NEW YORK (MainStreet)—"I want to go to University of Miami, because they have an awesome football team," my daughter, then a junior in high school, announced. "Julie's going there and I think I can get in, too."

What would you say?

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I simply told her we couldn't afford the private school tuition of University of Miami, with its intimidating $60,906 annual bill. She had not even thought about the price tag and was shocked. Then, we discussed colleges that cost less and ways to reduce that cost further. My daughter is a tall and athletic volleyball player, who, after a lifetime of training and competing, constant correspondence with college coaches and many official college visits and volleyball tryouts, was offered two scholarships from two different colleges, both out of state. One offered a generous athletic scholarship plus $7,000 more for her GPA and SAT/ACT scores bringing the total scholarship amount to almost 70% of the total cost of attendance, much less than the in-state schools would cost without the scholarship. So which one do you think we chose?

My other daughter, going into her senior year of high school, has no athletic skills and is ignoring the SAT/ACT tests, and although her GPA is around 3.4, her options are more limited because of the high public state schools' academic requirements. Also, I can't afford (nor will I pay for) pricey private institutions and out-of-state colleges with lower academic requirements which can cost upwards of $40,000 per year. And maybe she doesn't want to go to a four-year college if she doesn't want to try harder to meet the higher standards and take the tests. We still need to talk more.

"The best school" or "the school we can best afford"?

The rule used to be kids went to "the best" school that accepted them and created their college list accordingly. That rule doesn't apply now with today's unfettered growth of unmanageable student loan debt facing future generations and the unstable economy making a job in fast food a luxury. So, beginning the college talk with, "What colleges can we afford?" is the best way to create a realistic college list focused on keeping college costs and student loan debt down.

Rachel Cruze. 25, the daughter of financial debt-free guru Dave Ramsey, says her parents took that same hard line with her about where to go to college. They told her she could pay the difference in cost herself if she wanted to attend the expensive out of state school. She chose the in-state and is now relieved not to have that student loan debt hanging over her. "Many parents skip that opportunity to show their teens how to make a smart financial decision about where to attend college," she said. "It is the second largest lifetime financial investment--after a mortgage--and the decision about what to pay should be weighted as much."

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Cruze says that simply laying out the family finances and showing teens the cost difference and how it may affect both your future life and their can open their eyes.

The goal is to minimize student loan debt

In a February 2013 analysis on student debt by the Federal Reserve Bank of New York, researchers found that 39.9% of students have a balance from $1 to $10,000, 29.8% have balances in the $10,000 to $25,000 range and another 17.6% have balances in the $25,000 to $50,000 range. "While some student loan debt may be unavoidable," says Mark Kantrowitz, publisher of, a suite of college planning websites, "It can almost always be decreased."

You want to teach your teen to think about the future. "Student loans are not dischargeable in a bankruptcy," says John Ulzheimer, president of, "So, you're going to pay them, or you're going to die with them."

Don't just cosign student loans for wherever your teen "wants to go" or "can get in." Ask yourselves these tough questions and explain these principles to get your teen on board for finding ways to minimize college costs and their future student loan debt.

How badly do we both want to avoid student loan debt?

Your teen is probably unaware that every dollar borrowed costs twice as much to pay back or that student loan debt typically takes ten or more years to pay back depending on the amount borrowed and starting salary after college.

Ulzheimer advises that as long as student loans are paid on time, they are a record of responsible debt management. But, the long-time payment obligation will impact future debt-to-income ratio and could limit borrowing amounts for a home. And, if the student loan is in default or mismanaged, the impact is likely to be severe including lower credit scores, higher interest rates, credit declinations and even being disqualified for a job.

For the parent, cosigning for larger loans for pricier schools may come back to haunt you in the case of a default or simply not paying off for your student in terms of earnings, advises Kantrowitz. He says parents should always look to minimize college costs instead of cosigining large student loans or using home equity or worse, retirement savings.

Is your student academically eligible for state grants and awards?

Cruze stresses that many states offer grants (free money) based on a specific GPA and ACT/SAT test scores that may or may not have other eligibility requirements. Information on these is available at your child's high school guidance office.

"These grants help pay for college in-state only. Out of state, they are lost money," she says.

Based on your income, what is your student's state and federal aid or grant eligibility?

Always fill out your FAFSA (Free Application for Federal Student Aid) as early as possible in January of every year your child will be attending college to see your eligibility for need-based grants that will cut college costs. Again, leaving the state for college leaves state aid off the table.

What is the cost of attendance difference between in-state, out of state, public and private colleges?

Cruze says to sit down at the computer with your child and search the "cost of attendance" for in-state public colleges he might be academically eligible for versus the private and out of state institutions. The cost differences can be staggering and eye-opening.

How committed is your student to a four-year college education?

Search the "academic requirements" of those in-state public colleges to see if your teen is eligible by simple GPA and test scores. If not, find out how committed your teen is to earning the state grants based on those academics. These can be indicators, says Cruze, that your teen may not be interested or ready to attend a four-year college. Research the more affordable local community colleges and explore career paths earned via a technical certificate or a two-year associates degree and discuss any uncertainty openly.

Does your student have "scholarship" talents? If your teen exhibits high academic motivation, performance and test scores, outstanding athletic or musical abilities or religious or armed forces interests, he or she can earn a significant portion of college costs. But, those endeavors take commitment to achieve. If your child displays the desire to keep working at them through college, he or she can learn about scholarship opportunities and gauge the demand from teachers, instructors and coaches during the beginning of his or her junior year.

How willing is your child to work to help pay his living expenses?

Living expenses such as dorm room and board, meal plan, spending money and books can drive up the cost of attendance significantly over the affordably-priced state school tuition. Cruze says that a student willing to work at a part time job or at applying for many outside scholarships to help pay costs is more invested in the education and can help reduce his or her student loan debt at the same time.

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Once you and your teen have asked yourselves these tough questions and done the research, the least expensive route through college will become evident and your child will thank you (but not for about five years).

--Written by Naomi Mannino for MainStreet