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If you have a college-bound teen you’re well aware of the cost of college–it’s high. In a recent story in Business Week, one graduate confessed she had given up on her student loan debt of $186,000. She is not alone. With the nation struggling under a $1 trillion student debt crisis, stories like hers are nothing uncommon. For the first time ever, the national student loan default rate exceeds the credit card delinquency rate, and so long as student loans remain one of the few types of debt that can’t be discharged in bankruptcy, chances are the situation won’t improve any time soon. 

As their parent, it’s up to you to make sure they don’t fall prey to debt that they cannot repay after grduation. Before they ever accept an offer of admission, you need to talk to them about financing college. In my Parents Countdown to College Crash Course I call it “the money talk”.

Following are a few tips to help broach that uncomfortable topic with your college-bound teen:

The cold, hard facts

The first thing you need to discuss is finances: what you are willing to pay and what you expect them to contribute toward college expenses even if it’s just acquiring scholarships. Discuss the ramifications of student debt and talk openly about which colleges would fit into the family’s financial picture. Paint the picture clearly and explain to them this is a large investment and needs to be treated as such: you expect them to do their part and you expect them to study and to graduate.

The difference between wants and needs

This discussion is just as important as discussing the cost of the college education. When a student understands the difference between the two they can make financial decisions based of this criteria. Is it something they need or simply something they want? Don’t assume they know the difference. Most teens believe everything they want is a need. If they learn this lesson before going to college and living on their own, it will save them overdraft fees, past due notices and much heartache when they are controlled by their debt.

The college choice

Be realistic. If their dream college is out of reach financially think long and hard before you apply. This may be their first time to make a choice between what they want and what is best financially. It is a tough pill to swallow now, but they will thank you when they graduate with minimal or zero debt. The college they choose not only needs to be a perfect fit for them socially and academically; it also needs to be a perfect fit financially.

The budget

This is the perfect time to talk to your college-bound teen about creating and sticking to a budget. You may have tuition, room and board covered but there are always added expenses. Budgeting for those added expenses means there won’t be any surprises when the bills come due. Need a list of what those extras might be? Check out this article I wrote for Smart College Visit about the extras beyond tuition.

If you can’t sit them down for a time (we know how hard it is to even share a meal together), do it in segments. Just make sure you do it before they start applying to college. If you don’t, it’s going to be an uncomfortable discussion when they get accepted to their dream college and it’s not affordable for you and your student.