<p>The problem is it’s not just $35,000. Over 4 years it’s $140,000 (that’s if the tuition doesn’t go up every year!). Almost half of your retirement savings are gone, savings that could be earning while your child is in school. I hope for your sake that these savings are in an IRA, Keogh, or 401K and not just sitting in a Savings account because then they do count as assets to FAFSA and college financial aid offices.</p>
<p>We have a similar retirement savings picture between IRAs and 401KS, and we chose to borrow because the interest on the Plus loan was lower than rate that our retirement vehicles were earning. We figure that we can afford the loan payments, and when we do retire, at least we’ll have income if there are still outstanding loans. Whereas, if you spend your retirement, will your child be making enough to support all your needs because you will have run out of money within a couple of years? </p>
<p>As far as the student earning for college, I’m all for it, if your child has this kind of earning power. But I don’t think my kid can pay half his tuition bill on what he earns from summer jobs.</p>