From the August 2006 issue of Investment Advisor • Subscribe!

August 1, 2006

That Good Old College Try

Helping clients deal with college planning anxiety

As a bumper crop of teenagers makes its way through high school, many parents and grandparents are losing sleep over getting them into college. A good college education probably tops the list of hopes and dreams your clients have for their children. But this pressure, inside and outside the family, can lead to emotional and financial challenges that

try your expertise. Here are some ways to maintain a more balanced perspective.

Q: After my clients' son graduates from high school, his grandfather has offered to pay for four years at his Ivy League alma mater. The boy would rather enroll in an engineering school. Having the grandfather's financial help would make a big difference to my clients, who are not wealthy. They also like the idea of the connections their son could make at the Ivy League school. They've asked for my advice.

A: It's not unusual for clients to have aspirations like these for their offspring. But learning to widen their perspective beyond their own personal wishes to encompass the child's desires is a crucial part of good parenting -- and grandparenting, too.

To help resolve the situation with a maximum of good will, I would consider interviewing all three generations. With a deeper grasp of their individual perspectives, you'll find it easier to help them sort out the best solution. For example, how does your client feel about the conditions placed on this offer? Does he think Grandpa should be willing to pay (or help pay) for whatever school the boy chooses?

Find out what fuels the grandfather's desires for his grandson. How deeply is he attached to the young man following in his footsteps? Does he hope to see him enter the same profession as well?

How about the grandson himself? If he fears his academic record is not good enough, he may be reluctant to apply to his grandfather's college out of fear of rejection. Or is he convinced that the other school is truly a better fit for him?

If the engineering school seems the best choice to you and your client, you might help him draft a letter that outlines the reasons and asks for Grandpa's understanding. The letter could also appeal to the grandfather's higher nature by inviting him to put his financial support behind his grandson's education, even though the boy may choose a different path in life than his own.

Q: My clients, an immigrant couple, have set their hearts on sending their only daughter to a top college. They're convinced this kind of education is vital for her to succeed. However, I don't see how they can afford it, and her grades aren't good enough to qualify for scholarships. My analysis will be a tremendous blow to them. How can I help them handle it?

A: Many parents are ready to sacrifice their own financial future for their children's higher education. In some cultures, it's the expected thing to do. The assumption may be that the kids will take care of them in their penurious old age -- a somewhat shaky possibility these days.

A prudent advisor will help these clients scale back their unrealistic expectations and offer them other options. This is bound to deflate the parents, though, and may well make them blame themselves for failing to provide for their children's future. Thus, you need to proceed with great compassion, patience, and concern.

In the situation you describe, communicating the realities of your clients' financial position may be one of the most painful things you'll ever have to do. I would urge you to soften the blow with statistics showing that success in later life is not correlated to a diploma from a big-name school. Perhaps you know a personal anecdote or two about young people who now lead productive and satisfying professional lives, even though their families couldn't afford to send them to a top college.

Help your clients explore their cherished fantasies about their daughter's education. How, exactly, do they imagine it will affect her future success? What does the daughter herself want to do with her life? Then, see if you and your clients can brainstorm a more realistic college funding strategy. If you take time to educate this couple and tease out more options, you'll stand a good chance of helping them develop a viable plan for their daughter's future.

Q: Several local high school juniors were caught hacking into the school computer to change their grades. One of them was my clients' son. They are furious with him and have told him they won't pay another penny for his further education. Considering the importance of a college degree these days, I think this is very harsh. How can I encourage them to reconsider?

A: If you don't mind providing a place where these upset and angry parents can vent their frustration, fury, sadness, and fear for their son's future, invite them into your office.

By encouraging them to express their disappointment and disillusionment, you'll help lower the emotional temperature so they can think more clearly about how their son should make reparations for his deed. They might even consider asking him what he feels an appropriate sanction should be.

I also think they need to sit down with him and find out what was behind his dishonest behavior. Did peer pressure suck him into something he now regrets? Was it a reckless lark to see how far they could go? Did he feel a need to pump up his grades out of terror for his own future? Or does he have a sociopathic streak that his parents have been ignoring?

By getting clearer on all this, they may be able to devise a punishment more appropriate for the crime. For instance, a plan for future financial support that is contingent on his responsible and mature actions may make a lot of sense. A flat-out refusal to support his college needs seems like a panicked, enraged reaction that expresses their own frustration rather than steering him toward better behavior.

A family therapist, as well as some assistance for the son, may be very useful at this juncture. Besides helping them get to the bottom of this disturbing matter, counseling could eventually allow them to put it behind them.

Q: A widow who was my longtime client left a testamentary trust to help fund her two grandsons' education. The older boy, now a high school senior, is not much of a scholar. His parents, the co-trustees, want to use the bulk of the trust funds to pay for him to attend a prestigious university, reasoning that his younger brother, a much better student, will be able to qualify for financial aid wherever he goes. I have a hunch that my late client would think this was unfair to the second boy. Should I urge them to split the funds equally?

A: The parents' plan sounds like an emotionally dangerous decision to me. Before offering advice, find out more about each son's interests and gifts, aspirations, and educational goals. If the older boy has always been the squeaky wheel that got the grease, maybe there are better ways to give him a good start in life. For example, tutoring or a summer program could help him excel in a subject he's passionate about, making the unequal college funding unnecessary.

In the interest of long-term family harmony, I think equal financial support is the safest strategy. Encourage the parents to help their older son find his own ways of giving to the world and connecting to learning.

When your clients' plans for their children's education are in question, their own unfinished hopes, dreams, and regrets have a way of surfacing. Help them explore their rigidities about their children's future, and find solutions in keeping with their financial reality and the kids' unique gifts and limitations. You'll be providing a service that is important to the parents and grandparents who are your clients now, and may be even more valuable to the generation that succeeds them.

Olivia Mellan, a speaker, coach, and business consultant, is the author with Sherry Christie of The Advisor's Guide to Money Psychology, available through www.investmentadvisor.com. You can e-mail Olivia at om@moneyharmony.com.

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