<p>We live in our home, raised our family here. My interest rate has always been much less than 6.41. It has increased in value. If we need to sell it, it is an asset. And, our mortgage payment, including taxes and insurance, equated roughly to what rent (no stake) would have cost, for all these years.</p>
<p>"With the layoff culture we now live in, who knows about tomorrow? " - So true. </p>
<p>Mortgage debt is a burden, particularly in early years of lower income. Parent loan debt is a burden, particularly in later years of lower/retirement income. Both together is a double burden.</p>
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My wife and I did, too. My Dad gave me about $1500 a year while I was in college and my wife got nothing from her parents. We earned the rest by working during college except for less than $2,000 of student loans my wife had when she graduated. </p>
<p>But back then tuition at UC was $750 a year, a 2 bedroom apartment went for $200 a month and minimum wage was $2.50 an hour. The year my youngest graduated from UCSB the annual cost of attendance was $25,000 and minimum wage was $8 an hour. Obviously, things have changed. It is simply not possible to “work your way through” a school like UC these days. Living at home, attending community college first and then a Cal State for the last two years… maybe. But even the top state colleges are too expensive for a student to get through without parental help, grants or student loans - not even talking about private schools. That’s just current reality. </p>
<p>Lookingforward, what you say is true of me, too - but I’ve seen four neighbors on my block walk away from “underwater” houses over the past few years. Whatever they put into those homes - poof!</p>
<p>Colorado_Mom - you’re right. Debt is a burden. That’s why I don’t want my kids to have to start out with it, and also why I’m willing to take it on for them. Most of our grandparents took on burdens to further our parents prospects. Some of them took the desperate step of emigrating to new lands where they didn’t even speak the language. Our parent’s generation paid higher taxes and funded state colleges at a much higher per-student level than we do now. I guess I just don’t get the chorus of voices urging our generation not to do the same for our children.</p>
<p>kluge - you are correct, it is no longer possible to do what was do-able in the 1980’s. But we’re not leaving our kids on their own - we came up with a figure that we can give them, and that is what we will give them no matter what. It will pay all of the expenses, including room & board, at a Cal State, or at the University of Alabama, where D has earned a full-tuition scholarship. It will pay about 2/3 of the cost of a UC, and 1/3 the cost of an ivy or other highly ranked private school. If my daughter earns a full ride somewhere, she keeps our whole contribution to use for grad school or whatever she wants. So far, everyone is happy with this arrangement…we’ll see how it turns out!</p>
<p>Kluge, I know. I was going to note that- but how even selling at a loss reduces debt. If the kid doesn’t get a job or under-earns, or a parent gets ill or loses a job, you can’t turn over the diploma and get a reduction in the debt balance.</p>
<p>Remember, we took PP loans. I’m advocating that families have to very carefully assess. That’s not about the guy who wants a 100k car or the parents who are intentionally unsupportive. Not about over-buying a home, etc. Just that no one should minimize what the loan reality can really mean, to some families- especially not just because OP slipped in figures that don’t apply.</p>
<p>Ya know, some families will find that even the miserable state school can require big debt, if there isn’t a good FA program in place. I have doubts about that scenario, too.</p>
<p>I don’t oppose taking on debt for the college expenses of one’s children. I do think that it is short-sighted to take on debt that is approximately equal to one’s annual income, when one is near retirement, though–particularly when the purpose of taking on that much debt is to permit a student to go to a higher-ranked school (as opposed to needing to take on debt, in order for the student to go to college at all).</p>
<p>lookingforward, I am assuming that your use of “miserable state school” was tongue in cheek.</p>
<p>Q. Thinking close to home. Should have said miserable school. Or miserable match. Walked right into that pothole.</p>
<p>But it was more a knee jerk thing. Lately I’ve been so impressed by some students from some schools that routinely get kicked around in my area.</p>
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<p>I’ve always thought that car loans and educational loans are roughly comparable. Cars are depreciating assets. It never really makes any financial sense to finance a car. Buy a junker if you can’t afford to buy a new car outright with cash. It’s not recommended that one borrow money to purchase a depreciating asset.</p>
<p>If one has no philosophical objection to financing cars, one really ought to have no problem with financing a degree. But neither consumer good is worth a lot of debt in any case.</p>
<p>NJ Sue, I used to have an aversion to car loans, and I bought many of those junkers. Eventually realized that instead of predictable monthly payments, I was making frequent, unforseeable, often massive payments to my lovely mechanic. Not to mention significant inconvenience and sometimes outright un-safety.
I had grad school loans myself (fairly small ones) but feel very grateful that both my kids got decent public educations without borrowing.</p>
<p>I will most likely never buy a car that costs $80,000 and our household income is considerably higher than that of the family mentioned by the OP.</p>
<p>I have nothing against debt for education per se.</p>
<p>I originally wanted to go to university in New York or California as an in international student, to explore the big bright States. Then in grade 11 I saw the instate fees public and I was shocked. Then I saw the private universities and international student fees and I was horrified. The idea of going into massive debt to pay for education still feels alien to me, my undergrad degree was from probably the most expensive university in my country and it was still only $7500 per year. Oh well maybe when I get out of grad school I can do a post doc in a cool city like New York and it wont bankrupt me.</p>
<p>I got to say it is a bit nutty when a parent has to choose between quality education for their children and crippling debt that takes decades to pay off (didn’t the OP suggest a 30 year loan?).</p>
<p>NJSue - I see your point, and to take the analogy further, we are a Honda family & are looking at Honda educations that will get us reliably to our destination. BMWs are out there for those who can afford them - I won’t borrow money to get one.</p>
<p>Well it’s all a matter of degree (no pun intended). I don’t think it’s a good idea to take out huge amounts of debt to finance an unsecured item or a depreciating asset. </p>
<p>I’ll never buy an 80k car either, but I see a lot of people in my area who routinely finance cars in the 40K-50K range and trade them in every 5 years or so. They have been doing this for 15 years. These are the same people who complain that they can’t afford to send their children to Syracuse or BU or whatever. It seems all the same to me. Their choice, of course.</p>
<p>For us also, paying for college is the parents’ responsibility, WITHIN REASON. It’s part of the basic launch you sign up for when you have kids, if you’re lucky enough to have the resources. We socked some money in 529’s and have been able to pay two state university tuitions without borrowing. My kids were perfectly happy with this. If they’d had some specific niche or direction or need that the public system couldn’t fulfill, we might have had to do things differently. If they’d had only a preference, no matter how strong, to go someplace 3 times more expensive, they would have been out of luck. I think they would both be very uncomfortable if we took on significant financial strain for college when a decent and affordable public option was available. As it is, we’ll pay their grad school tuitions as well (yep, they do work and contribute to their own expenses), and they have never doubted our love and commitment for a minute in their lives. There’s a lot of ground between responsible and sacrificial, and my own preference is to stay away from sacrificial (of course I would throw myself in front of a bullet to save them, but that’s a different story). I also prefer to stay away from avoidable debt. No disrespect to other people’s different life decisions; we’re not all meant to do things the same way.</p>
<p>“There’s a lot of ground between responsible and sacrificial” </p>
<p>Agree.</p>
<p>soozievt raised an interesting point that people from different cultural backgrounds may see things differently, in terms of the responsibility to pay for higher education.</p>
<p>I think that if one’s parents paid for one’s own education, there is a certain obligation to pay for the education of the next generation–even though the costs have escalated rather steeply in the transition from our generation to our children’s generation. This does not necessarily extend to covering the cost of the most expensive college that admits one’s offspring, though, in most cases.</p>
<p>My mother-in-law was the valedictorian of her (fairly large) high school class. Her parents could not pay for her to go to college. In fact, they needed to have her go to work immediately after high school to help the family. As it was, she was the first in her family to graduate from high school. She was never able to go to college, but she was self-educated to a high level. </p>
<p>My father-in-law paid his own way through college with a combination of a co-op program and the GI bill. My dad had the benefit of tuition reduction for professors’ children + the GI bill. My mother won a scholarship to her college. It was $75 a semester! Unbelievably, I think it covered half of the tuition. My spouse and I were also fortunate in obtaining scholarships. My brother had scholarships + financial aid, but still was paying off a student loan well into his own parenting years.</p>
<p>We did pay for QMP (and are still paying). We were able to do it.</p>
<p>However, in terms of our cars, we have one from model year 2001 (the Acme Deathus Trappus) and another from 2005. The combined mileage on the two is about 360,000 miles. A few days ago, out in our driveway, I saw a very skinny coyote who had rigged up some kind of a crane-and-winch combination and had managed to suspend himself above the Acme Deathus Trappus with a belt around his waist, and then open the moon roof on the vehicle, in order to scatter some bird seed on the driver’s seat. I am not sure what his plan is. (We will be buying a new car soon–now I will get a lot of car ads in the side bar.)</p>
<p>However, a comparison with our situation makes me doubt that the family mentioned by the OP is buying $80,000 cars every 4 or 5 years.</p>
<p>Update: The same coyote was out in our driveway this morning, again with his crane-and-winch combination. This time, the waistbelt that had been suspending him above the vehicle unexpectedly broke. He fell through the moon roof and wound up in the driver’s seat. Somehow the car started up. Even though we live in the flattest part of the country, the coyote contrived to drive off a rocky cliff. At first, he did not notice that he and the vehicle were suspended in the air. Then the vehicle dropped from under him, shooting him back up through the moon roof. The vehicle hit the ground far below. The coyote landed on top of the vehicle. Aside from some short-lasting accordion-like compression of his legs, he was miraculously unhurt!</p>
<p>We will have to get a new car, though. Kindly stop guilting me about it.</p>
<p>I do know someone whose car was backed out of the driveway by a raccoon. And our new car is 2001. (The older was a “gift,” otherwise we’d do with one.)</p>
<p>I guess someone could say, the sacrifices should even include not just used or old or used and old- but only one car. The competition gets kind of crazy.</p>
<p>We’re not much into cars. If there is some special need, we’ll rent.</p>
<p>Hee hee. We had just one car for many years, but after a while the schedule constraints made that impossible, really.</p>
<p>The availability and reliability of public transport also varies quite a lot from region to region. As does the effective lifetime of vehicles (and the amount of salt on the roads).</p>
<p>To be sure, the family mentioned by the OP could probably have cut down on expenses over the years, to have a bit more in savings on hand. However, there aren’t any “do overs” on offer, as far as I know.</p>
<p>An element that is different for my generation of parents as opposed to the preceding one (generally speaking): day care costs.</p>
<p>The recession that hit in 2007 also prevented some financial plans from working out as people had thought that they would.</p>
<p>QuantMech wrote:</p>
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<p>Yes, that is what I was basically trying to say, though my post from this morning to which you refer is no longer posted on the thread.</p>