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looking for insight: borrowing for college

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gemini888 posted 5/7/2013 19:42 PM

My STBXH and I are separated, but do not have temporary orders,our first court date is in September. I work, but make very little, and do not anticipate having a cent beyond what I need for living expenses for myself and my three kids once I go on child support. I am more than willing to help pay for my son's education, but how? How have you all done this? He has thrown out borrowing against the retirement, but says the payments back begin immediately and come right from his paycheck, which will reduce what I will get from child support. He, meanwhile, is very concrned about what he will be living on...par for the course. Throwing this whole thing to the lawyers will cost, so I am trying to get as much input before I go there. Thank you all...the stress is just unbelieveable, isn't it??

devistatedmom posted 5/7/2013 20:17 PM

Gemini, I would suggest going and talking to the guidance dept at your son's school about bursaries, grants, scholarships, etc.

I work in a high school (in Canada, but same principle) and my understanding is that because of my "low" income and being a single mom, there is bursary money out there that is money you don't have to pay back. Won't cover it all, but every cent, right? Scholarships, I know up here, there is thousands of $$ not used each year because people don't apply for them.

Talk to the guidance dept. They should be able to help you know where to look to apply for everything you can.

phmh posted 5/7/2013 20:24 PM

In general, you don't want to borrow against retirement savings since your kid can borrow money for college, but you can't borrow money for retirement, and you want to leave it in the plan, continuing to accumulate.

Depending on how much money you make, he may be eligible for grants or scholarships. There are always loans, working FT during summers and PT during college, making sure he chooses an affordable school (compare the financial aid packages -- some more expensive schools offer more in grants), living frugally, possibly going the first year or two at a community college, and majoring in something that is practical and useful so he can get a job after graduating.

I am the oldest of four (my youngest sister graduated undergrad in December and heads to grad school in the fall.) Our parents weren't able to help us financially at all (I think my parents bought my groceries once) but we all made it through undergrad, and one sister and I have our master's degree, with the other sister starting her phd program in the fall.

There definitely are ways to make it happen, even if the parents can't pay cash. You just have to be smart about it as he doesn't want to wind up with student loans that are overly burdensome.

Dreamboat posted 5/7/2013 22:06 PM

but says the payments back begin immediately and come right from his paycheck, which will reduce what I will get from child support.

That is not true. CS is calculated on gross pay, before taxes and other deductions.

That does not mean that borrowing against a 401K to pay for a child's education is the best option. In fact, I think it is pretty risky.

Since you do not have a lot of extra money, perhaps the best way you can help your kids is by helping them research scholarships and grants. Become an expert on that by talking with the HS guidance dept and researching online.

TrustedHer posted 5/7/2013 23:12 PM

Don't do it.

Get a copy of "The Higher Education Bubble"

Unless you know for certain that the degree will actually help land a good paying job -- and by the way, an ivy league law degree is no guarantee of that -- it's a bad bet these days.

20 years ago, I was receiving advice to send my kids to trade school, and that's still good advice today. They can always pursue a degree AFTER they have skills, and they will be in a better position to afford it, and to weigh the costs.

College never was a guarantee of a great job, and today it is worth even less.

TrustedHer posted 5/7/2013 23:15 PM


I do believe that community college on a pay-as-you-go basis has some benefit, for a while.

Continued maturation of the student, filling in the holes that prior coursework left, exposure to new subjects and activities, access to social outlets and counseling are definitely worthwhile.

jackie89 posted 5/8/2013 08:46 AM

I am also separated and also do not have temporary orders.

Is this for your dd/ds to start college in the fall? If so, you will need to talk with your school guidance counselor immediately.

There's a government website, which you would need to apply for federal grants, (deadline is May 1)

Anyway, if the kids live with you, your salary alone is what is measured towards him/her getting more help from the government and schools he's applied to. Your WS salary is not taken into consideration.

Once you receive the award letter from the school, you will know how much he is getting in grants and government loans. Then your son/daughter will need to apply for government loans for the remainder of the need.

So say he gets 10,000 in grants/scholarships, etc. the school costs 20,000 - need to borrow 10,000.00
have your dd/ds borrow - not you!

I'm going through this right now.

Kajem posted 5/8/2013 10:54 AM


Are you looking to pay for this fall's tuition?

If so talk to the financial aid office of the college that your kid is going to attend. They can point you in the direction you need to go.

There are parent plus loans available that any parent can take out for their child's education. The payments start when you want them to (as long as your kid is still a full time student) or after graduation.

FAFSA needs to be filed. It is a pain but nets a lot of scholarship money for kids.



HopeImOverIt posted 5/8/2013 11:14 AM

CS is calculated on gross pay, before taxes and other deductions.

CS calculation methods really vary state by state. In my state CS is calculated on "net" pay, which is after subtracting federal/state/local taxes, social security, and medicare. However we don't get to subtract pay deductions for 401K. The OP doesn't have her state (or even country) listed in her profile, so it's possible that what her STBXH says might be correct for their state.

I agree that it's a bad idea to borrow against retirement for college education. By any chance do you have any home equity to borrow against?

I think I can posted 5/8/2013 16:28 PM


Are we talking about this fall?

What kind of college? Public instate, private, public out of state, community college? It really makes a difference which.

Your son can borrow $5500 as a freshman himself. After that he will need a cosigner. Parent PLUS loans are available, but not advisable if you are living hand-to-mouth already. I would not borrow against retirement. And if you are separated and your son lives with you for the most part, state colleges may not count the non-custodial parent's income when considering financial aid.

I'm assuming you are in the US.

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