<p>*I would say I am with the parents against taking out loans for their child if the said child is majoring in something that will have no return on investment i.e. ALL NON-STEM MAJORS. </p>
<p>Only a foolish parent will be reluctant to invest in a child who will major in engineering.
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<p>Well, there are very good reasons not to take out big loans for a child who chooses a pricey univ to major in eng’g.</p>
<p>1) many who start in eng’g end up changing due to lack of interest or WEEDING.</p>
<p>2) There are many lower cost alternatives that can result in an eng’g degree from a good school. Eng’g isn’t some rare degree found only at a few qualified schools. There are many, many, many ABET accredited eng’g programs. Nearly every state (if not every state) has a few good programs. The state of Calif has over 25 schools with good eng’g programs. </p>
<p>3) In most/all states, a student can easily start eng’g at a CC and then transfer…and still get a great job.</p>
<p>4) Hiring companies do not pay new-hires more for graduating from Pricey U. Company A is going to pay NewHire John from instate Purdue the same as its going to pay NewHire Sally from Cornell.</p>
<p>I think the best thing (as long as we’re spouting our parenting and financial philosophies as if it’s the only way) we can do for our children is to provide them with the best opportunities and experiences <em>within</em> our means.</p>
<p>I want my children to learn how to live without debt; and, if necessary, to use debt wisely. We try to buy new cars with cash. We don’t buy expensive if there is an adequate more reasonably priced option. </p>
<p>I also don’t believe in borrowing for my children’s future putting my own financial future at risk. I happen to think this is just plain foolish.</p>
<p>I don’t believe my children deserve “The Best”. They deserve the best that H and I are able to give them. I don’t plan on buying them BMWs when they learn how to drive; I didn’t buy tailor made clothes for them; I didn’t send them to the most expensive private schools. </p>
<p>We’ve told our children the inexpensive option for college (as staff, tuition is free at all instate schools), but we’ve also saved a bit so out of state/private, within a certain dollar amount, are also options. Can we afford $50-60K? nope. Am I ashamed or embarrassed? nope. It is what it is.</p>
<p>Exactly. First of all, where do you get a 30 year loan for something with no collateral, at 3%? Perhaps you are thinking of a house. But there is a physical entity for a house.
So maybe you could do a home equity loan, if you have 80,000 in home equity.
Maybe I do, but maybe I want to have that money for MY retirement or for emergencies or for home improvements. So I am paying $122,400 (assuming I can get a 3% interest rate over 30 years, and this includes all the interest) for you to go to a slightly better school? And you want me to do this for all of my children?</p>
<p>Parents do tradeoffs all the time. What neighborhood do I move into? Cost of housing vs. quality of school. </p>
<p>For college, it is great if parents can help the student pay for a college that meets their needs. They want that child to be able to get a job that they can sustain themselves independently.</p>
<p>It does not have to be one way to end all.
I understand about not going into debt that you can’t afford to pay for college, I also agree that some debt for a brighter future is worth it. If it costs 250K to raise a child to age 18, why is it that bad to add 100K in the most important years to prepare the child’s future?</p>
<p>Please don’t say you can do without debt by going to state school and community college … it is not the same everywhere …
In Texas, UT Austin is pretty much reserved for top 8% of the students.
CC are mediocre, many classes require very little of the students. When and if they get into universities later, they are not well prepared . Of course if you work hard anywhere, you can still do well but the percentage of the students who excel is not as good.</p>
<p>There are some middle tier schools but not all schools are the same. When some friends and myself graduated from a NOT top notch school some time ago, our job offers were very limited while my brother and friends who graduated from top schools had many more opportunities.</p>
<p>While not all people from non-top notch schools have it worse than all people who graduated from top notch schools but I will bet that the percentage will favor the later.</p>
<p>Bottom line, if you think it’s money well spent, who is to say it’s not?</p>
<p>I don’t believe my children deserve “The Best”.</p>
<p>This is interesting. I, too, don’t think kids should expect to get the “best”. Encouraging children to think that they deserve “the best,” does encourage a philosophy that often requires debt to get those “best” items. It also encourages the thinking that what one currently has isn’t “good enough” whenever the “next big thing” comes out. Bought an iPhone last year? Well, the “best” one is out now, so got to get a new one…the best one…until next year.</p>
Or they remember the 1980’s when engineers were being laid off by the thousands. </p>
<p>OP, a family that can comfortably afford $340/month in loan payments, and have any thought of doing so, was most likely frugal enough and concerned enough to have saved that money for college, and therefore not need to take out as large loans. Parents who didn’t save are likely not concerned enough to saddle themselves with large loans.</p>
<p>Oh please…here we go again with the STEM vs non STEM “value”. The OP to this thread mentions engineering more often than not on his other threads. As an FYI, one needs to attend an ABET accredited school to become an engineer. There is no need to go to Caltech or MIT to become an engineer (great if you can, but it is NOT essential). There are plenty of less expensive schools or places where the HYPSM wannabes can get merit aid, and major in just about anything.</p>
<p>Take into account a mortgage, car payments for possibly more than one car depending on the household, car insurance, utilities, monthly gas costs, enough food to feed the entire family, and other odds and ends such as laundry detergent, toilet paper, shampoo, vet costs for the family pets, birthday gifts etc… And that doesn’t take into account unexpected medical costs, unemployment, a car breaking down, something major in the home needing to be fixed, etc. It also assumes the family doesn’t have other debt such as credit card or personal loans, plus property taxes. At the end of the year, there may not be a whole lot left, especially when the “unexpecteds” come up; and most certainly if there are 2-3+ children in the household.</p>
<p>…And what if you do have more than one child? Will you take out another $80,000 in loans? Could you even get approved for so much debt on top of a mortgage, the previous $80k in students loans, and possible car loans? And if not, how will the second or third child feel if you offered the best to their older sibling(s) and just can’t do it for them due to poor financial planning?</p>
<p>Also, not everyone can work into their 70’s. I’m in my twenties and already know that I must work in an office setting with minimal physical demands because of health conditions (that you would never guess I had by looking at or even being friends with me, unless I explicitly told you); at the rate of my progression I will be in rough shape by the time I’m 50, and working until I’m 70 would be terribly painful and exhausting - even with an office job. </p>
<p>My take-away point is that even if you think a family is financially well off, you have no idea what their true financial situation is. You may think it’s terrible they’re not paying for their boy to go to Harvard when in fact they did not share with you that the father is very ill (but may not look it) and they are paying high medical costs. A couple that does not agree with you may not be sharing that they’re having a second child, or that their basement is flooding and needs immediate repairs. People can be very private about these issues, and it is naive to believe that a $60k take-home salary can be so perfectly budgeted when there are so many unexpected costs that can arise at any given time.</p>
<p>In addition to all of the valid reasons stated previously for not going so deep into debt for your child’s college education, please consider 2 examples from my personal experience:</p>
<p>Student #1: Attended a Top 30 school out of state at considerable expense, graduated, and is now working retail (cashier).</p>
<p>Student #2: Attended a Top 10 school at a shockingly considerable expense, graduated, decided he didn’t want to work in his field, and is now attending culinary school.</p>
<p>I bet those parents are kicking themselves now.</p>
<p>My husband went to University of Chicago and got a degree in math. When he graduated, the best job he could get was answering phones for a data center. Apparently, it was horrible. Later, he went back to college at University of North Texas for computer science. As soon as he graduated, he was hired by Texas Instruments as an engineer. Now, he is higher up in the field and there is a guy who graduated from MIT under him (who is about the same age, has been in the field for about the same time).</p>
<p>Moral of the story, it is what you do with your degree, not how far you sunk your parents or the t-shirt you get to wear, that sets your future. I know others who went to top 10 schools that took years to find jobs, and then ended up doing grunt work for a living. </p>
<p>Going to a school that costs that much is about having a luxury that does not matter much in the long run, except as someone said, in 1 or 2 careers. </p>
<p>If you are that concerned with luxury and “self esteem” then how about you go to the cheapest college possible, and then get a job, and tell your parents to quit theirs and give them all your earnings, so that THEY can have that luxury and self esteem you think you would get by going to one of those schools. I am sure it would make your parents feel great to get to travel, via your dime, and to come back and show their friends the pictures and talk all about it.</p>
<p>“So, why are parents so reluctant to take out loans?”
Let’s see, my husband is a social worker and I work for one of the poorest, most backward states in the Union. We don’t make squat, although I do have good health insurance and retirement and DH draws military retirement. I’ve been laid off three times since college, most recently for 18 months from 7/2010 to 1/2012. When I finally went back to work, the job paid $10,000 less than was I was making. In the meantime, we’ve had to cash out both H’s and my retirement, basically to keep our house from falling down around our ears. We have one car, a 2001 Toyota Camry with 175,000 miles on it. We nearly lost our $80,000 home to foreclosure. We have medical bills up the ying-yang, from when we had poor health insurance. In 24 years of marriage, we’ve had just about every financial crisis and made just about every financial mistake known to mankind. I’ll be damned if we’ll take on anything else. We are too old and have too much to lose. S1 has scholarships and loans, plus a small college fund from his grandparents. He goes to a regional public university because it was affordable and had exactly the major he wanted. He will graduate with debt, but not as much as some. S2 is looking at the same regional public university (one of the advantages of being in one of the poorest, most backward states in the Union is that the cost of living, including college tuition, is low.) He is also looking at a small LAC affiliated with our faith where he has a chance of getting need-based aid and a sports scholarship. He, too, will probably graduate with manageable debt. “The Best” for our kids is the best we (and they) can afford, and that’s what they’re getting.</p>
<p>challenge fan. Draw up a contract with your parents. If you do not hold up your end of the bargain, YOU begin to make payments to your parents. I bet your tune would change.</p>
<p>OP - the solution to make your attitude change is to have a sliding scale tuition bill. The colleges can calculate from your income the MAXIMUM a parent can afford then charge you 80K more than that so EVERYONE has to take out loans. So if the maximum you can afford is 80K a year, that school can charge you 160K a year…</p>
<p>I guess I am one of just a couple people on this thread who think it was worth it to take out college loans to help fund our kids’ education. I don’t want my kids to have to pay for any of their education themselves. However, unlike some parents, I won’t support them after they graduate. I would take out loans to any college (prestige has nothing to do with this choice) and for any major (I didn’t care what my kids majored in…I was paying for them to become educated people). Subsequently, both kids have graduated college and one went on and graduated from grad school. Both are supporting themselves in their chosen careers. One is in sustainable architecture and one is in performing arts.</p>
<p>Sooz, i think the issue with the OP is that he implies that any parent who does NOT want to take out excessive loans is a deadbeat parent. We all know that isn’t true. Different families have different price points for college costs, and different ways of financing college. The notion that taking out loans is something ALL parents should’ve willing to do is simply poppycock.</p>
<p>The OP has a history here that support STEM and in particular engineering degrees. He also has stated numerous previous times that taking out loans is something that ALL would do for their kids. </p>
<p>This is all personal family decisions. The notion that every family wants to pay off any amount of student loans for THIRTY years is…well…ridiculous.</p>
<p>There is also a common belief that expensive things are “better” (see [Veblen</a> goods](<a href=“http://en.wikipedia.org/wiki/Veblen_good]Veblen”>Veblen good - Wikipedia) and [positional</a> goods](<a href=“http://en.wikipedia.org/wiki/Positional_good]positional”>Positional good - Wikipedia) as examples of goods associated with such beliefs). People who adopt this kind of belief tend to end up with expensive lifestyles which can be unaffordable. This includes both students who dream of colleges that are far too expensive for them and their parents, and parents with high enough income to be ineligible for financial aid anywhere, but are not able to contribute a cent to the kids’ college due to spending all of their high income and more (perhaps up to the maximum debt level that anyone would lend them).</p>
<p>That is not what is being discussed on this thread. The main discussion is whether it is wise to take out substantial debt ($60k, 70k, or more) at the risk of one’s own retirement, home, etc., in order to get the kid into the best college in the country because anything less than the best isn’t good enough in their eyes.</p>
<p>Many individuals here, from what I’ve read, have no problem with 10k, even 20k in loans if they can comfortably afford it. But 80k, if you cannot comfortably afford it, and to stretch it out over 30 years, is generally viewed as excessive.</p>
<p>As a side note, I do not regret my ~$60k in student loan debt for a BA in psychology. I am paying all loans myself, (all are 10-15 year loans) and have a rather handsome salary to show for it. I would not, however, have asked my parents to take on that much debt themselves. My major was a risk for the debt I took on, but I had the faith in myself that I could do it. I was humble enough to take on any job that would pay all the bills (even if multiple jobs were necessary, but they weren’t in my case). But my parents didn’t know my potential or my motivation, and it would have been riskier for them to invest that kind of money in me than it was for me to risk it on myself. It was my own skin in the game, and I am young enough to have all debt paid off by the time I’m 30 with my current salary - worst case scenario, 35. They would have been in their 60’s had it been their debt.</p>
<p>No sane parent would jeopardize their retirement, future health etc. with student loans. But assuming reasonable loans, I pay to have my kids educated, not for a return on investment. My oldest went to an expensive college and is more making two times their COA two years out. But I’m not sure I’d want to count on him to take care of us in his old age - and otherwise, why would I care what his salary is as long as he isn’t coming to me for handouts? Younger son is likely to make much less, but is in a field with a good chance of making the world a better safer place for all of us.</p>
<p>Believe it or not, collegehelp, not everyone equates confidence, self-esteem, and general happiness with the “school of your dreams,” with a top private as the dream (never mind the reality).</p>
<p>But if that’s your opinion–or even if it isn’t–why not start at the beginning? Try saving that $340 (double or more if you have more kids) every month when they’re born. See if you can do it, despite layoffs, medical issues, career changes, moves, home repairs, cars falling apart, and all the other things that may happen in life. People don’t magically become good savers when their kids go off to college. When your child is 18 you’ll know how much debt you can reasonably handle, and whatever you’ve saved, you’ll have something to give your kid more college choices. </p>
<p>And when your promising STEM student flunks out in their first year and moves back home, at least debt won’t be one of your problems </p>
<p>I love my job, but how many 50-somethings here are excited at the thought of HAVING to work 30 more years, full-time, probably at the same job (because new careers aren’t easy at 75), because you have to pay off college loans? No time for relaxation, travel, grandchildren, retirement? Not me.</p>
<p>There is a solution to this: Better funding for post secondary education renders this debate moot. Make it so parents don’t have to take out an $80 000 loan and put off retirement to pay for a child’s undergrad.
There are so many wonderful Universities in the US, its a pity so many of them cost an arm and a leg.</p>
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