These are the biggest mistakes in college financing, according to financial advisors

Jody King, Director of Estate Planning at Fiduciary Trust Company: A big mistake is for the student and his or her parents not to have an honest conversation about the financial impact of the college choice, that is, the impact on the family’s assets and on the child if there are loans to repay.

The college selection process is very emotional for both the family and the student, and it is sometimes difficult to have honest conversations about the financial impact of the student’s school choice. Families need to understand what the actual cost of attendance would be after financial aid without loans. Many families think there is more financial aid than there is and are very disappointed when they don’t get what they expect. And then the family would come to an agreement about what they can reasonably contribute and to what extent the loans will be used. The concern with loans is how they affect the future financial flexibility of the student or sometimes the family.

And within this, there needs to be a discussion about the degree the student wants to pursue and how it will affect their cash flow. You need to think about it as a family: Will it affect the parents’ ability to fund the next child’s college education? Or the parents’ ability to fund their retirement? All of that conversation needs to happen early on, before the school selection process gets too emotional.

Charles Thomas III, Founder and President of Intrepid Eagle Finance: A common mistake is giving up before you even start. Many families assume they don’t qualify for any financial aid. They believe that if you’re middle class, there are no scholarship opportunities. In reality, there are families who fit the definition of middle class perfectly and still qualify for financial aid after going through the process. Some families are surprised to find out that their student is considered “needy” at one school, but not at another.

Another mistake is not spending time on the right things. I see families misallocate their efforts to the financial aid they seek. I am all for getting as much money as you can, but not all aid is equal. Scholarships from private and nonprofit organizations represent a fraction of the money available to students. The majority of the money available comes from direct school aid, federal aid, and state aid. I encourage families to budget their time and effort with this in mind.

Finally, there’s starting too late with planning. Starting to pay for college early involves more than just saving in a 529 plan. For example, families who want financial aid for the 2026-2027 school year will be asked questions about their finances for 2024. Many financial aid questions are delayed by two years. That means a decision your family makes this year could help or hurt your student down the road. Getting an early start on dual enrollment credits, test prep, AP classes, and other strategies can pay off if you start early enough.

Kelly Regan, Financial Planner, Girard Advisory Services: Parents should avoid putting assets (a brokerage account, a gift from grandma, or whatever) in the student’s name. Depending on how much assets a person has, that can have an effect on what they can get if they apply for grants or loans.

Another mistake is not communicating to your child what he or she should contribute and what you expect him or her to pay back and what you expect him or her to pay back. And not being honest and realistic about what you can afford could jeopardize the parent’s retirement or could mean the child starts out with a lot of high-interest debt. Another is not taking into account other costs besides tuition, such as rent and food. Make sure you account for those, and if you have a 529 plan, do your research because many of those items, as well as things like books and computers, can be paid for through a 529 plan.

Timothy Smith, Founder and CEO of Aurora Private Wealth: First, most people lack a plan of any kind. If they have done anything, it has been haphazard. Second, most people don’t put in the effort to calculate how much college will cost when their child gets there or how much savings they will need over time. Therefore, most people don’t have a disciplined approach to saving.

Additionally, many only view 529 plans as vehicles. For most people this is fine, but there are some situations where the investment limitations of 529 plans make them a little less attractive. For example, if you work for Google or

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You may want to donate or transfer some of your company’s stock, with its high projected growth rate, to help fund college. You can’t do this with a 529 plan. Instead, you can use a Uniform Gifts to Minors Act account or a trust account, depending on other factors. You wouldn’t get the tax benefits of a 529 plan, but you might if you think the stock could outperform the 529 even after taxes. You could also consider a Coverdell IRA for this, but annual contribution amounts are limited.