Fair to Make Student Take Out Loans?

Parents Forum
1

<p>Our son was not accepted into our flagship state university. He's pretty smart (but not a genious), but flagship state university only accepts the really elite from our high school, since so many top students apply from there. (Would have been accepted if he had come out of a lesser high school in another part of the state.) Also, he wanted their Business college, and it is the hardest to get into. Funny thing, due to their desire to diversify location-wise, it is easier to get into it from out of state than from our high school. Unfortunately, our son didn't like any of the other public colleges in our state, and we had to agree. With the exception of the flagship, the others have been underfunded for years and have greatly deteriorated in many respects. Also, given as to how out-of-state tuition has risen in recent years at the flagship public universities in our surrounding states, we just couldn't bring ourselves to focus on them all that closely. (Hard to accept spending big bucks for out of state public when in-state students are paying a third of that for the same education.) He wanted a small college anyway, and we had to agree that he was best suited for small. Therefore, our son focused on private colleges almost exclusively, although we made it clear that it would all depend on how much merit aid he gets. (We don't qualify for need based aid at any of the colleges he is considering.) </p>

<p>He was accepted at three very nice small, private colleges, but they certainly are not elite or ivy leaque. Unfortunately, with respect to his first choice, it was the most expensive and offered very little merit aid. Although he really loves it (and we agree that it is the best of the three in several respects including academics), it would cost us about $10,000 more a year than the cheaper of the other two. After some discussion, he had to agree that the cost ruled it out. </p>

<p>Comparing the other two, the cost difference for us (due to merit aid) would be about $2500 a year between the two. Although either would be a stretch for us (i.e. longer to retirement and cutting our discretionary spending), we could afford either financially. However, while my wife and I liked both of them about equally, my son really likes the more expensive of the two, and absolutely hates the other. (He had a short visit during the summer to the one he hates, and we can't get him to even go back to do an overnight visit, so he can better compare. He tends to make snap judgements and doesn't much care what we think.) Would it be fair to tell him that he can go to the more expensive of the two, only if he took out an unsubsidized Stafford loan for the $2500 difference each year? I've always heard that it is a good idea for the student to have his own investment in his education to ensure he stays on task and focused. Our son is really smart, but tends to not work to his potential. As a result, he get's pretty good grades, but could do much better. Maybe paying some for his own education would be additional incentive. (We already told him that he will need to pick up any costs beyond room/board/tution/fees/books himself through savings and summer work.) He presently holds down a part time job and works pretty hard at that. (He likes it a lot better than school.) However, he is also a spoiled brat and is extremely disrespectful to his parents. Should that be a consideration?</p>

2

<p>We have four kids, and they will all have a 2,500K per year student loan (I think it gets a bit larger each year) that is in their fin aid packages. It's just a necessity in our family, and one they don't seem to mind, considering the complete cost of their education--even with heavy discounts in grant money. I don't see that asking them to be responsible for part of the debt is too harsh. We have mentioned that this debt needs to be repaid whether they graduate or not, and obviously graduating might make repayment a tad easier.</p>

3

<p>i have student loans out in my name, and i believe i have to start and repay them six months after i graduate.</p>

4

<p>My son took at the full amount of Stafford loans that were part of his package -- it just was a given that he would take the loans. We didn't even discuss it. </p>

<p>But it had nothing to do with choice of college - that is, he would have had the same or larger loans if he has picked the cheapest of his alternatives as with choosing the most expensive among those that fell within an amount we could afford. </p>

<p>But there really is something else going on here, isn't there? I mean,
[quote]
However, he is also a spoiled brat and is extremely disrespectful to his parents.

[/quote]
Sounds like there are some issues between parent & kid that have nothing to do with the cost of college. I'd suggest that you figure a way to address the real issues without using $$ as a leveraging point - that will only create more resentment. Pay for your son's education out of love -- or don't pay at all -- but don't tie the $$ to how you feel about him. Things will only go from bad to worse on that front. </p>

<p>That doesn't mean you can't set down conditions for your financial support through college - but the conditions you set should be objective ones, such as maintaining a minimum GPA.</p>

5

<p>i consoildated my student loans so I could take advantage of lower interest rates. Me and my brother both paid for college ourselves (he paid cash through out the process while I used my Air Guard scholarship and the rest were loans) but he would slide us a buck or two if we * really * needed it. It all depends on whether or not you as a parent want to assume tons of debt. My great uncle took out like a bunch ($100k+) to pay for his daughter's dream major. She now makes like maybe $20,000 grand a year doing muscials and stuff like that. Personally I could never go into extreme debt just because my kid wanted to go into some exotic major where he had a snowball's chance in hell of making money.</p>

6

<p>Both of our kids have unsubsidized Stafford loans. We believe it is appropriate for them to have some financial stake in their own educations. Compared to the overall cost and to the loans we ourselves have taken out, it is a drop in the bucket, and it had nothing to do with the choice of college. We didn't see it as a punitive measure, though.</p>

7

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<p>I believe if you continue your education through graduate/professional school, repayment can be deferred</p>

8

<p>Let him make the decision, and figure out how to pay for the more expensive school, if that's what he wants. It sounds like you need to back off and let him make his own choice, good or bad. </p>

<p>Commit yourself to a certain amount of college dollars, and then let the issue drop. You might be surprised at the maturity of his decision.</p>

9

<p>I'm with aparent5. We have had our son take out unsubsidized Staffords for his high priced private college (one year at this university was equal in cost to four years, with the pre-paid tution plan, at our state flagship). We could have afforded him not to, but my thinking was that it might make the education more valuable to him if he had to pay for a small percentage of it himself.</p>

10

<p>I really wish people here would be specific about the colleges and univeristies they are talking about. We would be far easier to offer specific advice and opinions. I do not think anyone would be compromising their anonymitiy particularly when talking about public universities.</p>

<p>I have always freely mentioned the colleges I attended(OSU, Cornell), my wife attended(Rensselaer), my son attends(Rensselear) and the others he applied to(Case, Oberlin, Wooster, Allegheny, et al).</p>

<p>It help others here to know that he received more merit aid from Case($17k) and RPI($25k) than from Allegheny($15k) and Wooster(14k) and that Oberlin offered a pittance(less than $4k). Its helpful to know that he was accepted and offered these merit scholarships with a SAT score of 1450 and a top 6% class rank.</p>

<p>With all this specific info is anyone able to crack our desire for anonymity? Of course not. And if some one were would it not bother me at all. They would be a friend or relative and I would not care at all.</p>

<p>A person would only care if they were grossly exaggerating which I fear is often the case on most message boards.</p>

11

<p>I agree with tsdad and aparent5. Hubby and I certainly plan to aid D financially for her college education, but I do feel children have a greater appreciation for things when they are contributing financially, too. We have seen this in D already. She took a part time job last summer (after her h.s. sophomore year) and hasn't asked us for a penny since. I insist on reimbursing her for those things that are school-related, but she never asks. Before the beginning of her junior year, she came home with several bags of school supplies. I was surprised and asked how she had gotten them. She said, "I paid for them with my money." She has also purchased play tickets, school books, paid school fees, etc. without mention. I have found the best way to handle it is to make occasional deposits in her bank account and give her the deposit slip. She is genuinely appreciative, but certainly does not expect it. It makes me want to help her as much as possible while continuing to allow her to be more responsible and independent. (Hmmmm ... maybe she has figured this out and it is a ploy to get more money from us!:eek: ) </p>

<p>I paid for the majority of my college education through grants, loans and work study programs. I have a great appreciation for that. I think working hard for my education made me work harder to achieve my goals. It's much easier to spend someone elses money. D is determined to graduate college without being in debt, but I have told her that is not very realistic in terms of the expenses involved in higher education. She has worked very hard in school and will receive some scholarship money from our lottery scholarship program, but only if she chooses an instate school. Hopefully, she will be eligible for additional scholarships, etc., but nothing is guaranteed. I absolutely believe that telling your son he will be expected to partake in the financial responsibility of his education is the right thing to do. Maybe spending his own money will give him a greater respect for what you have provided to him thus far.</p>

12

<p>I, too, would like to hear the schools involved. That said, I will ring in with a thought which hasn't been mentioned. The first choice school (first choice of S and M/D, as I read it) has been written off, perhaps because of the "underachieving, spoiled brat" perspective.</p>

<p>Instead of writing that off, why not a family discussion of all 3 school options: M/D will contributed $x, S will borrow $2500, conditions under which M/D might contribute more to make first choice possible. Perhaps S will step up to the plate if treated with the respect that he is a maturing adult (sometimes they live up to expectations instead of down to them when given the opportunity). Perhaps he will perform better and achieve to potential if treated as though that is the expectation and obligation if all three of you invest in him in that regard. Just a thought.</p>

13

<p>"Would it be fair to tell him that he can go to the more expensive of the two, only if he took out an unsubsidized Stafford loan for the $2500 difference each year? I've always heard that it is a good idea for the student to have his own investment in his education to ensure he stays on task and focused. Our son is really smart, but tends to not work to his potential. "</p>

<p>That seems more than fair to me. FYI: The average college student takes out about $20,000 in loans to help pay for their entire college education. Such an amount to pay back is reasonable.</p>

<p>I used to teach college at a third tier university. What I noticed were that there were 2 categories of students who were the hardest workers:</p>

<ol>
<li><p>Students who had been stellar high school students and who were lured to the third tier by substantial merit aid. </p></li>
<li><p>Students who were working to help pay for their college education.</p></li>
</ol>

<p>With rare exceptions, the students whose parents were giving them everything were the students who were slacking. Typically, their parents didn't realize this because the students were not forthright with their parents about what the students were truly doing.</p>

<p>Because of my job, which gave me an office in the middle of a major student activity, I overheard students' conversations -- with each other and with their parents. I could see that the students who were slacking were also spending their time: partying heavily, getting high, boozing, getting laid, traveling to other colleges to party, skipping class, etc. </p>

<p>Meanwhile, I had student loans and worked a job when I was in college. Despite some periods of unemployment and grad school after college, I had no problems paying back my loans, which were reasonable amounts. I did not feel resentment about having loans.</p>

<p>". Although either would be a stretch for us (i.e. longer to retirement and cutting our discretionary spending), we could afford either financially. "</p>

<p>I don't see any reason for you and your wife to do all of the sacrificing. It's your son's education, and his choice. Let him share some of the load.</p>

14

<p>audiophile - i'm sure it could be deferred, but i'm not going to grad school or professional school. at least not in this point of my life. I can't afford anything like that. I need to find a job :)</p>

15

<p>I think it is actually a very positive issue for a student to bear part of the responsibility to pay for their college education - handing it to them on a silver platter will not help them in the long run of life.</p>

<p>If taking out a small loan will satisfy the financial responsibility - then I think the OP's son should be able to have the choice to do that to attend the school of his choice - and if not - he can can go to the 2nd or 3rd choice. I see nothing wrong with him having a job also while in school - any kind of job - even if only 5-10 hours a week for pizza $$. I really feel that students should ''buy into'' their education - it helps them learn responsibility and gives them some sense of empowerment. </p>

<p>Student loans and payback occur after they graduate and over a 10 year period - they should be able to manage the payback on their own - or even with help from parents - but if the loan is the difference between attending the school you want to go and one where you won't be very happy - go for it!!! It can make all the difference in the world. Just make sure the student - and parents - understand the management of student loans and all will be ok.</p>

<p>OP - I would discuss all the choices and possible $$ scenerios possible - you call him a spoiled brat - that takes a family for that to happen - it also takes a family to work thru the $$ issues for college. He apparently 'earned' his acceptances - and you let him apply to all these schools - now it is time to get him to one - one that will make him happy and will allow him to grow and mature also - please don't base this decision on some feeling you have about him - base this decision on him being a part of a big picture - with all of you involved in the process.</p>

16

<p>My son's choices are go the school his works at on full tuitions waiver (no loans) or go where reasonable merit/fin aid is offered, take loans and work during the school year. He thinks its fair.</p>

17

<p>I agree that my D should accept some of the financial responsibility for her undergraduate education & beyond if she chooses to go to graduate school. And the Stafford Loans are a good place to start because of their low interest rates & liberal repayment terms. D will be making her decision this weekend, and besides what we have as far as using disposable income, we will be taking out PLUS loans as well as having her taking out the Staffords.</p>

<p>Bottom line is loans are necessary and with presently 2.77% on the Stafford & 4.17 on the PLUS (although they're bound to rise when they're calculated again in July--but still cheap money) it's the way to go rather than using savings or retirement funds.</p>

18

<p>$2,500 a year isn't bad. Work-study plus summer job will cover that with some left over. </p>

<p>Offer to help by co-signing the loan (for lower interest rate if you can) or the like. Don't let so little money stand between him and a school he likes, though. It's a lot of money but also chump change compared to the total cost. </p>

<p>Even if he leaves with $12k in debt (tuition will go up, random other things), that is affordable for a college grad. It will not keep him from going to grad school. Perhaps you could even throw in an offer to live at home for the first year after graduation so he can pay down loans.</p>

19

<p>Although I realize it is late in the game for some, I really cannot stress enough how important it is to think/talk these things through early in the process. </p>

<p>When D applied, our financial situation was different than it is now, and we were very worried about money. We earned too much to get finaid but too little not feel the cost a lot.</p>

<p>One of the schools she was considering was not need blind, had one of the highest tuitions in the country, and was a reach. We simply could not afford it, and told her that she would have to pay a portion, if she ended up getting in and going there. Her reply - "So I'll have loans." She really had no sense of what might be involved in paying a loan back. So we looked at the costs over four years, and tried to figure out how much of a loan we'd allow her, so that when the time came, the payments would be manageable. We agreed that she would have to pay 15% of the costs. If she had gone there, she would have ended up with about $25,000 in loans. We would get the rest from savings, income and loans we would assume. </p>

<p>We decided that 15% was a reasonable figure to then use as an overall guide - she'd pay 15% of whatever the final cost was. So if School X gave her a half tuition scholarship, she would be responsible for 15% of whatever the final bill from the school was. Grandma has already offered to cover books for four years, and we would cover travel in addition to our 85%. (That was deliberate - I never want one of my kids to not come home because they don't want to spend the money!) If she got outside scholarships, that could be part of her 15%, as could money from her savings, and money she'd earned or would earn.</p>

<p>The idea was to have her buy into it - literally - as a more expensive school would cost her more. A merit scholarship from a school would reduce how much she had to pay, and it was in her interest to apply for outside money.</p>

<p>It had a happy ending - she soon decided not to apply to reach school, and her first choice school offered merit. She got a little more from outside sources, and her 15% was never very much. She graduated without loans, and it was only then, when her friends with loans were starting to panic, that she realized that paying a loan payment each month would be roughly equivalent to paying two rent payments! Given the job she got on graduation, that would have been quite a stretch for her, and she would have had to have considered what the job paid much more carefully - not just what she wanted to do. She is now back in grad school and we have offered to help her, since we didn't blow it all on her college costs. </p>

<p>We struck a similar deal with our son. He decided quite quickly that in his opinion, no school was worth $160,000+, and he set his sights on finding the right school that would give him merit money. For a while we worried that he would choose simply on price, which worried us, and it wasn't until he saw a few schools that he realized that the very cheapest might not be the very best for him. </p>

<p>Another happy ending - He has been offered merit money at two of the five schools he applied to, and is waiting to hear on some more money from one of them. He applied to outside scholarship competitions too, but won't know until after May 1. In our experience, all but the truly extraordinary kids have the most chance when they apply locally for money - which is what both of ours did. Once it is all signed, sealed and delivered, I will be happy to share college names and specifics.</p>

20

<p>You have two issues here...I'll respond to both. First, I do not think it is unreasonable for students to take out those Stafford loans. Our kids will do that as THEIR contribution towards their college education. It's not asking all that much. Second...you say your son doesn't like the second school (the less expensive one). That being said it may be worth your while to find a way for your child to attend this school. To be honest, kids do better where they are happier. That is not to say that your son might not like less expensive U once he gets there...but is it really worth $2500 to you all to find out?</p>