With the college application process in full swing for high school seniors, and the recent press about the high cost of college and increasing levels of student loan debt, it’s easy for divorced moms to feel overwhelmed and uncertain about paying for college for their kids.
Many parents feel they should provide their kids a college education so they can start their adult lives debt-free, and according to at least one recent survey described in an article for Forbes magazine, divorced moms prioritize college over saving for their own retirements. Guilt plays a big part in some of these decisions, but uncertainty is a factor, too. Many divorced moms don’t know what to do about college, and they don’t know who to ask.
So here are some suggestions from a divorced mom who’s been there. First remember this:
College education is a privilege, not a right.
Despite the mixed messages of the financial media, this is true. And it’s helpful to keep in mind when you hear things like:
- Help your kids leave college debt-free.
- Direct your kids to practical majors where they can get well-paying jobs when they graduate.
- Follow your passion.
- Save money by doing your first two years of college locally and then transferring to a bigger school.
- Where you get your undergraduate degree doesn’t matter; save the money for a good grad school.
- Finish in 3 years instead of 4.
- Fund your own retirement first.
- Use your home equity to help pay for college; it’s tax deductible.
- Don’t take out parent loans.
How do you know what’s right for you with all these conflicting messages?
First, throw out all the conventional advice, or at least the contradictory messages that are clouding your decision-making or making you feel bad. Like “help your kids leave college debt-free.” If it’s not happening, why even give it a thought?
Then approach college funding decisions from the specifics of your situation, not somebody else’s general rules. Unless your divorce settlement agreement says otherwise, you are under no obligation to pay for college. Here are a few guidelines to help.
1. Pay yourself first.
This is one area where I think conventional wisdom makes sense. If you have to pick between funding your retirement and paying for college (or paying your rent and paying for college), take care of your own needs first. Your kids have many years ahead and more time to earn.
2. Student loans are not the enemy.
Loans, especially the government subsidized loans, are a way for your kids to invest in their education. These loans come with limits on how much can be borrowed, which keeps the overall debt levels reasonable. One rule of thumb I’ve seen that makes sense is not to graduate with more in debt than you expect to earn in your first full-time job.
3. Don’t limit what colleges you apply to by cost.
It’s the overall financial package that you need to look at, not the tuition and room and board costs listed on the school’s website. Some of the more expensive schools offer sliding scale tuition, scholarships, and grants that bring down their overall costs, and many private schools have more funds available than public schools. And if you are the primary financial support for your kids, as a divorced mom, your child may qualify to receive federal grants that will also lower your overall costs.
4. It’s ultimately your young adult’s responsibility, not yours.
This is one of the first big decisions an older teen will make, and it’s a good opportunity for them to take the lead. Let them do the footwork while you support them in the process. If you want it more than they do, you’ll just set yourself up for frustration and resentment – and possibly financial losses if things don’t go as you hoped they would. It’s their future, not yours. However, they need to understand the factors involved, including money, so it’s important to talk with them throughout the process.
Here are a few questions to consider and discuss with your child/young adult so you are both clear on the parameters of college financing. If your former spouse is involved, you may want to discuss these questions with him or her as well so you can approach this transition with a common understanding.
1. Is your child ready for college? If so, what are your expectations?
Not everyone is cut out for college, and some kids aren’t ready right after high school. There’s no harm in exploring other options or waiting a year or two if it’s a better fit. If they are ready and planning to attend, it’s important to set clear expectations for grades, course loads, etc., if you are paying for all or part of their education. For example, my guidelines include the expectation that academics is a priority and they should take advantage of what the school has to offer. Their grades should reflect that (As and Bs). Also, I consider the social aspects of college and learning to live more independently important, but I am not paying for them to party, and I won’t be shielding them from the consequences of their choices. I won’t be contributing if they aren’t using their time and opportunities wisely.
2. How much, if anything, do you have set aside for your child’s college education?
Whatever it is, that’s your baseline, and your kids should know it. So tell them. If you don’t have any money for college, let them know that, too. Kids can explore financing options through their high school counseling office and www.finaid.org. They can also work for a year to establish independence, qualify for financial aid, and save up money to fund their educations. Or they can work part-time and go to school part-time. It may not be easy or “fair,” but it’s their education and their future life, not yours.
3. How much, if anything, do you expect to contribute each year over and above any current savings?
Factor that into your overall calculations, and include that in the discussion with your child (see #1).
4. What do you expect your child to contribute?
Will you expect them to take out subsidized or unsubsidized student loans? If they qualify for work study, will you expect them to work while at school? Should they consider applying for jobs like Resident Advisor (RA) that often come with free board and a stipend. Also discuss other options such as those described under question one.
Remember: A college education is a privilege, not a right. And it’s your privilege to help your young adults get started on the right foot with good communication and demonstrated financial responsibility for yourself as well as them.
For more on financial well-being for divorced moms, download a new, free guide available on my website (www.thedivorcedbreadwinnermom.com).