We had some money lent to DH so he could finish his bachelors degree…maybe $5000? We had the money, and wrote the check to repay, and the parents said, they had decided it would be their gift to DH. It was a happy surprise, but we fully intended to pay the money back.
Someone upstream said they lent money to their spouse? Not sure that would fly in this marriage, but to each his own.
Let your kid take the loan and you can help when you can. That’s what we are doing with our daughter who just started grad school.
I’ve seen it happen in multiple generations both in my family and my wife’s. Never seen problems, although I have in other families. If it is a larger amount documenting it is a good idea, just to make sure everyone is on the same page. Also if there are other kids and something happens to the parents, there is documentation to avoid conflicts among the heirs about equal treatment.
My family does not borrow from or lend to each other. I have heard that some people will lend to family and close friends with the understanding that it has the potential to turn into a gift if the borrower can not repay for some valid reason. If it turns into a gift then there are absolutely no future loans unless the first one gets repaid and the borrower should not even bother to ask for another loan unless the first one is paid off. I like the saying of expecting a loan to family and friends to become a gift.
My mother gave my brother a mortgage. They got very good terms and when she passed away they got the amount they hadn’t paid up yet taken from the estate. But my Mom was in her 70s then, so she wasn’t worried about her own retirement. I agree with others, that you should just gift them the money or not.
My father lent my brother some amount of money to buy some land with the understanding that my brother would pay it back to the estate after my dad died. So my brother did and because he was one of three heirs he got a third of it back as part of his inheritance. I guess neither of them thought it through at the time the deal was struck. The other two heirs thought it was pretty funny.
@Wellspring sounds like a cute minuet. But it’s also heartwarming to read that the money flowed in a way that was fair to the whole family. I love seeing when people handle this sort of thing honorably.
My H’s stepfather did this exact same thing to him, loaning us part of the down payment with interest and an amortization schedule. My H signed but I never did. Once my H paid him a few days late, he called and asked if I was the one who asked my H to stop paying him !! That was an agreement between my H and his stepfather and I had nothing to do with sending payments. After that incident, I avoided speaking to him and repaid the whole balance as soon as we could. It helped that they lived across the country from us.
We gave our kids each a debt free college education and we helped D with some living expenses when she was in grad school. She took out loans for tuition and incidentals which she paid back as soon as she could.
@Riversider - i have seen so many of your posts, and rarely agree with your thought process. we know successful, happy people who have not attended top colleges; and I do not think it’s all that necessary.
HOWEVER - when it comes to law school, and top jobs, — that’s a different beast. My sis was in the right place at the right time with her law school adventures; she’s told me she’d NEVER be hired NOW with her pacific northwest JD degree to the jobs she’s held in the last 20 years. It’s all ivy league all around her where she works. But - she’s doing phenomenally. 
as a parent, i would not loan my kids the money for an ivy league law school; i have 4 kids. But I would certainly help my kids, and encourage them to pursue this area if that’s what they wanted. Ivy league law school is tops.
But the OP does not HAVE to Loan the kid money for law school. The kid can take a grad plus loan in their name only for up to the cost of attendance. Let them do that Loan…and help them repay if you can and feel like doing so when the time comes.
I agree about avoiding debt to go to a non-top law school. Supposedly in NYC it is common for waiter/waitress to be aspiring actors OR lawyers.
This article says graduation from T14 (Top 14 law school) matters most for getting your first job. But hey, finding that first job is important (especially if you have big law school loans) - https://7sage.com/does-attending-a-t14-law-school-matter/
DH went to a T-14 and he took some PLUS and Stafford loans to cover the part of tuition not covered by scholarship. We had been married three years when he went back to school; my income paid for living expenses, car and my Staffords. No help from parents for UG or grad.
If my sons wanted help with grad school tuition, they should have taken the big $$ at the flagship. We were up-front about that long before UG acceptances came in. Both chose the private school and the Stafford loans that meant. We can’t pay for UG, grad school and retirement, esp since I can’t work. That’s our reality. My sons still have it much better than DH and I did.
T-14 or bust is not reality. If a student wants to work locally, they don’t need a T-14. They need to go to the best law school in their state/region and do well. Good law students outside of T-14 are getting very good jobs. The debt needs to be managed for all as those high paying jobs you hear about have a very high burn out/drop out/dissatisfaction rate. And once you leave big law, the pay drops significantly.