@hebegebe Boy, it is going to be a full-time job for somebody dealing with the logistics of the gifts. For instance, no gift tax returns would be needed if he is just giving up to the $15,000 amount each year, but if he is gift-splitting with his wife to get to $30,000, then each year he is doing so he would have to list each gift separately with donee information.
I think his net worth is north of $5B. I’m sure he has a small army of tax attorneys available to make it as easy as possible.
Gifts at $15k or less don’t require records provided to anyone beyond his accountants, who are the ones handling everything anyway.
I really don’t think he’ll be handing checks for $15k, or $30k, to any student. He wants the money to pay the loans, so I bet there will be some fund set up for them to apply to have the loans paid directly. A bigger chunk of the loans are PLUS loans and again, he won’t want to give the money to the parents but actually pay the loans.
He’ll figure it out.
These Americans fled the country to escape their giant student debt…
https://www.cnbc.com/2019/05/25/they-fled-the-country-to-escape-their-student-debt.html
Millennials struggle under the burden of student loan debt: “I had a panic attack”
https://www.cbsnews.com/news/student-loan-debt-i-had-a-panic-attack-millennials-struggle-under-the-burden-of-student-loan-debt/
The latest victims of the student debt crisis — parents
https://www.cnbc.com/2019/05/10/the-latest-victims-of-the-student-debt-crisis-parents.html
The five charts show how bad the student loan debt situation is
https://www.nbcnews.com/news/us-news/student-loan-statistics-2019-n997836
Some good analysis of the new/expanded debt data in College Scorecard starting to come out:
https://www.chronicle.com/article/The-College-Scorecard-Just-Got/246345
https://www.chronicle.com/article/New-Data-in-College-Scorecard/246372?cid=db
Search for schools/programs here: https://collegescorecard.ed.gov/
Once you input a school/program there are several detailed sections, including ‘financial aid and debt’ as well as ‘earnings after school’
Graduating into student loan debt? Financial tips for Class of 2019
https://www.cbsnews.com/news/graduating-into-student-loan-debt-financial-tips-for-the-class-of-2019/
Finally, students can comparison shop the cost of their college majors
https://www.marketwatch.com/story/finally-students-can-comparison-shop-the-cost-of-their-college-majors-2019-05-27
@Mwfan1921 That’s quite the interesting website. When I put in the three schools my lads attended, the similarities (similar average debt for all three) and differences (significant difference in economic diversity, federal loans needed, and salary post graduation) stands out. One has to wonder how much the higher salary goes right along with the wealthier students coming in - networking and/or mindset in action.
None of those three schools left students with high debt on average. One has no idea how much parents borrowed though.
It will be fun to play around with as colleges come up for students.
Some on this thread argue zero undergraduate debt is the only way to go. Others on the thread say over $100,000 debt for undergraduate is acceptable. What do the posters think of “rules of thumb” for how much undergraduate college debt is too much? Something like this:
“There is a simple rule of thumb you can use to determine how much student loan debt you can afford to repay after graduation. If your total student loan debt at graduation, including capitalized interest, is less than your annual starting salary, you can afford to repay your student loans in ten years or less.”
https://www.collegeavestudentloans.com/blog/what-is-reasonable-and-affordable-debt/
@foobar1 My issue with that rule of thumb is you don’t know what your starting salary is going to be or if you will have any salary. I like to work from some worse case scenarios and see how those play out.
@foobar1 I hate that rule of thumb. It is responsible for many students taking on too much debt. According to that rule of thumb, if you plan on going into IB or MC, taking on $100k in debt is reasonable. $100k in debt is crazy for an undergrad degree, period. Too much can go wrong with the plan of a 17 or 18 year old to be a six figure earner post college graduation.
“Too much can go wrong with the plan of a 17 or 18 year old to be a six figure earner post college graduation.”
This is what has been bugging me about the threads with kids who want to go into investment banking and are willing to run up debt. I understand that you need to attend a “prestigious” school to get into investment banking. However, a lot can go wrong with a 17 year old who has a plan that involves $100k+ in debt and hoping to get a $100,000/year job 5 years down the road.
I have seen multiple cases of kids who had very good in-state public schools that they could afford with no debt, but wanted to attend out of state schools that were pretty much equally ranked that would require some debt. These are worrisome and I tend to recommend the “no debt” option. It is tougher when the kids only have options that require debt, or when the more expensive option is also significantly better ranked for the intended major, and the major is one where there are actually jobs available.
My oldest who graduated a year ago is certainly much better off now because she has no debt. She knows this too, and is no longer annoyed about how insistent I was six years ago that she take a “no debt” option. In her case however she had no debt options that were academically appropriate. Not everyone has this luxury.
There is no rule of thumb because the math makes so many assumptions that can set someone seriously down a dangerous path.
A kid thinks they’re going to get a great job in whatever field and discovers that a Master’s degree is required. Where does that money come from? More debt. A kid is gung-ho on a high paying/high stress field and after experiencing a serious depressive incident sophomore year, agrees with his/her mental health team that this field will be deadly long term. So reboot to a less stress/less lucrative field.
Ask virtually any member of the class of 2009, or for that matter, 2002. And more localized- there have been cyclical layoffs in tech, petroleum engineering, aerospace, etc. over the last twenty years. Those are all great paying jobs- except when they pay zero. I remember looking at my company’s hiring targets for the 2009 recruiting cycle (which were off by a huge percentage vs. the previous few years) wondering “where are all these kids who took out all these loans going to land?”. And economists MUCH smarter than I am have started publishing papers showing that graduating into a recession not only depresses your career prospects for the first year or so after graduating, but continues to depress your career prospects- and probably, lifetime earnings- a decade later.
These “simple rules of thumb” are clickbait and sell magazines. They do not reflect reality.
A well regarded tier one research university launched a degree program in e-commerce to much fan fair in the late 1990’s. It closed very, very quietly in the early 200’s with NO fan fair after the ecommerce craze blew up after 2001. Occasionally I’ll see a resume with that degree listed from that era, and it’s like finding a 3 lb. cellphone stuck in the cushions of the backseat of your car.
You don’t need $300k in loans to be a lawyer. You do need to avoid going to an expensive private or OOS, unless you can get aid. Your average in-state public will charge an average of $27k for tuition, which over three years of law school adds up to $81k. To the extent the legal market is over-saturated, our main worry should be too many people are going to law school.
https://www.nytimes.com/2015/08/25/opinion/too-many-law-students-too-few-legal-jobs.html
@DadTwoGirls A little secret about IB that is rarely mentioned on CC: you don’t have to go to a prestigious school to get into IB. There is an imaginary cut off where IB is very unlikely, but it is far lower than T20 on USNWR. A smart go-getter can attend a school ranked, eg, 60 (I picked that number randomly), and still end up in IB with no to minimal debt if that’s the career they truly want. Additionally, attending to a much higher ranked school and incurring six figure debt isn’t going to guarantee an IB internship or full time job.
I wouldn’t just dismiss Mark Kantrowitz’s recomendations on finanical aid. If the math for reasonable and affordable undergraduate debt is way too complex then the only safe amount is $0 debt. I don’t think this is an impossible math problem to figure out.
It’s best to avoid debt if you can. Also, $100k in debt is way too much even if you’re going into a high paying field. Stuff can change! You can loose your job, want to change jobs, not get a high paying job, get really sick, get in an accident, loose everything. You also need to save for retirement and a rainy day. Much easier to do when you don’t have a ton of debt.
I do get some students HAVE to take out loans or they wouldn’t be able to attend college otherwise, but that’s a whole different situation!
@foobar1 I think it’s terrible advice, particularly when we’re talking about resulting debt well north of the federal loan amounts. By and large, it is those borrowing more than the federal loans for undergrad that are truly struggling and burdened by student loan debt. Even the federal loan limits doesn’t make sense for certain professions, eg. teachers, artists, musicians, and other low income fields.
I think that’s a reasonable rule of thumb. Borrow no more than the federal subsidized loan limit for undergraduates (currently $23,000) Borrow less if you expect to be in a low income field.
I think the federal limits are a reasonable guideline for most undergrads. The recommendations assuming you know what your future income is going to be are so risky. Majors change, priorities change. You never know if that riskier opportunity at a start up that might be on a cutting edge might be a better resume builder than the more stable company. Maybe a stint in the peace corp would be good. Students can change. I know SO many people that went to law school that are not practicing lawyers
I know a young man from a state school in a fly over state doing IB in Manhattan right now. I think the need to spend $$$$ on college for particular career paths are exaggerated. My flagship grad spouse works with elite grads every day and manages some of them. If you have the money and your student likes and gains entry, great. But in no way do I think it’s necessary.