Parents share load of kids’ college borrowing

[Liberal_in_LA]

http://www.bostonherald.com/business/general/view/2008_12_23_Parents_share_load_of_kids__college_borrowing/srvc=business&position=recent_bullet

Parents share load of kids’ college borrowing

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“Now, I feel like a terrible parent,” said Susan, who asked that her real name be withheld because she feels “embarrassed.” “I should have either sent them to less expensive schools or done better at saving for college. Now, they’re stuck in this terrible situation.”

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As a student, she took out $18,000 a year in private, Sallie Mae loans. By the time she graduated, she owed $86,000 on the loans, including interest. She lost her first job after graduation, fell behind on payments and began getting calls from Sallie Mae “10 times a day,” demanding payment.

Since then, she has been splitting the $700 monthly payments on those loans with her parents and now she has about $65,000 left to pay.

She also borrowed $14,000 in federal loans with a fixed interest rate. She consolidated those loans, and now her parents pay $100 a month on them.

“It’s sad that at 27, I’m still relying on my parents,” Shannon said. “Even with their help, it will take at least seven years to pay off the debt. . . . The irony is I have friends who don’t have degrees and, financially, they’re far more secure than I am.”

[SAXMAR]

1. Tuition Account Programs

I know it is too late for you but to help others please spread the word that Tuition Account Programs that most states have are the way to go. You buy credits at schools. Of course state schools give you the best bang for the buck.

It is also very hard to use the money for anything but college once you invest it (oh the temptation) in a TAP 529. The Gauranteed Savings Plan that is a TAP option is the way to go.

saxmar