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Ask Dave

Different School Or Student Loans

The economy has cut the educational savings accounts of Bonnie in half. Instead, should she go for a student loan?

QUESTION: Bonnie’s husband has always planned everything out. He has educational savings accounts going for their high school kids. They have taken a hit because of the economy and with one daughter going to college soon, she wants to take out a student loan. He wants her to re-evaluate colleges. Can Dave settle the dispute?

ANSWER: I agree with your husband. With this economy, there’s no way you should be taking out student loans when you’ve got money sitting right there in an ESA and it’s all about college choice. The reality of your life right now is that the educational IRAs are in half because of the economy.

A community college might not be necessary when you can send them to a state school. You might have to roll up your sleeves to send these kids to college because you didn’t have enough money in the savings accounts to start with. But don’t go into debt for college.