I refuse to take out a loan to pay for the children's college

<p>I wasn’t going to post here, but I’ve decided to do it, despite the replies I know I will get. I agree with the OPs husband. If taking on a reasonable amount of parental debt gives the student a better college choice or the opportunity to live on campus, I say do it, assuming you have overall financial stability. I have happily gone into debt to pay for my two sons college educations. I have no regrets and would do it again. I think it is the best gift I could ever give them and I am proud to have done it. If it takes a few years after they graduate to get it all paid off, so be it.</p>

<p>If the amount you’re contributing is $1000 a year, and you have the ability to contribute more, I feel that you should. If the amount you’re contributing is $20,000 a year, even if you can contribute more there is no reason. In some sense the amount a parent should contribute is relative, in some sense, when there is an ability to pay, it’s not.</p>

<p>I think the students should have federal loans, so that they got some ‘skin in the game.’
But no private loans or parent loans!</p>

<p>My parents sacrificed greatly for me and my siblings to go our schools. I felt strongly that my kids should have the same opportunity, whether it meant borrowing or saving up for it.</p>

<p>MommaJ–I don’t think it is and it doesn’t matter how they fit into the budget, it’s just a poor financial planning decision all the way around if they need those funds to pay for school.</p>

<p>dstark–feel free to check back posts of mine for all the links. The problem with using general charts is that you need to compare apples to apples. It doesn’t take into consideration things like reduced funding from states to state schools–CA being a big example of that. You also have to compare apples to apples and the salary of one job to the salary of that same job today in comparison to XYZ college back then to XYZ college today. Sure, I can say that my parents paid $500/year to go to a state school back in the 60’s and my kids are paying $40,000/year to go to their private school in 2013 so costs have gone up by whatever percent.</p>

<p>Vladenschlutte–why should a parent contribute more at $1000 vs $20,000? Your argument makes no sense. What we will contribute and what we CAN contribute are two different things. Our kids will get enough money to go to a fantastic school with excellent programs for their intended majors that they love. It took some time to find schools that fit all their needs but they found 10 each that they applied to–wasn’t that hard.</p>

<p>

</p>

<p>State school in-state tuition has risen much faster than either private school tuition or general inflation. In other words, in real terms the state schools that most four year college students attend are significantly more expensive now than when today’s parents were in college. And, no, private schools are not generally cheaper than roughly comparable state schools, no matter how many times you claim that. High stats students can find merit scholarships at some of what would be admissions safety schools for them, of course, but the average college student may not have much of that to choose from.</p>

<p>Well, every family has a different financial story. Every family sets different expectations for their children after high school. Certainly this should be communicated to children so that there is no misunderstanding about it. I think we can all agree on that.<br>
Beyond that, I can only speak for myself in response to the OP. As a high school junior, I would feel terrible if I knew that my parents had to go into debt to pay for my college education. That is just how I was raised, right or wrong, agree or disagree – that is fine. My parents are not “bad” parents, nor are they selfish. They are the most giving and generous people I know. They are just not paying for college for me, my brother, or my sister. Period.
whatdidyou – I didn’t miss the point, I understand that college expenses have increased. But people can now take a class at a time when they have the money. My father, who graduated from a private Catholic college, not a public university, had to enroll for entire semesters. I understand that earning a degree like that would be nearly impossible, but technology has made other options available for those pursuing degrees in nontraditional ways.<br>
I very much appreciate the link to the financial aid information. I will have to look into that and talk to my brother before he goes back to college.</p>

<p>SteveMA, you are a prolific poster. I am not going to go thru your posts. </p>

<p>I am one of those people that went to a UC in the old days. The cost of going to a UC has gone up much higher than the average salary over the last 30 years.</p>

<p>I am talking the cost to the student.</p>

<p>I am not comparing public achool costs to private school costs.</p>

<p>I would love to see a link because what I read and see says something different than what you wrote.</p>

<p>ucbalumnus–no, the cost to the STUDENT has risen because the states have cut funding to the state schools and passed those costs off to the students. The overall costs have not risen as fast. Again, you have to compare apples to apples and yes, for a B student or better with corresponding test scores, private schools are almost always less expensive…</p>

<p>dstark–that is because CA has CUT funding to the public schools. It wasn’t long ago that students in CA got their first 2 years of college paid for 100% by the state–that doesn’t happen any more, of course it’s going to look like costs have gone up at an unusual rate but they haven’t, the state FUNDING has changed. Again, you can’t compare “average salary”. You have to compare apples to apples–what did your parents make when you went through college compared to what a person in that SAME job makes today and what the cost for the college YOU attended is now compare to what it was back then. If you went to a state school, include the state funding portion of that cost.</p>

<p>

Again, SteveMA, I don’t see how that general statement could possibly apply to every family’s circumstances, and you offer no support for you position. Do you feel the same way about borrowing for a house or car? We took out a parent plus loan for S’s education because it made financial sense to do so at the time for a variety of reasons, including enabling us to preserve some savings for the planned purchase of a small business. Who are you to say it was poor financial planning? When people take dogmatic positions, I am always skeptical of their logic.</p>

<p>SteveMA, college costs to a student are rising more than salaries. State cuts in funding is a reason why students today pay more, and students do pay more.</p>

<p>Salary increases are terrible over the years. I am comparing apples to apples.</p>

<p>When was the first two years of college free in Cal? I have lived here a looooong time…</p>

<p>[College</a> tuition, other costs climb again this year - Oct. 24, 2012](<a href=“http://money.cnn.com/2012/10/24/pf/college/public-college-tuition/index.html]College”>College tuition, other costs climb again this year)</p>

<p>I know this is what you are saying SteveMA, budgets are cut, but for the student who has to pick up the costs…the student does have a bigger burden…</p>

<p>The student is paying more, but he might be getting less…</p>

<p>“States have cut the amount of money they are giving to colleges by a total of $15.2 billion since 2007, or 17.4%. At the same time, the number of students enrolled in college has risen 12%. That means the average public college gets a tax subsidy of only $6,600 per student, down from $9,300 just five years ago.
The dramatic increases in public college tuition over the years have made up only about two-thirds of those subsidy losses, the College Board said.”</p>

<p>I totally agree with your perspective, and in your case with several more headed off to college it would be foolish to mortgage your house for the first child’s college. It is NOT a question of "different answers’ for different families in your case because you have given us true specific pressures you are experiencing. Solving this problem as a family by establishing some parameters as you have done is very smart and very fair. We are lucky we live in the USA where with some research and creativity, you can discover some great options. Good luck to you!</p>

<p>Sent from my ADR6410LVW using CC</p>

<p>I agree every family’s situation is different, there are a lot of variables that affect what they decide they can pay. I don’t like sweeping generalizations either - obviously for some families it makes sense to take loans for their children’s education. The OP and her husband need to work this out between themselves. We don’t know their whole situation, current debt, ages, salaries, etc. The son has scholarships, but do they have the complete financial aid package yet?</p>

<p>My parents did not contribute anything to my education other than to let me live at home for a year when I ran out of money. They could easily have afforded to help - I was the last of a large family, older kids got good FA but father’s salary was at peak when I was in school and no other dependents around. I have always resented that, and decided I would not do that to my kids. We will not need loans for them to graduate debt-free, but if we had to we would.</p>

<p>My only comment is addressed to those with HS juniors or younger: </p>

<p><strong><em>This conversation should be had BEFORE the kids is applying to schools. Parents should discuss first, come to an agreement and then talk with the student.</em></strong></p>

<p>Although I’m hoping to avoid loans for my child, I don’t see how someone can make the blanket statement that that’s the only way to do things.</p>

<p>My parents felt very strongly about not requiring loans for their kids, and sent me off to an expensive private school with the intention of footing 100% of the bill, but within my first two years of school, my older sister developed a severe illness, and needed financial support from my parents, both for unpaid medical bills and for living expenses, my father contracted cancer and had to take an early retirement, and my younger brother started school at an expensive private school. Loans became a necessity. Hardly “poor planning” on their parts.</p>

<p>Similarly, I’ve chosen for a long time to put savings and any extra money I receive towards a 529 for my child. I think that was a responsible choice, but if I’d taken that money and instead put together a down payment on a house, and then pulled equity from that house to fund college for him? I don’t think one could consider that less responsible. In fact, it’s quite possible that had I done so I’d have a higher net worth, given how much homes in our area have appreciated.</p>

<p>CuriousJane–except that if you have LOANS and your income goes away, you still have to PAY those loans. Putting the money into savings, even a 529 you still have access to those funds if you need them to pay medical bills, etc. You can’t do that with your loans you paid to the school. That is why it is poor planning to take parent loans to fund your child’s education this close to retirement. Take what happened in 2006–add loans on top of losing a significant portion of your retirement savings and you get to keep working until you are 80. It’s just NOT a good idea financially to take out loans this close to retirement.</p>

<p>Even in your case, loans were not “required”. You COULD have switched to a less expensive school…</p>

<p>^^That’s the route we’re planning. We’ll have paid off our mortgage before child #1 enters college and will be otherwise debt-free. A large chunk of his college fund is in the form of home equity, which we can borrow at a very low rate.</p>