Why are parents so reluctant to take out loans?

Parents Forum
641

<p>

This assumes that living below one’s means wouldn’t leave the family living in the street. Not everyone has a high enough income to have been able to save enough to pay for those high cost colleges out of income and savings. A combination of reasonable loans, savings and income is much more likely for a lot of families.</p>

<p>Also, per the OP’s suggestion for shopping at the Salvation Army, I wonder if he would have been happy having all of his clothes purchased there as well as living with the sacrifices he recommends for his parents all through his childhood. Would he have felt good about that frugality? Or would that not be good enough for him.</p>

642

<p>

</p>

<p>I don’t either. :rolleyes:</p>

643

<p>Salvation Army, Goodwill, VOA, etc. … they all have good clothes and I have bought them. I almost never by new clothes for myself (except for underwear). Among some of my friends, it has, in fact, become chic to shop at these places. Helps out a good cause.</p>

<p>I get new clothes for Christmas and birthday from relatives…almost never buy clothes for myself. I drive a 1997 Buick although I could pay cash for a new one. I am proud of my frugality. I would not send my children to Exeter because it would not be developmentally healthy to send a young child away from home. I applaud stay-at-home Moms and Moms who limit their work to part-time (which is the trend as I understand it) so they can devote more time to children but I totally respect women who make other choices or who don’t have a choice due to financial reasons. I love children very much and like to think that I have compassion for families that struggle financially. Raising children is the most important thing we do. I say amen to the idea that the most important things you can give your children is your time, attention, and support. I think I DO understand that hard decisions have to be made about money. I eschew the ostentatious display of wealth on frivolous items…people are important, not money.</p>

<p>So, that is probably more than you wanted to know about me.</p>

644

<p>So there’s really no point in spending extra to send Junior to a more academically prestigious school, because he can do “just as well” at Local State U - is that it? And the folks who spent the big bucks to send their kids to Duke, or Yale, or Rice, are either all just fools or rich folks with so much money to throw around that it doesn’t really matter to them, and thinking otherwise is “arrogance.” That really is rather convenient, isn’t it?</p>

<p>

Well, I know I never said that, and I’m pretty sure the OP never said that, so I’m not sure what “these threads” are that you’re referring to. Maybe it’s because I only went to a state school. :rolleyes: </p>

<p>Most of the successful people I know did not go to elite private colleges. Of course, most of the unsuccessful people I know didn’t, either. (The vast majority of people I know attended various state schools, or in some cases, none at all.) But neither observation actually is germane to the discussion. The question isn’t whether people can achieve some measure of “success” - however one defines it - without attending the more academically prestigious college, but whether attending that school will increase their probability of doing so - again, by whatever measure you choose to define “success.” </p>

<p>I’ve restated this often enough and I think clearly enough that I don’t believe that reasonable people should continue to misunderstand or misrepresent what I’ve been saying - not that it’s impossible or even improbable to achieve some level of success (again, however defined) without attending the more academically prestigious school one is accepted to over a cheaper alternative, but that doing so increases the probabilities of greater success in life. </p>

<p>Nrds, I guess you just don’t know as many people as I do. I know lots of young people struggling to get by while paying off large student loans while their affluent Boomer parents are living large. Maybe that’s just a “coastal” thing.</p>

645

<p>Now, granted, I work in a very specific field, but most of the affluent boomers I know (lawyers or former lawyers) all set up trusts for their kids’ educations at birth or as part of partnership compensation structuring. No student loans for their kids unless there is a desire for skin in the game.</p>

646

<p>One more comment. Clearly some people think that it is necessary to pay out the nose for their kids to attend a prestige school. That is your choice.</p>

<p>My take on that is that there is a pride factor in doing this, just as there is a pride factor in belonging to the best country club, driving the best car, or having the biggest house.</p>

<p>I have invested considerably in my kids’ education and will continue to do so. However, just as I don’t believe it makes financial sense to pay outrageously for the country club, car or house, I don’t believe it makes financial sense to pay outrageously for a “name” school. </p>

<p>Like some have mentioned earlier, I believe that there are tremendous biases placing value on “premier” educations without the data to prove the return on investment of those educations. I attended a state university for my undergraduate degree and a private highly rated school for my graduate degree. I did not see a great deal of difference in the education. I put a lot into both and I got a lot out.</p>

<p>I’m going to be a bit crude about it, but some seem to think that attending a prestige university improves your likelihood that you will be “hot snot.”</p>

<p>And there have been some references to being exposed to populations that are not up to snuff. Frankly, some people need to ride the city bus more and see what it’s like to work hard, support your family and have the dignity of being an ordinary person. </p>

<p>The world is not filled with “top” people. Otherwise, there would never be a top. And someone with the true qualities that I consider necessary for success will have respect for those who aren’t at the top. Those people may have more “success” in life that top earners. </p>

<p>I fully understand sacrificing for my children. I have done it, and will continue to do it. I owe them parenting and providing for them to the best of my ability. I do not owe them great clothes while I dress from Walmart or Target or goodwill ( and yes, sometimes that’s trendy, but that’s not the point). I do not owe them a “premier” education while I suffer in retirement. </p>

<p>I am not doing my job as a parent if I don’t teach my children that we all make sacrifices for one another, but that one person is not entitled to have everyone else make all the sacrifices.</p>

<p>Isn’t that what we’re really discussing here? A belief that parents should sacrifice until it hurts and put children before them at all costs? Rather than a belief that parents should sacrifice for children to provide a reasonable education, and that there may be times when children should sacrifice for their parents.</p>

<p>I am not opposed to taking out reasonable loans. I am not opposed to sacrificing for my children. I feel an obligation to provide education for my children to the best of my ability and it means that I don’t dress from expensive stores, drive a fancy car, go out to dinner a lot, or belong to any clubs. It doesn’t mean that I live like I’ve taken a vow of poverty. I am a person, too, and my child can sacrifice having everything she wants so that I can have some comforts.</p>

<p>Where some have gone off track, I think, is by assuming that parents have an obligation to provide the “best” education, defined by many as the most expensive education. Clearly, not everyone gets the best (otherwise it wouldn’t be rated the best). Moreover, what is best for one may not be best for another.</p>

<p>Finally, my children are learning that Mom and Dad make sacrifices for them, but that sometimes you don’t get what you want and you learn to economize and make things work for you.</p>

<p>I suspect students who know this are much better prepared for life that students who believe that the world will bend over backwards to give them what they want.</p>

<p>For those of you who choose to sacrifice everything for your child to have the “best” education, however you define it, power to you. I won’t judge you, and I hope it works out for you.</p>

<p>You shouldn’t judge others who make different choices.</p>

647

<p>"The coastal bias comes through in both Kluge’s and collegehelp’s comments. "</p>

<p>I think what is missing when those of us who don’t live in the northeast talk about how U of Illinois or U of Texas or whatever are perfectly fine choices in our areas – is that there is a misperception that upper middle class life in the northeast is somehow different from upper middle class life anywhere else. When in reality, living an upper middle class life in suburban Dallas or suburban St. Louis or suburban Kansas City or suburban Minneapolis just isn’t all that different from an upper middle class life in suburban Boston, NYC, Phila or Baltimore. And it’s more accessible via non-elite schools in other parts of the country. I know I didn’t get that when I lived on the East Coast - I truly thought that upper middle class life in the Northeast was somehow special or better. And now I’m grown up and experienced enough to know it’s pretty much the same thing no matter where you go.</p>

648

<p>

I’ve been curious about you, so it is a fine amount to know about you.</p>

<p>I don’t want this to go off topic but couldn’t let your comments about stay-at-home Moms go without an answer. I agree that raising children is one of the most important things we do, and as a stay-at-home Dad, I’ve put my money where my mouth is. I doubt that it was your intention to offend, but I personally find it offensive that the opportunity/sacrifice (and be sure that it is some of both) seems to always be expected of the mother.</p>

649

<p>I’d like to try to move the needle on this conversation back to the middle a bit. Imagine the following fictional question: “My son has been admitted to Princeton, and to the state flagship. At the flagship, he would attend for free. At Princeton, he would get substantial financial aid, but due to some other expenses, we would not be able to pay the entire EFC in cash. We would have to take out about $15,000 in loans for each year of attendance. We are confident that we could pay back these loans over the next 10 or 15 year, although we’d have to do some belt-tightening to do it, such as putting off replacing an old car, taking more modest vacations, and eating out less. Our son is willing to attend either school, but he (and we) would prefer Princeton. Advice?”</p>

<p>Is there anybody who would think it would be a bad decisions for such a family to take out the loans to send such a kid to Princeton? And if there isn’t, we’re just talking about line-drawing on how much debt is reasonable, aren’t we?</p>

<p>

C’mon. In the same post, you say that such people think they are “hot snot.”</p>

650

<p>I think it would depend on the family’s situation. In the situation you described, in which the family is confident that they can pay back the loans by making sacrifices which many would consider minimal, because they’ve already done those things - drive old car, take “more modest vacations” (not give up vacations entirely) and eating out less, it’s not a hard choice. Really, those are such modest sacrifices that it indicates that this family has plenty and could easily choose Princeton. I don’t think that’s what most families face.</p>

651

<p>Hunt- are these parents 62 or 49? Do they have a 401K invested in a diversified set of options, or is their retirement plan Social Security and a 25K CD? Are there other children still to be educated or is this an only or their last? Are there two working parents with reasonably fungible skills, or is this a single paycheck family where the options for finding a similar job limited?</p>

<p>Etc.</p>

<p>For me- I’d pick Princeton. But if push came to shove- I’d relocate if I had to (not everyone can or wants to.) I’d take a promotion if it meant traveling more (not everyone can or wants to). etc. So many factors…</p>

652

<p>I’m trying to learn if there are people who will say that nobody should borrow 60 grand to send a kid to Princeton over the state flagship. If there aren’t, we’re just talking line-drawing.</p>

653

<p>

</p>

<p>This to me reveals the bias of the upper-middle class. There is a large segment of the population that ALREADY never eats out, never takes a vacation, and drives every car into the ground (and then replaces it with another used one). Their incomes have stagnated as the cost of everything has increased, and they are already just scraping by. There is no unallocated income that may or may not be used for college (or retirement, for that matter). And even if people in this group are homeowners, they are unlikely to have enough equity to be able to borrow against it to pay for an expensive education for one or more of their kids.</p>

654

<p>Hunt - I would borrow the money in a heartbeat. Seems like a reasonable thing to do.</p>

655

<p>I have neighbors who should not borrow 60 grand to send their kid to Princeton (and our State flagship is not UVA or Michigan.)</p>

<p>Why? Because they spend every nickel they earn. They had to tap the home equity line of credit to paint their deck. They live a nice life but they are two paychecks away from disaster. They marvel at people who buy cars and drive them for 12 years (like me) and say things with astonishment like , “imagine not having car payments!” like it’s a dog who can operate a microwave.</p>

<p>They complain that they have $1200 in each kids college fund. They take great vacations and eat dinner out constantly, and they are fun to be around except when they are worrying about money (when a high ticket item needs to be replaced).</p>

<p>If someone can’t get it together to cut back when the kids start HS in order to ramp up the savings, how the heck are they going to get it together enough to pay off loans?</p>

<p>Their kids are smart and personable; IMHO they should seek out free merit rides somewhere and get the heck out of dodge. Their parents freely admit that either “someone” is going to die and leave them enough money to get out of debt (any takers?) or they’ll be moving in with their kids once they retire.</p>

<p>They should not borrow 60K.</p>

656

<p>Granted, the “hot snot” comment was uncalled for. It was certainly no less harsh than many of the other comments that have been made here without knowing anything about an individual’s situation. But nonetheless, I apologize for the remark.</p>

<p>There’s a divide. There’s probably always going to be a divide.</p>

<p>But what I actually meant was that I believe that they are placing a lot of faith that attending a “premier” school will cause them to be better than most other people. </p>

<p>I DO NOT believe that attending a premier school will necessarily cause most people to be more successful in life, and I’m not sure how we’re defining success or better. Each person must have his own definition.</p>

<p>And as some of you have acknowledged, the data connecting success to prestige schools is sorely lacking.</p>

<p>If attending a premier school will cause some, but not all, to be more successful, it becomes a matter of analyzing the costs, the risks and the potential benefits. If we’re talking about financial success, you have to determine what you think the likelihood is that the child will make enough money to justify the investment, and then there could be a question regarding whether it is fair to ask the parent to make the sacrifice of living in poverty so that the child can live in luxury. The child will have no legal obligation to provide for the parent.</p>

<p>Maybe we haven’t defined well enough what we are making the sacrifice for. Is it for the education in and of itself? Is it for financial return later in the child’s life? Is it for happiness? </p>

<p>My main point still stands. It is important to teach our children that we work through life together and that we all make sacrifices for each other at different times. It is not healthy for the child to believe that sacrifice is a one way street.</p>

<p>Some sacrifices are time and effort (stay at home parents, home schoolers), some sacrifices are financial (loans, private school tuition), some sacrifices are quality of life (working at a really unpleasant job because it provides better for the family).</p>

657

<p>We may be better served if we talk about what “we” would do versus speculating about what someone in a totally different situation would presumably do.</p>

658

<p>I need a like button for Sally.</p>

659

<p>Kluge: liking all your posts.</p>

<p>Hunt: I’m borrowing the money for Princeton IF Princeton has better departments for what my kids are interested in than the state flagship option. Of course, if the state flagship is the best fit for my kids, they aren’t applying to Princeton so no debate arises. All my kids had a very good idea what they wanted to study and knew they would be applying to graduate school in their area of interest. They did not change majors. So my take is probably different than that of many.</p>

660

<p>Re: #656</p>

<p>Yes, exactly. The parents who are compulsive overspenders are not suddenly going to become frugal to be able to fund their kids’ college the moment they graduate from high school. collegehelp and kluge can criticize such parents all they want, but that won’t bring the kids any more parental money for college.</p>