Ask Terry Questions contributions or college loan

contributions or college loan

By Terry Savage on July 24, 2018 | College Savings / Student Loans

Hi Terry,
I’m trying to contribute as much money as I can for my two son’s college tuitions, without having to get a loan. One son will be a junior and one a freshman. The 529 plan for my junior has run dry, and I have enough in a 529 for about 2 years of college for my other son. Both sons’ are also taking subsidized and unsubsidized federal loans for now, and they will most likely take out personal loans (Discover or Sallie Mae?) down the road because I can’t take it all on myself. I’m 49 and frankly, I haven’t been contributing to my traditional IRA for the past 5 years because everything is going to college. I estimate I won’t be able to make contributions for another 3 or 4 years since I’m saving for college. My balance is about $250,000 on the IRA, plus I’ll have a teacher’s pension (been teaching for 12 years). Then I wonder if I’m not really making the right decision by not making the contributions, and instead taking a loan for the kids college.

Terry Says

I think your family should have assessed the available funds and cost of college BEFORE you all took on this burden. A far better solution would have been each son taking two years of junior or community college and living at home. That would have saved a lot of money. Suggest the second son take this route,and use the 529 money for his junior and senior years in college.

I know parents want to sacrifice for their children’s education, but the situation has gotten way out of hand. College is too expensive, and the burden of debt will destroy their future. They can’t get private loans because they have no income. You’d have to co-sign. That will make your retirement impossible.

I think it’s time to sit down with each boy and the financial aid counselor at the college and explain that your family is overwhelmed. Maybe the school can find a work/study program, or check out scholarships and grants. Go to to start working on that aspect of the funding.

And make sure the boys are taking courses that lead to a real profession. I’m all for a liberal arts education, but as your important profession has demonstrated teachers are not highly enough compensated for the important work they do.

Bottom line: there are no good answers. You can earn extra money by tutoring, or perhaps adding a summer job. Similarly, your sons are going to have to work as well as attend school. But debt can really creep up on them. Go to to see just how much they will have to pay on those loans every month for a real education!

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