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<p>You can apply this same poem to the parents’ retirement. There is no borrowing for one’s retirement.</p>
<p>Collegehelp…just curious…what made you start this thread? You have spent greater than 5000 posts offering advice in the College Search and Selection forum…with this same theme repeated periodically over there. You concentrate your posts on STEM and particularly engineering. I’m curious…do you honestly believe that engineering majors need to go into huge debt to become successful practicing engineers? </p>
<p>We helped our kids with college costs, and we’re happy to do so.</p>
<p>Maybe you should be telling the younger generation to start college savings before their kids are even born…rather than insisting that they take out massive loans when approaching retirement. </p>
<p>But I still say…your premise is flawed. I do believe those top schools are excellent schools. But I also believe that you can get an excellent education at schools other than the top 20 or so.</p>
<p>And more than that…I believe you should live within your means.</p>
<p>thumper - I started this thread because of a real example that I know of. A relative…cousins. Their kids are not spoiled, doing quite well, and parents seem to be doing ok. No, I definitely do not think you NEED to go into huge debt for engineering or any other major. But, sometimes some debt, even large debt, can make sense. It is costs and benefits, including intangible benefits. I believe in the value added by better schools. “Living within your means” can mean different things to different people, evidently. Yes, students can be successful without a top school but I believe it helps…and those 4 years are likely to be more satisfying.</p>
<p>Of course, parents shouldn’t jeopardize their financial futures to the extent they might be left homeless and hungry in their old age. But, I am surprised by how many posters in this thread seem intent on subjugating their child’s needs to their own needs. We are not talking about “spoiling” children here. We are talking about leaving the next generation better off than the parents generation. Where is the joy and satisfaction in sacrificing for your own flesh and blood? Where is the warmth? Dare I ask the question? How much do you love your children? I am not trying to be provocative. Parents have to ask themselves that question. The next question is “How do I best express how much I care about my child?” This may be where we differ. How much do you think your child will benefit from a top-tier, private school.</p>
<p>By the way, the original scenario I posed of an $80K / 30 yr loan is based on a relative’s family. The parents make about $80-$100K per year, they are nearing retirement at this point, and seem to be doing just fine. I don’t know all of their financial details.</p>
<p>By the way, the issue of loans is greater for families with higher incomes, I think. For families with incomes below $75K, the average net price of publics and top privates is about the same ($12K). For families with incomes between $75 - $110 K, the net price rises to $17K for top private schools, and for families with incomes greater than $110K the average net price for privates rises to $40K. It is very unlikely that grants, work study, and so on could be of much help to wealthier families. If your income is in the $100k range, your net price would be high and you would probably have trouble paying out-of-pocket. Loans would be a more likely option.</p>
<p>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.</p>
<p>It’s the phrasing, yes.
And, I am curious whether OP has been through the financial aid cycle or paid enough attention to the CC posters who know how FA really can work (not just the overly encouraging examples on some college web sites, not just some convenient “averages.”) </p>
<p>*Fundamentally, I want people to reach their potential. I think you have to aim high. I am concerned about children who work very hard, do very well, and then have to settle for a lesser “reward”. *</p>
<p>Not good enough. That is life. Crap happens. To think this is all about hard work and a goal is na</p>
<p>If the parents are nearing retirement, and you don’t know their projected retirement income, then you really know nothing about their financial situation–and certainly not for the next 30 years.</p>
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I find this whole paragraph and the attitude it implies absolutely appalling.</p>
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Going to an expensive school is not a need. It’s a want. The fact that you think it is a “need” speaks volumes. (personally I’m willing 365 days a year to help my kids out with a “need”. “Wants” are taken care of at Christmas and birthdays if they are withing my budget)</p>
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HOW DARE YOU!!! I’m so disgusted by this, I don’t know how to be polite about it so will not say too much. If you really think that a parent not being willing to go into debt for an expensive school means they don’t love their child, then you have a very perverted idea of love. </p>
<p>I really hope you are trying to be provocative because otherwise your idea of love is actually very sad.</p>
<p>I believe in the value added by “better” schools, too. But this is not a one-one guarantee. OP is looking at this too simplistically, assuming the stars really do line up- the aid comes through at just what the family can manage and a gap they can close with loans, afford to pay off over x years. Reality is more complex. Not simple math.</p>
<p>Not to mention this, that I harp on: just because a kid is tops in his little hs environment, just because friends and family think he is uniquely endowed, works oh-so-hard, wins accolades in his own subset, does NOT make him so extraordinary. Admissions competition is chock full of these kids, many with greater challenges they surpassed, broader experiences and early evidence of far more promise than just what we see in our own little home towns. It’s not easy to gain perspective. Not so easy to project that this one “belongs” at a top U.</p>
<p>And, “better” is not US News, not a matter of some ranking. That’s too simple, too.</p>
<p>Khan Academy is partnering with Bank of America to present video lectures on personal finance. I think the OP should look into these.</p>
<p>And, actually, as lookingforward points out, the students in question may not even be admitted to the “dream” school, which would make the whole discussion moot.</p>
<p>“You can always go to [X] for grad school.”</p>
<p>Never said this before. Didn’t think I would. But didn’t consider this particular circumstance.</p>
<p>^^ Reality is funny, eh? AS IF. We deal with a freaking blizzard of snowflakes. The ones who kick into “I deserve this” mode are id’d in a flash. Not good. The ones who suggest they can’t thrive elsewhere are often saying they have limitations, starting with their perspective. It is too-narrow thinking, to believe a great person is only made by affiliation with a US News highly ranked college.</p>
<p>By the way, the original scenario I posed of an $80K / 30 yr loan is based on a relative’s family. The parents make about $80-$100K per year, they are nearing retirement at this point, and seem to be doing just fine. I don’t know all of their financial details.</p>
<p>Holy Smokes!</p>
<p>You based your opening post on relatives that are “NEARING retirement age,” and have an income of $80k (which is rather modest in some pricey regions)…and you think it’s OK for such people to take out THIRTY YEAR LOANS totalling $80K???</p>
<p>What the heck!</p>
<p>If they are “nearing retirement age,” I’m guessing that it’s somewhere between 5-15 years away. So, your plan has them burdened with this excessive loan while they are living on a reduced/fixed retirement income AND during their last years before retirement (when they’re filling any gaps that they can…perhaps trying to pay off the mortgage). Good heavens. Obviously none of us know what their retirement income will be, but I think it’s safe to say that it will be less than (maybe a lot less than) their current income. </p>
<p>I’m also shocked at the idea that a few hundred a month for THIRTY years is no big deal. That’s like making car payments for thirty years straight and having no nice car to show for it. Of course, during that 30 year period the parents are likely also having to purchase 6-8 REAL cars themselves (assuming each parent replaces a car every 8+ years).</p>
<p>Collegehelp…are you a young adult or a parent?</p>
<p>Wow, mom2collegekids, at this point, do you even need to ask your last question?</p>
<p>Simple situation of someone: a) believing in the marginal value of tier I schools over other tier II, etc. schools, and b) will little regard to the marginal cost. I’ll give the OP credit for calculating the cost of the loan, but it’s the same tactic a car salesman uses. </p>
<p>“This baby can be yours now(!) for the low, low cost of $300 per month. What price can you put on the safety of your loved ones?” </p>
<p>“But the other car I’m looking at is considered ‘safe’ too, and the total price is less than a third of what you’re asking.”</p>
<p>“Awww, but our car is rated THE safest. And imagine of what your colleagues and neighbors will think when you drive home in this beauty!”</p>
<p>Collegehelp- from reading your posts I am assuming you are an adult. Do you have, or have you already had, college-aged children that you have helped thru school?</p>
<p>Taking my analogy one step further, I drive a car that’s 2x’ish of what I NEEDED to spend on a vehicle ($25k vs. $15k). For me/family we were willing to do that b/c we were able to pay cash. Could we have spent 3x by taking out a loan? Sure - but what’s the marginal benefit of that extra $20k - $25k? For some people that extra money is a drop in the bucket; however, to our family that’s another car one day in the future (yes, I have two kids). </p>
<p>I’m sorry the OP equates money to love regarding education. One day they will realize that money is a finite resource.</p>
<p>Wow, mom2collegekids, at this point, do you even need to ask your last question?</p>
<p>lol…I know it seems like a silly question, but from the OP’s past posts, it’s hard to tell for sure. Maybe two people are using the same acct???</p>
<p>The number one goal of parents should be having their children graduate debt free with a marketable degree in accounting/finance, engineering, nursing, IT, teaching or math/physics. Students should consider spending their first two years at community college, earning scholarships and attending public universities. The idea that someone needs to spend $80,000 on their undergraduate degree is laughable. </p>
<p>Assuming that student makes $50,000 a year after college, which is $35,000 after state, federal, Social Security and Medicare taxes. Their monthly income is $2,900. Here are their other monthly expenses:</p>
<p>$750 rent
$435 for retirement savings
$75 cell phone
$100 cable/internet
$100 health insurance
$100 utilities
$300 monthly saving to pay cash for a $5,000 used car
$200 entertainment
$300 food
$100 travel
$200 giving to charity
$100 clothing/hygiene
$100 appliances & electronics & furniture
$100 miscellaneous </p>
<p>Budget is already over by $100 a month without factoring in auto insurance and gas. Your idea of going $80,000 into debt for an undergraduate degree and adding in another $350 a month for 30 years is crazy. People don’t care where you attended university and you’re not even factoring in graduate school.</p>
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I’m always bemused in these discussions how resistant people are to this sensible, middle-ground point. Debt is debt–what matters is your overall debt burden, and whether you can manage it. If you value living in a spiffy house more than an expensive college education for your kids, then you’ll put your debt burden into the house, or cars, or a second house, or whatever. If you value the education more, then you might decide to have a bit less house. I just don’t get this idea that debt for a kid’s education is somehow radioactive, while other debt is OK. Instead, we get all this moaning and groaning about entitlement, and retirement, etc. To me, it’s pretty simple: figure out how much debt you can reasonably manage, and don’t borrow more than that. Use the borrowed funds for expensive stuff that you value but don’t have the cash to pay for up front.</p>
<p>The most heated discussions and arguments are always about spending other people’s money. OP, are you ready to assume the 30 year loan for 80K when you are near retirement? Most folks I know that are near or in retirement are paying off debt for their reduced retirement income not taking on new debt. </p>
<p>OP, are you ready to pay your folks’ expenses if they take in loans for your dreams and underfund their retirements? There are only so many assets and they only go so far. This is real life, not monopoly or a video game where you can hit ‘reset.’</p>