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what happens if parents refuse to pay for child?

britboynybritboyny Registered User Posts: 11 New Member
Hi
Im a complete newbie when it comes to university - im from england and was lucky enough to get a free university education in London that helped me do well in life. My son just got into Princeton which obviously i am very happy about. We are looking at paying around 70K a year for four years, which is about the same as which my mortgage i'm still paying for cost.
Im still a little confused as to the financial connection between parent and child. What happens if i refuse to co-sign a huge loan for my son in which case he wont be loaned the money? Does he not go to Princeton at that point ?
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Replies to: what happens if parents refuse to pay for child?

  • intparentintparent Registered User Posts: 33,749 Senior Member
    Right. Unless Princeton offered him need based aid (assuming you filled out the financial aid forms with him), then that is correct. No one is going to loan a kid that kind of money without an adult co-signer. Plus, if you co-sign, you could be on the hook for the loan (plus interest). If he doesn’t pay back, or can’t (disability, death), that debt probably doesn’t go away. It sounds like it is unaffordable for your family.
  • boudersbouders Registered User Posts: 2,177 Senior Member
    The parent is responsible for paying. If you want to take out loans for 70K , it has to be in your (the parent's) name. A US citizen student can only borrow $5500 for their first year and slightly more in the years after. It doesn't matter if the parent wants to or not. If you choose not to pay, your child doesn't go.
  • britboynybritboyny Registered User Posts: 11 New Member
    if i take out the loan for four years and become unemployed/family health issue etc after the four years is the loan reduced or forgiven? I understand that some people get a greatly reduced or even free college education because their parents income was too much (and agree with this) but what happens on the flip side of this - if the poor parents become wealthier or the wealthy parent becomes poor? Like i said, coming from the UK this entire process seems very bizare. I ask these questions because my wife and I jointly earn about $250K, a nice salary but definitely not rich living in long island new york.We quality for no financial assistant and our son got into an Ivy. Sending him will be a dream but its a huge debt. Im hoping it will get cheaper with two other children reaching college age soon.
  • TomSrOfBostonTomSrOfBoston Registered User Posts: 13,783 Senior Member
    edited May 11
    You will not qualify for US federal loans. The loans would be through a UK bank. You will need to check their loan terms.

    You did not qualify for aid at Princeton? How much can you afford to pay per year before taking out loans? If Princeton gave you no aid then you likely have a fairly high income. Higher income Americans often have college funds saved up for their student.
  • lookingforwardlookingforward Registered User Posts: 27,861 Senior Member
    edited May 11
    280k in debt? Like a $3000/mo payment for 10 years. Cumulative payments 353,000. Interest 73k.
    This takes my breath away. Send him somewhere affordable.

    The only break for a lower future income is maaaybe he qualifies for aid in senior year. No break on the loans you signed for so he could to to Princeton. Or any other college you can't afford.

    And this: loans are taken by year. We don't know your full fin details. It is possible that after the debt for freshman and soph years shows up, you won't qualify for further loans.


  • 3scoutsmom3scoutsmom Registered User Posts: 5,211 Senior Member
    edited May 11
    @britboyny I think you can purchase disability insurance but that's yet another expense, If you are cosigning a loan for your kid I'd make sure you take out a life insurance policy on him too, that at least should be very cheap.

    You have 3 children? Yes, some schools might grant you some need based aid for having multiple kids in college but it's certainly not going to be cheaper because you be paying for college for three kids.

    I hate to say this but just because your kid got into Princeton doesn't me you can afford to send him there, you need figure out how much you can afford keeping in mind you have multiple children and look for a college the fits your budget
  • AroundHereAroundHere Registered User Posts: 3,555 Senior Member
    Many parents have to draw financial lines for their students as to which schools they can and cannot afford. It would have been better to have had the money conversation before May. Any student smart enough to get into Princeton would have been eligible for merit scholarships at less selective universities. Any more affordable US offers your child had before May 1 may be gone at this point as schools go to their wait lists, but you can try.

    If your wife and child are US citizens you can participate in the US loan system. It may or may not be financially wise to do so. The parent PLUS loan application does not consider your ability to repay or what is fair to your other children when granting the loan. Your student loan debt will not make you eligible for more financial aid in future years, but having multiple children in college at once will give you some discount.

    If you lose income while your children are in school, it can be the basis for a financial aid appeal, but this does little good if the loss of income happens after a child graduates but before you repay the loans. There are some bases for forgiveness of a parent PLUS loan, but they are more limited than what is available for the direct student loan. You can read about the student loan programs here: https://studentaid.ed.gov/sa/types/loans
  • TomSrOfBostonTomSrOfBoston Registered User Posts: 13,783 Senior Member
    Do you live in the US or the UK now? In my post #4 I assumed that you are in the UK.
  • thumper1thumper1 Registered User Posts: 69,887 Senior Member
    edited May 11
    if i take out the loan for four years and become unemployed/family health issue etc after the four years is the loan reduced or forgiven

    No, the loans will not be forgiven...or reduced..actually they will be higher than the amount you take because they will accrue interest.
    What happens if i refuse to co-sign a huge loan for my son in which case he wont be loaned the money? Does he not go to Princeton at that point ?

    That’s right....if you don’t pay the amount Princeton expects you to pay...your kiddo cannot attend that college.

    Are you a U.S. citizen? If not, getting loans here will be a challenge.

    I’m going to cut to the quick. Princeton is amongst THE most generous colleges in the country when it comes to need based aid. If you got no aid from Princeton...there can be only two reasons.

    1. You have a very large income. For your net cost to be $70,000 for one year, your income exceeds $250,000 a year...and/or you have huge assets. Right?

    Or

    2. Your kid and you neglected to apply for need based aid at Princeton by completing the financial ill aid application forms and submissions required.

    You say it’s your high income. There you go.

    When your kid committed to attend Princeton, you KNEW how much this was going to cost you. Did you have NO idea how you were going to pay the college bills?

    I’m going to give you some very free advice. Princeton is a fabulous school...but $280,000 plus interest in loans for an undergrad degree is beyond too much. The payback on that will minimally be $3000 a month or so for at least ten years. That is quite the way to strangle hold a new graduate...even from Princeton.

    And it will never be forgiven...unless you die.

    Your kid won’t be able to get these loans himself. You will need to co-sign...if you are a U.S. citizen that might not be a problem. But you will need to be a qualified cosigner for four years of huge loans.

    And you have other kids in the pipeline for college? I think you have some financial thinking to do here...but really it should have been done before your kid even applied to college.

    And it definitely should have been done before May 1when your kid committed to attend Princeton.

    How much CAN you reasonably fund for your kid’s college education annually? That is the budget.

    If Princeton is not affordable, maybe your kid will need to take a gap year and apply to schools that are affordable. With Princeton accepted stats, he likely could garner merit aid at some colleges.

    But to your question...if you don’t pay...your kid cannot attend. Period.
  • britboynybritboyny Registered User Posts: 11 New Member
    edited May 11
    I think its a brave parent that turns down giving their child the opportunity of going to Princeton in place of a state school like Binghampton on the basis of cost. We applied for merit scholarships but theses are a few thousand here and there. Employers in this country place alot of emphasis on where you went instead of what you studied and how well you did. It may have changed back in the Uk but this definitely wasn't the case when i went to university in London 25 years ago
  • 3scoutsmom3scoutsmom Registered User Posts: 5,211 Senior Member
    @thumper1
    Which is it?
    Per post #3
    my wife and I jointly earn about $250K
  • lookingforwardlookingforward Registered User Posts: 27,861 Senior Member
    edited May 11
    He can go to Princeton for grad school, maybe with generous funding.
    Cost is s significant basis! If you can't fund this on $250k annual income, the solution isn't crippling debt.
    When did you learn what P costs?
  • thumper1thumper1 Registered User Posts: 69,887 Senior Member
    edited May 11
    @britboyny

    Straight talk here. Your kid will be able to get a good job...and be self supporting with a degree that is affordable from Bing.

    And he won’t have over $3000 in loan payments to make per month when he starts to work...which will give him some flexibility.

    That’s $36,000 a year just in college loan payments. Thank about that.

    Here is your issue...it is May 11. The date to choose colleges was May 1. Did your kid choose Bing or Princeton by May 1...because the one he didn’t choose is likely off the table for the upcoming year.

    And adding...I think it’s a smart parent who helps their kid learn how to live within their means. Princeton sounds a bit beyond your means if you plan to fund completely with loans.
  • hpcsahpcsa Registered User Posts: 130 Junior Member
    edited May 11
    @britboyny With the income of $250k between you and your wife plus corresponding liquid assets, the best way to go is to cash flow the major part of Princeton COA and to take on minimal debt in the process. Hoping that your son will have graduated by the time your second child goes to college, and so on, you should be fine. Make sure your son will be able to attend Princeton and (hopefully) his siblings as well.
  • thumper1thumper1 Registered User Posts: 69,887 Senior Member
    @hpcsa

    Brotboy has already said that he would need loans to fund the $70,000.

    If he can pay $70,000 plus a year out of current earnings...this isn’t a problem...at all. But that’s not what he is saying.

    @britboyny are you the parent or the student?
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