3 Easy Ways Single Moms Can Send Their Kids to College.
If you’re a single mother, regardless of the age of your child(ren), you’ve probably thought at least once about how you’re going to pay for your child’s college education.
It’s tough enough as a parenting team of two to make this aspect of life work, but when you’re trying to make it work on one income, it can feel like even thinking about paying for college is scary.
In addition, making your child take out a student loan is something that will likely to end up on your plate at some point in the not so distant future.
I’ve read countless stories of parents who have hundreds of thousands of dollars in student loan debt on behalf of their children.
It’s these parents who’re paying for college that have found that these debts are causing them financial struggles, keeping them from reaching their retirement goals.
These parents end up drowning in debt that’s not theirs, simply because they want to help their children get through college.
What they don’t realize though, is that there are other ways to help your kids graduate from college.
Many parents think that going into debt for their child’s education is their only option, and that every student has their parents paying for college.
Many of the emails I receive are related to whether or not a parent should risk or possibly ruin their retirement by helping their child pay for college.
I hate hearing about single moms who’re already in struggling, and are now going even further into debt for their children’s education.
Most children aren’t aware of their parent’s financial situation, and feel that tuition is something that’s their right..
Please don’t be one of the many moms who’re struggling to pay for college, on top of everything else, simply because you think you have to. If you can truly afford it, then that’s entirely up to you. But I don’t know a lot of single moms who can swing it financially.
Before you take out any loans for your child’s education, please stop and think about your own financial well-being before you do anything! Are you on track for retirement? Is this loan going to get you into crippling debt?
Mom, think long and hard before you co-sign ANY college loans.
The default rate on student loan debt averages about 10-15%.
In recent years, 90% of student loans are co-signed by others (mostly parents).
So, what does this mean for you?
It means that if you co-sign a student loan for your child and they don’t pay it back, you’ll be stuck with the bill.
Even if you have a great relationship with your child, that relationship can easily change once you involve money.
In my experience, nothing causes drama in family relationships like money does. I’ve heard of people who had a falling out with their parents and actually, deliberately stopped paying their student loans, because they knew that their parents would cave in and start paying for them.
All of that said, here are 3 Easy Ways Single Moms Can Send Their Kids to College:
1. Scholarship Money
The first (and probably the best) of the 3 Easy Ways Single Moms Can Send Their Kids to College, is to apply for scholarships.
With tuition fees increasing in leaps and bounds, it’s better to have figured our your college financial plan so that it won’t be another expense that you need to stress about when that child heads off to college.
It’s unbelievable just how much scholarship money goes unclaimed in the US!
It’s been said that more than $2.9 Billion (that’s a “B”) dollars in scholarship money goes unclaimed in the US every single year! It used to be an exercise in futility tracking down scholarships that a student might be eligible for, but that’s not an issue anymore.
As a parent (single mom in particular), you don’t want to wait in those long lines for financial aid, or let your child work him or herself to death (in addition to going to school) just to have money for tuition and other expenses.
With websites and apps like Fastweb and Scholly, finding financial aid in the form of scholarships for your child’s college education is no longer an issue. These two apps connect students and their families with the best scholarship matches.
2. Saving it. The earlier, the better.
The second of 3 Easy Ways Single Moms Can Send Their Kids to College is to start saving for it, and start early.
Start investing your money as soon as your child is born. Put the savings or investments under your name.
Later on, decide whether or not you want to transfer the account to your child’s name by the time he or she turns 15. This way, you’ll have minimal taxes, if at all.
You also need to be careful when transferring account names. Some states require a total turnover of funds once your child turns 18 or 21. This is also ineffective if, in the future, you apply for financial aid.
Also remember that tuition fees 10 or 15 years from now may be double or even triple the current rates. Speak with a financial advisor about the implications of this plan.
3. Establish a trust fund for your child.
The third and last of the 3 Easy Ways Single Moms Can Send Their Kids to College, is to start a trust fund for your child.
A trust fund is a smart plan for a child’s parents or relatives to invest in.
When you hear the term “trust fund”, we think of “Richy Rich” families who have oodles of dough to toss around.
But trust funds aren’t only for the rich.
A trust fund is similar to a time-deposit, where the money will be given to your child after a certain number of years, or when he/she reaches a certain age.
At the designated time, the fund can be received in one lump sum or on an installment basis.
When building a trust fund, check out details like the interest rates, taxes and withdrawal restrictions and penalties (if any).
All in all, you need to approximate the costs of tuition fees, dorm room, meals, books, and other expenses that may come up.
By the time there are only two or three years left to go before you send your son or daughter off to college, “lock” an ample amount of the funds by investing them in low-risk bonds to ensure that you will get to have enough for them to start their college education.
I hope you found some helpful ways to fund your child’s education in 3 Easy Ways Single Moms Can Send Their Kids to College.