Out of all my friends who completed their graduate degrees, only 2 of them (now married to each other go figure) that had their parents fund their education. One took out a $20K loan to travel abroad during the bachelors but that was strictly for the semester trip. . Both went to a fancy art grad school, 1 actually conpleted their masters and the other 1 quit a semester away. Since Mom and Dad paid for everything is there a reason to push yourself when Adult life gets... adult? I'd say out of all the money borrowed for the two of them by their parents, their HHI is probably 1/3 of the total loan debt (not including the $20K loan 1 of them owes)

Our kids will finance all of their education through loans. The deal is that if they graduate and maintain an acceptable GPA, we will pay back the loans. If they don't graduate, or fail to maintain the GPA, they're responsible for repayment.

We could have very easily written out a check for their education, but we want to teach responsibility and make sure they have skin in the game. I'm not financing four years of partying and a 2.0 GPA.

Anonymous wrote:

Anonymous wrote:Student loans are a huge part of debt in this country, but just not in the DCUM neighborhood? I have read plenty of threads that promote "skin in the game" for students. Where a those posters?

This thread is about PARENTS taking out loans to finance their children's education. That is an entirely different situation than students themselves taking out loans, which is completely acceptable provided they take out a manageable amount (PP's first-year salary guideline is an excellent one). Parents putting themselves into debt is not a good financial move.

https://www.washingtonpost.com/apps/g/page/lifestyle/when-grandma-defaults-on-a-college-loan/2189/

https://www.washingtonpost.com/business/get-there/yes-all-debt-is-bad-debt/2017/04/14/77955ea4-1ee3-11e7-a0a7-8b2a45e3dc84_story.html?utm_term=.6014716b1b59

I expect/am planning to save enough for college, but if something happens to derail those plans -- I would encourage my kids to take out student loans, but assist them with prepayment to the extent possible.

My parents felt bad that they couldn't afford my college, and I had to take out loans. Later when they were in a better financial position they "paid back" what I'd had to borrow, long after I'd paid off the loans. I used that money to prepay on my mortgage. It was a really nice gesture and I know I will pay it forward if I am not able to fully pay for college.

Anonymous wrote:Student loans are a huge part of debt in this country, but just not in the DCUM neighborhood? I have read plenty of threads that promote "skin in the game" for students. Where a those posters?

This thread is about PARENTS taking out loans to finance their children's education. That is an entirely different situation than students themselves taking out loans, which is completely acceptable provided they take out a manageable amount (PP's first-year salary guideline is an excellent one). Parents putting themselves into debt is not a good financial move.

Anonymous wrote:Student loans are a huge part of debt in this country, but just not in the DCUM neighborhood? I have read plenty of threads that promote "skin in the game" for students. Where a those posters?

I'm the pp who's nephew is paying 1/3. Skin in the game doesn't have to mean loans. It can mean merit scholarships, RA or TA positions and summer jobs.

Student loans are a huge part of debt in this country, but just not in the DCUM neighborhood? I have read plenty of threads that promote "skin in the game" for students. Where a those posters?

The financial advice I've read says a student should not have loans greater than the income they could make in their first year out of school based on the degree they are getting.

So, if you are an engineering major and the average first year salary is $75k, then you shouldn't take out more than $75k to get your education. If you are an elementary ed major and the first year is $45k, then that's the max of the loans.

Anonymous wrote:

Anonymous wrote:None, but that's a function of affluence more than principle. Not sure how we would have handled college finances under other circumstances.

Its a feature of affluence, not a function of it. That's tautological. Clearly you're not the one earning the big bucks...

No, there are affluent people who *do* take out loans for college and non-affluent people who can't or won't or needn't take on debt to finance their kids' education. So I don't think it's accurate to say debt-free is a feature of affluence. Affluence is neither a necessary nor a sufficient condition for putting your kids through college without taking out loans. In our particular case, I think that debt-free is a function of affluence because it's possible that I/we would have taken on debt to send DC to college under different financial circumstances. Clearly there are other posters here that wouldn't have.

Anonymous wrote:I don't think it's so terrible to take out parent loans if you have to in some cases. When my kid goes to college I will still have many years before retirement. As long as the debt service is equivalent to what I had been saving for college before, it will be affordable. Obviously I don't hope for this to happen and I won't do it unless there is no other option. But it's not a completely crazy thing to do.

Please explain a situation in which you would "have to" take out loans to finance your kids college education, or when there would be no other option.

And yes, it's a completely crazy thing to do. As any financial advisor will tell you.

No parent loans here, although the kids have Stafford loans. Through savings and cash flow plus student loans we can afford 4 years at in-state public. If we couldn't afford that, the kids would live at home and go to GMU (or Nova for 2 years, then college).

Anonymous wrote:I guess it's DCUM reality that everyone has saved enough, can pay out of pocket or has wealthy grandparents to chip in. Really, no one has taken out a loan??

HHI $220k, we can pay up to $45k/kid/year. Maybe $50k. We have two kids. No grandparents help.

Our kids will go to public in state or privates with merit aid.

No loans.

I work on higher ed policy and am a former Senate staffer who worked on student loan issues. Whenever possible loans should be taken out in the students name not the parents bc fdderal loan programs are more generous to the student. Here are some quick examples: interest rates are lower, origination fees are lower or don't exist, repayment programs are more lenient and recent college grads are more likely to be able to deduct interest payments from their taxes wo hitting the income phase-out. If they are in a financial position to do so parents can always help their child repay loans and the money devoted to that purpose would count as gift within the family.

Anonymous wrote:

Anonymous wrote:I took out $0 for my undergrad and $70K for law school. We hope to have enough to pay for our kids undergrad at state schools (or equivalent cost) and we have no idea what we'll do for their grad school. One thing I learned from taking out $70K is that those kids who have their grad school paid for (by any means), are 10 years ahead of those who have $70K debt!

If you come out of grad school with little or no debt, you can immediately start saving for a house/condo -- which puts you on a whole different path financially when you want to have kids, etc.

We probably need to be saving more, but there is only so much $$ to go around. Like many people -- we'll deal with some problems when they come (i.e. grad school tuition).

Nobody should pay for grad school. If they pick a degree that is worth anything, they can get research or teaching assistantships that cover tuition plus pay a stipend.

This doesn't apply to business or law school.

I don't think it's so terrible to take out parent loans if you have to in some cases. When my kid goes to college I will still have many years before retirement. As long as the debt service is equivalent to what I had been saving for college before, it will be affordable. Obviously I don't hope for this to happen and I won't do it unless there is no other option. But it's not a completely crazy thing to do.