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Financial and Legal Matters for New College Students

financial matters
Financial matters

When teens turn 18, they love the idea that they are now legally adults. They can vote, serve in the military, sign contracts and even get married. Emotionally they might still be our babies, but the law considers them adults.

 

That being said, there are a few legal and financial issues that should be addressed before your teen goes to college. If your child has turned or will turn 18 during the next year, they are legally an adult, and you, their parent, lose the legal authority to make decisions on their behalf. That means you have no legal right to see their grades, to manage their finances (although you remain responsible for paying their college tuition), or make medical decisions, or speak with their doctors. So, before they go off to college, consider asking them to sign some documents that will allow you to keep informed.

 

FERPA release: with your child’s permission, you can speak with the college about their performance. Colleges often have their own FERPA release forms, so ask your student’s college for a copy.

 

HIPAA Authorization: this allows you to access your child’s health records and speak to their doctors about medical issues.

 

Advance Care Directive for Health Care: allows you to act on your adult child’s behalf in the event that they are incapacitated and unable to make decisions for themselves.

 

Durable Power of Attorney: allows you to act on your adult child’s behalf regarding legal or financial matters. You can get the previous three forms from your family lawyer. Each of these forms can be revoked at any time, but having them in place while your child is away at college may provide the whole family with extra peace of mind.

 

Here is a link for more information: Make Sure These Health Forms Are Sorted Out Before Your Kid Goes to College This is also a good time to address money management issues.

 

Set up a bank account that will allow you to easily transfer money to their account. An online bank account may be the most useful, especially if the bank has special student accounts available that will give parents access to bank information. Find out which banks have ATMs close to campus—college kids usually don’t write many checks. Be sure to check on fees for using an ATM that’s not part of your bank’s network.


Make plans to protect student property. College kids tend to have a lot of valuable electronics and computer equipment. Renter’s insurance can protect your investment if these items were to disappear. Your homeowner’s policy might also cover dorm room possessions—check with your agent.

 

Health insurance: check out options provided by the college and compare these policies with your existing family medical coverage.

 

Car insurance: check with your agent. If your child does not have a car at college, you may be eligible for a discount on your auto rate.


Discuss credit card dangers: college students are besieged with credit card offers—discuss the difference between high-interest fees that credit cards may charge and bank debit card options.

 

Photo by Pixabay: https://www.pexels.com/photo/black-pen-placed-on-white-paper-261679/