Please HELP Single Mom...Daughter needs help paying for college!!

[Teri2801]

I’ve been lurking on this forum for months and it’s been very helpful. I don’t even know where to start or if this is the right forum topic to post (Mods please move if necesssay TIA).

So here goes!

I’m a single mom with 4 teenagers. I’m a first generation college student so I’ve been in school most of my children life.  Needless to say my credit has been poor my entire adult life.  All of the vehicles I’ve driven have been in my ex-partner’s name – with me footing the bill. All of the bills - again in his name while I paid for it. So while I was improving his credit - mine was stuck in a poor state.  Fast forward, I’ve been out of school for 2 years and went from averaging $20,000 a year in income to making over $99,000 for 2013 (working 2 jobs). 

My current Credit baddies:

-Judgment (private student loan) = almost $11,000

-Collections (medical and private student loans) = 6

-Inquiries (trying to rebuild my credit) = about 11

Strongest credit is my repayment to Sallie Mae since Sept 2009 with no late pays = about $44,000 (13 different accounts that are so confusing to manage)

Recent Credit Trade lines:

-Capital One Secured CC (opened Jan 2014) = limit $1000 with balance about $450

-Capital One CC (opened Jan 2014) = limit $500 with balance about $200

-BOA Secured CC (opened Dec 2013) = limit $400 with balance about $250

-Credit One CC (opened Jan 2014) = limit $500 with balance about $100

-Walmart CC (opened Jan 2014) = limit $400 with balance about $100

-Macy’s CC (opened Mar 2014) = limit $600 with balance about $350

-Capital One Auto Financing (just opened –shopping for car now) blank check activated up to $30,000 high APR 13.51%

I opened all these new accounts to better my credit profile as I’m 40 years old and want to become a homeowner in 2 years. Also, I need the new car because my ex partner is taking back the 9 year old SUV I paid for and paid off – its in his name. This is a lot of information I’m sharing because I have been doing it wrong for so long and now that I make more money I need help from the experts of the forum.

Here’s my problem, I work a lot of overtime so I average more than $5,000 a month in take home pay. But the money goes fast. I have zero savings and I owe over $6,000 for 2013 tax return (I’ve never owed Uncle Sam).  Albeit my kids get an allowance totaling more than $1000 per month - I don’t see a way to reduce it.

My biggest problem is how to help my 18 year old daughter pay for college. She has a 4.0 GPA and will be valedictorian in May.  According to the FAFSA, she is not eligible for any Fed Grants and certain scholarships because my income is too much. Again, I have no savings and being the only financial provider of 4 teenagers my living expenses are high. She deserves to pursue her dreams. 

Please help me with any information on how I can help my daughter pay for college with poor credit. I just don’t see how I can set aside $10,000 cash every semester to pay for college out of pocket. She’s never earned less than an “A” her entire educational journey. I feel like I"ve let her down.  Also, I have 3 other kids who are college bound.

Thanks everyone for reading this long post and thanks in advance for any advice. Please don’t judge me too harshly as I’m doing my best without the support of family or friends.

Current Scores:

EQ (myFico) = 629

TU (Wally) = 627

EX = ??

[seeyouthere]

There are many options for your daughter such as government loans and since she is top of her class, I'm sure getting a scholarship wouldn't be that hard.

As far as allowances go....STOP IT.  If you are barely squeking by, why are you giving money to you kids to spend.  If they are old enough to work, then they are old enough to pay for the things that they WANT (different than NEED) .  (I may be a jerk about this, but it was something I did and can say helped to shape me as a person.  I paid for my first car in cash from the money I saved from working at Burger King )

[Teri2801]

Thank you for your advice. I hope you are right about her being able to get scholarships based on her GPA. I just always thought I’d be in a better position credit wise and savings wise to help my kids pay for college. Needless to say, I can’t think straight with all the stress from worrying.

Thanks again!

Edited due to typo

[Teri2801]

I hear you loud and clear on the allowance. I agree with you but don't know how to put a stop to it. For example, my daughter in question has a part time job at Sears and I still give her an allowance. She only pays her cell phone bill but complains she don't have any extra money.

But I have to stop it and start saving.

Thanks a billion!

[SCF]

Filling out the FAFSA is just the first step in paying for college.  The next steps are to investigate private scholarships - your local library, and your daughter's high school guidance counselor may be of help getting started here, and to apply to schools to look at the aid packages they may be willing to offer.  Some schools, both private and state, offer automatic scholarships for previous academic achievement, involvement in certain activities, etc. and most schools also have other scholarships that students can apply for at the same time, or after they have been accepted to the school.

Once scholarships are exhausted, federal loans and privates loans are there to make up the difference.  I would stay away from private loans at all costs, even if that meant taking classes at a community college or skipping one or two semesters to work and save money.  Federal loans are a good option, but best taken in moderation.  You and your daughter need to start thinking about how much she can afford to borrow and repay.  The biggest way to save is to look for an affordable school - maybe two years of classes at a community college while working part-time and then transferring to a state school is the most affordable.  Maybe she gets a full-ride to a small private school and that's even better.  Apply to a variety of schools and ask lots of questions.

[UrbanLagoon]

I am a recent college graduate. I also did not qualify for FAFSA. I am 23 years old and I have never had an allowance of any sort. I worked at a hotdog place starting from 18 and I paid for half my college and my parents paid for the other half. I commutted to school (University of California, Irvine) and that made a HUGE difference. Instead of bulking up $20k per year, it was only $10k per year! Saved a lot and I worked 20 hours a week at the hotdog place at $9/hr through my college career as a Biology and Mathematics major. She can do it! 

Another thing I regret not doing is going to community college for my first 2 years. Would have saved $20k and I would have gone to a better college.

[Teri2801]

I earned my GED at 27 years old and somehow managed to get through college. However, I never fully understood the financial aid process. I got to my last semester of the nursing program with 4 credits left – exhausting my financial aid because I had earned too many credits for a 2 year college as I was taking unnecessary classes while waiting be accepted in the nursing program. I couldn’t afford to continue the nursing program out of pocket, thus I never got my nursing degree. The financial aid office wouldn’t help me at all. At the time my GPA was 3.4, which I think is impressive for the boot camp type of 2 year nursing program studies.  I left the nursing program with nothing but a boat load of student loans that I couldn’t afford to repay – hence the judgment from EDUCAP and collections I now have.   I found out a few years later that I would qualify for financial aid at a different school. Luckily I was able to transfer some of my nursing credits towards a degree in healthcare management.

I said all that to say, I am not well versed in how the financial aid process works for someone graduating from high school with accolades and wanting to go to a 4 year university. The information and advice from you all is invaluable and I greatly appreciate it.  My daughter and I have a lot of research to do.

Thanks again everyone!

[Sock]

Your daughter's education is her responsibility- not yours.

Part of the growing up process is learning how to put your big-person pants on and taking care of what needs to be taken care of. This includes 18 year olds figuring out how to put themselves through college.

IMO, it may actually be worth it to postpone college for a year (take a sort of gap year), and spend that time learning a skill or getting licensed in something. One year spent learning to cut hair or something else can go a long way towards making more money WHILE in college, as well as having something she's experienced in to fall back on when she gets OUT of college. One of the tough lessons out there that is so hard for kids to learn these days is that no one is entitled to anything- even if you have a 4.0 gpa. These kinds of life skills are ultimately what determine future success, not which over-priced institution you bought your degree from. Employers want SKILLS more than degrees (believe it or not), and no university out there is bothering to teach skills to anyone.

Additionally, depending on her level of responsibility, she can take out student loans while using her INCOME to purchase a house that she can rent out to roommates. Lo and behond, the rommates actually end up paying the mortgage and part of her tuition as well. She may just find that starting college a year or two later than her high school classmates will result in her 1) being more mature and responsible about her education, 2) having more money set aside, and 3) gaining skills that will help push her forward into the marketplace farther beyong her classmates- even if she ends up on the "6 year plan."

[martinsoka17]

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@UrbanLagoon wrote:

I am a recent college graduate. I also did not qualify for FAFSA. I am 23 years old and I have never had an allowance of any sort. I worked at a hotdog place starting from 18 and I paid for half my college and my parents paid for the other half. I commutted to school (University of California, Irvine) and that made a HUGE difference. Instead of bulking up $20k per year, it was only $10k per year! Saved a lot and I worked 20 hours a week at the hotdog place at $9/hr through my college career as a Biology and Mathematics major. She can do it! 

Another thing I regret not doing is going to community college for my first 2 years. Would have saved $20k and I would have gone to a better college.

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^^^^^^^^^^^^^^^^Tech school first, then transfer. It will save her SO much money.

I went to a four year college right out of high school and had to some how pay for it myself. I qualified for a bit of FAFSA money, but I also worked my butt off the summer before, and I squeaked by. I ended up having to leave the school after two years because I just couldn't afford to do it anymore, even though I was commuting to save money by not living on campus, I was shacked up in my grandparents' basement for free, and I was working about 30 hours a week. Had I gone to a community college and transferred, I would have saved myself over $10k, which I wouldn't owe in student loans. Now, I have about $14k in student loan debt that is being rehabbed because I couldn't afford to make the payments. It's a slippery slope. And even after all this has happened, I wouldn't ever consider paying for my children to go to school. I would help them save, but I would never front them the money. Paying my own way through school (I now pay out of pocket for an associates degree at a local community college) has taught me how to manage money, create a budget, ect.

I saw many, MANY of my fellow classmates wasting mom and dad's tuition money partying their way to failure. Plus, if she has such a fantastic GPA, apply to every scholarship possible, even if she doesn't think she'll get it. It's free money! Have her act like applying for scholarships is another part time job. Set aside time to do it, and it will pay off.

[Anonymous]

for reference: I'm 23 and graduated from UCLA a few years ago. During my second year at UCLA, they approved a 33% fee hike in tuition. I have two siblings and we were raised by a single mother, so I guess you could say I was recently on the other end of this situation.

honestly, i think the best way to approach this is to have a conversation with your daughter about your financial situation. this is critical because it will put everything in perspective for her, while reiterating that you're supportive of her future goals and aspirations. if you're anything like my mom, which you seem to be, you feel a huge amount of responsibility over your daughter's future and a loving obligation to help her in any way you can (this means that leaving her to her own devices to sink or swim will probably eat you up too much). your daughter is smart and probably mature enough to handle this conversation. it will also relay the message that you're supportive of her ambitions and simultaneously give her the agency to decide the next step of her life, while showing that you are willing to work with her in whatever capacity that you can. if framed correctly, this conversation will be very productive (it was for me) and eye-opening for her. when my family had this conversation, i was infinitely appreciative of my mom and the sacrifices she made for the three of us, and i put the burden of responsibility on myself to help out in whatever way i can (up until this conversation, i was largely left in the dark on our financial situation and just assumed things were fine. my mom provided everything we needed and then some, leading me to believe that there were no problems. though i dont come from an middle-upper class background, i can honestly say that my mom provided us with a lifestyle that allowed us to enjoy the material pleasures (within reason)). There's also the added bonus that as the oldest of your children, that sense of financial responsibility will trickle down the sibling chain.

as far as options:

commuting is a good option, but it does make it a bit tougher for her to get involved as there's a good amount of learning to be done on campus that several of my commuter friends missed out on / had to work much harder to be involved in. (and no, i'm not talking about greek life) community college is a valid option, though be aware that some (not all, and definitely depends by industry) companies value a university degree slightly less if she transferred from a CC rather than straight out of HS. never underestimate the value of scholarships; there's literally scholarships for anything -- any type of field, personal interest, essays, for being left-handed, etc. Check out Ramit Sethi's blog IWillTeachYoutoBeRich -- you might hate his condescending and snarky tone, but he has some good tips on applying for multiple scholarships (he paid his way through Stanford strictly through scholarships). In addition, working while being in school is increasingly common, and some schools offer some pretty strong workstudy programs for the employed student. let her know that whatever route she chooses WILL be one of the toughest challenges she has faced but you are behind her 100% of the way. there was a point in college where i was taking the maximum number of units, working 40 hours a week, interning 15 hours a week, and in a club organization leadership role (just for some perspective on how "tough" things can get. i know people who have done more).

i'd be hesitant to recommend her putting a year off or going to a trade school first. if she is valedictorian, she seems pretty driven and saying, "great job, but now we're going to stop you for a year because we can't afford it" is very offputting. it could potentially extinguish her drive, make her resentful that you didn't tell her to get a job earlier, etc. if there was a particular trade she was interested in, i'd hope that she would have mentioned so by now. the last thing you want is to make her feel like you're being insensitive, unacknowledging of her hard work, and unsupportive (which obviously you're not). if these are things that she's willing / open to doing, it will come out during your conversation with her (most likely not right away, but after it's sinked in).

i tend to disagree (respectfully, of course) with the notion that college is solely the responsibility of the person attending. i think it's an incredibly difficult (almost unreasonable) reality check to go from high school senior where everything is provided to "good luck paying your own way through college" especially if you haven't prefaced that to them in the past. By no means do i think you should pay for everything or even bear the brunt of it, but i think there needs to be some transition point or a collaborative partnership there. it can't be a sink or swim situation; rather, she needs to know that you'll support her in every way you can, even if your ability to support her financially is limited.