right arrow
Examples: Monday, today, last week, Mar 26, 3/26/04

Pay for your kid’s expensive top school tuition or take out loans by kids themselves?

2»

Replies to: Pay for your kid’s expensive top school tuition or take out loans by kids themselves?

  • momofsenior1momofsenior1 7242 replies56 threadsRegistered User Senior Member
    If we were unable to foot the bill, our D would have gone to the regional university where she got a full ride. We would not have allowed her to take out loans, nor would we have been willing do so ourselves.
    · Reply · Share
  • compilercompiler 19 replies11 threadsRegistered User Junior Member
    If we were unable to foot the bill, our D would have gone to the regional university where she got a full ride. We would not have allowed her to take out loans, nor would we have been willing do so ourselves.

    So, you are willing to pay for your daughter's education but do not allow your daughter takes out the loan by herself. If you are unable to offer the top school expensive tuition, you just let your daughter go to inexpensive college. Is it correct?
    · Reply · Share
  • momofsenior1momofsenior1 7242 replies56 threadsRegistered User Senior Member
    edited July 22
    Correct. I don't think student debt is worth it. She would have been able to reach her goal to be a chem e at any ABET accredited school.

    Note: We have saved for her college since she was born so didn't have that issue but as a family, we are very debt adverse.
    edited July 22
    · Reply · Share
  • ucbalumnusucbalumnus 78206 replies687 threadsRegistered User Senior Member
    edited July 22
    SJ2727 wrote: »
    While you're at it, use the calculator to see what the total interest paid over the life of the loan is, so that the kid can see that the "$200k loan" is actually much, much more. If it is the child insisting on going and saying they'll repay the loan, then hopefully that should inject a dose of realism. If it is the parent, realize that "making the child pay back the loan" is something that may need to wait a few years, and that the parent is on the hook in the meanwhile.

    The AAMC has a convenient example of repaying $200k debt at https://store.aamc.org/downloadable/download/sample/sample_id/240/ . If those payments look scary on physician's post-residency pay of $190k, imagine how scary they would look for a BA/BS graduate earning $60k (see https://db.career.vt.edu/scripts/PostGrad2006/Report/DetailReportSalaries.asp?College=00&Majors=Y&Cohort=2017-2018 ), or even $111k (if the kid succeeds in a high paid major at a well respected school for the major; see https://capd.mit.edu/sites/default/files/about/files/GSS2017.pdf ).
    edited July 22
    · Reply · Share
  • thumper1thumper1 74741 replies3274 threadsRegistered User Senior Member
    you are willing to pay for your daughter's education but do not allow your daughter takes out the loan by herself

    @compiler

    Our kids took the Direct Loan limit in loans. Nothing more because we would not take or co-sign loans in excess of that.
    · Reply · Share
  • thedreamydaisythedreamydaisy 154 replies5 threadsRegistered User Junior Member
    We are a family who can not afford an expensive college and our son knows that. He is applying to in-state public schools and may need to take out some of the fed loans depending on whether he gets any financial or merit aid. We will pay out of current income for the rest (we do not have college savings due to a tougher time financially during the recession). We will not take out (or co-sign for) large loans for an expensive school. He will get a good education from one of our Cal State schools and that's what matters to us and him. Thankfully, our family is not driven by prestige.
    · Reply · Share
  • compilercompiler 19 replies11 threadsRegistered User Junior Member
    We are a family who can not afford an expensive college and our son knows that. He is applying to in-state public schools and may need to take out some of the fed loans depending on whether he gets any financial or merit aid. We will pay out of current income for the rest (we do not have college savings due to a tougher time financially during the recession). We will not take out (or co-sign for) large loans for an expensive school. He will get a good education from one of our Cal State schools and that's what matters to us and him. Thankfully, our family is not driven by prestige.

    Actually it is common. I heard one family parents told their son to take out loans and pay back by employment after graduation whose son has been admitted to a top 30 private university with expensive tuition this coming Fall. The parents will pay only living expensese, however.
    · Reply · Share
  • thumper1thumper1 74741 replies3274 threadsRegistered User Senior Member
    One family story is hardly “common.

    Are you a student or a parent?
    · Reply · Share
  • NJWrestlingmomNJWrestlingmom 1221 replies2 threadsRegistered User Senior Member
    edited July 22
    A kid can’t take out that debt without a co-signer. My co-worker learned that the hard way when her daughter defaulted on the loans and she’s now forced to repay them. My son is at a state school that we can afford; he will come out with mostly federal subsidized loans and a bit of unsubsidized, but under $20k total. D21 is higher stats but she is looking for merit and will either attend a state school (hoping for honors college if that route) or another school where she will get merit to get the cost to the state school range.
    edited July 22
    · Reply · Share
  • thedreamydaisythedreamydaisy 154 replies5 threadsRegistered User Junior Member
    Agree with @thumper1 that one family’s story is not “common”. And, as has been mentioned before, a child cannot take out these large loans without a co-signer.
    · Reply · Share
  • jmnva06jmnva06 754 replies7 threadsRegistered User Member
    Both of my kids have the maximum amount of federal debt and we added some Parental Plus loan debt. I view the debt as simply easing my cashflow. Much like we borrow to buy a car, we borrowed for education.
    · Reply · Share
  • austinmshauriaustinmshauri 8916 replies332 threadsRegistered User Senior Member
    Why do you only focuse the amounts but instead of say something about your decision how to get the money for your kids to pay for the expensive top school tuition?

    Kids don't pay the cost of attendance, parents do. Students can borrow small amounts (~$5k/year), but if there's no merit or need based aid the rest has to come from the parents. If you can't pay $200k then you can borrow it. You may know someone who's borrowing that kind of money and thinks they're going to have their kid repay it, but it doesn't sound like you actually know any 22-year-olds who can afford to make $3k/month loan payments. You're better off choosing a school you can actually afford.
    · Reply · Share
  • SJ2727SJ2727 1881 replies6 threadsRegistered User Senior Member
    If you are unable to offer the top school expensive tuition, you just let your daughter go to inexpensive college. Is it correct?

    There are some excellent state schools that are cheap for instate residents. There are expensive colleges that become inexpensive for students receiving merit aid. But I don’t think that’s your point. It seems to me you are making a mistake in equating expense with quality, which makes me think you don’t have a lot of exposure to the US higher education system, public or private.
    · Reply · Share
  • thumper1thumper1 74741 replies3274 threadsRegistered User Senior Member
    Pay for your kid’s expensive top school tuition or take out loans by kids themselves

    I’ll try again. Your kids can’t get loans themselves to pay costs in excess of these amounts:

    Freshman $5500

    Sophomore $6500

    Junior $7500

    Senior $7500

    That’s the limit of the federally funded loans your kids can take out themselves. More loans would either require the parent to take out the loans or to co-sign loans. The kids can NOT take out huge loans by themselves.

    IIRC, you are asking about loans for $30,000 or more. That being the case, for freshman year! Parents would need to be on board with loans for about $25,000...kid by themselves can take $5500.
    · Reply · Share
  • toomanyteenstoomanyteens 1019 replies61 threadsRegistered User Senior Member
    We did the same as the @thumper1 family plan - the kids all got decent merit where they attend (and in some cases places some would consider academically 'below' them) -- there are 5 so..... they took all their GSLs and we have managed the rest out of some 529 savings and current income. No huge loans for us or them.
    · Reply · Share
  • NCKrisNCKris 230 replies1 threadsRegistered User Junior Member
    @compiler Nobody can answer your question the way you are hoping to hear.
    There have been many responses to your original thread about taking 200k+ loans.
    You need to consider your own family finances and make a decision that you are comfortable with, whether that means Parent loans, or expecting the kid to pay back at a later time or go to an affordable school or hunt for merit aid.

    Is your kid going to be competitive for HYPSM type or Top 10 ? Do you have good in-state options ? Will your kid be a NMF ? or competitive for merit aid ?
    The point everyone is trying to make here, any loans will have to be taken by parents, as students are eligible only for 27K in federal student loans.
    There may be some families that expect the student to pay them back later, or take care of them in old age or take loans with Home equity or 401k etc. but that is your OWN decision.
    · Reply · Share
  • ucbalumnusucbalumnus 78206 replies687 threadsRegistered User Senior Member
    NCKris wrote: »
    There may be some families that expect the student to pay them back later, or take care of them in old age or take loans with Home equity or 401k etc. but that is your OWN decision.

    Of course, in such families, if the kid somehow dies, becomes disabled and unable to work, or can only get work with relatively low pay, the expected financial support from the kid to the parent will not occur.
    · Reply · Share
  • toomanyteenstoomanyteens 1019 replies61 threadsRegistered User Senior Member
    @ucbalumnus with 5 kids this was our exact worry -- they don't finish, cannot get a job, have some other issue financial or otherwise and we are left holding the bag during old age. And with 5 the likelihood of at least one of them having said issues is increased so we were a no to big loans that we co-sign
    · Reply · Share
  • Groundwork2022Groundwork2022 2211 replies36 threadsRegistered User Senior Member
    Another "hard no" vote here for cosigning student loans. An education is supposed to be liberating, but being a debt slave is hardly that.

    "As a high school student, I was introduced to the adage that college tuition, whenever possible, is a loan from one’s parents that is repaid to one’s children."

    Love this philosophy, and it is also the way of our family. We too started saving when DD was in the womb. Whatever we end up with is her budget. Knowing her she will stretch that to cover grad school too.
    · Reply · Share
Sign In or Register to comment.

Recent Activity