to achieve them because you have a constant reminder of what you’re working toward.
Focuses you: Life is crazy most days, right? Goals help you be more strategic because you can zoom in on what you want to achieve.
Measure your success: It’s easier to determine whether you’ve had success when you have goals you’ve started with. Nothing feels better than seeing how far you’ve come compared to where you started!
Keeps you motivated: You build momentum when you’re hitting your goals and feel like there’s nothing you can’t do. Think about the last time you worked really hard for something! How did you feel? Chase that feeling by setting goals and achieving them!
4. Choose the right college savings strategies for you.
You can find literally hundreds of investment options available to you, from state-sponsored 529 plans to regular savings accounts. Unfortunately, that’s part of the problem. The part that trips people up the most is not knowing where to put their money.
529 Plans
Wondering why the heck you’d open a 529 plan if it’s not going to gather much interest in just one or two years? Here’s a great reason: Opening up a 529 in one child’s name doesn’t mean that money needs to go to only that child. 529s can be transferred to your other children — or anyone else, like your niece or nephew.
You’ll be able to find two different types of 529 plans: prepaid tuition plans and education savings plans.
Prepaid tuition plans are plans in which you can pay in advance for all or part of the costs of attending a particular college. In other words, you can avoid future tuition jumps.
Education savings plans are a tax-advantaged savings account designed to be used for education expenses. You won’t pay income taxes on earnings as long as money stays in the account. When you pay for qualified education expenses (tuition, room, board, fees, books, etc.), those withdrawals may be federal income and state tax-free.
Pros:
All 50 states and the District of Columbia sponsor at least one type of 529 plan. Look into your state’s 529 plans for more information and to sign up or go to the handy UNest app for an even simpler experience.
The tax advantages are excellent!
Cons:
Funds must be used for qualified educational expenses.
You’ll pay fees for each type of plan.
You’ll also encounter some ownership rules. You (not your child!) gets to make decisions about how the money is used.
Roth IRAs
Just like with a 529 plan, you won’t pay income tax when you contribute to a Roth IRA. Your contributions and earnings grow tax-free. You can withdraw contributions at any time, for any reason, tax-free.
The annual contribution limit for 2020 is $6,000, or $7,000 if you’re 50 or older.
Pros:
The beauty of using a Roth IRA is that it has a dual purpose — you can save for retirement and college.
Cons:
Taking out too much from your Roth IRA could hurt your future retirement goals.
Contribution amounts are limited to annual maximums. You’ll also face income restrictions.
Coverdell Education Savings Accounts
A Coverdell education savings account (Coverdell ESA) is a trust or custodial account you can set up to pay qualified education expenses for your child. ESAs offer tax-free qualified withdrawals and contributions are limited to $2,000 per year and there are income limitations too.
Coverdell accounts can cover educational expenses from kindergarten all the way through grad school.
Pros:
Offers a wide variety of available investments and tax-free growth.
Offers more flexibility than 529 plans.
Cons:
The beneficiary changes are not as straightforward as with a 529 account and can vary by custodian (the financial firm hosting the account).
Growth potential isn’t as great.
All assets must be distributed to the beneficiary by age 30.
Other Investment Types
I’m going to list a few other types of investments you may want to look into:
Also, remember that there are no rules here. You can combine strategies — you can use a 529 plan and a Roth, CDs and ETFs.
Make Sure Your Goals are Achievable — You Can Do This!
Post a sticky note with your kiddo’s last school picture on it. Scribble “1,000 for college” on the note. Knowing your “why” will help you stay motivated in months that feel like a major challenge.
It’s not too late, and you can do this. Set that goal, attack it and keep moving forward. You can do it!
It’s July, and while it might seem like it’s a great time to catch up on Netflix, go to the pool and work at a summer job, why not get a jump start on college?
(I knoooow, convincing your high schooler might be a different story.) It’s even more important to start thinking about college now because we don’t know what college visits will look like for next year. Lots of colleges have closed up shop but many are still open for visitors. Take a quick peek at the list of schools open and closed to visitors from the National Association for College Admission Counseling (NACAC).
I reached out to a mom friend of mine who has a rising junior and asked her what her concerns are right now. She said, “Coronavirus has changed things. What should we do right now to get ready for college? It’s a little frustrating.”
I hear ya.
Here’s a quick list of items your child can consider doing (after lounging by the pool and taking lots of sips of fizzy lemonade, of course):
Get ready for the PSAT test and ACT or SAT tests (if required)
Start doing college visits (either in-person or virtual visits)
Consider the activities on that resume — and whether there are gaps
Put together a robust schedule of classes
Start a college list
Develop relationships with admission counselors
Now, one of the most important things you can do during this time as a parent is to make the college search exciting. The last thing you want to do is scare your child off before this process even begins!
Here’s how to help your child launch the college search this summer, even though things might not be (totally) normal.
Get Ready for the PSAT, ACT or SAT Tests
You can find some great test prep resources for PSAT, SAT and ACT. Check out Amazon or your local bookstore. You can even check out the local library for these editions, though your child won’t be able to write in anything from the library, of course!
First, let’s define PSAT, ACT and SAT — it’s easy to confuse PSAT and SAT in particular.
PSAT: The PSAT’s formal name is the Preliminary SAT, also known as the PSAT/NMSQT (National Merit Scholarship Qualifying Test). It’s a great way to practice for the SAT exam. You can only take the PSAT once per year, and many students take the test in 10th and 11th grade.
ACT: The ACT is a standardized test used for college admission administered by the nonprofit organization, ACT. The ACT test covers four separate academic sections: English, mathematics, reading and science reasoning. Your child can also add an optional writing test. The 2020-2021 ACT costs $55 without writing and $70 with writing.
SAT: The SAT is a standardized test also used for college admission. It’s administered by the nonprofit organization The College Board. The SAT test covers 20 SAT Subject Tests in five general subject areas: English, history, languages, mathematics and science with an optional essay portion. The current SAT costs $52 without writing and $68 with the essay option.
Before your child cracks open some study books, check with the colleges your high schooler plans to apply to. Find out whether the college requires the ACT or SAT. Lots of colleges have waived the SAT and ACT for this year’s incoming class — and many are doing away with standardized testing altogether.
That doesn’t mean throwing test prep out the window or sidestepping a school that still requires it. It might be important to take it, particularly if a school shows up on your child’s radar this year or next and that requires the ACT or SAT.
Make a College Spreadsheet
I developed a very simple, easy-to-use College Money Tips College Visit spreadsheet. You can use this spreadsheet to keep track of the schools your child wants to visit on the left, and as you get knee-deep into visits later on this fall, use it to record things like application deadlines and more.
I believe one of the most important parts of the spreadsheet is the Heart/Gut Test. The former college president at my alma mater coined the Heart/Gut Test to talk to families during visit days and scholarship weekends. Sometimes you just know whether a college is a good match — parents usually feel it, too. There’s a section in the spreadsheet that references how a college felt. You can use this spreadsheet yourself or share it with your student.
Get the spreadsheet below — you’ll also get my free college money tips guide!
Complete Virtual or In-Person Visits
Visiting. Hmmm… It’s a bit of a head-scratcher right now, isn’t it? I understand — virtual summer visits aren’t really ideal. But guess what? There were already several disadvantages about summer visits, anyway. Truth be told, nothing beats a college visit during the fall. Crunching through leaves, watching students hurry to classes — it’s simply the best atmosphere.
Here’s one example of why I believe summer visits aren’t the best: You typically only see staged residence hall rooms. In fact, I was the one in charge of that when I worked in admission! I’d send two or three summer student workers to three of our residence halls to stage rooms using donated items from Bed, Bath and Beyond! It was tons of fun to decorate the rooms but the staged room always seemed… fake and empty, not homey. Here are some other reasons summer visits are less than ideal:
Fewer students live on campus during the summer, so you don’t get the “real” feel of what a college is like.
Tour guides are usually the only students you can really interact with.
Normally, fewer classes are in session anyway, so you’d have limited opportunities to sit in on classes.
Many buildings remain closed to tours.
Professors and department chairs are not around to chat with during the summer.
So, my point is, if you have to do a virtual visit right now, sure, you’re at a disadvantage because you can’t see the campus in person — but summer visits were disadvantageous anyway.
Now, if you have the chance to set up a visit for your child, should you do it? Of course! And if you want to do a virtual visit, here are the perks of virtual visits right now:
You’ll get to see what every part of the campus looks like, even areas closed down during the summer, like the dining hall.
You don’t have to worry about finding a parking spot, fighting traffic and driving or flying to get there. You can watch from anywhere!
It’s less nerve-wracking. If I had a dime for every nervous parent and student that used to walk into the admission office…
You don’t have to worry about the weather. (There’s nothing worse than visiting a campus in the pouring rain or driving sleet or snow!)
Hear me say this: If you have the chance to do an in-person visit this summer, do it. We don’t know what the fall will look like, and being in person on a college visit is better than not doing a college visit at all. Sometimes you just have to take what you can get.
Call the admission office at schools your child is interested in. Ask about:
Tours
Talking with an admission counselor
Scheduling a meeting with a coach
Communicating with a professor about a major — take a look at this great college major quiz before you go!
The nice thing about being a rising junior is that your student still has time. Do what you can now and know that there’s still another year ahead to go on visits.
Learn More About College Requirements and Scholarships
It’s never too early to start searching for scholarships and helping your child learn everything you possibly can about colleges.
There’s no reason your child can’t start applying for scholarships. It’s a myth that seniors are the only ones who can submit scholarship applications. Research a scholarship that’s promising and have your child apply. Why not?
Summer is a great time to learn more about colleges! High school juniors have a busy upcoming year — lots of extracurricular activities, tough classes, standardized tests and more. Help your student learn as much as possible right now.
Talk About College Money
Talking about money might not be your favorite subject. Your kiddo may not be interested in talking about it at all.
The conversation doesn’t have to last for hours! Grab a quick snippet of time to chat about:
College costs in general
How much money you think you might be able to contribute toward college costs
How much your child must contribute to college costs
An explanation of loans and how they work
How scholarships and grants help offset the cost of college and why it’s important to make them a priority
Those are just a few topics that can jumpstart your conversation. Make sure to have the whole family involved — and leave plenty of time for more conversations later on.
It’s okay to hit the pause button if your child doesn’t want to talk. You still have time to have lots of conversations!
Make it Fun, Make it Exciting
It might seem like there’s lots to do! Now’s the time to get started. Don’t forget to make it fun! Include rewards whenever possible. Go out to eat at a restaurant of your child’s choice after your child completes a really gnarly scholarship application or treat your daughter to Starbucks — and have the money talk there.
How will you get some heavy research out of the way together so the upcoming year is smooth sailing for you and your rising junior?
Joan Halawi said, “A common misconception in modern American society is that education can only happen within four walls of a classroom.”
Oh, wow. How true is that? It certainly makes the case for heavily considering a gap year.
A gap year — a year off from college to gain perspective and develop occupational skills — is a great option if your child needs an extra year of growth. Taking a gap year is popular in Europe. I remember asking, “Gap year? What’s that?” when I studied in England and heard that almost all people take one. I literally had no idea what it meant.
A gap year can be a great opportunity for your child to slow down and consider what he or she wants out of life (don’t we all need that?!). Your child may want to work (and save money for college), tap into rich experiences, grow more introspective and/or develop new skills.
Here are a couple of examples:
Katie is nervous about going off to college. She’s also always wanted to spend time composing and developing her piano skills. She really wants to continue lessons with her current teacher.
Jake, on the other hand, isn’t sure what he wants his major to be. He hasn’t applied for college yet and he’s going to take a year to “find himself” and determine what he wants his future to look like. In the meantime, he’s going to work at his dad’s accounting firm to decide whether he’s interested in taking over the business someday (though he’s really doubtful). He’s also going to hike and do some backcountry camping in Alaska next summer with a friend (his ultimate passion!).
A deferral is when a student decides to delay his or her start date by a semester or two. It’s different from a gap year, which is a full-year deferral and often involves enrichment, fellowship or other such program.
Here’s how to help your child take a gap year or deferral — successfully.
1. Help your child understand what he or she will do during gap year.
First of all, why does your child want to take a gap year? A gap year or deferral should involve accomplishing specific tasks or doing something with purpose.
There are lots of ways to use a gap year or deferral. Is there something your child wants to study on his own? Does she want to start a new venture? Get some work hours under her belt so she has more money for college? Here’s a great list of things your student can do during a gap year or deferral:
Attack a project that’s been sitting on the backburner (restore a Model T, write a book, etc.)
Write, compose, practice whatever skills your child wants to tackle
Learn new problem-solving skills
Travel
Complete an experiential learning program/hands-on learning program
Do an internship
Volunteer
Do a mission trip (or several)
Needless to say, it’s important to make it clear to your child that taking a gap year isn’t an excuse to sit around playing video games for a year.
Explore those deeper reasons for wanting to take a gap year together, because any college is going to want to hear why your child’s planning to do a gap year or plans to defer enrollment. Your child is going to need to have a very focused, careful answer.
2. Explain how a gap year might be challenging.
It’s important to convey to your child that since most other kids your child’s age aren’t taking a gap year (at least, in the U.S.) he or she might feel like a fish out of water. How will your child feel when his friends are going off to college? How will your child feel when high school friends are posting about fun times at their respective schools and he’s tinkering with science experiments in the basement or working the late shift at the grocery store?
If he’s got entrepreneurial ambitions, how will he feel if his business isn’t going as well as he thought it would? (Protecting that young confidence can be important.)
A gap year might not be the shiny offering that your child thought it was — and it’s important to share with your child that it might be difficult. Adapting to change might be a great thing to talk about prior to this major decision.
However, it could be the best thing ever. Sometimes change can be monumental!
There’s evidence that a gap year has specific reported outcomes. A gap year, and in some cases, deferred enrollment, can:
Boost a resume. Who can deny how an internship as a page at the Capitol or implementing a program for the homeless can look amazing on the ol’ resume?
Lead to increased job satisfaction. A gap year with real-world experience can clue your child into what he wants to do for the rest of his life (or even what he doesn’t want to do). Our college president always used to tell students at visit days that an internship where you learn exactly what you don’t want to do is just as valuable as an internship that you love.
Increase confidence and maturity. Learning how to get along in the world at a young age can make your child feel like he’s got the world at his feet.
Allow time for personal reflection and growth.
Help develop communication skills.
Increase a student’s desire to learn about various people and cultures.
However, the experience might not end up getting your child all of those things, and that’s okay. It might just be meh — but it might still be a good learning experience.
3. Get admitted, then defer enrollment.
Where is your student in the search process? As a rising senior, your child may be planning to take a gap year after this year.
It’s a great idea to work to get admitted to college starting now. Determine when a college’s applications are due, whether standardized tests are needed and more.
How to Communicate to Admission Offices About Gap Year or Deferred Enrollment
Your child will need to make a good case for a gap year decision. A gap year or deferred enrollment won’t hurt your child’s admission prospects at all as long as your child thinks carefully about how the experience will intentionally help him grow. Here are the steps your child will need to take:
Make sure your student applies to college before the gap year.
Get accepted at that college.
Next, your child will need to send an email or letter to the director of admission at that college to explain exactly what he or she plans to do during gap year. Check out the Gap Year Association for college and university policies concerning gap years. Double-check for the most updated policies at your child’s school.
Submit the enrollment deposit. This amount will be different at every school.
Determine the effects deferral will have on your child’s financial aid or scholarships. Every school is different! Many schools will allow you to keep the same financial aid and scholarships but it could change year to year. Check with the admission office at your child’s school.
Have your child find out whether the institution offers some form of gap year fellowship or subsidy program. Yep, it’s possible to get funded for a gap year!
Note that the school has the right to deny your gap year. If that happens, your child has a few options:
Your child can decide to attend the college as scheduled and not take the gap year.
Your student could wait and reapply to college until after the gap year. The downside is that your child may not be able to start college for another two years, which could end up making the transition a bit more difficult. Transcripts, test scores and letters of recommendation may also be more difficult to come by.
It may make sense to apply to multiple colleges and ask about gap year policies at each one.
The process for deferring enrollment is largely the same. Just make sure you ask careful questions about deferment policies at each school where your child has applied.
4. Set targets way before (and during) gap year.
Stephen Kellogg said it best: “The moment you put a deadline on a dream, it becomes a goal.”
Wouldn’t it be fantastic if your child started to launch those dreams during gap year? Why not now?
You know a year dedicated to watching Netflix won’t help your student, so it’s time to put some specific goals in writing organized by target date. For example, let’s say your daughter wants to take a stab at freelance writing during a deferment. She may want to consult with a freelance writer and map out the year in a nutshell:
September: Talk to three freelance writers about their craft. Learn to write a good pitch and send five pitches per day.
October: Create a website and social media channels for advertising freelance skills. Pitch to marketing agencies.
November: Write successful stories based on pitch results. Continue to pitch.
… and so on. Whatever those goals may be, make sure your child writes them down and has someone who will hold her accountable to those goals. Maybe it’s you and maybe it’s better if it’s someone else.
5. Make sure certain skills aren’t lost.
Your child may be planning to be a math major in college, but what happens if she isn’t taking math classes during gap year? Those calculus skills could slip right through your kid’s fingertips. It’s a great idea to add a benchmark to keep with those skills in some way.
However, know that your student may not be able to take classes, enroll in a degree-granting program at another institution or apply to other colleges during gap year or deferment. Your child could lose his spot in the class if he does. Ask about institutional policies concerning gap year or deferment.
Is it Too Late to Ask for a Gap Year for this Fall?
The only thing you can do is ask. In some cases, the door’s still wide open!
Whether your child has ambitious dreams to transform the world or just wants to earn some money before she spends four years in a lecture hall, being out in the real world can be a transformational experience.
Heavily consider pros and cons, goals and what your student wants to achieve prior to opting for a gap year or deferment. Make sure your child will head off to college after a year. The worst thing that could happen is that your child decides never to go at all.
Here’s something I witnessed in the admission office many, many times: Parents playing an active role in the college search. It’s natural, right? We worked with families, not just students.
What happens when the student wants you to do it all? I saw a lot of this:
Parents who called me in the admission office (not their student).
Emails from parents with questions (I never heard from their kid).
Parents who filled out applications for their kids (it was sometimes obvious!)
Now, to be fair, students sometimes messaged me. The occasional student even talked to me on the phone.
One mom, Mrs. Bach, left me this voicemail: “This is Mrs. Bach, Emily’s secretary. Emily refuses to pick up the phone, so I’m calling to ask questions about your college’s music scholarship.”
It made me smile, but I also know Mrs. Bach was slowly being driven crazy by her daughter’s reluctance to handle her own college communication.
What should you do when your kid wants you to be a helicopter parent? (Maybe not even consciously?) I know you’ve probably heard this term before, but just in case: Helicopter parents before college hover and take care of every part of their child’s life. On the other hand, lawnmower parents mow down any person or obstacle that stands in the way of anyone or anything that causes their child discomfort or frustration.
Here are a few tips to set expectations, goals and work together. You may want your child to do most of the work but you may also know there are things (like the FAFSA) that may require you to lend a hand.
1. Set Clear Expectations Up Front
Make sure your child knows your comfort level with helping in advance. For example, you can tell your high schooler you’re definitely on board to assist during the college search process but you’re not going to do everything for him. Explain your reasoning and explain your limits way before the college search begins.
Remind your high schooler that completing college admission requirements, scholarships and more doesn’t mean he’s overburdened. Instead, explain that he’s gaining the mental strength he needs to get ready for college.
2. Divvy Up Responsibilities
Decide ahead of time who will handle specific parts of the college search. For example, you might decide you can handle the following:
Go to scholarship events at the college (if applicable)
Scholarship searches
Talk through financial aid awards
Obviously, you can pick and choose which tasks make the most sense for each of you. Your child may be completely fine with scheduling college visits on his own and doing robust scholarship searches.
No matter what, figure all this out ahead of time and gently hold each other accountable.
3. Set Goals Together
Setting goals together is different than splitting up responsibilities. Setting goals during the college search is a great way to make sure you’re on track. The beauty of goal-setting is that you can kick start it at any time, whether you’ve got a year left in the college search process or three. For example, let’s say your child is a junior in high school. You can map out goals over the next two years. Let’s say you’ve got twin eighth graders. Why not set some loose goals for the next four years?
Make sure your goals are specific, detailed and indicate when you’d like to accomplish them.
Let’s say one of your high schooler’s goals is to get into a prestigious university. He could even write it down: “Get into Carnegie Mellon.” But would that actually help him? Nah. A general phrase like that won’t help your child (or you!) hone in on exactly what you both need to do in order to make that happen.
Instead, research what it will take to get there. For example, let’s say you look up Carnegie Mellon’s requirements for the School of Architecture. You find out that your child must:
Apply Regular Decision before January 1 during senior year using the Common Application.
Submit a portfolio of creative work for admission to the school of architecture.
Complete an on-campus review of the portfolio submission.
What will it take to get there?
Here are some targeted goals your child could write:
Take an architecture software class at the local community college by May of sophomore year.
Talk to an architect in my community who can advise me on how to put together an architecture portfolio and assist with a project by June of sophomore year.
Design several small buildings using this software during junior year.
Design my aunt’s new home that she’s planning to build during junior year.
Create a portfolio that showcases design creativity and technical expertise in several types of architecture software like Grasshopper or Rhino3D fall of senior year.
Did you notice goal No. 1 on the list? It’s a goal that allows your child to take immediate action. Taking an immediate step toward a major goal makes it more real and builds momentum toward the ultimate goal.
Here’s a way you can apply it in another way. Let’s say your child has always wanted to travel to Europe with a friend, spouse orother family member. What’s one immediate step she could take to make it happen?
Call a travel agent today and discuss your future plans.
Request a brochure from a travel company.
Set a date within 24 hours. Why not?
See how doing those three things can make something seem so real for your child?
Your child can set small, realistic, specific and attainable goals that lead to the big goal in the end — getting into Carnegie Mellon. Or achieving a specific scholarship — or whatever that goal may be!
4. Write Down Those Goals!
Encourage your child to write down his or her goals. There’s such power in writing down goals! Put them in a place where you’ll both see them every day, whether they’re on a Post-it Note stuck to the bathroom mirror or a printed-out list on the refrigerator (as long as your child doesn’t see them as a constant nagging reminder!).
Trello, a free service, is a great way to handle scholarship applications or college applications. It could include categories like this:
Scholarships to apply for/ Applications to complete
In progress
Draft complete
In editing
Ready to submit
Submitted
Trello is a great way to keep track of progress and all family members can use it to aid the college search.
5. Acknowledge Steps Taken
Once you and your child have set those goals, it’s time to tackle them. Now, what happens if your child finds that his or her goals are difficult to achieve?
Break them down into smaller, more manageable chunks. This might take a little more planning but it’s always better to make sure goals are achievable. Otherwise, it would be really easy to give up on them. Be flexible with due dates if it’s an option.
Every time your child achieves one of his or her goals or mini-goals, celebrate! Acknowledging achievements goes a very, very long way during the college search.
6. Pivot When Goals Aren’t Met
What happens if a goal slips right past your child because he just didn’t feel like doing the work or is unable to complete it in the allotted time?
For example, what if your child doesn’t want to do the work to get into Carnegie Mellon’s architecture program?
It might be time to go back to the drawing board and figure out whether that’s really your child’s best path. Maybe committing to an architecture major at 18 isn’t the best option! Get to the root of the problem — have some serious conversations with your child and decide what you’ll do next.
So what do you do?
You move forward with the next plan. Maybe the next goal is to apply to Carnegie Mellon using the Common Application after August 15. Maybe the new goal is to get into Arcadia University, closer to home! Break down those goals, write down the new goals and move forward.
Nip Helicoptering (or Lawnmowering) in the Bud
Your child may be used to your heavy helping hand (remember that science fair project? Yikes!) but now’s the time for your child to start learning how to move independently. Recognizing that deserves a huge round of applause.
One more quick tip: It might not help to air frustrations during this time. You want to be as positive as possible during the college search and you want to be your child’s partner during the process. Remember, your goals may not be the same as your child’s goals. It can be tough to wrap your head around (and tough to accept!) alternative decisions.
