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Your Credit and the Holidays

Where to go for mortgage and debt help

What You Should Know About Debt Settlement

Create a plan to deal with medical debt

Options for Higher Education

Back-to-School Strategies for Staying Out of Debt

Will Changes in Credit Reporting Affect You?

What to do if your medical bills are turned over to collections

What to do if your spouse can't pay his or her bills

What to do when a family member ruins your credit

Homeownership is possible

What you need to know about the IRS and collection agencies

Will being turned down for a store credit card hurt my credit?

Beware of credit repair

Debt Management versus Debt Settlement

How to get ahead of late fees

Is There a Service That Helps You Not Pay Bills

Is a Debt Owed

Patience is the key to furnishing a new home

How to split expenses with your partner

Will my boyfriend's bad credit affect me?

Tax filing options to consider

What to do if your account is turned over to collections

Celebrating Valentine's Day on a budget

Personal Credit and Starting a Business

Finding Money to Reduce Your Debt and Improve Your Credit

Simple Keys to Personal Finance

Be vigilant to avoid telephone and internet scams

Debt Settlement

Understanding credit utilization

Setting New Year's goals that you can keep

The pros and cons of skipping a payment

Strategies for Financially Surviving the Holidays

Creating a fun and memorable holiday on a budget

Keep an open line of communication with parents about their finances.

Make a Choice to Get Ahead Financially

What to do when a relative asks you for money

Should You Buy a Home Now or Wait?

The difference between debt settlement and debt management

Tax Refund Delays for some in 2017

The negative impact of paying a payment 30 days late

Stressed by Finances

How to navigate two significant financial decisions: starting a family and buying a home

How to advise someone close to you who is coming into a significant amount of money

Make a Conscious Decision on How to Spend Your Money

Tips for Back-to-School Shopping

How do you know if you have a good credit score?

Americans spend more money eating out than on groceries

Having Good Credit Saves You Money

Developing good money habits with your first job

How to save for a home

How to Know if you are Ready for Home Ownership

When is the right time to buy a home?

You can improve your credit to buy a home

Plan a Memorable Vacation Without Incurring Debt

The Hidden Costs of Payday Loans

Be Wary of Credit Repair Services

Use Caution when playing the credit card game

What does it mean to say bankruptcy gives you a clean slate?

How your credit is affected by various debt options

Be wary of predatory small business loans

What to do if you fall behind on mortgage payments

Financing a College Education

Money, Credit and Relationships

Should you be concerned with your date's credit scores?

Best options for a small, short-term loan

How to help a relative who is always borrowing money from you

Setting New Year's goals that you can keep

Making the holidays memorable for families on a tight budget.

Skipping a Payment over the Holidays

What to do if you are overwhelmed by medical bills

Make your financial intention a financial goal you can achieve

Should Consumers Use the New EMV Cards?

What to do when a collector calls you

The difference between paying bills and managing your money

My wife and I have gone through some tough financial times, which eventually led us to file for bankruptcy.  Following this experience, I don’t ever want to use credit again, but my wife

What do I need to know to pay ahead on my mortgage?

What to do if you get an unsolicited credit card in the mail

What to do when moving in to share expenses doesn't work out

Financing a College Education

Q. My daughter received $40,000 from her Grandfather for her college education. She wants to go to a private college out of state. My husband and I disagree on whether we should try to steer her in a different direction. Any advice?

A. Choosing a college is an exciting decision for young people, but it’s easy for their enthusiasm to cloud the big picture—namely, how to pay for four or more years of higher education. Your daughter will ultimately have to decide how to spend the money she’s been given, but you can help her to consider her options. Right now, she probably sees college as a passageway to her dreams.  With your help, she can find where her dreams and the reality of paying for college need to align. 

Not long ago, it was common to hear the advice: take out student loans, get your degree, and when you graduate, you will have a good job and be able to repay your loans. Unfortunately, this advice is outdated and will not serve your daughter well.  The cost of college has risen so steeply that many people get degrees, only to find that they can’t make enough to cover their expenses.  What’s more, not everyone who goes to college graduates with a degree.

As her parents, you can encourage your daughter to take a telescopic view of how her choices may influence her down the road.  For example, while $40,000 may only cover one year, or part of one year, at a private college, it would go much farther at an in-state institution.  In fact, if your daughter lived at home and went to a state university, her $40,000 would probably cover most of her degree, and she could graduate with little to no debt.

If your daughter opts for an in-state school, but does not live at home, her $40,000 would cover a large portion of her education, but she would still need to take out student loans.  She could end up with less than $20,000 in debt to get her degree.

If you daughter goes out of state, the $40,000 may or may not cover one year of college, depending where she goes.  If the university she chooses is $40,000 a year, she would end up with $120,000 in school loans for the other three years.  It will be difficult to find a job that will pay enough to cover her expenses while she repays her school loans.  She may qualify for deferment upon graduation, but that only delays the process of repaying what she has borrowed.  She needs to know, too, that it is nearly impossible to file bankruptcy on student loans. 

As for your role in the process, I would caution you about co-signing for any of your daughter’s student loans. You will be responsible for making her loan payments if she cannot. This remains true, even in the event of death. For parents who do opt to co-sign, it’s important to purchase enough life insurance on their child to pay-off the student loans in the event something unexpected happens.  Life is unpredictable, and parents need to protect themselves.

College is an investment, and like all investments, students need to consider the risks and the rewards.  Given the economic landscape, my advice for students seeking higher education is this: Make it your goal to get a degree in a field where jobs are plentiful, with as little debt as possible. If she follows this advice, your daughter will be able to make the best use of her Grandfather’s gift and leave her program with a significant advantage over most of her peers.

Bonnie Spain is the executive director of the American Center for Credit Education and Consumer Credit Counseling Service of the Black Hills. For more information, email acce@acce-online.com.

The material in this transmission is provided for personal, non-commercial, educational, and informational purposes only. ACCE makes no representations or warranties with respect to the accuracy or completeness of the contents of this transmission and assumes no responsibility for errors, inaccuracies, omissions, or any inconsistency herein. You should consult a professional where appropriate.