Your Retirement Vs. Their College

Question of the week:We have a son in high school and want to be able to pay for his college education. However, our retirement accounts have been so beaten up that we also need to save as much as possible to shore them up. We don't think we can manage both, so where is it best to concentrate? --CPI

Dear CPI,

Given the sky-high cost of funding retirement and rocketing college tuition, your dilemma is shared by many. We asked the Armchair Millionaire community about whether retirement or college should be the priority for parents, and heard from both sides:

Take care of yourself. "During the pre-flight routine, we're always told that if oxygen is necessary, secure your mask first then help your children. Same goes for finances. Fund your retirement first, then help the kids." --Steven

Take care of the kids. "In a decision between your retirement or your kids' education, the kids' education wins, no questions asked. Children owe nothing to their parents, while parents owe the world to their children." --billmac

In my own opinion, when you can't do both, you should focus on your retirement. After all, there are no student loans, scholarships or work study programs available for your retirement years. And the last graduation present your kid would want is a pair of financially destitute parents.

But if you don't have a dime saved for your kid's college, don't despair. Even if your child doesn't qualify for financial aid, there are still many other strategies that will help bring college within reach. My guide tells some of the best.

The Armchair Millionaire Guide to Alternative College Funding

• Get a scholarship. Scholarships are generally reserved for students with special qualifications (like academic, athletic or artistic talent), who are interested in particular studies or who demonstrate financial need. They are not often awarded out of the blue, so it pays to seek them out. Scholarship reference books (found at your local library or from your child's high school counselor) are a good place to start. There are also a number of searchable online databases. Pass up on search services that charge a fee to locate scholarships--they won't turn up anything that you can't find yourself.

• Be of service. AmeriCorps, a government-run, domestic volunteer program, offers an education award of $4,725 to pay for college or re-pay student loans. Participants can also defer their student loans while serving. In addition, there are a number of government programs that forgive student loans in exchange for teaching, practicing medicine and other activities in economically disadvantaged areas. Since these are fairly specific, the best source of information may be your child's college financial aid office.

• Be in the service. For military-minded people, plenty of help is available:
  • Montgomery GI Bill. This program provides an educational benefit for up to 36 months of college for veterans who served on active duty.
  • Reserve Officer Training Corps (ROTC). This program offers generous scholarships that pay up to the full cost of college. However, ROTC scholarships are not available for every school or for every field of study and carry a substantial service obligation upon graduation.
  • Service academies. West Point, the Air Force Academy, Naval Academy and Coast Guard Academy all provide a free college education in exchange for a commitment to serve after graduation.

• Consider community colleges. These are the last great education values. A student can attend for two years while paying rock-bottom tuition, then go on to finish up a bachelor's degree at a four-year college.

THE BOTTOM LINE: With a bit of forethought and flexibility, both you and your child can be winners in the struggle between retirement and college.