<p>I liked kluge’s posts very much, but see both sides. I see providing my children with the best education possible, even if some sacrifice is involved, as a benefit that gets handed on to future generations. It seems to me these are scenarios to consider before having children. It does change your options in life. It’s not for everyone. </p>
<p>I can’t offer an opinion regarding the OP - not enough information.</p>
<p>adding:Even if my children don’t have children of their own, I feel good about concentrating on them, even when that negatively impacted opportunities and possible financial gain available to me.</p>
<p>I agree that the OP’s post was bait for the “no debt” position, but this discussion has gone beyond that. (And I was never clear that the OP was suggesting that somebody nearing retirement should take out a loan like this–I interpreted the statement to refer to somebody who had taken out such a loan at some time in the past, was now nearing retirement, and was doing OK. But who cares?)</p>
<p>I think the specifics of the circumstances are relevant to the advisability of taking out the loan. I read it as a “prospective” loan, not as a loan in the past. The OP did not seem to have any idea about the retirement savings of his cousin’s family.</p>
<p>Yes, most of us have agreed debt is a valid way to help pay a bit more than our current resources allow, for what truly (truly) is the better match for a kid’s interests and strengths. </p>
<p>But, the decision has to be wise. “Moderate and manageable.” NOT some ingrained belief excessive debt “proves” our love, not thinking it’s the one and only way to show our concern and respect for their needs and potential.</p>
<p>And certainly not trying to justify the excessive debt on social grounds, what sort of spouse could be found or assumptions about lowlifes at non-elite schools.</p>
<p>I’m definitely bringing some baggage to the thread. A relative whose three children have tippy-top stats decided early retirement (55) with two non-mortgaged homes, new cars, a boat, and travel money was an important personal goal. The kids couldn’t qualify for financial aid. Relative said state school was good enough (could be right about that) and kids needed to earn all their spending money, that grad/professional school tuition was all the responsibility of the kids. This relative isn’t doing for his children what his own parents did for him and it kind of burns me up. They lived under their means and took on debt to put him through professional school so he could earn the big bucks to retire early. Although this is an extreme example, I am seeing more and more examples of this kind of thinking in my generation.</p>
<p>Perhaps many or most here would not look kindly on the parents in question (wealthy enough to disqualify the kids from financial aid, but not willing to contribute that much to their kids’ college even though their parents paid for their college and professional school), but it is not something the kids have any control over when choosing colleges. The best that they can do is find this out early enough to tilt their application lists toward low cost or merit scholarship schools.</p>
<p>Many parents will fund undergraduate ( even if “only” a state school) and have the kids finance their own grad school education. alh’s relatives don’t seem that unusual in that regard. Unless I’m missing something, the parents in question sounded like they were willing to fund a state school education for their kids but expected them to earn their spending money. Again, doesn’t sound all that unusual.</p>
<p>These kids live in a state where valedictorians automatically get free tuition, so the parents didn’t have to pay any tuition - just room and board, though there seemed to be an expectation the kids should help out with that, too, if summer earnings were high enough. They were encouraged to be RAs. The parents didn’t provide transportation to and from school, sorority/fraternity dues, clothing budget. The kids had to cover all of that. </p>
<p>One reason the parents are mortgage free is one set of parents gave them a down payment and then financed the rest of the house for them at a better than market rate loan.</p>
<p>This is off-topic and I’m sorry but Kluge’s posts really struck a sore point with me.</p>
<p>adding: the “unusual” thing here is that my relative’s undergraduate education, spending money, fraternity dues, and then professional school tuition with help with living expenses, and help with getting started in life buying a house were all taken care of by their parents. They do not feel obligated to do the same for their own children, although they are in better financial circumstances than their own parents ever were. I don’t see the paying forward that might have been expected. </p>
<p>*Quote:
I come from a $75K family, with three kids…
Additionally, non-private schools have not only lower tuition rates, but more scholarship opportunities, making the choice a no-brainer for middle and lower class students.
It’s not a no-brainer for colleges with excellent financial aid. Some net price calc cost to parents for a $75k/income with 2 children in college and $20k in savings are below. All costs only include grant aid (no loan aid). Room, board, and other expenses are included, as well as tuition.</p>
<p>Berkeley (in state) – $4500
Michigan (in state) – $13,000 (does not include work study income)
Maryland (in state) – $18,000 (no grant financial aid offered)
Virginia (in state) – $26,000 (no financial aid offered)*</p>
<p>???</p>
<p>UVA is a full need school. What kind of crazy formula do they use that determines a family with that financial info and TWO in college gets no aid? That’s just nutty!</p>
<p>Alh, I look at your relative’s situation differently. </p>
<p>Your relative is wealthy enough to retire early. He has three kids. If he sends the three to a top private, he could be in for at least $750,000 to put all three through just undergrad. It sounds like he is providing them with a debt-free undergrad experience while still requiring them to have some skin in the game (by requiring they earn their own spending $.)</p>
<p>Maybe he doesn’t want to hand them the world on a silver platter. Maybe just getting an undergrad degree is enough to give them a helping hand without them being too spoiled.</p>
<p>Dh and I make plenty of money. I drive a fabulous car. We will pay our kids’ college expenses of the equivalent of state school and discourage them from taking on any debt. We don’t like debt. Given our income and the kids’ 529 plans, we know how much per year we will pay to cover undergrad. My kids might or might not be Ivy material, but in the end they have very realistic financial constraints. Our hope is that by talking to them about the cost and putting it in terms of our income and budget, they will appreciate the sacrifice and work hard to earn a degree. </p>
<p>But I can’t fault your relative for not wanting to take a 3/4 million dollar hit to their retirement capital.</p>
<p>Most people who are against taking out 80K per kid for loans a)are likely still giving their kids a college education and b)have probably made many many sacrifices for their kids along the way.</p>
<p>The wealthy parent spending megabucks on themselves but contributing nothing to their kids’ education is likely more myth than reality. Probably an infinitesimal number in comparison to all the loving parents who disagree that the only good education comes from one of 30 schools and therefore reject the idea of taking out a 30 year note per child to finance it.</p>
<p>“UVa is a full need school.” Yes, I doubt that $26,000 figure is accurate. I put in some numbers (not sure if the numbers were the exact same ) and it was more like $13,000.</p>
<p>You really can’t win on this . Even paying instate for your kids is just not enough in some people’s minds. We could have made our kids go to community college or go for free with merit somewhere. But we didn’t. Paid for them to go instate. And yes, our oldest did pay his own fraternity dues. I have no guilt about that whatsoever.</p>
<p>Sounds like they are living the generational stereotypes. The Greatest Generation fought World War II and launched a period of economic growth for their Baby Boomer kids. The Baby Boomer kids prospered from the economic growth, but are now bequeathing their Millenial kids an economy with less growth, high entry (college or other school) costs, and worse employment opportunities, while expecting them to be taxed way more than they ever were to cover their ballooning Social Security and Medicare costs.</p>
Edit: I found the error in the UVA calc (income entered twice and counted twice). The correct UVA cost is with the listed data is $14k. This is approximately the same as Michigan and several times higher than HYPS.</p>
<p>sevmom: I certainly see fraternity membership as a luxury and not an expense parents should be expected to cover. When my own son joined a fraternity, since part of the money paying for him to go to college came from a small inheritance from my father, who in turn had inherited from his father, and both were fraternity members and both had their fraternity expenses paid for by their parents… I felt ethically obligated to pay my son’s expenses even though I really don’t like fraternities. Because my father and grandfather would have expected the money to be used in that way. And I couldn’t come up with a good enough moral argument against it. My relative had the same sort of inheritance and obviously thinks about this in a completely different way. He thinks fraternity membership is a good thing. He was in one. His parents paid for it. And yes, his argument would be don’t give it to them on a silver platter, though he’s going to have to take that silver spoon out of his mouth for us to hear him.</p>
<p>I should have put all this on the “get it off your chest” thread instead of here.</p>
<p>data,Well, I just did it again and it said $1495 Pell grant and 11,634 grant for net price of 12,757 with that zipcode. Used the calculator above. One of my kids went to UVa (unfortunately at full pay) and I really do doubt that the 75,000 income you’re using with two kids in college would result in a kid being full pay. But, we’ll have to agree to disagree so this does not distract.</p>
<p>alh, we didn’t pay for the fraternity but we did pay for clothes,transportation, etc. so we’re not THAT mean! :)</p>
<p>Bottom line, state schools are not mediocre. It is far better to go to a state school and do well, and leave owing no money than a private school, and pay for it the rest of your life. by the way, you can go to a state school and get exactly the same chance to get into medical school, law school, pharmacy, engineering, and tons…tons of other career paths. I have one kid in state now and likely to have one in private…but I am not sure yet. Maybe the 240,000 that would go to a private education would be better used guaranteeing a life savings…</p>
<p>Quantmech, the loan I mentioned in the original post was $80,000 accumulated over 4 years with about $50k left to pay at $280 per month. It was incurred at a very selective private school that gave no merit aid. Said school had one of the 3 best programs in the country for the student’s intended major. There were two other children, both older, who attended mid-tier private schools. Their schools were a good match for their interests and abilities. One got into a top-30 school but chose a less selective private school for several reasons, none financial. Both of these other children attended almost tuition-free because of merit and only had to pay R&B. They were all excellent students but the third was really gifted and the family passed up a free ride at a mid-tier private to send this great kid to an elite school. This kid was just an extraordinary person and student. Their decision was motivated by love. And, he is the antithesis of “spoiled”, manages his money wisely, finished grad school (one of the best programs in the country), has a young family, bought a house with help from parents.</p>
<p>Even parents who take out large loans can teach their children financial responsibility.</p>
<p>If a student gets into a reach school, it is worth it to take out a loan so they can attend. You grow the most when you are challenged. Being in the bottom 25% of the student body is a good place to be. Being in the top 25% means you could have attended a better quality school. Students absorb a lot from fellow students…the hidden curriculum. Students are diverse at every school but there are overall differences in quality.</p>
<p>It is not just about prestige. There are real differences in academic quality. But, the prestige doesn’t hurt. It is really about priorities and values. </p>
<p>You have to know your child. Not all students take advantage of the opportunities afforded by a better school. If the student is bored, uninterested, uncomfortable in the world of ideas, if they would sit in class and send text messages or get their emails from their iphone or surf the web…well, I wouldn’t waste my money on that student.</p>
<p>But this is not the normal case of parents facing parent loans for their kids’ college. Most parents in that situation just do not have the money or other assets, so borrowing that much will put their household finances in a precarious position (if said household finances are not already in a precarious position). Your example situation, in contrast, is of a wealthy financially secure household which is using parent loans as a money management tool, although it could easily do without such loans if they were not available.</p>
<p>Collegehelp (and others), I think the issue here is that we are all starting with different assumptions about the value of the elite college education.</p>
<p>If you place a very high premium on the perceived benefits of an elite school education and take a dim view of most state schools, then a loving parent should indeed do anything in his or her power to secure their children the inestimable benefits of the better school.</p>
<p>If, on the other hand, you think elite schools are vastly overrated and may even prove detrimental to the prospects of students who earn lower GPAs there than they would have at a state school, there would simply be no reason to take on even modest debt for a “benefit” you find highly questionable.</p>
<p>If, like the majority of us, you are somewhere in the middle, believing that while elite schools confer a number of advantages on students, both during the four year experience and afterwards,many state schools (and not just Michigan and UVA) also provide an excellent education and opportunities, you are probably willing to undertake some additional financial burden to send your child to the better school, but not to go into massive debt. The amount extra you are willing to pay may also vary depending on the school; I think a lot of people who might be willing to pay substantially more for Harvard wouldn’t necessarily be willing to pay the same amount for Tufts, Brandeis, or Boston College, and that seems reasonable for me. </p>
<p>You seem to be in the first group. You may believe that the premises of those in the other two groups are faulty, but that doesn’t make this an issue of how much you love or are willing to sacrifice for your children.</p>
<p>I also think that some of your assumptions are off - a student who finishes in the bottom 25 % of an elite school would, in most cases, have been a lot better off (in practical terms, at least) doing better at a lesser school.</p>