Want to make summer a distant memory? Two words: College applications.

(The words: College tuition, could also work…)

As students head back to school, high schoolers and their parents are keeping one eye towards the future and those forms, essays and looming costs of college. College is one of the first steps towards adulthood, so the application process is a good time for parents to start treating their kids like adults, especially when it comes to money.

Talk Honestly About the Cost of College

One way parents can begin this transition is by sitting down with their child to explain the reality of college costs, says Dr. Cheryl Paradis, a clinical psychologist, professor at Manhattan Marymount University, and co-author of the college application book, Sanity+Strategy=Success.

"A lot of parents have never talked about money with their kids, so they never tell the kids honestly what they can afford," says Paradis. This may be a new subject for a child, so it's important to talk openly so that they know the difference between the costs of a year at a private school and a year at a public university. According to the College Board, a non-profit association that connects students with universities, the average cost of a year at a four year private school in 2007-08 was $23,712 while the average cost of a year at a four year public school came in at $6,185. That means a student can attend four years of a public school or one year of a private school for the same price.

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Even more money can be saved by looking at a year of community college, which averaged $2,361 a year. While the community college might not be as prestigious as the four year school, Paradis says they often make sense. "A lot of kids, maturity wise aren't ready to go away to school." And saving that $20,000 doesn't mean the student can't get into a private school eventually as a transfer. "The reality is that prestigious colleges accept community colleges. They like them because of that whole diversity thing." While a student might not like the idea of missing out on that big college football game freshman year, explaining the reality of finances could take the edge off, especially if they're the ones who are footing the bill through loans.

Learn About Loans
Students who take on the loans themselves should understand the difference between being $20,000 in debt (two years at a community college and two years at a public school) and being $100,000 or more in the hole (four years at a private university). One way to do this is to explore what they want to do after college and how debt can hamper these plans. "Students have so much debt, that those who want to go into public service can't afford it," says Paradis. "They can't be writers, they can't go into arts. They have to go for business even though they don't want to."

Any College Boosts Earning Potential
Future leaders don't just emerge from building smothered in ivy. And while the Ivy League doesn't guarantee success, it will guarantee a huge tuition bill. "The Rhodes Scholars and the CEOs of Fortune 500 companies come from everywhere," says Paradis. "If your kid is going to succeed, they'll succeed anywhere. Why give them a hundred or two hundred thousand dollars of debt?"

No matter which path a student chooses, an important thing to keep in mind is that over a lifetime the earning potential gap between a student with a high school diploma and one with a bachelor's degree is $800,000, according to a 2007 College Board study. So while exploring all the options, remember that the best option is one that ends in crossing that stage with a diploma in hand.