<p>
I agree. It completely depends on the student and the major. I just don’t agree with everyone on here saying people should support themselves or what college you goto doesn’t matter. A person like Barack Obama would have never became president if he went typical state-school.</p>
<p>Well, Bomerr, who knows if your assertion about Obama is true - but note that Joe Biden graduated from the University of Delaware. Check out the book “Harvard Schmarvard”. There’s an amazing and enlightening list of the alma maters of governors, senators, Fortune 500 CEO’s, and Washington Post editors.</p>
<p>Maybe I should have made that clearer - LOTS of “typical state schools” on those lists.</p>
<p>To give one specific example, I don’t think it is worthwhile for parents to take out a loan for their entire annual income (if that is even possible) for their son or daughter to go to Dartmouth rather than Ohio State.</p>
<p>It is not clear to me how much President Obama gained from going to Columbia, as opposed to how much he gained from going to Harvard Law School. There are plenty of Ohio State University graduates who are admitted to Harvard Law and do well there.</p>
<p>Of course, if you are going to posit your financial decisions on the likelihood that one of your offspring may become the President of the United States, you may not be thinking very clearly.</p>
<p>Well said, QM.</p>
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</p>
<p>But the point is, the parents who lived below their means for years before their kid reaches college age are much less likely to face the “need” for large debt to finance the kid’s college*, while the parents who lived just at or above their means are the ones who cannot afford to take on that much debt anyway. A student whose parents make high income but saved nothing needs to plan accordingly, since only low cost college options will be realistic in that situation (i.e. the student cannot expect the parents to take out large loans).</p>
<p>*Excluding the use of debt for liquidity management or financial planning purposes by those who otherwise do not need parent loans, which is an outlier case, even though the OP seems to think it is the common case based on the OP’s example.</p>
<p>“It is not clear to me how much President Obama gained from going to Columbia, as opposed to how much he gained from going to Harvard Law School. There are plenty of Ohio State University graduates who are admitted to Harvard Law and do well there.”</p>
<p>I don’t think that you understand the law school admissions process.</p>
<p>Because it is so great an advantage to come from Columbia, rather than coming from Ohio State, when one is applying to law school?</p>
<p>Or because Columbia has classes where 90%+ of the grades are in the A range, and those are hard to find at Ohio State?</p>
<p>FWIW Mr Obama spent two years at Occidental. I’ve never understood why Columbia gets all the (undergrad) credit for his success.</p>
<p>Admittedly, the only (recent) lawyer in my family is an ex-brother-in-law, so it is true that I don’t have much information about law school admissions. What exactly is it that you think I don’t understand, JonLaw?</p>
<p>Related to the issue on this thread, an op-ed piece by Peter A. Ubel in today’s New York Times contains the statement that $50,000 is “more than the average lifetime savings of the majority of American families.” Ubel is a professor of medicine at Duke, so I am not sure how he came by this figure, nor am I sure exactly what “lifetime savings” includes. But I go back to my basic opinion that $80,000 is quite a lot of money.</p>
<p>One of my friends who is an econ prof used to ask students he interviewed to estimate the median household income in the US. Generally speaking, the estimates were much too high.</p>
<p>I think one would need to look really critically at what $80,000 was buying, in terms of improvements in the college experience and post-college chances.</p>
<p>I was looking for statistics about parent PLUS loans for various schools but wasn’t able to find anything. I did find data on IPEDS website about STUDENT loans. I was struck by the fact that average fed + non-fed (private and institutional) did not seem to be closely related to the selectivity of the school. The correlation between average total loans and SAT CR+Math midpoint was only +.22. I also noticed that public schools were right up there with the privates in terms of student loans. Too bad students are being saddled with so much debt. The schools could help by trimming fat and lowering tuition!</p>
<p>I did get a little confused about what the three different “average loan” statistics meant on the IPEDS website…could use some help with that. I totaled only 2 of the 3: fed + non-fed.</p>
<p>Many elite schools didn’t make the list because student loan debt was so LOW!</p>
<p>pub or pri, average fed + non-fed loan debt for incoming freshman class 2011, SAT midpoint, school name</p>
<p>2 32211 1335 Colby College
2 30537 1350 New York University
2 30349 1090 Prescott College
2 29297 1295 George Washington University
2 29234 1325 Whitman College
2 28436 1220 Drexel University
1 28093 1130 The University of Alabama
2 27734 1270 Santa Clara University
1 27161 1235 Clemson University
2 26767 1160 Providence College
2 26634 1335 Colorado College
2 26595 1175 Seattle University
1 26415 1150 Virginia Military Institute
2 26386 1240 Muhlenberg College
2 26275 1490 Washington University in St Louis
2 26266 1275 Boston University
1 26222 1175 University of Colorado Boulder
2 26066 1120 Saint Joseph’s University
2 25821 1485 University of Chicago
2 25817 1255 Fordham University
2 25802 1295 Villanova University
2 25746 1120 Eckerd College
2 25717 1390 Georgetown University
2 25706 1165 Hofstra University
2 25627 1105 Saint Marys College of California
1 25344 1300 University of California-Los Angeles
2 25262 1375 University of Southern California
2 25215 1310 University of Richmond
2 25177 1127.5 Bryant University
2 24872 1052.5 Hampton University
2 24839 1325 University of Miami
2 24834 1310 Bucknell University
2 24672 1300 Stevens Institute of Technology
2 24612 1160 Syracuse University
2 24392 1225 Elon University
2 24200 1185 Rollins College
2 24044 1115 Catholic University of America
2 23992 1220 Furman University
2 23968 1071 Lesley University
2 23885 1130 University of Scranton
2 23859 1115 California Lutheran University
2 23807 1145 University of San Francisco
1 23447 1370 University of California-Berkeley
2 23446 1365 Rensselaer Polytechnic Institute
2 23434 1300 Lehigh University
2 23430 1420 Carnegie Mellon University
2 23287 1195 Kalamazoo College
2 22969 1280 Polytechnic Institute of New York University
2 22902 1110 Warren Wilson College
2 22804 1145 Simmons College
2 22786 1160 Marymount Manhattan College
2 22709 1120 Saint Anselm College
2 22704 1160 Washington College
2 22678 1165 Butler University
2 22564 1230 Willamette University
1 22548 1355 College of William and Mary
1 22468 1215 St Mary’s College of Maryland
2 22161 1280 Southern Methodist University
2 22053 1160 Wagner College
1 22048 1195 Pennsylvania State University-Main Campus
2 22001 1205 University of Denver
1 21988 1185 University of Delaware
1 21952 1215 University of California-Santa Barbara
2 21881 1100 Arcadia University
2 21825 1180 Texas Christian University
2 21814 1225 Baylor University
2 21788 1140 Siena College
2 21766 1195 Ursinus College
2 21730 1405 Johns Hopkins University
2 21684 1195 Loyola University Chicago
2 21611 1170 Belmont University
2 21604 1153.5 Gordon College
2 21584 1210 Chapman University
2 21522 1110 Salve Regina University
2 21497 1175 Marquette University
1 21459 1180 Auburn University
2 21448 1445 University of Pennsylvania
2 21385 1350 Davidson College
2 21348 1460 Northwestern University
2 21158 1143.5 DePaul University
2 21084 1150 University of Dayton
2 21061 1150 Saint Michael’s College
1 21022 1300 University of Maryland-College Park
2 21014 1100 Xavier University
2 20885 1110 Pacific University
2 20878 1155 Point Loma Nazarene University
2 20841 1249 University of Puget Sound
2 20778 1285 University of Tulsa
2 20743 1165 Carthage College
2 20739 1220 Rochester Institute of Technology
2 20619 1440 Duke University
2 20591 1415 Haverford College
2 20587 1105 Emmanuel College
2 20488 1340 Tulane University of Louisiana
2 20396 1475 Stanford University
1 20364 1150 George Mason University
1 20320 1275 University of Pittsburgh-Pittsburgh Campus
2 20269 1180 Creighton University
2 20261 1100 Hollins University
2 20228 1165 Ohio Northern University
2 20200 1430 University of Notre Dame
2 20146 1140 University of Redlands
1 20142 1195 Rutgers University-New Brunswick
2 20100 1157.5 Stetson University
2 20095 1485 Columbia University in the City of New York
1 20087 1145 University of Utah
1 20066 1360 University of Michigan-Ann Arbor
1 20060 1360 University of Virginia-Main Campus
2 20024 1240 Emerson College
2 20013 1090 Randolph-Macon College
1 19877 1230 The College of New Jersey
2 19871 1145 Florida Institute of Technology
2 19683 1121.5 Saint Mary’s College
1 19542 1185 Miami University-Oxford
1 19520 1140 University of California-Santa Cruz
2 19486 1115 Adelphi University
2 19481 1115 Biola University
2 19397 1105 Mount St Mary’s University
1 19337 1190 University of Massachusetts Amherst
1 19273 1215 Virginia Polytechnic Institute and State University
2 19262 1125 The University of Findlay
2 19214 1200 Allegheny College
1 19213 1165 Indiana University-Bloomington
2 19171 1155 Loyola University-New Orleans
1 19118 1230 University of Connecticut
2 19077 1195 Southwestern University
2 19071 1115 Birmingham Southern College
2 19066 1085 Florida Southern College
2 19062 1190 Cedarville University
2 19059 1206.5 Bentley University
2 19057 1116.5 Westminster College
2 19036 1205 Saint Louis University-Main Campus
2 18935 1165 Franciscan University of Steubenville
2 18790 1190 University of Portland
1 18761 1110 Temple University
2 18700 1230 Kettering University
2 18699 1185 Milwaukee School of Engineering
2 18689 1315 Wheaton College
2 18635 1130 University of Evansville
2 18593 1210 Calvin College
2 18448 1180 Hope College
2 18201 1110 Elizabethtown College
2 17976 1155 Mills College
2 17763 1115 Valparaiso University
2 17710 1156 Bethel University
2 17498 1165 Clarkson University
2 17490 1230 Austin College
2 17375 1150 Stonehill College
2 16554 1105 Hanover College</p>
<p>QM, I also went looking for the savings numbers and saw that figure. And lower, when broken out by age group, with younger folks now saving proportionately more. Can’t even cite anything, but think it showed most older folks have far less accrued than needed. But I was looking for an average for parents roughly the right age group for college kids, by income. No luck. It’s there, somewhere.</p>
<p>What loans a kid takes doesn’t tell us what the parents borrowed, to plant his feet in what they assume is a “better” college experience.</p>
<p>I don’t know if OP is aware that some of us have been arguing the “better” issue for some time. Eh?</p>
<p>I actually thought this OP was somewhat tongue-in-cheek… couldn’t imagine someone could be posting this seriously! 
My husband and I are in our 50s, with our first of two kids about to graduate high school. We are OK financially… today. With the layoff culture we now live in, who knows about tomorrow? I just convinced my husband to replace his 12 year old car. We do not have an extravagant lifestyle. I would LOVE to be able to tell my daughter “Pick any school, sky’s the limit - don’t worry about cost”, but reality is reality. Even a 20 year college loan would take us to our mid-70s, and the second daughter would bring that to our 80s. I love my children, and their future is important - but so is not breaking ourselves in the process of educating them.</p>
<p>The comments in this thread made me think of the term “risk aversion” It usually applies to investors but it could also apply to borrowers. It is a personality difference.</p>
<p>There is no safety net for investors but there is for borrowers. I wonder what the percentage is of people who experience unexpected financial setbacks. Statistics would help people make more rational decisions about loans. Their safety net is bankruptcy, although fed loan debt is not covered. I am NOT advocating bankruptcy!! Please don’t twist my words. It is protection from creditors from certain kinds of debt. It is a last resort safety net. Even people who manage finances responsibly sometimes have to use it.</p>
<p>It saddens me to hear about some of the tough situations people have faced.</p>
<p>There is actually mathematics behind the concept of risk aversion.</p>
<p>From Wikipedia:
"Risk aversion is a concept in psychology, economics, and finance, based on the behavior of humans (especially consumers and investors) while exposed to uncertainty to attempt to reduce that uncertainty.</p>
<p>Risk aversion is the reluctance of a person to accept a bargain with an uncertain payoff rather than another bargain with a more certain, but possibly lower, expected payoff. For example, a risk-averse investor might choose to put his or her money into a bank account with a low but guaranteed interest rate, rather than into a stock that may have high expected returns, but also involves a chance of losing value."</p>
<p>[Risk</a> aversion - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/Risk_aversion]Risk”>Risk aversion - Wikipedia)</p>
<p>*I wonder what the percentage is of people who experience unexpected financial setbacks. * Think 2008.</p>
<p>Distinguish between risk aversion and risk management (a pretty significant field,) making wise decisions not simply flying without a net because you have the chance to, after all, fly.</p>
<p>I know that student loans are not discharged by bankruptcy. I assume that the same applies to loans to parents, for their son’s or daughter’s education?</p>
<p>I have also read in the New York Times about student loans not being discharged when the student dies. Is this generally the case?</p>
<p>Are loans that parents take out to fund their children’s education discharged when the parents die? </p>
<p>If the parents are nearing retirement age, what are the odds that they will still be alive in 30 years?</p>
<p>
I think many families have taken out a mortgage of $80,000 or more at some time - does that debt suck, too? I know that if hadn’t taken on some debt in my life I would be significantly less financially secure today than I am. I owe a lot of money, but a result of that debt is that I own even more. Yes, it’s less “safe” to live that way, but nothing is 100% safe; it’s a question of whether a given expenditure is really “worth it.” The decision to borrow money to pay for something today in the expectation that the long-term benefits from that expenditure will exceed its costs is not always a bad one. </p>
<p>I have no problem refraining from charging a trip to Disneyland on a credit card, but I’ll take out a mortgage in a heartbeat if the rates are right and what I buy with the borrowed money will pay off down the road. I’ve used debt to buy every house I’ve owned, the commercial space my office is in, even to turn around and loan it to someone else at a higher rate on occasion.</p>
<p>My son needed to buy a car last year, but used cars in good condition weren’t cheap, and he could buy a new car with good gas mileage for a few thousand more at under 1% interest and pay it off over three years while keeping a healthy reserve in his savings account. His per-mile-driven costs would actually be lower that way. That was a sensible decision in my opinion. (It also helps him establish a good credit rating as he pays off the loan.)</p>
<p>People like simple rules, but life isn’t simple. Debt and assets are all factors in your overall financial picture, to be handled in the manner that is most prudent given where you are in life.</p>
<p>And sometimes, in my opinion (and ignoring the OP’s somewhat offensive mid-thread comments on this point) that includes spending a little more - even if you’re borrowing it - to provide your kids with a collegiate option that may give them better prospects down the road.</p>
<p>In my mind, yes, that debt sucks too but is necessary AND is secured by the house itself, as are car loans. Nothing secures a student loan - there is no way to get out from under it if disaster strikes. DH and I are taking many steps to get out from under ALL forms of debt as soon as we can - it allows me to sleep at night.</p>
<p>I don’t view college debt as necessary. I got a great education at my state university and valued it highly since I worked for it. I want my kids to have the same satisfaction and feeling of accomplishment by contributing to their own education and upkeep once they become legal adults fully capable of doing so. </p>
<p>My HS senior is currently working very hard on scholarship applications & keeping her grades up to maintain merit scholarships. Where is her incentive to do that if mom & dad will cover it anyway? She knows exactly what we will contribute (& it will cover all expenses at her less expensive choices), now she’s trying to save herself money and/or “upgrade” to a pricier school.</p>
<p>
</p>
<p>Every kid is different. My two kids kept their grades very high (one had straight A’s and was val in HS for example), and didn’t need any incentive to do so. They simply set high standards for themselves and are driven to succeed. My kids got scholarships and fellowships (in undergrad and grad school) also, knowing that it would help their parents as much as possible, but they also knew we would send them to any school of their choice.</p>
<p>Well, I know she’d still WANT to do it, knowing it would save her parents money rather than her. But with a bit of senioritis after a killer junior year, and many music department activities competing for her time & attention, I feel that a lot more effort will go in to the essays, etc. knowing that it’s her own skin in the game so to speak. BTW, she has not once complained or pouted over this state of affairs - I think she’s enjoying the challenge of it.</p>