<p>SteveMa, I am not sure what part of the FAFSA site does state that, but I am quite certain that the tenet of financial aid is that the primary responsibility is borne by the student AND his or parents. Since the student is a teenager, that is really a proxy to state the responsibility is on the adults in the family. </p>
<p>In addition, I am 100 percent sure that within ten minutes, I could post dozens of links to websites that easily confirm the PARENTAL responsibility. Or I could simply link to the EFC formula that is the basis of the FAFSA. </p>
<p>Show me one school that does not base its financial aid formula on assessing the parent(s) first and foremost and I will revise my opinion on this. Well, perhaps with the notable exception of a few trust fund babies, independently wealthy, or … orphans. </p>
<p>Again, while the funding mechanism of public education might mask the responsibility of parents to support the K-16 costs, the financial aid “system” serves as a rude awakening for everyone who believed that education is free for the asking.</p>
<p>We always told our kids we were striving to save for state college costs… and for other options they would likely need to fill the difference with scholarships and loans. In the end we did end up spending a little more for one at a private college, but he does have a half tuition scholarship.</p>
<p>It’s not easy for most families to save for college. But if they have been unable to do so until now, it seems unlikely that they should go into more debt. There are exceptions, especially if there is nonliquid wealth to use.</p>
<p>Steve, I’m not sure I understand your point about being able to use money in a 529 to pay for medical bills. You seem to be comparing one person (the homeowner) after they’ve paid for college, with the person who invested in the 529 and has not yet paid for college. </p>
<p>If I save $100,000 in a 529 and spend it on my child’s education, and my brother invests that $100,000 in a house and then pulls that money back out via a second mortgage to pay for his child’s education, both of us will be able to use that money/equity to pay for medical bills before our child attends college, and neither of us will be able to use it after they attend college. Furthermore, if both of us lose our jobs after having paid for college, we might both be in trouble. I will be in the situation of not owning a home or having an income. If my brother is unable to pay his loans, he will need to sell the house and will then be in the same situation I am. I am not seeing why investing in the home would have been the irresponsible choice.</p>
<p>As far as your second point, you are correct, my parents could have asked me to leave school rather than taking out parent loans. However, unfortunately, my mother knew that she’d be able to pay off the loans as it was clear at that point that she’d be receiving my father’s life insurance within the next few years.</p>
<p>There are examples, but they are specialty schools with no or minimal monetary costs for all students (so no reason to consider parents’ income or wealth since there is no need to do financial aid calculations), so you need not revise your opinion on this for the more general case.</p>
<p>I guess I should have stated it differently. You should leave you kids with some options. Generally $1k/year won’t do it. If their only option is to go to CC for 2 years, and transfer to a university with a few semesters off to work to save up enough to pay the difference between what they can borrow without a cosigner, and what they have to pay, and the parent can afford to pay more than they are, they should. If whatever amount you are contributing leaves your kid with good options, then that amount is fine.</p>
<p>The only problem here, IMO, is that the parents aren’t close to agreement. Everyone has an opinion on the subject and there are a hundred ways to fund an education (though curiously, almost all involve forking over a lot of money, whatever the source).</p>
<p>I shake my head when I hear parents say they want their kids to take out loans in the child’s name so they will “have skin in the game.” A HS senior signing a form, when they have most likely never had to meet a hefty financial deadline, has less reality than most video games. It’s an academic experience, but not the one these advocates think it is. No one ever sends their child off to college thinking s/he’ll graduate with no marketable skills into a bad economy, to say nothing of the kids who began as pre-med or engineering and end up in specialties with fewer job prospects. The federal loan limits are, IMO, reasonable amounts for a young adult to pay back over some years. </p>
<p>I likewise wonder when I hear people don’t want to be a financial burden to their children. Who says the children are willing to play along with that? Just as parents can refuse to fund an education, grown children could refuse to fund a dotage, or more likely won’t be able to because of their college loans and own families. </p>
<p>We will have managed (last one graduates this spring) to do it - each went to college of choice, each had federal loans which we were able to pay off for first and since 2nd has very small amount, can probably do that as well. We are naturally frugal people, except when it comes to education. It’s worked for us. I expect to live on my old age income just as we’ve always managed and will cross the finish line with maybe just a little to spare.</p>
<p>This is one of those topics that can evoke strong responses. I think the decision is personal, and depends on a lot of factors. My parents took out some loans for us, but that said, my dad was the type that would take out a loan with a very low interest rate and invest the money in something with a higher rate of return. </p>
<p>We told our kids we would pay for undergrad. If that had meant taking out a loan, I am not sure what we would have done or if we would have put a cap on it (probably would have tried to keep it to a minimum though). But we let our s’s know there was a dollar amount we’d saved and earmarked for college, and if they needed more, they needed to have skin in the game. Each earned merit scholarships (older one applied for and got a bunch of small outside scholarships as well as earning some school merit $$). So for us it wasn’t a question we faced. That said, if we’d have had to take out a loan, or had chosen to do what my dad did, we would likely not have taken out much. We’d not want to take on excessive debt.</p>
<p>But again, we consider educating our kids, at least through the undergrad level, our responsibility. And our pleasure. Just our take on things.</p>
<p>Paying for my kids education is something that I WANT to do for them. I’d borrow the money if I didn’t have it. I think it’s ok for the kids to have some debt, like Stafford loans, or even a little more, but I wouldn’t want to force them to get a job that would cut into study time or social life, I wouldn’t want them saddled with crushing debt, and I wouldn’t want them to miss out on terrific opportunities because I wouldn’t pay. </p>
<p>I certainly wouldn’t view it as US vs THEM. I’m missing that gene. I hope that they are missing that gene too and pass it down.</p>
<p>Well said, classicrockerdad! Agree that it is our priviledge to educate our children, and considered it our responsibility through undergrad. So we planned ahead and early.</p>
<p>If you can cover the EFC from savings and current income (the ideal situation), you shouldn’t be expected to borrow beyond the limits on federal student loan limits (which are a normal part of need-based aid packages.) </p>
<p>^ Agree with jym. However, problems arise for families with similar philosophy but lack of opportunities to start saving early. Much of current income could go to EFC.</p>
<p>Helping pay and taking out loans are two different things. People can help pay for college out of income/savings and not take loans. If you have to take out parent loans to pay for your child to go to college, the child needs to find a more affordable college. Taking on that kind of debt that close to retirement is a poor financial planning move, period. It’s not a matter of “wanting to”, it’s just not a financially sound thing to do.</p>
<p>Agree with classicrockerdad, and think this is a poor time for parents to be misaligned when the kid is getting ready to go to an accepted student weekend at a place he really likes. I think it’s cruel to get so close and potentially have to pull away. Parents should be aligned on finances before kid applies.</p>
<p>Vladenschlutte–our kids have options, almost too many options. None of them are going to come close to us needing to pay $20,000 and several of them will cost us under $1000. Why is that a bad thing?</p>
<p>You are not alone. Many families decline to rack up college debt if thre are multiple children or expectations for graduate school or family budgets that have to prioritize retirement savings. It is best to fully understand these factors when one is building the list for college applications.</p>
<p>To me there is nothing crueler than telling your child to apply wherever they want, implying that the parent will cover the cost, and then when the accceptances come in, to make the kid justify why they want the more expensive school and then say its not worth the expense, and take that school off the table. </p>
<p>We had brunch with a dad who did just this to his daughter, and seemed proud of it. Ugh. And he could well afford the higher priced school. He just thought it wasnt worth it. And it crushed his daughter. Mean, mean mean, IMO. I am not saying that he was wrong in looking to justify the added expense. It was how he went about it.</p>
<p>IMO, it is imperative to have the “here is what we can afford/are willing to pay for college” discussion early. Yes, situations can change. Waiting to see what packages are offered by schools is reasonable. But yanking the rug out from under a kid for what may not be the best reasons is mean-spirited. Agree that its hard to swallow the big full pay bill, and it needs to make sense on a lot of levels if one is going to do that. With respect to loans, its important to differentiate if one is looking at $10k/yr or 30k/yr. in loans. It may or may not really affect ones retirement plans any more than buying some other high ticket item.</p>
<p>jym626–except that if you take out that $10,000/year loan, you have $40,000 in debt that has to get paid back when you get laid off at age 57 or have to retire early because of a bad back or illness or your company goes bankrupt and you are out of a job at age 60–oh and there goes your pension too because the company is bankrupt…It’s hard to absorb 40K in debt in that short of time and that is the point.</p>
<p>Our DD had to turn down her #1 because the money wasn’t there. It was a sad day in our house but we had about 842 conversations with her over the past few years that most likely was going to be the case. We had a spreadsheet tracking net cost for all the schools she (and her twin) applied to. It was very black and white but, being 17, she didn’t really grasp that until it happened. Could we have borrowed the $20,000/year so she could go there, probably, but there is NO WAY we would, sorry, not happening. She had 8 other schools that were wonderful choices for her that were BETTER fits for her than her #1, our alma matter even. Sometimes you DO have to say no.</p>
<p>Are you well-funded for retirement? If not, then loan payments will interfere with your ability to fund retirement.</p>
<p>What’s going on? Does your son have good and affordable options? Would loans and loan payments hurt your ability to fund younger kids’ college costs? Is your H the type who just doesn’t like saying “no” to his kids, wants them to have “the best” regardless of affordability? If so, then that’s the issue to address. Taking out loans just to assuage immature parenting isn’t a good idea. </p>
<p>I would also be concerned about how those future loan payments affect the family’s month-to-month budget. If the dad is very willing to borrow, but not willing to cut-back (long-term) for the payments, then this could become a huge source of monthly arguments in the future (Uh, no, you can’t buy new golf clubs because we still have those loan payments for that loan that you insisted that we take out.")</p>
<p>But, if it’s a case that your child has no other good options and you can rather easily afford the loan payments without it hurting any younger kids, then borrow a little (not a lot).</p>