<p>Our DS will be starting grad school in the fall and we shudder to think about the large nut he'll have to crack by the time he's done. We're contemplating lending him the $$ ourselves so that he won't owe interest on top of the nearly $200k in principal. </p>
<p>Has anyone in this boat made their adult child sign a loan agreement? If so, would you mind sharing the terms and how you determined the repayment schedule? Did you stipulate that s/he'd owe X percent of gross monthly income? or net monthly income? Did you amend your will to reduce that child's inheritance by any unpaid principal?</p>
<p>We've got a great kid and have faith that he'll do his best to repay us as quickly as he's able, but who knows what his future holds? and whom he might marry? We want to ensure that we're fair to our other child.</p>
<p>We didn’t. We helped our kiddo with some housing expenses, and our grad gift to him was helping repay the loans. We did not loan him the money. His debt was FAR less than $200k.</p>
<p>Is this law, MD, or MBA? If not, then those other academic graduate degrees are usually funded by the university. Even for programs without funding their ought to be loans available up to $40k+ for Stafford and Grad Plus, why are you funding instead of student loans?</p>
<p>I’m going to co-sign the recommendation that you let a bank do the lending unless you are prepared for thhe possibility of not getting that money back. Not that your child will shortchange you, but in case he or she doesn’t get a job that will pay sufficiently to cover that (and I have to agree - unless this is an MD he’s borrowing for, the graduate degree is NOT worth the money. No other graduate program can guarantee a salary high enough pay that back) or some other life circumstances interfere to make it impossible to pay you back.</p>
<p>From another thread, it sounds like this is for a MBA program. I would be very cautious about borrowing even half that amount. What kind of salary does he expect to be earning upon graduation?</p>
<p>Isn’t an MBA only two years? Why $200k debt?</p>
<p>No, I would not make my child sign an agreement before loaning them money for grad school because I would not loan them money for grad school. D is currently a law student, and her gift was being debt free for undergrad. As a grad student I give her what I can afford give with no expectation of being paid back.</p>
<p>If you think that you are going to need this money and can’t afford to give it to your child, then I agree with the others that you should let the bank do the lending.</p>
<p>I dont know if the 200K includes UG debt, but in any event, imho, there are very.very few MBA programs that are worth the 200K. Time for kiddo to shop around.</p>
<p>We would not fund grad school and no we probably wouldn’t co-sign a loan either. If it’s an MBA she might consider working for a year or so, many companies will reimburse for some if not all of the costs. Back when I got my MBA most of the programs preferred students who had some work experience but it’s been a couple decades.</p>