<p>I personally do not like the idea of lending to family members. I would consider it an unneeded complication. However, if your family has enough money where this is a reasonable possibility then I don’t see anything wrong with having a note on paper. Assuming that no one is actually unwise enough to push the limits of such a note payable by either refusing to pay or threatening to sue someone for missing payments (!) then it would be a good idea just to help encourage some financial discipline while keeping the kid out from underneath the loan sharks at Nelnet. That former point is very important to me though – if this is going to something that leads to drama and fighting later on then I wouldn’t do it. You know your kids and your family dynamic better than anyone else so it’s really you who can best predict whether or not setting up a formal loan with your kids would be responsible or a recipe for a disaster.</p>