Foreclosures' financial strains take toll on kids

More than 300 school districts in the USA have reported a rise in homeless children because of the foreclosure crisis, according to a soon-to-be-released report by the National Association for the Education of Homeless Children and Youth and First Focus. Areas that are absorbing the biggest surges include Michigan, California, Florida, parts of Illinois and the suburbs around Houston. As of April 1, Cleveland schools enrolled more than 2,100 homeless students, a 30% increase from last year.

Under federal law, children who meet the definition of homelessness can stay in their school district if it's determined to be in their best interests, though many school districts and families are unaware of the legislation. Under the law, the district determines what's best for the child.

But children who move to rentals or to homes in other school districts aren't typically allowed to stay in their original schools, even if it's in the middle of the school year.

The consequences can be hugely disruptive. If children move too frequently, especially when their families are forced to, "They become detached. They don't want to make friends," says Barbara Duffield of the National Association for the Education of Homeless Children and Youth.

"In one school, a second-grader who had lost his home just put his head on his desk and cried all day," Duffield says. "Schools are seeing the impact of (foreclosures) on children firsthand."

Parents afraid of further traumatizing their children don't always inform school districts of the change in residences and try to conceal their family's financial distress, Duffield says. In one case, she says, a mother who had moved to a motel was discovered by the school district in Mobile, Ala., to be living beyond the school boundary after her car broke down and she couldn't drive her child to school.

Several districts, facing a wave of homeless students or children living beyond the district lines, are having staffers or private investigators check for families using false addresses. Palm Beach County, Fla., set up an anonymous tip line that residents can call to report families who might be improperly enrolling students.

In Los Angeles, the school district has lost 8% of its enrollment over the past few years as many families who can't afford to stay in their homes have moved out of the area, says Monica Carazo, a spokeswoman at the Los Angeles Unified School District. A number of high schools had to let teachers go. Before, schools were so crammed, some children didn't even have desks.

Trying to be a kid

For children, there are other consequences from mortgage-related financial crises. Some are losing their health insurance because parents cut back on that expense to try to keep up with mortgage payments.

Some say they're simply trying to focus on still being a kid even though they're dealing with grown-up concerns.

Zoe Esslinger, 15, says she tries not to think about losing her home. In October 2005, her parents bought a house in the countryside just outside Neenah, Wis., with plans to sell their home in the city of Neenah. But six weeks after moving to the country home, her father moved out, and her parents ultimately got divorced. Her father signed the country home over to her mother, Tracy, 42, a creative services manager for Fox World Travel.