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For scenario #2, college

Submitted by Sky on October 17, 2007 - 17:07.

For scenario #2, college students typically have a number of financial aid options, including loans, and a long lifetime in which to repay said loans--whereas parents of college students are generally nearing retirement.

I would advise using the "college savings" towards mom's medical expenses and having the kids pursue financial aid. If the family finances are really shaken up by mom's situation, any reasonable college or university's financial aid officers would probably be sympathetic and secure some need-based financial aid money (grants, scholarships) for the children.

If the parents take on debt they're unable to repay, the children will likely be responsible for it in the end, anyway--and at terms far less favorable than those attached to student loans.

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