Full Pay, No Loans: Does your child hide their status ?

Parents Forum
41

Of course, but the time to talk about it is before going to college, not after the debt is incurred. And parents should encourage selection of lower cost colleges, and even live at home and attend a juco for two years if that helps minimize debt.

“Public policy” should not be designed so everyone can attend ad sleep-away college. (Think about the current Congressperson who complains about her ed debt but ignores the fact that she chose to attend an OOS private college instead of the local instate public which would have been less than half the cost.)

42

Do I think we did something more right than my co-worker who earns much more than what we do but lived in a hugely expensive home, bought luxury vehicles every 3-5 years and took several 5 figure vacations a year and then needed student loans? Yes. But I don’t feel that way about most people. Most people my daughter knows with loans had parents who worked very very hard and tried their hardest to be in the best financial position possible. They just weren’t as lucky as we were. Hard work and living below your means only goes so far. Financial stability, let alone fortune, depends on a good deal of luck. It’s good to remember that.

43

Most kids don’t like to be too far outside the norm for their setting. My daughter got an expensive bag for her 21st birthday. She’s not ashamed of it but she doesn’t to bring it to work at the health care facility where she’s employed. If she worked in finance, high-end marketing, or another similar industry she’d definitely use it every day.

She lived in close proximity with her friends in college and they’re all pretty aware of who has college loans and who doesn’t, who needs to live at home to build up a nest egg and who was able to move directly into an apartment, whose family lives in what kind of housing. They all seem comfortable with it. As to her co-workers, considering that she was a bit evasive with themabout where she was going on the family vacation I doubt she’d be eager to be forthcoming with them about having graduated from college loan-free.

44

Is this a regional thing? In my circles, throughout my life, folks don’t chat about their mortgages, rent and car payments. Money is a pretty taboo topic for discussion.

45

If pressed into the seemingly unavoidable college debt conversation, one can always tell folks, “I got a good scholarship.” Folks don’t need to know the scholarship was awarded by mom and dad.

46

I had no idea the topic of who has/hasn’t student loan debt was so touchy. My son told me that in his first year at university, his professor asked his class (Economics, I think) to raise their hands if they didn’t have any student loan debt. He raised his hand, looked around, and was shocked to find that only a few other hands were up.
The class then went on to discuss the impact of student loan debt on the overall economy. As far as DS could tell, the topic didn’t seem to bother any of his fellow students or cause any noticeable resentment toward those who didn’t have any debt.

Maybe it upsets the parents more than the students, at least while they are still undergraduates. It certainly helped my son to realize how lucky he has been, so I’m glad that the exercise gave him some perspective.

47

@doschicos it is more likely a timely/generational thing. College debt is a newsworthy topic at the moment, as are the millennial financial struggles. Plus, due to the Internet and social media, our kids are much less private than we were, and much more information is available to them and coming at them on a daily basis.

48

The topic of college debt and who talks about it depends on how you were raised and also who you are. There are many who are not going to say a thing and others who spill the beans about their entire life situation.

49

I don’t think it is a generational thing. My kids operate very similar to us parents in terms of not talking about it with friends.

50

@doschicos Actually, I agree. I think it’s a class thing. The more people have, the less they talk about it.

51

But more unequal today than a generation ago.

However, how you did in the birth lottery of parental money determines how hard you have to work for a given opportunity. Losers of the birth lottery may have to work far harder (beyond just their own academic achievement, which often has to compete with other priorities like working to support family and/or pay for college) to find any opportunity at all, while winners of the birth lottery will find no limits to opportunity other than what their own academic achievement limits them to (and they will have more support in helping them academically achieve to the limit of their own ability, unlike others who are likely to face external barriers or competing demands for their time).

Most college students are just trying to afford any college, not specifically trying to go to a sleep-away college (and most commute from where they lived before college).

Of course, public policy in many places makes it hard for many even to commute to an in-state public university. The nearest one may be too far for reasonable commuting (e.g. in many rural areas), or may not offer the desired major (e.g. engineering in many parts of Pennsylvania), or may be too expensive for low income commuters (e.g. Pittsburgh).

Past public policy can also impose current costs. The state of Alabama maintains two public universities in the Huntsville area. You can probably guess why it built up UAH as a separate school in the 1950s-1960s rather than expand the existing AAMU (then AAMC) that was there since 1875.

52

Definitely. If you have more and don’t ever talk about it, nobody else knows that maybe they should be asking for more.

53

My family is very open with financial things so it was never a taboo subject to me. I like talking money matters so if I find someone that will engage in a conversation along those lines, I will. I have some friends that don’t want to go there and some that are as open as I am and I know a lot about their debt load or lack there of.

I had a scout leader come up to me the other day and tell me that at a recent campout she was trying to warn DS about choosing an affordable school to avoid all the debt she had and she said he told her “Oh, my mom and grandpa have it all taken care of so I won’t have to borrow anything.” So, he’s obviously comfortable saying that to an adult anyhow. Maybe he won’t want to be “different” with peers, I don’t know, but I don’t think so. Incidentally, the scout leader that I barely knew and I then got into a big conversation about her student loans and how they got to the crazy number they were (over 100K) and how they were also paying off another 30K loan that her FIL took out to pay for her husband’s college and apparently they were planning on paying that one until his death and the loan would die with him, so I’m assuming they’re paying some really low payment amount.

54

I don’t know that being transparent about who has loans and who doesn’t helps the wage inequality issue or now (would love to see data). But I am VERY sure that NOT talking about how the choices one makes in one’s twenties have very long consequences is quite problematic financially.

I work with a LOT of younger people. There is absolutely no reason why someone would not sign up for free money (aka the company retirement match). There is absolutely no reason why someone should opt for a medical plan which is appropriate for a 45 year old with a spouse, kids, and a chronic condition when the plan which IS appropriate for his or her situation is so much cheaper (and we employ benefits experts who will take the time to walk everyone through the various plans so they can see exactly how expensive it is to be in the wrong plan). Explain to me why a young person who is nicely launched into a career walks into his manager’s office to say “I’m taking a leave of absence to travel to Nepal, leaving next week, hope my job will be here when I get back”.

I keep an open mind. I try not to judge (who am I to judge?) But here’s some really tough reality:

1- If you don’t start saving in your twenties, it is MUCH harder in your thirties and forties, and you have MUCH less time to allow the miracle of compounding or long term capital gains to work for you.

2- Leaving the work force for any reason- unless you are disabled- is a killer when it comes to your financial future. I have friends in their late 50’s who are still mystified as to why they are earning 30% of what they were earning (not adjusted for inflation) when they decided “to go back to work” after a decade or 15 long maternity leave. They are resentful that the worlds of commercial banking, publishing, PR, credit card marketing or whatever did not stand still for those 15 years. In many cases their skills are obsolete and in other cases, the industries have just blown up entirely. So now when they really need to be focused on saving for retirement- those alleged “good jobs” are not going to them.

They believe it’s age discrimination and in some cases it likely is. But more often than not- they are just not qualified to walk back in to the jobs they left. Credit scoring? Market Research? Database marketing? These have all been transformed by big data. The old school analytical techniques just don’t cut it anymore. And book publishing???

Don’t quit your job. Don’t quit your job. Don’t quit your job. Find another job which is more interesting, offers better work/life balance, pays more, pays less, shorter commute. But voluntarily leaving the work force is a dangerous step, and it may take you years to get back on track.

3- Loans- college loans are likely a necessity. Take them if you have to- college graduates still out-earn most non-college graduates, except if you have a flair for the trades and can get good training and apprenticeships. But you CANNOT pile on consumer debt on top of your educational loans. This is financial suicide. You graduate, your job for the next 5 or 8 or ten years is to pay off your loans, period full stop.

It makes for good copy to write about the barista with 100K in school loans from NYU and a major in photography. But that’s not what is tanking people. It’s the kid with 25K in loans for an engineering major from U Conn who has to live in a “fun” condo for his job at Sikorsky instead of a shared rental home which costs half of that. And he needs a new car. And is out every single weekend at sports bars. I know this kid- his parents are mystified why “he has no money” and theorize that it’s because of his school loans. I want to say “what about the ski trip with his buddies, or the bachelor’s party in Vegas” or the other five fancy vacations he took last year- but of course, I say nothing. But I cannot imagine how many credit cards he is juggling at this point.

If you have educational loans, you are done. No more credit for you. Pay down your loans, and Blossom will allow you to shop at Neiman Marcus.

4- And the sad part of my rant- I don’t think that fiscal stupidity is hereditary, but kids for sure pick up bad habits from their parents. The adults I know who are always complaining that they need to take out a HELOC to paint the deck (seriously? You can’t just buy a few cans of varnish, borrow a ladder, and do it yourself for free?) have kids who live in off-campus apartments which come with maid service (seriously?) and take their brand new cars to college because “the bus isn’t reliable”. And these are not wealthy people!!!

So talking about finance at a young age- I’m all for it. Does it help? I haven’t a clue.

55

I am middles aged and I have acquaintances that I have to keep
Quiet about money around. The kind of person who is ALWAYS talking about how much everything costs. “Omg. Organic grapes are so expensive, who on earth spends more than $2 on a bag of grapes it’s insane?” Me shutting up as my kids are sitting next to us eating organic grapes.

Money comes up literally all the time with her. I am lucky that we are very comfortable but I feel forced into this constant conversation and it’s not comfortable.

56

What about the people making $250k+ but cannot afford more than $10k per year for their kid’s college “because the cost of living is too high” (then how do the people earning 1/4 of what they earn live?)… and the kid is shocked that the first time his/her choices are limited by money is the choice of college… ?

57

Have you considered it is not “level” for one family to pay $50-80,000 year while others pay nearly nothing? A student loan is a form of contribution. Eliminating them typically would mean less contribution from some students and full pay families subsidizing more of the cost for their classmates receiving aid.

58

For full pay families to subsidize the costs of their classmates they’d first have to be paying 100% of what it costs to educate them. I don’t believe they are. I think need based aid comes from alumnae grants and endowments.

59

@ucbalumnus wrote:

I’ve posted this before, but it bears repeating…

https://digitalsynopsis.com/inspiration/privileged-kids-on-a-plate-pencilsword-toby-morris/

60

Almost every gen Z/millennial in my office

has mentioned student loans at some point. Many of the older workers mention their kids student loans. Money is a normal topic of conversation.