Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 26, 1992 TAG: 9201250016
SECTION: BUSINESS PAGE: B1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY BUSINESS WRITER
DATELINE: LENGTH: Long
HOW ONE PARENT PLANNED, SURVIVED
"MOM, Welcome to Your Last Parents' Weekend Ever," the sign said. "Only 231 days until graduation."That's the way Shannon greeted me at the Greenville, S.C., airport in the fall of 1990.
It was home stretch for my daughter as she entered her senior year at Clemson University and I was more than ready to give up the role of parent who had put two children through college.
It had been about the same time eight years before that her brother, Michael, met me at the New Orleans airport with a long-stemmed red rose and welcoming me to a final parents' event at Tulane University.
During those eight years, money was a major issue in my life. The span in their ages meant only four years for financial recovery between sending the first to college and starting the second.
Jerry Bird, with the Southern regional office of The College Board, warns that it takes years for a family to save enough for college costs. The College Board's Early Awareness Project aims to reach parents with college financing information by the time their children are second-graders, giving families a minimum of a decade to accumulate savings they'll need.
Parents and students become most aware of the needs for college money when a student reaches the 10th grade and begins serious college planning. But two years before college is too late for a savings plan to have much impact, Bird said.
Four years wasn't much better.
It wasn't long enough to restore the financial stability that I'd known before my son began college. I'd had 18 years to save for that.
Costs for tuition and housing were about $8,000 a year at Clemson and Shannon's father paid part of that. My savings covered my share of tuition only for her first semester. After that, I borrowed.
There are only so many ways to pay for college.
Basically, there are three ways: For the student to get a job. Have someone else pay for it. Borrow money.
Any way, it calls for a plan.
This was mine. I would do everything reasonable to send my daughter to the college of her choice, but I wouldn't live in sackcloth and ashes and sacrifice every treat to do it.
I continued taking a special vacation each year, eating out occasionally and going to a few plays and movies. What I didn't do much of was buy clothes or entertain.
When I had to buy a car, I bought a used one. Other expenses were cut in little ways: Magazine subscriptions were canceled, minimum cable TV was ordered and any unnecessary changes to the house were shelved.
Bird warns parents also not to attempt to save for a kid's college at the risk of their own retirement funds. Given his advice, I decided to continue payroll deduction for a 401-K pension plan rather than use that money to meet college expenses.
A home equity line of credit got me through the college bills, and it proved one of the best ways to borrow. It means a parent can borrow small sums when they're needed simply by writing a check. And, the interest on the equity loans is deductible on income taxes.
There's good information available about how to get all sorts of financial aid and loans for student and parents. Nothing prepares a parent, however, for how much it will really cost to send a child to college.
The college costs you read about are based on tuition, board, books and supplies, a couple of trips home and minimal spending money - the obvious expenses.
Actually, the college student has to set up a little home away from home and needs to buy detergent and fabric softener and have coins for the laundromat.
Sending a student to college means increases in every category of a household budget with the exception of a small decrease in grocery and water bills at home.
The moment a parent begins to fill out a Financial Aid Form - better known as the FAF or The Form From Hell - the parent begins a four-year course in reality.
The biggest shock is learning the college financial aid program for the federal government works like a welfare program. The recipient is penalized for being conscientious.
It means if a child has worked to save for college that money will be counted as income on the FAF. It could mean that the student's eligibility for work-study and loan availability is diminished.
Here are some other realities:
If your child goes far away from home to school, the travel expenses are major and discount air fares usually are invalid during holidays, when students are likely to fly.
This was painfully brought home when my son was at Tulane. Air fare between Roanoke and New Orleans is equivalent to a cross-country flight.
If a teen-ager has a car, you'll still have to pay insurance, no matter if it stays home while the student is away at school. You might get a discount because car and child are separated, but it's not a lot of money.
But if you sell the car, it won't be available when the student comes home for the holidays and summer and needs it to drive to work to make money for college. My daughter's car eventually went to school with her anyway because she needed it to get to her part-time job, another reality.
If the school is a long-distance phone call away from home, phone bills will reach the proportions of heating costs, especially in those first months when parents and child are adjusting to being apart.
The college student will need more special clothes than before. There will be dances and initiations for clubs or fraternities and sororities, and eventually for the - say this with reverence - Interview Suit. That outfit will set you back a bundle. And because interviewing begins in the late fall and goes into spring of junior and senior years, there will a need for a cold weather suit and another, warmer weather suit.
There also will be fees that you hadn't anticipated and emergency dental and doctor visits to pay for and medications to buy, all generally at higher prices than you might pay at home.
If you intend to take part in any college activities as a parent, you'll need to budget money for air fare or gasoline and motel rooms.
During that last Parents' Weekend, I slept on the couch in the dorm lounge. But, that won't work for two parents or for anyone bothered by corn popping in the middle of the night.
I wouldn't trade the kid-in-college experience, even if by the time the last tuition payment was made and graduation expenses paid, I was up to my limit on both the home equity loan and my Visa card. Other charge cards also had been pressed into service.
The large equity loan coupled with a mortgage payment meant my monthly payments were so high that I had to resort routinely to charging for any needs, like new shoes.
I literally lived on negative income for four years.
And when it was over, there was my daughter's debt on top of mine. She left college owing about $12,000.
Bird of The College Board assures, however, that borrowing money for college has to be looked at as an investment and isn't bad.
"Just don't borrow more than you can afford to pay," said Bird.
That's a growing concern, said Buddy Johnston, financial aid director for Radford University. The way college costs are rising, some students are coming out with loans that have monthly payments greater than they can afford on the incomes they're getting.
Johnston said my daughter's loan amount is about the average.
Her monthly payments are just under $200, meaning that with her income she can still buy a car, rent an apartment and do other things that young adults dream about while they are studying for four years.
To begin my recovery, I refinanced the house, combining the original mortgage and the equity line balance to get one, smaller monthly payment. I also began an aggressive savings program, trying to put aside the difference between the old mortgage payment and the new one.
Could we both have done a better job of cutting college costs? Perhaps, but we wouldn't have enjoyed it nearly as much.