Why are parents so reluctant to take out loans?

Pizzagirl · November 20, 2013, 8:24pm

Every state has a state flagship that falls under “decent” and from which students can achieve good educations and make a good living. So your premise is flawed from the get-go.

And $80K income with a lot of debt - do you really think that people in that situation should take on the kinds of uber-loans you proposed at the start of the thread?

What if? If the child knows parent is doing his / her best, but there just isn’t money there no matter how many belts are tightened, then the child has to live with it. I mean, there’s just nothing more than can be done, at one point.

It’s unfortunate, but you know something? I live in a middle to upper middle class suburban area, and there are plenty of parents around here who, in order to save money, send their kids to the local comm college for 2 years and then have them transfer to U of Illinois to get the final degree, because they can’t afford to send their kids to U of Illinois for all 4 years. I mean, collegehelp, this is just life sometimes. People make what they make. Not everyone has a high skilled job.

My H is owner of a small business with 20 employees, none of whom have the education / skill level he does. Sending his 2 kids to elite schools full-pay – his employees couldn’t dream of doing such a thing. If they only knew what we were spending, their eyes would pop out of their heads. Their kids go to comm college or directional state universities or rely on whatever scholarships they can find. It is what it is. Your concern for your cousin is touching, but aside from contributing, what else can you do?

ucbalumnus · November 20, 2013, 8:32pm

Point her to the full ride merit scholarship threads and lose the “expensive college or bust” mentality.

lookingforward · November 20, 2013, 9:31pm

Know how many vals and sals there are in this country? And many of them- and their friends and family- think they are special snowflakes. They may be, but that’s in their high schools. Put them all together and it’s a blizzard of them.

I don’t think we’ve even begun to touch on what makes OP’s relatives’ kid one of the few that will be compelling to tippy-top admins. High school standing alone doesn’t cut it. OP should look at Brown’s detail about freshmen- how many vals/sals and high scorers just didn’t make it through the admit process. Princeton used to offer a similar look.

And, it can be a disservice to send some kids to a most competitive college, where it’s no longer their high school peers they are up against. Where it is no longer that little, unique pool. Some will be lost to be a small, struggling fish in a big pond. Some would be empowered in a different sort of school. Some don’t need the rep of the entire school to be tops, just their programs. Some need a different place to achieve their wins. I hate the tunnel vision. In the end, it seems so unfair, to me, to try to steer a kid based on superficials.

Second guessing where a kid “has to” go feels so incomplete.

sally305 · November 20, 2013, 9:38pm

It is impossible to prevent our kids from ever being sad or angry. If we have done a good job as parents, they will be resourceful enough to get over it–and compassionate enough to forgive us.

You know, we could have a whole other thread on High-Achieving Parents Whose Kids Have Not Lived Up to Their Expectations. Or Ungrateful Children of Parents Who Have Done Their Absolute Best. Or Families That Seem “Fine” on the Surface But Which Have Problems the Parents Have Tried to Hide from the Kids.

Nrdsb4 · November 20, 2013, 9:42pm

Hmmm…well, I can think back to all the times I was sad or angry…and…well…

I got over it.

Is it some kind of human tragedy if our kids experience sadness, anger, disappointment, or frustration?!?

moneymom · November 20, 2013, 10:43pm

Allowing our children to learn how to deal with disappointment and distress is part of being a good parent. These are necessary lessons. And learning to cope is a blessing.

Young people who never face disappointment, frustration or failure suffer from a true disability.

Colorado_mom · November 20, 2013, 11:17pm

emeraldkity4 · November 20, 2013, 11:44pm

OP I think is making the same mistake that many parents have made.
They don’t want their special snowflakes to ever be angry or sad, or bored or upset.
When the kids are small you can perhaps control that a little, but as they get older, not so much.
But iMO, its more important not to shield them from the pea under the mattress, but to teach them to get up when they fall down.
Otherwise you get the kind of kid who peaks in high school and spends the rest of their life trying to recapture those " glory days" and looking backward, instead of looking ahead.

Do you really want to raise people who need to be wrapped in cotton because you are afraid they will bruise? Or do you want to raise someone with a sense of purpose and belonging who can withstand foul weather?
[Parenting</a> Tips To Teach Children Emotional Resilience](<a href=“http://www.kidspot.com.au/schoolzone/Friendships-Teaching-your-child-resilience+3994+394+article.htm]Parenting”>http://www.kidspot.com.au/schoolzone/Friendships-Teaching-your-child-resilience+3994+394+article.htm)

monydad · November 21, 2013, 1:46am

"What’s the point of having a Cornell (or other fancy) education if you don’t have common sense? "

You have it in the reverse. If one doesn’t have common sense, or other favorable attributes going for you that will inevitably lead to success no matter what, a fancy credential is needed MORE. Because then at least you’ll have that. Absent that, you’d have nothing.

Without his Master’s and 2 PhDs, where would Sheldon be??

But FWIW I have strong reason to believe that collegehelp is actually really, really smart.
That may, or may not,be in full display on this thread. But I dont think he was really prepared for this fight that’s developed here. IMO he was just venting out of concern for his relative’s education.

Lots of people feel that a “good” school eduation is potentially “better”, including many people posting on this thread. They however haven’t felt called upon to try to prove it. Or justify their feelings about it.

emeraldkity4 · November 21, 2013, 2:33am

I cant help but think of a friend who has been quite successful in life, who was admitted to Cornell.
However, she chose to attend TESC.
She never looked back.

boysx3 · November 21, 2013, 9:48am

Admittedly, I haven’t read through this entire thread.

But recently, the son of a friend really, really wanted his parents to pay for him to go to NYU for business, rather than to Illinois or Indiana (in state for Illinois) which are also known for their superb business schools. He was a direct admit to all 3. He wants to get his CPA.

The parents told him they could afford Illinois or Indiana (Indiana merit scholarship brought cost to same as Illinois).There are 3 children in the family, and they want to be able to help all3 go to college.

The student wanted the parents to take out loans for NYU “which he promised to pay back for them when he graduated.” because they told him that after paying for 3 children to go to college, they would like to retire some day.

They sat him down and showed him black and white numbers.

What the total loan numbers were going to look like at the end of four years.

What his likely salary would be right after getting out of school, should he be lucky enough to be employed at graduation. What his take home paycheck would look like (he couldn’t believe the amount taxes take out of a paycheck, nor did he realize he would owe state and city income taxes in addition to federal taxes). Nor did he realize that loans got paid back over 10 years, not 30 like a mortgage.

And what the monthly nut for the student loan repayments would look like (remember, he was saying HE would pay back the parent loans as well as the ones in his own name)

Ummm…there wasn’t going to be enough left over after taxes and student loan payments for him to afford rent much less any of the other expenses of life like food or transportation etc

which would mean he would be moving back home because he wouldn’t be able to afford to live in NY

where salaries would be lower, and his whole paycheck would essentially be going to loan repayment while he lived at home…

He is at Illinois. One of the best business schools, and one of the best accounting programs, in the country.

Pizzagirl · November 21, 2013, 10:05am

In the past, we were involved in discussions about how national in scope different colleges are. IIRC, collegehelp would compare the % of students at (say) Harvard who were from MA vs CA to the % of students at (say) Stanford who were from MA vs CA in trying to draw conclusions about the different student bodies. It was explained to him numerous times that a greater % of the overall national pop was in CA, and therefore, a greater % of Stanford students being from CA compared to the % of Harvard students from MA didn’t mean anything – CA has a larger “catchment area” because a kid living 300 miles away from Stanford can still be in CA but a kid living 300 miles from Harvard is in another state. (The vast majority of Brown students are OOS just because Rhode Island is a teeny state. It doesn’t mean they necessarily come from far away.) It was explained repeatedly every which way til Sunday, and collegehelp still didn’t get it. So, no, I think there are some logical flaws here, not the least of which is the provincialism that a top 20 or so school is “needed” for a smart person to gain life success.

Pizzagirl · November 21, 2013, 10:08am

I feel a “good” school education IS “better,” and I am putting my money where my mouth is in that regard. But all you have to do is look around to see plenty of successful people who didn’t go to top schools. If, when you look around, you only see top schools = job success? Then you’re in a small bubble of a handful of professions, and one would think one would be smart enough to recognize that that world is a bubble.

monydad · November 21, 2013, 11:21am

"…I am putting my money where my mouth is in that regard."

So then why shouldn’t collegehelp’s relatives put their money where their mouth is too, if they can afford the loan payments? Is I guess what he is asking. There is obviously a breaking point where this is insane, but doesn’t this just come down to each person’s definition of “afford”?

"I feel a “good” school education IS “better”
Oh yeah, prove it. You guys are making collegehelp prove/justify it. Let’s see how much better of a job of it you do. But watch out for that Pizza person, she’ll go take a position she wouldn’t even do herself, just to be contrarian.

thehoods · November 21, 2013, 11:22am

This question appears to have been asked by a selfish teenager. Unfortunately (or maybe fortunately?) many of our children have been raised in a world where they had everything, but they don’t value anything.
As to the question - no. My son was accepted to Vassar College and for the first year received a very generous financial aid offering. My son very much enjoyed his first year at Vassar. We set up a payment plan of $1,000 per month to pay our share. This was on top of the federal student loan that my son had to take out. It was tough to make those payments, but we felt it was worth it. Then came the whammy. The first year’s financial aid was based upon our income from the previous year after my husband had lost his job. We lost our home & car, but we managed to keep my son in his IB program in High School where he worked hard to graduate with honors and get into Vassar before we moved out of state to take the new job. It was because my husband did eventually find work that we could barely manage those $1,000 per month payments. It was also because of that income that the following year the financial aid was slashed and we were going to owe over $20,000 per semester. We couldn’t afford the $4,500 per month payments, as that’s his entire salary. It didn’t really make sense to chose paying for college over paying rent. Getting a loan - $120K for the last 3 years, for an undergraduate degree, makes no sense, for anyone. Our family - not sure if it was more my son or more me - was devastated that we had to have him withdraw from Vassar. He enrolled in a local community college to complete his sophomore year and has applied to several state colleges. It would have been great for my son to graduate from Vassar, but he’ll be just fine graduating from a state school with a degree in political science, then going on to law school. The college finance system is definitely broken. As a taxpayer, I am horrified that I (and all of you) guarantee all those parent plus loans that people are foolishly taking out. Did you know that there is a provision in the guarantee that says if I were to take out those big loans, then die, the loans could be forgiven - and you’d all have to pay them back?

collegehelp · November 21, 2013, 11:25am

ucbalumnus- I hadn’t thought of the ex-husband. The Mom hadn’t mentioned him. They have a strained relationship but he has a good job, I think, and he lives in FL. New College might be a good option for her. I can’t really say too much but maybe drop the hint.

pizzagirl- Are you sure you aren’t my wife? She is also very good at remembering things from years ago. haha. I can barely recall that thread but I thought I used ratios somehow to compensate for the issue you mentioned in #813.

There was an article by Caroline Hoxby, a Harvard economist, about the return on investment for attending a selective college. But, I don’t think she controlled for differences in pre-college statistics like SAT.

<a href=“https://net.educause.edu/ir/library/pdf/ffp0002s.PDF[/url]”>https://net.educause.edu/ir/library/pdf/ffp0002s.PDF</a>

Pizzagirl · November 21, 2013, 11:36am

If they were in a position to afford loan payments, they’d have been in a position to have saved money in the first place. Collegehelp’s relatives can, of course, do what they like with their money. It seems as though they already are – by deciding the girl will go to comm college first to save money.

Pizzagirl · November 21, 2013, 11:39am

Monydad - I don’t “need” to “prove” to you or anyone else that a good school education IS better / worth it, because I don’t have to justify how I spend my own money. It doesn’t really matter if my kids’ elite colleges are “worth it” or not from a strict return-on-investment standpoint relative to, say, our state flagship – because it’s worth it to me / our family and that’s all that counts in our decision-making. Other people, of course, are free to make other decisions. Plenty of people spend plenty of money on things I think are a waste, but they don’t have to justify it to me.

monydad · November 21, 2013, 11:52am

And by the same token, collegehelp shouldn’t have to justify his feelings, about the very same thing, either.

zoosermom · November 21, 2013, 11:57am

That’s not always true. In my situation, my family income more than doubled between child 1’s college and child 3’s college. We knew that would be the case (step increases), so we did take out what we saw as reasonable loans for D1 and we likely won’t have to for S because we will have had that larger income for enough years to pay out of savings/income. I know families who have had law school debt paid off later-ish in their kids’ childhoods for whom saving wasn’t as easy in the early years, but who knew that their own student loans would go away in time to make prudent loans a smart choice.

Why are parents so reluctant to take out loans?

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