STUDENT LOAN SHARK

[Anonymous]

I am a single mom with 2 teenagers. I am working and trying to pay off my student loans. I am also trying to put money into my kids college funds for when they graduate from high school in 4 and 5 years. I am living 65 miles away from work and my kids help my parents when I am at work and they are not in school. I have found out that by paying $1000.00 per month that I can just get by. I am also putting around $100.00 into my kids 529 for school. I am not sure if I will be able to get my student loan paid off before they get out of school. I really don't want my kids to go through what I had to when I got my student loan.  I want to get a house or something closer to work, I don't know if I should rent or buy a house. Any suggestions on what to do?

[SCF]

Do you mind sharing some more details about your situation? I think you're doing great by focusing on your student loans and your kids' education, but do you have any higher interest (especially CC) debt? If so, you might do best by paying that down first and just doing the minimum's on your SLs for a while.

Also, even though college is years off, now is the time to start pursuing those activities that might get you scholarships. Encourage your kids to develop talents in sports, music, debate or other areas. Are they Boy or Girl Scouts? Pursuing Gold or Eagle awards can reap benefits for college. Also, beginning with honors courses in freshman and sophomore years of high school can lead to AP courses and college credit at a much cheaper price tag (plus increases their chances of getting a merit scholarship!). Now, very few people can do all of these, but just doing one or two can make a difference.

Also, keep in mind that your kids may well qualify for Pell grants and Perkins loans based on your income, so that will help them avoid getting stuck with heavy debt and nasty loan terms. Fill out the FAFSA and seek out help through college financial aid offices when you get to that point. There are also sometimes community organizations out there to help you fill out the FAFSA and understand student aid, if you're in Montana, I can point you to one, if not, Google is probably your best friend.

As far as buying or renting... there's a lot that goes into that, I would say you don't want to buy until you're ready to commit to being in one place for a long time and you have all of the financial pieces (including FICOs) in order, at least that's my provisional plan for the moment. I'm sure some members who have bought homes have more there.

Good luck, it sounds like you are doing great with what you have!

[jaybird201]

First of all, FAFSA, FAFSA, FAFSA!!! Even if you're making a 6-figure income, you should still have your kids fill out the Federal Application For Student Aid.

I applaud you for saving up money to help pay for your childrens' college expenses, but if it's not possible, it's not possible, there's nothing you can do. Now let's take a look at what your kids can do. As mentioned above, Pell Grants and Perkins Loans are need-based and can provide money for college. Your kids however, should definitely go to their high school counselor and college resource center (Assuming they have one) and inquire about scholarships. Even if they don't qualify for merit based scholarships, there are TONS of scholarships out there for anything and everything.

Just an example: Dave Letterman the late-night talk show host gives a scholarship to one student each year at his alma-mater. The qualifications? The student must have a 2.0 GPA. No higher, no lower.

Individuals or companies can set whatever qualifications they like for scholarships they fund. Chances are, depending on your race, religion, field of study, extracurricular activities, street address, city, town, state, etc. your kids could qualify for and apply for numerous scholarships. Some may be merit based, and some may not be. Get them to do their homework. If you tell them that they might need to take out a loan for their own education, that provides an incentive for them to do as much as possible to get funding from someplace else besides the Bank of Mom and/or Dad.