<p>It depends on the kid’s character–how likely is the kid to pay back? My parents loaned my two older sibs money for college, they all signed papers on it. It was a good deal for my sibs because the interest rate was lower than what banks charged back then. They paid back, and had no problem finding employment right after college (engineering and accounting majors). Four younger kids got through on work-study/scholarships and ROTC. My parents lent me and H 5K when we were in grad/professional school. Just to make it through those times that loans/paycheck didn’t come through in time to pay the babysitter–so I wouldn’t have to embarrassed, calling her up to borrow a small sum every month or two. We owned a house at the time. When we sold the house, we paid them back in one lump sum. (Mom was surprised and pleased.) We also borrowed money for a down payment on a house from my sister (the accountant). Win-win–she made more interest/we paid less interest. She knew we had the income/trusted we would pay back on schedule, which we did. We also borrowed money from a friend for another house. Both of these loans were about 20K. (Scary to think they trusted us with that much!)
We have loaned small amounts of money ($700-800) for travel and car repair to friends who were in tight spots. We did this knowing they might not pay back. Actually, the one we thought we might have trouble collecting from showed up at our door with cash. The guy who actually made a payment schedule of $50/mo made one payment and never sent another. Still keeps in touch with H, with no mention of $ owed, no shame apparently. </p>
<p>We have given our kids very unequal amounts for college. But the idea is that they will all get out of college debt free–through scholarships or our support. We promised cars as graduation gifts to those who took full rides. Those who got more now will get less later. </p>