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Financial Tip

If your child has a handle on using cash responsibly, get a debit card or a secured credit card with a low limit. Then pay the bill together.

Education Debt vs. Earning Potential

When asked, "What do you want to be when you grow up?" children for generations have answered that question based on things like: a parent's occupation, their favorite sport, their love of a family pet or simply something they like to do. Rarely does the idea of making a living or supporting a family seriously enter into a young child's dreams of the future.

But as the cost of a college education increases, tying career selection and future earnings potential to the cost of the education can help add a layer of information to the decision process - especially if there is a large gap between earnings and expense.

According to a report by the National Center for Education Statistics (NCES), nearly half of all undergraduates take out student loans to help pay for their education. This includes nearly two-thirds of students who attend private nonprofit four-year colleges and about 90 percent of students enrolled in for-profit institutions. On its credit card blog, NerdWallet.com reports that the average student loan debt is $33,607.

While student loans improve access to post-secondary education for many students, repaying them has become increasingly difficult for those who earn a limited income or have trouble finding a job. According to a recent TransUnion study, more than half of student loans are in deferred status where the loan payment has been temporarily delayed - this represents nearly 44 percent of all student loan balances.

Luckily, there are numerous resources that provide information on how much a college student can expect to spend on post-secondary education costs in his or her efforts to earn a specific degree. Many of these resources also provide forecasts about how much he or she can expect to earn upon entering the working world.

The Council on Graduate Schools has launched an online platform called GradSense.org. This site provides federal data on the cost of getting a degree in specific areas of study, along with the median salaries graduates can expect to earn upon receiving their degree. Data is based on the specific degree level they plan to pursue (bachelor's, master's, doctorate, or professional). GradSense also provides information on repayment plans and how to evaluate and negotiate job offers.

The Consumer Financial Protection Bureau website also offers information on comparing costs and helping students make smart decisions about paying for college (consumerfinance.gov/payingfor- college). This site provides tools and resources that will help students assess college costs and financial aid offers, as well as advice on repaying student debt.

The U.S. Department of Education also provides students with information on the affordability of specific colleges. Access the data through its College Scorecard. This online resource allows students to select specific schools or research additional options by searching for colleges that might be a good fit, based on location, size, their area of interest and those that offer distance education.

In addition to the cost of tuition, when planning a college budget, students and their parents should also consider the cost of room and board, books and supplies, and any other anticipated living expenses. The NCES College Navigator provides more detailed information on these expenses for individual colleges, along with more specific demographic information about each school.

Teachable Moments

While students should choose a career based on their interests, talents and lifestyle preferences, the education path they take to reach their goal can have a tremendous impact on the amount of debt they have once they receive their degree.

Sit down with your college-bound student and discuss how the financial decisions they make today could impact their future opportunity for financial security. Explore their options for getting the best possible return for their education investment.