Dear Dave

My daughter is a freshman in college, but I didn’t save for her education. My parents said it was my job to pay for my college, and that’s what I’ve told her. She’s going to have about $12,000 in student loan debt after her first year. How do I talk to her about not ending up with $50,000 in debt when she’s through? — Paul

Dear Paul

If you want her to pay for college, then, as her dad, you have to coach her on how she’s supposed to come up with the money and manage it properly. She’s already behind the eight ball because it sounds like you didn’t teach her the correlation between work and money earlier. So, you’re going to have to get real busy, real fast unless you want her to be drowning in debt.

I think you owe her a leg up at this point. Twelve thousand dollars doesn’t just magically appear in an 18-year-old’s hands. I’m perfectly okay with kids working through college and parents cracking the whip when it comes to acting responsibly. But if you expect them to pay for it, you first have to show them how to do that. Otherwise, they’re going to hit the default button and wind up $50,000 in debt when they graduate. That’s a really bad plan!

If you have some money, I think you should help her along while teaching her how to make money, save and budget. Then, maybe she’ll be prepared to pay for her last couple of years with some good, hard work! — Dave

Dear Dave

I’m a junior in college, and I live in a rental house. There’s no formal lease, and my landlord never asked for a deposit of any kind. Recently, I started receiving notices from Chase Mortgage saying that my landlord is $7,500 behind in his mortgage. I’m worried about what will happen if they foreclose on him. Should I move out, stop paying rent or what? He’s told me not to worry, because he’s just behind on the payments and not in default.

— Chris

Dear Chris

Well, the last part is not quite true. When you’re behind on payments you are in default. I think you should stay where you are for now, and keep paying your rent on time. Keep the lines of communication open with your landlord. I’d contact Chase, and tell them about your situation in this house.

Ask them to keep you informed, so that you’ll have time to formulate a plan and find a new place to live.

Chances are they’ll give you at least 30 days to move out if a foreclosure occurs. You probably won’t have to pay anything to the bank afterward, so you may get to sit there rent-free even longer while they sort out everything. Considering the fact that you don’t have money wrapped up in a deposit or a lease hanging over your head, there’s really not a lot of risk for you here.

You might keep an eye out for other properties in the weeks ahead, but other than that, as a renter, you’re in pretty good shape under the circumstances.

— Dave

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