My parents paid for undergrad, law school, and med school for me and my sibling. They were well off, but not really rich - e.g., new cars but not fancy cars. We also never had an allowance, our parents just bought us what we wanted and needed that was reasonable. We both worked very hard, and didn't need "skin in the game" to do it. And we would both take care of our parents if that ever became necessary. I expect to do the same for my kids. I might take out a loan for their college/grad school,, but that's because I know our retirement savings, when we can access them, will be sufficient for us to continue to live reasonably. If I thought I would be a burden to the kids later, I wouldn't take out a loan.

Anonymous wrote:

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.

My ex-h blew up our finances and drained all our savings during our divorce last year. He then declared bankruptcy, and left me basically broke and now I'm starting over. He pays nothing towards education, and will contribute nothing towards our kids' college. I have full custody of our three kids. Our oldest is headed to college in the fall and is going to a state school. She got about 2/3 COA in grants and scholarships, and has taken out a fafsa loan. I have taken out a small PLUS loan to cover the rest. So yes, I am the rare bird who has taken a loan to help pay for my kid's college. She will work next summer and I hope to be on firmer footing next year so that I can avoid taking out a loan for her second year. This was not a decision I made lightly.

Anonymous wrote: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.

How will/do they do they qualify for enough loans to cover their expenses? How much more will you spend as a result (interest costs)?

We have been paying our older DC's tuition and R&B out right. So far his GPA is 3.75 at a top ten engineering school. Not every kid who has his college paid by his/her parents parties and wastes the opportunity.

Anonymous wrote:

Anonymous wrote: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.

Do you realize the student can only get a loan for $5500 freshman year. Any additional loan money must be co-signed --probably by you.

Yes and at high interest rates, which PP will then have to pay back. Hardly a great lesson in personal finance!

Zero. We could only pay for 1 kid to go to college...so we only had one kid.

Anonymous wrote: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.

Do you realize the student can only get a loan for $5500 freshman year. Any additional loan money must be co-signed --probably by you.

Anonymous wrote:

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.

It's not completely crazy - people finance all kinds of things they can't afford in the moment. In my case I expect to work for at least 15 years after my child starts college. I will be saving $500/month for college until then out of my salary (after maxing retirement). For college, my child will have his 529, plus that $500/month I had been saving (so around an extra 5k/year), plus maxing his federal loans. With college tuitions being what they are, it's entirely possible he could need an extra 5-10 k/yr. That is an amount I could comfortably borrow (at a good rate) and be able to make the payments out of what I had been saving before. If that 5-10 k/yr makes an appreciable difference in the quality of college it would totally be worth it.