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I think we need advice as to the best loans for our kids to take to pay for college. I have been reading and studying a lot about this over the past few years, but I am still not sure what to do, and need some good advice.

We have $40,000 in Savings Bonds for each child. My son is 18, and a freshman at University of Illinois, Champaign. My daughter is 16, and a Junior in high school.

According to the Government and the FAFSA document, we are too rich to be eligible for Government Aid. Our Expected Family Contribution is the total bill. However, in reality, we are too poor to pay for college for our kids.

Freshman year for my son will cost $23,000. So, we have just about enough for 2 years for him before the $40,000 is gone. The story is pretty much the same story will be true for our daughter.

I am telling them they will have to pay for the rest of college by taking out student loans. Problem is: What is the best student loan? Naturally, we have been swamped by the banks with offers for college loans.

I have studied most of the web sites like, and, but they are pretty generic in their advice.

My wife and I have some money in our 401k and IRA, but all the experts say not to use this money for college for your kids. They say: “Your kids can always get a loan for college, but nobody will give you a loan for retirement.”

My wife and are both 59 years old. The only debt we have is our mortgage and a 0% car loan. We have pretty much lived from pay check to pay check for last 12 years. We typically have only about $1,000 in the bank and any given time. In short, we are struggling.

I think our kids need to take out loans to pay for college. The question is: Who do they get the loans from and what is the smartest and best deal?

Any and all help is appreciated. Thanks.
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1) Have both kids start out at a LOCAL community college for the first year or first two years. Make certain that they check the courses they take are 100% transferrable to a 4-year college.

2) Year 3-4 of post high school education can be completed at a LOCAL university where room and board are not necessary. If they really, really need to go to an out of city/out of state college for a specialty, tell them to get really, really good grades so they can get a scholarship.

It doesn't sound like either you nor they have enough money to go to an out of city college at this point. Taking out mega loans when it isn't necessary is just foolish.

My .02

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I agree with Jennifer.

The proposition which should be put to the kids is, "We have $40K total each for you to spend on college - what do you want to do with it?" Whatever is beyond that is *their* responsibility to hustle whether it be through personal savings already accumulated or work. (You *have* been telling them that college expenses are *their* worry, haven't you?)

Loans may be an option, but I'd only do that for a child already shown to be responsible and with a targeted after graduation plan as to what they want to do. That is, I wouldn't co-sign "so you can go to college" but would for "I want to be a <fill in the blank> so I'm going to college."

I know, I know. Some will say college is for education, not job training but education in the abstract (esp. at today's prices) would be a true luxury if one didn't have a plan to actually use it.

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