Question: My daughter just had her sweet 16, but it wasn’t sweet for me — she goes to college in two years, and I don’t know how my wife and I will pay for that. We’re also pregnant with a son, and I’m already worried about HIS college. While we both make good money — I’m a paramedic and she’s a lawyer — the sad fact is, we still have about $60,000 of student loans between us. How are we going to pay off our own loans while sending our kids to college? This wakes me up in the middle of the night.
— Mitch in Arizona
Howard Dvorkin CPA answers…
Sadly, you’re not alone, Mitch. A new survey from the College Savings Foundation reports, “One-third of parents are still shouldering student debt but are determined to change that for their children.”
What are they doing? Quite a few things you and your wife can benefit from…
First of all, if you didn’t enroll in a 529 college savings plan for your daughter, do so for your son. While you could start one for your daughter even at 16 years old, the big savings come from starting young and contributing regularly. According to that College Savings Foundation report, a third of parents have 529 plans.
Second, your daughter can start now pursuing scholarships. Together, you can search for scholarships that fit her interests. Studying those requirements a year or two before she applies means she can tailor her activities and efforts to impress the judges. Don’t limit your search — as Debt.com has reported, there are eccentric scholarships for pumpkin carvers, peanut-butter lovers, and redheads. Debt.com’s scholarship is open to anyone who’s applied for lots of other scholarships!
Third, as I told one reader last year, consider community colleges for the first two years. Not only will two-year schools save your daughter on tuition, but there are so many community colleges — more than 1,700 — that one is likely to be within driving distance of your home. If you daughter lives with you those first two years, she can save thousands. That’s because U.S. News estimates room and board averaged $9,999 last school year.
Fourth, take care of yourself so you’re better able to take care of your children. You and your wife can slash your monthly student loan payments by taking advantage of several federal programs. In fact, you might be eligible for loan forgiveness because of your job, Mitch. To find out is free: Call one of Debt.com’s certified counselors at 1‐888-472-0365.
Bottom line, Mitch: There are many things you can do to help out your children — and let you get a good night’s sleep.
Have a debt question?
Email your question to firstname.lastname@example.org and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.