“As credit crunch hits student loan market, many finding it difficult to finance their educations.” (The Morning Call, Allentown, PA 3/9/08)
      
That was the headline that greeted me Sunday morning.  The article detailed how a crisis in the sub-prime mortgage industry is now leaking out and creating other financial issues – like parents and students who had planned to take out loans for tuition now unable to secure as much as they need.  The writer points to a few reasons including lenders looking more closely at credit. Families with less-than-stellar scores who may have received the loans just a few years ago are now getting turned down.  Meanwhile, a number of lenders have left the student loan market, reducing the pool of lenders available. 

This after a week that included two telephone calls from friends who very unexpectedly lost their jobs and conversations with two others who are considering selling their current homes to achieve a smaller monthly payment.  With inflation and fuel surcharges hitting every good and service at once, the families are strapped and worried about meeting payments. 

Facing the total cost of a college education was a bit shocking when we started window shopping a few years ago.  But in 2008, as we watch the economy struggle and feel the squeeze here at home, it has become just plain scary.
      
In response, we move through this year making changes.  While we were gathering the information for our tax return, we also took a new look at all of our expenses.  My husband spent a few weeks comparing new quotes on our insurances, we cut out a few extras, and we have outlined general house maintenance and updating needed in the next few years.  The low-cost, do-it-yourself tasks are at the top of the list while other items will have to wait. Although we’ve always stayed in touch with our budget, it does feel good to re-evaluate and know we are being organized and smart with our income.
      
In the meantime, we also completed the FAFSA.  The major OOPS on our part was selling an investment property in 2007.  Ironically, we had purchased that property with the thought that it would be lined up for tuition when the time came.  Instead, the net from the sale – not a huge gain, but enough – was added to our annual income and likely shut us out for any assistance that might have been available to us.  When the FAFSA email came back with our expected contribution toward college costs, we enjoyed the same big laugh many other parents are sharing.  A few friends have asked me, “Why are we even filling that form out???” The argument is that the form doesn’t ask for debt, so there is no balance for the income and assets line. Also, the form asked how much parents are saving for retirement...does this suggest those in college lending see money intended for retirement as funds instead for education? 
      
Now if we could just hear from the last college application, we would have the final numbers to review with our son and help him make his decision. As we start that loan shopping, we are fortunate that our credit rating is very strong.  We also signed our son up for a credit card in his name when he turned 18 to build his own history.  We have monitored its use this year and made sure the bills were paid right away.  This will give him an opportunity to secure some items, even the cell phone, without our co-signing. 
      
Hopefully the plans we have put in place will help us through a trying time to fund a college education.