College Savings

[mwhittington]

I saved for what I believed was 4 years costs of college for my daughter. She decided to go to a school that was more expensive that we didn't anticipate. So basically 3 years of her school are completely paid for but I will need to pay for anything after that (her senior year).

she will not be able to work enough in the summer to pay for her final year. should i take out a loan for this last year or should i have her take out the loan?

thank you for your advice

[disneysteve]

should i take out a loan for this last year or should i have her take out the loan?

Do you want that cost to be her responsibility or yours?

Some people feel the student should have skin in the game. Others feel it is their responsibility as parents to provide for their child's education.

It also depends on your own financial situation. Can you afford to cover that expense? Do you have an adequate emergency fund, saving enough for retirement, debt free other than your mortgage, etc.? You don't want to put yourself at risk by borrowing to fund her schooling.

And then there's always the hybrid answer. You could have her take the loan but offer to help with the payments if you have the means to do so.

[mwhittington]

college loan

great advice - thanks Steve

[mwhittington]

529 College Savings

I've used up the entire amount in the 529 for my daughter. she is in her junior year at college and I will owe for the next semester in January. I will have 3 more semesters of tuition, books, housing, meals, etc.

I have 2.5 years saved for my son in a 529 plan also. He will start college next fall.

Would it be better to take out a loan for my daughter or transfer part of my son's 529 to her and then take out a loan for him in a year or so?

Doing that would ease the cash flow for me for now. And getting a sallie mae loan for him in his name would allow us to pay it off when he graduates.

Is this a good plan?

Thanks

[Thrif-t]

Do you not qualify for any Federal Loans? If so I would take those where you can.

Luckily we qualified for the subsidized loans so we took every penny of those loans and used the 529 to pay the difference. My DD senior year we will not have to take any loans she has money left in the 529. We also got $2500 back from the American Opportunity Tax Credit so over 4 years that was 10k towards school. When everything is said and done DD will have a student loan of 7k to pay back. But she is an engineering major and working at some coops so she should have the money to pay those outright before the interest even accrues.

But long story short if you can get the government loans get them and don't go private.