S/O Student Loan Debt

Mrs.B6302007

Really late to the thread but since my kid is keeping me awake...

We will be doing Dave Ramsey's baby step #5 which is saving for college through an Educational Savings Account.  The interest rate payouts are higher on an ESA than savings bonds and pre-paid tuitions.

danieliza1127

I'm with luckyme on this one I guess.  I think it's awesome that so many of you plan to save for your kid's college and pay for it, but the attitude of that being a duty as a parent is kind of off-putting to me.

My Mom had 4 kids when my Dad left and he never paid child support.  She struggled hard to support us all by herself.  There was no way she could have paid for us to go to college.  I got grants and student loans and I pay my student loan bill every month.  Then I put myself through grad school with no student loans.  So I get saying that it's your duty when you decide to have kids to pay for their education, but things happen.    Whether it's divorce or death or some huge disaster, who knows.

I would definitely like to start saving money as soon as we have a kid specifically for that kid's college education.  I'd love to be able to provide for them so they don't have student loans like we do. 

sweetpea0911

I'm even later to the thread than Mrs.B, but this is my job now, so haaay...

Anyway, we're going to save as much as we can, but we'll be expecting them to contribute as well.  We both have our own loans to pay off - I had to finance my schooling 100% by myself - so it probably won't be feasible for us to pay for their entire secondary schooling, though that would be awesome if it did.

People who have student loans, though, don't realize all of their options. Just for federal loans, I can name you 16 different ways to make a $900 monthly payment to a much smaller, $50 payment.  BUT you have to be proactive about it.  Don't just pay whatever they tell you too, especially if you can't afford it and will have to go without other essentials.  Call your loan company and work with them to make it affordable.  It can be done.

TheBeckmeister

My parents have PLENTY of savings, enough to put each of their kids through 4 years of private education.  However, my dad had me take out the Federal Stafford Loan each year, so that I felt some ownership and responsibility over my higher education (so I wouldn't just blow THEIR money).  I came out of school with about 1/10 of the cost of a 4-year private university (still over 15k), but having a bulk of my education already paid for was very nice.  I plan to do something similar for my kids.

FutureMsAlexander

The great state of Indiana will be paying for our children's tuition if they attend a college in Indiana. But I'm definitely going to push them to pursue scholarships and try to avoid loans as much as possible.

[Deleted User]

I graduated college without any debt before I suffed in high school. I did the IB program, which guarantees 100% Bright Futures scholoarship for in-state universities. It made high school suck because it was so much work, but worth it in the long run because I didn't pay a penny. My brother did the same and he will be starting in the fall with basically a free ride.

We won't be having kids, but if we did I would make them work for it just was I did. I would certainly help when I could, but we can barely pay for ourselves at this point so I don't know how the hell we would ever start a college fund.

andyandhillary

My parents said they would pay X amount each year and after the first year they couldn't afford it anymore.  That's life.  The stock market tanked, my grandparents both got sick and they couldn't take care of themselves.  So I took out loans but honestly, it made me appreciate my education more and it made me learn how to take care of myself and my finances more quicly. 

Some of you are the exception to the majority of what I've seen in students whose parents pay for their education.  I went to a private school and it is a noticeable difference between the kids who are paying for their own education and the kids whose parents are paying.  I would rather my children have debt than be a spoiled child with a lack of true appreciation.  IMO, saying "I'm so grateful" isn't enough.  All my friends said that.  Most didn't act grateful.  They skipped class, got decent but not great grades when they were capable of so much more, they used the money their parents gave them for booze and drugs, etc.  They did what they had to do to get by. 

Andy's dad worked at a college and Andy chose to go there so he will have no debt.  It worked out well.  Andy might end up teaching with his Phd but we won't force our kids to go to that school (his parents didn't btw).  His parents said that they will pay half of whatever the costs are for each kids school.  All the kids chose to go to his dad's school so that was great.  My only worry with this plan, though, is how one kid could chose Harvard and one kid could choose a state school and the costs could be wildly different and perhaps unfair.  Not sure how I feel about it.

I think we'll try to do what my parents did but better (i.e., not rely on the stock market).  Save X amount for each child and they choose what to do with it.  I also like the PP's plan of X amount for each letter grade. 

I don't think it's a parent's duty to pay for their child's higher education.  I think that is the perfect age to make your own choices, including how to pay for school.  You don't want debt?  Work hard in high school, save money, and go to where you want.  Andy and I plan on working very hard to send our kids to excellent religious private schools (because we're religious, not because all public schools suck) so that they can have greater opportunity to succeed and get scholarships for college. 

K Byte

I'd pay for my future kids' education to a point. I would want to pay for the cost of four years tuition, and room and board if they live in the dorms, at a public, in-state school. If they choose to go out of state or to a pricey private school, they'd have to take out student loans or hope to get scholarships to cover the difference. Ditto if they go more than four years for undergrad or go to grad school. I would additionally hope that my future kid would work part-time during high school and college to help support himself/herself in terms of cost of living expenses.

That's just my opinion though. I got a pretty good education at a state university. FI graduated from Cornell and his parents paid for all of it which had to be hugely expensive. I don't see that being an option for us though haha.

Eriberry

I feel like it's a cycle. If my parent's had paid for my education, I would not have loans and would therefore have more money to save for my own kids' education. Since I am currently paying over $500 a month for my student loans, it's hard to find extra money to put away.

I did what I had to do. I got a lot of financial aid, scholarships, grants and got loans to cover the rest. I went to Northeastern University in Boston, a five year school, where tuition was over 30k a year and got out with only about $50,000 in loans. I also do believe I worked a lot harder in school than most of the people who had their education paid for. Not saying that everyone who has theirs does that but I did notice.

I will help my daughter, and any other children I have, any way I can, but I don't think it's mandatory.

goheels05

I've had the same experience as DrReed and Hillary, but my undergrad college was kind of a douche-magnet, so there's that.  Friends would give me a hard time about always studying and doing my homework, but if my GPA dropped below 3.4, I would lose my scholarship and have to go home. 

I think it's really going to depend on my kids.  Mr. Heels was like you, Fishy.  His parents paid for college and it made him that much more motivated to do well.  If our kids are like that, we'll be happy to help them financially, but if they want to spend 5 years beer-bonging at a party school and majoring in underwater basketweaving so they can come home and live with mom and dad indefinitely, I think I will have no problem cutting off their cashflow. 

Maybe things have changed in the last 10 years, but there is so much scholarship money out there, a lot of which goes unused because no one applies for it.  I'm sure that now with widespread availability of internet, it's easier than ever to find those scholarships.  They aren't all need/academic/athletic based.  They give scholarships for completely random things, like being of Scandinavian decent or for being the child of a veteran.  Growing up in the 2nd poorest county in NC, our principal made it her mission to ensure that every one of us who wanted to go to college could afford it.  Our class of about 250 students (less than half of which went to college) got a total of over $1,000,000 in scholarship money.  Meanwhile, my husband who graduated 1st in his class didn't even apply for scholarships.  He assumed his parents made too much money for him to qualify. 

I'm personally not a fan of 529 accounts.  The penalties are ridiculous for using the money for anything other than college.  What if your kid doesn't go?  What if your kid has a full scholarship?  There are too many possible ways to get stuck paying penalties when you didn't do anything wrong.    JMO.

wadingmoose

My parents paid for my education, well half of it.  The other half was scholarship.  I had a part time job which helped to pay my living expenses, but that made my grades drop so they wanted me to quit.  I did, but I continued on as a faculty assistant which paid a little. 

No one at school knew that my parents were paying.  I suppose, based on what you've said here, they would've assumed I was paying myself.  Perhaps that's true for more than just me.  I do know a lot of people on student loans who drank and partied A LOT.  I suppose this just means generalizations get us nowhere.

My boyfriend in college had to drop out because his parents wouldn't pay and according to the student loan program, they made too much money so he couldn't get loans.  Now he works at the salt plant and he's pretty much stuck in a dead end job going nowhere.

If I had kids, I couldn't do that to them.  I'd plan and save for their education to ensure that they received one and had opportunities.  That doesn't mean everyone needs to.

andyandhillary

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_student-loan-debt?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:45083b97-58ce-4c78-8535-72fdb827a464Post:5a477159-dfe0-4472-ad51-a5488d891c0b">Re: S/O Student Loan Debt</a>:
[QUOTE] My boyfriend in college had to drop out because his parents wouldn't pay and according to the student loan program, they made too much money so he couldn't get loans.  Now he works at the salt plant and he's pretty much stuck in a dead end job going nowhere.
Posted by wadingmoose[/QUOTE]

He could have gotten a loan by himself.  My best friend did it, she has a horrible interest rate, but she did it to avoid getting a job like your friend. 

squirrly

My parents had saved some for my college, but they made sure I got a good education and did well in school.  That resulted in a full ride to college plus two extra scholarships, so they paid for my car and insurance since school and living expenses were free for me.  H went to West Point, which was also no cost for him or his family. 

It's our intent to do basically what my parents did - save what's reasonable, but try to ensure our kids have the best shot at scholarships possible.  Since we both graduated from public high schools, neither of us is inclinded to put money into private school UNLESS we end up living someplace that simply doesn't have a decent public school system.  However, good schools are pretty high on our list of requirements, so that's an unlikely situation.

Ultimately, I see it as our responsibility to provide a college education for our children in some way.  That doesn't mean we have to pay out of pocket for the most expensive option available, though.  It means we will provide for a good school, but I can't see paying for Harvard.  If that's what they want, then they're going to have to take responsibility for at least a portion of the costs.

mandysmear

And one thing I will do is really strongly recommend that they go to school in our city.  That way they can live at home while doing so.  I had to move away because my parents lived in a small town. It cost a lot of living expenses.

And in Alberta, some universities may rank higher for certain faculties, but for the most part the schools are at par with each other and cost about the same (until you get into the smaller community colleges).  No ivy league schools and none of this 10k+ a semester.  Not even law school is that much in Alberta. 

danieliza1127

Heels, that's true about scholarships.  I got a Rotary Club scholarship and I wasn't even affiliated with it and neither was anyone in my family.  I don't even remember how I got it, I think I just applied.  I will definitely help my kids apply for scholarships.  I should have applied for a lot more but I just didn't know much then and I was only the 2nd in my family to go to college so my Mom didn't know a lot either.

landra310s

I graduated with a lot of debt.  I've learned 2 things over the years.  I wouldn't have appreciated my education if I HADN'T paid for it.  I don't think college is all it's cracked up to be.  Now with that said, here's my situation... went to a private college.. STUPID decision on my part and parents for not knowing better and go with a cheaper state school.  I left college with 65k in loans.  Parents paid the gov't loans while i was in school, ~$200/month by senior year.  I picked up all bills after I graduated.  I'm a chemist working in the pharmaceutical field.  My FI went to a tech highschool (no college), has no loans and makes 10k more than me a year base salary + he get over time.  He installs phone/dsl at houses or offices.  I find it ridiculous that I have all this debt and make less than not only him but I know for a fact my hair dresser makes more than I do, and has no loans.  So IMO  I think college is over rated.  You can easily go to a tech highschool or a program dental hygeine that pays better than my field or hairdressing.. any of that.  NOW I'm not saying that working minimum wage is goign to work out well.  But I personally am not going to push my kids into college as long as the have some sort of tech schooling behind them.  Cause I know all those liberal arts classes i had to waste my time on in college certainly didn't help me get where i am today.  I'll help cover loan costs for my kids (if I can)while they are in college, if they decide to go, but i will not be paying for them once they graduate and I certainly won't be saving up to pay for all of it.  I have my own loans to pay off.  I probably sound like a horrible person but I really hate seeing perfectly able people get things for free while doing nothing to earn them.  Like kids getting cars when they turn 16 from their parents.  I bought mine myself.  I was never given a car.  And I will never give my kid a car...  they can save like I did and buy one themselves.  If you don't teach them to make and save their own money they will always be expecting you to buy and provide for them.  I know this one girl that just got a new car from her dad at 28yrs old and is having her whole wedding paid for by him.  They are not rich, he works 80+hrs a week to do this and bitches about how she always has something she needs, and never appreciates anything he does.  Yet he can't seem to tell her no.  It baffles me!

goheels05

I wouldn't necessarily say that college is overrated, but I would say that college isn't for everyone.  Yes, there are some high paying jobs out there that only require a 2-year degree, and there are some careers that require a 4 year degree and/or masters and pay very poorly.  But many people go to college not to make a lot of money, but instead to get qualified for a job in their chosen career-path. 

That does bring up a valid point, though.  While you were racking up student loan debt, you probably had no idea how much it was (I know I didn't).  I mean, I knew the dollar amount that was appearing in my checking account every semester, but I didn't understand compounding interest and what payments on $25,000 of debt would look like.  The whole time I was thinking, "whoopdeedoo, I'll be makin' big bucks as a CPA I'll have that sh*t paid off my first year out of school!!!1111!!!"  Yeah, false. 

katiewhompus

I was very lucky and my parent's had saved for me to go to college. I left college with about $6k in loans I had to repay but they paid for the rest. I also busted my butt to attempt to get scholarships/grants, etc.

Hopefully Dh and I will be able to help our kids with college. We will probably help them for 4 years at a reasonably priced school (depending on our financial situation) and after that it is up to them. I do want them to learn the importance of student loans and appreciate their classes, but I also don't want to set them up for a lifetime of student loan payments.

arbolita

My parents and grandparents all put some money away for my sister and I for college, but we also both worked our butts off to get scholarships for school, and I'd expect my kids to do the same.

Cercamom2011

I have been on both sides of this.  My folks paid for my undergraduate degree (and for all of my siblings' undergraduate work).  I'm working on my second master's degree.  With my MBA,  I was really stupid and took out a ton of debt, because I really didn't understand the sacrifice my parents made to pay for my undergraduate degree.  Now I'm getting my second master's and trust me, we watch every penny because we are paying cash for it. 

We want our future children to learn the value of a dollar.  We plan to save for their college, but like the doctor in a pp, we will want them to earn and learn a little.  I always thought of debt as no big deal and made the payments,  until between the two of us we figured out that we had over $100k in debt (not including our houses).  It's to each his own, but we did not want to start our marriage like that, nor do we want our children going through it either. For any Dave Ramsey fans, we decided to change our family tree!!

parker624

I know I'm late to this topic, too, but I thought I'd share what my parents did, because hopefully I'll do the same if we have the money.

My parents paid for us to go to the college of our choice (we all went out of state) with the stipulation that if our grades fell below a 3.0 average, we would have to transfer to an in-state school.  That was motivation enough to get good grades and be very thankful for the education they provided us.

We all had to pay our own way for grad school.  Ironically, we all ended up going in-state for our graduate degrees!