We're addressing a unique set of listener inquiries about education and student debt in this Mailbag episode.

As we celebrate the holiday season, we're thrilled to bring you five special episodes focused on listener questions! Our audience sends in fantastic queries year-round (to info@savinghunt.com), and we aim to answer as many as possible before 2020.

In this episode, Jean and Kathryn respond to questions about college costs, educational funding, and student loans. Jean provides insight to a woman who co-signed her daughter’s loans, now struggling with repayment due to her daughter's lack of responsibility.

We also hear from a woman facing divorce whose husband will stop contributing to their children's college savings once they reach 18. She seeks ways to maximize her funds, considering an Education Savings Account (ESA) for her college-bound son.

Jean further explains how the 529 accounts she set up for her nieces might affect their financial aid eligibility and offers advice on managing those accounts as college approaches. Lastly, Jean addresses a question regarding refinancing $180,000 in student loans while maintaining eligibility for income-based repayment plans.

Transcript

Jean Chatzky: (00:06)
Welcome to a special mailbag episode! Thanks for joining us. Kathryn and I have been reviewing your questions, and we’re excited to dive into topics about college and student loans. Currently, there are 45 million borrowers with a staggering $1.5 trillion in student debt. The average debt for recent graduates is around $30,000. Facing this burden is challenging, but we hope to provide guidance.

Kathryn Tuggle: (00:46)
Absolutely, I enjoy this!

Jean Chatzky: (00:48)
I’m particularly eager to address listener inquiries regarding college expenses and loans. Many parents are anxious about helping their children avoid debt.

Kathryn Tuggle: (01:35)
This certainly keeps parents awake at night.

Jean Chatzky: (01:43)
Absolutely. When I give talks, the question often arises regarding how to balance saving for college with personal retirement. Traditionally, I suggested prioritizing retirement since financial aid is available for college. However, as my kids approach college age, I’ve come to understand the parental instinct to support your children, even at the expense of your own financial needs. We need to find a balance, utilizing tax advantages while saving for both college and retirement. Roth IRAs are a great option since they allow funds to be allocated for either purpose.

Kathryn Tuggle: (03:16)
Great point.

Jean Chatzky: (03:17)
Let’s get started.

Kathryn Tuggle: (03:19)
Our first question comes from Annie. She writes, "Hi Jean and team! I’m 63, a widow, and a member of the sandwich generation. I live in Ann Arbor, Michigan, and borrowed $12,000 for my daughter’s education in 2008. Now I owe $60,000 to Navient due to my daughter not taking responsibility for her loan. I need advice on negotiating this situation and managing the debt while trying to build my savings."

Jean Chatzky: (04:26)
I empathize with your situation. Unfortunately, co-signers are equally responsible for the loan. If your daughter neglects her obligation, it significantly impacts your finances and credit. I recommend contacting the lender to negotiate a manageable payment plan covering interest. If your credit allows, explore refinancing options. Additionally, consult a non-profit credit counselor through the NFCC for tailored advice.

Kathryn Tuggle: (08:35)
How does one find a reputable credit counselor?

Jean Chatzky: (08:40)
Use the NFCC to find accredited counselors.

Kathryn Tuggle: (08:55)
That sounds great.

Jean Chatzky: (08:57)
I’ll tease you because it’s amusing. Kathryn often says