It’s impossible to predict whether your child will experience unexpected costs or an emergency during his or her time in college. But by researching, planning, and budgeting for the known and unknown, you’ll be less likely to experience a big financial hit.
Before School Starts:
Anything can happen, so it’s important to make sure your child and his or her property have the appropriate insurance coverage while away at school. This includes:
If you decide to keep your child on your insurance policies because it offers better coverage or rates, decide if you will cover the entire payment or if your child is responsible for his or her part. If you decide to help your child establish his or her own plan, read the fine print carefully and make sure your teen understands what is and isn’t covered.
Health Insurance: The health care reform law makes it possible to keep your child on your own health insurance plan until he or she is 26 years old versus having him or her use a college-sponsored plan. If you opt for your child to have his or her own insurance plan, check with the school to inquire what it offers students.
Make sure to compare the premiums and coverage on the college plan to what your child receives on your insurance. Part- and full-time jobs also might offer health insurance for your student.
Car Insurance: If your child brings a car to college he or she will need insurance. People younger than 25 years of age typically face higher insurance rates, so it may be cheaper for your child to remain on your insurance. If you decide to keep your child on your policy, remember that your rates could go up if your teen is in an accident or is ticketed for speeding. However, insurance companies also offer perks such as “good student discounts,” which may qualify your student for a lower rate.
Certain situations can leave you on the financial hook for your child, including co-signing your son or daughter’s credit card. And, if you co-sign your child’s card, you are jointly liable and your own credit might suffer if your child doesn’t pay the bill on time. This is the time to set clear expectations for your son or daughter.
As for off-campus housing, you’ll also inherit a financial stake in your son’s or daughter’s apartment if the landlord requires you to co-sign the lease. Be aware of your responsibility if a roommate fails to pay rent or leaves, or if damage to the property occurs.
Montana Credit Unions for Community Development (or MCUCD) is the award-winning, charitable arm of the Montana Credit Union Network. A state-wide nonprofit organization, MCUCD works together with the state's credit unions to improve the lives and financial independence of all Montanans.