What do you consider a lot? Student debt?

[NHdisneylover]

Calm down. Just explaining why. And there is a chance we may need the favor returned when we are older and grayer, dare I say, because THAT is what kids do for elderly parents.

I am calm---but it is what YOU chose to do as parents, not what "parents do" saying it is insults the large number of parents who do not/did not/can not make the same choice you did in this one area yet still provide perfectly well for their children.

Interesting on the elder care issue: we very consciously, and vocally (so our kids have always known) chose to fully fund retirement (max out 401K contributions etc) as a higher priority than college savings. Our reasoning is that if needed you CAN borrow for school, or delay starting it while you save, but you cannot borrow to retire or delay need care in old age.
We felt it was far less of a burden for our kids to have to choose a reasonably priced university (or, other--one is taking a different path) as young adults than to be possibly saddled with years of caring for us when we age.
I would NEVER leave my parents or in laws without help if they needed it; but I would also NEVER make future plans which include relying on my grown children for my financial care in old age---I see that as far costlier and more stressful than most student loans OR having to go to a school that is not the very best most perfect school ever in order to keep cost down.

 

[soccerdad72]

There really isn't one hard and fast answer to this - it's different with every family, both financially as well as philosophically.

We're fortunate in that we likely will not have to take out loans for our boys' colleges (at least undergrad degrees), but a reasonable amount of student loans seems perfectly acceptable to me. Again, what is considered 'reasonable' varies from person to person.

When I was in college, my parents ran their financials each year and let me know how much loans I would need for each school year. I knew going into college that if I chose a private school, it would be more likely that I would be taking out loans versus staying in state. That was my decision. My last year or two, I ended up with a little more loans than the first couple, due to tuition increases and my father's business (plumbing) not doing as well. I think I graduated with somewhere around $12,000 in student loans (in 1994). Fortunately, I was able to get them paid off in a couple years.

 

[mjkacmom]

I think it depends on major and prospects. I took out the stafford loans. My parents took out parent loans of about the same amount and that with grants and scholarships got me through my private school.

I have no problem paying my loans. My parents I think are done with theirs (since they started paying them back as I was there and I deferred mine until after grad school. That degree also allowed me to get a job making a pretty nice salary.

The rule I heard as a student often was that you shouldn't have more in loans then you expect you can make in your starting salary. Even counting in my parents loans we were within that.

I agree with this. Dd22 has about $90,000 in loans (we paid $30,000 plus her loan interest), she has her masters, just passed her first CPA exam, and she already has an employment contact with a nice starting salary (she graduated from an in state public university with a great business school). Dd17 is going for a doctorate in PT, even with generous scholarships ($28,000 a year, $30,000 for graduate school) she will have over $100,000 in loans (with $30,000 from us). She has applied to school with strong PT programs (and none in state). Dd22 graduated college at the top of her class while living in crowded off campus apartments and houses while waitressing to pay for food and rent. Ds20 is a finance major and works 2 jobs to pay for his food and rent (also in state public university, he will have similar debt as dd22). We told our kids to major in fields they could tolerate (dd17 has actually always wanted to be a physical therapist). Dd15 and ds15, so far, plan on going the business school route (all of my kids are very strong in math). Get a degree that will get you a job.

 

[Mackenzie Click-Mickelson]

I think I graduated with somewhere around $12,000 in student loans (in 1994).

Doing a rough inflation index in today's money that's about $20,500.

 

[mom2rtk]

Exactly I could just imagine my parents telling how much I can take & when to pay it back. Advice was welcomed & still is, but by that age I was a legal adult & making my own decisions. This is part of why our adults can’t be functional until they’re 30.

Except that over the base amount of around $23K in subsidized loans, kids need parents to sign for them. So parents very much have an important voice in the decision.

 

[mom2rtk]

we would not have signed for a parent loan for more than what our kids could take out (5500 per year). I think that is getting near "a lot" as is and anything over about 25K total is a lot. As is, our goal was for them to have minimal debt, if any---but that also meant that price (including scholarships) needed to be a major factor when choosing a university.
I am always shocked by how little parents and highschool students look at price when narrrowing down the university choices---that (with schools offering a decent program in the major my kid wanetd) was our first criteria to then get the list narrowed to something reasonable to really look into.

Our oldest has about 17K which is how much can be written off if they teach for 5 years in a high needs area----if that type of work doesn't pan out for them for any reason, we will help pay those loans off---but it made sense to take them given that the plan is to teach.

Our youngest is in an apprenticeship program (not in the USA) and is paid to learn. He lives at home and saves most of his money. He will have no debt at all and I am grateful for that.

That's where we're at with it. We told them up front we would not sign for any student loans. The amount they can get is about what I think is reasonable for them to have.

Our 3 have chosen schools with a eye toward total cost. One went away, one commuted from home, the third just committed to our flagship state school and will be going away next year.

 

[mom2rose&john]

The common wisdom around here is to take no more in loans than you are likely to earn in your first year of employment in your field. (teachers earn around 35k, so no more than that for an education degree, nurses earn 60K, so that's a good number for nursing school, etc...). DS 18 chose wisely and is at a state school that we can afford with Pell grants and our 529 savings. He will have no debt and a teaching license in 4 years. DS 16 may be another story!

This is the rule of thumb that the guidance counselor told us to follow. My nephew is going to school for Pharmacy and graduating in May. He has $70,000 in student loans over seven years. He has job offers ranging from $83,000 to $110,000.

 

[LSUmiss]

Except that over the base amount of around $23K in subsidized loans, kids need parents to sign for them. So parents very much have an important voice in the decision.

I agree. But, I would have never asked my parents to sign for student loan debt b/c then it also becomes their debt.

 

[tvguy]

I am calm---but it is what YOU chose to do as parents, not what "parents do" saying it is insults the large number of parents who do not/did not/can not make the same choice you did in this one area yet still provide perfectly well for their children.

Interesting on the elder care issue: we very consciously, and vocally (so our kids have always known) chose to fully fund retirement (max out 401K contributions etc) as a higher priority than college savings. Our reasoning is that if needed you CAN borrow for school, or delay starting it while you save, but you cannot borrow to retire or delay need care in old age.
We felt it was far less of a burden for our kids to have to choose a reasonably priced university (or, other--one is taking a different path) as young adults than to be possibly saddled with years of caring for us when we age.
I would NEVER leave my parents or in laws without help if they needed it; but I would also NEVER make future plans which include relying on my grown children for my financial care in old age---I see that as far costlier and more stressful than most student loans OR having to go to a school that is not the very best most perfect school ever in order to keep cost down.

I am just being honest. DW and I just felt is was important to try and find ways to do all the things you mention and fund our kids college as equal priorities. It's all a balance. It's possible, and I have seen people with a whole lot less income that I have pull it off too.

 

[North of Mouse]

Any student loan is a lot, and too much in our opinion! The interest can eat you up, and it's easy to let it slide! We've seen it happen to people we know. Much better to put some aside each year earlier, plus work (student) along the way.

Also, we have a great community college, which many have elected to attend the first two years and commuting from home. This has drastically cut down expenses. Many have also continued to live at home while getting their degree - commuting is not an issue.

 

[gillep]

I am just being honest. DW and I just felt is was important to try and find ways to do all the things you mention and fund our kids college as equal priorities. It's all a balance. It's possible, and I have seen people with a whole lot less income that I have pull it off too.

My parents couldn't financially swing helping either my brother or myself with college, and I for one have no issue with that. I am glad that I self funded my education. It taught me a lot. I also do not think that parent's are responsible for funding college, help is great, but I just don't see it as parental responsibility, even if others do.

I could never have lived home for college, not in my personality, if I had, my mom and I would have had a lot of issues with our relationship and it would not be worth it to me, we just can't live together, it doesn't work.

Knowing that I had student debt made me so much more aware of financial decisions, I knew my loan payments and it taught me some pretty hefty lessons in responsibility. We made choices regarding our careers (my husband was in a very similar situation) that we probably wouldn't have made had we not had debt, but we are in fantastic places in our careers for our ages. We moved a lot for new opportunities, and that has been such a rewarding experience, although it does have huge downsides, such as being nowhere near family and having no safety net nearby.

Our credit is excellent because it had to be, we had no choice if we wanted to be able to have purchasing power.

We are now in our mid-thirties, we have bought three homes and sold two, we have fully funded retirement accounts and travel and live comfortably even in an extremely expensive area of the U.S., our loans did not limit us, they forced us to be real and focused regarding finances.

Loans are certainly not right for everyone, but they are also not universally bad. It is certainly a lot to ask a young person to take on, but people can take on loans and be successful, just as they can take on loans and be crippled under them.

 

[NHdisneylover]

I am just being honest. DW and I just felt is was important to try and find ways to do all the things you mention and fund our kids college as equal priorities. It's all a balance. It's possible, and I have seen people with a whole lot less income that I have pull it off too.

So which is it---you feel that parents should save for college as an equal priority to other things., or you feel parents should fund any college their child chooses, not taking price into consideration and budget any way needed to make it happen? Your posts seem to imply one then the other.


Even you, at your income, fell 30,000 dolars short of funding the dream school and needed an inheritance to make it happen (not everyone gets an inheritance), and only one of your children chose a pricey school. Had bot hchosen the 50K per yeear option, then what?




(FTR---we did not have to steer either kid away from a pricier option---both grew up with the idea that value for money applies in all areas, including education---and niether ever even looked at anything out of range or indicated wanting to, so we were lucky to not need to crunch really hard numbers and decide what we would or would not)

 

[MomofKatie]

DD will graduate with about $25k in loans (the federal Stafford ones). She is an engineering major and she is doing a co-op that pays very well during her senior year, so she will be able to pay most if not all of her loans off immediately upon graduation.

We considered schools carefully, keeping cost and scholarship offers in mind. Her top 2 choices gave her about $28k per year in scholarships each. Out of state flagship public university #1 gave enough to cover full tuition, books, and fees for all four years. Out of state well regarded private University #2 gave same $$ amount, but it only covered about half if tuition, no fees, and no books. DD would be paying OOP about twice as much per year. She decided to go for University #1.

 

[LSUmiss]

I agree that one should have a concept of how budgeting and money works as kids become legal adults. But budgeting for gas for their car and paying for their own cell phone is a whole lot different than paying for everything and for a parent to willing co sign a loan (which they would need to do since the student can only take out $5500 a year in their name) that could totally alter their financial future when they are starting out in life is, in my opinion, selfish and short sighted on the part of a parent.

Now if a kid wants to take on all that debt without a parent co signing, there is not much anyone can do and that is certainly their option as a legal adult.

I don’t understand why any parent would want their kid to start their adult lives buried in debt just to teach them a lesson or because they are considered legal adults. How about we teach them to budget responsibly from the get go and not take on huge debts in the first place.

Maybe if more parents thought this way, we wouldn’t have such a student loan debt crisis like we are now seeing. And yet, I consistently hear talk about how student loan debt should be forgiven. Why? If you as a parent or student take it on, you own it.

Have you consider that there are many many many students who could not attend college at all if it were not for student loans??

 

[mjkacmom]

DH graduated from the same in state public university as Dd, tuition was $2000 a year, it is now over $14,000 a year. College costs have risen way more than the inflation rate.

 

[bjscheel]

My DD17 just completed a tutorial on student loans. The points made were to stay at or under one year's salary, and monthly payments in the range of 8-12% of monthly income. I also see the advice not to borrow more than the federal loans. This can be really hard because college is expensive!! And some people, like us, don't have commutable options (just a cc at 35 miles away which is further than I want them to drive in winter).

DD20 is living at a community college, got lots of scholarships, and works 20-30 hours a week. She'll be done with her program in May, no debt and money in the bank. DD17 is going to go to a small public where the COA is $15K (and hopefully more merit to be awarded- she has interviews and auditions in February). We'll help her with about half, and she'll work and use savings. I would be okay with her borrowing say $2-3K/year but if she gets some more scholarships she may not need to.

So I think we will get by without a student loan crisis in our family. I don't know how their friends going to more expensive places do it. Or how people in more expensive areas of the country do it. At times DD17 was a little put out about her options but she understands that not taking on debt for those few years at college means much more freedom for the rest of her life. And her older friends and cousins have given her many talks about their college cost regrets!

@mjkacmom yes, the private I attended in mid-90s was $12,000 COA. Now it is $42,000. DD20 was offered $18,000 there, leaving $24,000 x 4 = $96,000 and she said no way is it worth that! DH thinks kids should pay their own way like he did but his partial year of trade school in 1989 is in no way comparable to getting a bachelor's in 2018. I'm choosing to help them as needed, but keeping costs low to make it not a big deal.

 

[mjkacmom]

The problem with living in areas where colleges are more expensive is the fact that if you live here, there is a good chance that you won’t be eligible for federal loans due to income, but really need them due to the high COL, which isn’t factored into the equation. Here, the only college program offered by the state is free community college for those in the top 10% of their graduating classes. That’s it, not even any state tuition reciprocity with other states.

 

[Mackenzie Click-Mickelson]

Have you consider that there are many many many students who could not attend college at all if it were not for student loans??

In a perfect world costs would be quite reasonable across the board, loans wouldn't have to be taken out at all, and everyone could easily get a job in their given field.

It's not a perfect world.

 

[amberpi]

When we discuss putting the kids in a local private elementary I always think of college savings (which DH is doing already). If we don't put them in that expensive school until middle school we would save WAY more than what undergrad for both of them would be even at the most expensive uni. It's crazy to have to consider this stuff when college is so far away, but you do.

 

[DopeyDame]

I graduated in the 90s with nearly 100,000 in debt - some in my name, mostly PLUS loans in my parents name that it was clear I was responsible for. I earned an engineering degree from a school I loved, and have since paid off all the loans. For me, it was the right choice.
For most people, it was "too much debt"