<p>steveMA- zero debt for them…my parents were savers and spent their money on their kids and not themselves. Even though college did not cost as much as it does now, it was a considerable amount for them to pay. I cannot think of two more selfless, hard working and smart parents. (really old school) The other lasting legacy they taught me is saving for a rainy day, living on less, never living paycheck to paycheck and not borrowing money recklessly. Saving is a mental habit and every child in my family has done well for themselves and is a saver… (despite what some people may view as indulging us, by paying for our entire college education.)</p>
<p>Consolation–it’s a cheep benefit to offer so most companies do offer some form of long term disability coverage. It’s also relatively easy to get on your own. Most people don’t realize how LITTLE they really get from the LTD though. If your company pays for the premium on that you get 60% of your TAKE home pay. Usually you are disabled for a reason, usually medial, your medical costs tend to go up significantly when you are disabled and most people lose their group coverage for health insurance so you then have to try to qualify for a private plan, which until next year will be pretty much impossible for someone on disability. 1 in 5 people will file a LTD claim, it’s not out of the realm of possibility at all. I’ve seen it happen way too many times to take the chance. We have private plans for LTD. DH’s company doesn’t offer it on purpose. You get WAY better coverage with a private plan so salaries are adjusted accordingly.</p>
<p>marybee333–so then we agree, taking debt for your kids’ college is not a good thing, right. That’s not the same as “not paying for”. Say you have $30,000/year to pay for college but your child wants to go to a school that will cost you $50,000/year–do you take the extra $20,000/year in loans or tell jr to find a school that costs $30,000 or less?</p>
<p>We are in the “no loans” camp. We saved enough to pay for instate publics. Our instate public system (North Carolina) is a good one and reasonably priced in comparison to others. </p>
<p>Told both kids they were welcome to pursue other options but only if they got merit money (not loans) to make up the difference. We didn’t want either of them to graduate with debt. We weren’t willing to scacrifice our retirement fund. </p>
<p>They wanted big rah,rah schools. Both chose big state u’s, got a good educations, graduated with some college fund still in the bank money to start their lives and are now gainfully employed. They had the times of of their lives at colleges we/they could afford. </p>
<p>Now we can start looking toward retirement.</p>
<p>People take on debt at all times in their lives. Its not a choice I’d personally like to make, but if its necessary, in our eyes, we’d cosider it. We had to refinance my dad’s house to pull out cash for his living expenses when he was alive. So he had a 30 yr interest only loan in his 80’s. Probably doesn’t make sense to some, but its what we needed to do.</p>
<p>I happen to have 2 disability policies AND an office overhead policy. Some people feel disability insurance is the smartest kind to have [New</a> advice on buying disability insurance | <a href=“http://www.clarkhoward.com%5B/url%5D”>www.clarkhoward.com](<a href=“Clark.com - Advice You Can Trust From Clark Howard and Team Clark”>Clark.com - Advice You Can Trust From Clark Howard and Team Clark)</a></p>
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<p>Regardless of how one feels about going into debt for college expenses, I’m not sure why this point keeps having to be made. Seems like some are equating not going into debt with not paying period?</p>
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<p>Disability insurance has been a big priority for me, but I’m kind of doubtful that “most” people have it as was asserted earlier in the thread. Maybe I’m wrong?</p>
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Amen, Nrdsb4</p>
<p>SteveMa - I don’t know where is your source of information when it comes to longer disability. If your premium is paid by your after tax money then your LTD benefit is not taxable. If your premium is paid by your employer then your benefit (65% of gross) is then taxable. Your coverage can be 60-75% of your gross pay, never net pay because everyone’s net pay is different based on number of deductibles. Your insurance also does not get terminated when you are on LTD.</p>
<p>Most companies do offer LtD, but many do not offer short term disability.</p>
<p>My first post stated different strokes for different folks . . . There are as many views of life as there are people on the planet. Sharing knowledge, values and beliefs is helpful to everyone, to make the world a better place. Isn’t that why we are sending our kids to college? If parents have not saved or are unwilling to borrow, that is their choice too. I know how I’ve planned it and that is right for me. What is right for anyone else is their business. I am so very thankful for CC to make the process a little less stressful and I am grateful for everyone who shares here. (whether I would do it, the same way or not)</p>
<p>oldfort–you can have up to 100% of your income replaced by disability. The industry standard for a group plan is 60%, some companies offer a buy up option to get you to 70-80% depending on what they choose to offer. If your premium is paid by your employer your benefit is taxed. If you pay 100% of your own premium, it is not taxed. Either way, you are getting a CUT in PAY. If your employer is paying your premiums and you go on disability, net to you will be about 60% of your take home pay because you are only getting 60% (or 65% if that is what your company offers) of your pay, minus taxes. It roughly equals 60% of your take home pay. Then you have to add in that most group plans are not “your occupation” plans and if you can’t do your job they can make you take another job, at a lower pay, and not pay out on your disability at all. In most cases your health insurance DOES get terminated because you are no longer an employee of that company. Most people are VERY surprised to learn that little bit of information on a long term disability claim. At best, most companies will offer you the 18 month COBRA option.</p>
<p>Most companies DO offer short term disability if they offer only one plan. Group short term disability is cheap as well, getting an individual short term plan is very expensive.</p>
<p>Again, it’s just a poor financial decision to take out that kind of debt that close to retirement, plain and simple.</p>
<p>That is exactly what CC provides, marybee. Opinions, suggestions, great advice, you name it. You are new to cc. Welcome!! You will notice, after a while, that the same issues come up over and over. I think thats what Nrdsb4 was referring to.</p>
<p>With all due respect, Steve, it might help to ratchet it down a bit. No one is saying that disability insurance replaces income at 100%. But it has a benefit that is valuable to many, even if it provides only 40-60% of income. 40-60% is a cut, but is better than none, and in many posters opinion, the premium is worth it, just in case…</p>
<p>Haven’t read the whole thread yet, so might be repeating what others have said. Bottom line, it’s up to each family to decide how they can or cannot contribute.</p>
<p>What’s unfair is if parents decide to give $0 and then continue to claim their college student on their taxes as a deduction. They should not; it’s better for the college student to be independent and file separately. At least then the student can take lifetime learning credits or tuition credits, as they are obviously funding their own way. </p>
<p>Which way to pay for college all gets down to the math, IMO. If parents have the money, but don’t believe in paying for the college, then perhaps it would be cheaper for the student to borrow from the parents and pay the parents back on a loan schedule with interest, rather than paying that interest to the bank. Loans increase the bottom line cost of college. Paying what you can in cash is best/cheaper. Next would be taking the lowest interest loan available, and paying that off as soon as possible. But look at the tax advantages of a home equity loan; deductions you can take for that reduce the ‘cost’ of the loan.</p>
<p>College students don’t have the same resources and credit available to them that parents might have. If you, as a parent, have the wealth or means to offer financial aid to your own kid, then you could use it as a teaching tool on money management.</p>
<p>My H and I put ourselves through an excellent university (costly) with only a little help from our parents and lots of loans which took 10 years to pay off. Our parents said instead of paying them back, we were to put money aside for our own kids’ college.</p>
<p>We were fortunate enough to have enough money saved to pay for our kids’ college (saved since birth). Our D graduated debt-free, and is extremely grateful. She went on to get a Fellowship, so continues to go to school without debt. Our S, on the other hand, has been put on academic probation by the school AND us, and his funds from us end with the next poor performance. I worry he doesn’t appreciate the money he’s video-gaming away instead of studying. </p>
<p>So, while I don’t think the answer is black and white (pay all or pay nothing), I do think there are many ways to pay for college, and each student’s ‘financial package’ should be tailored by the parents to the situation.</p>
<p>jym626–I’m not saying it isn’t worth it at all. This discussion started as one reason why talking on debt close to retirement isn’t a good idea and being disabled is one of those reasons. We have disability coverage, lots of it, including my overhead policy that I no longer really need but just in case I keep it. DH has 100% income replacement over the 4 policies and mine are limited because I had pre-existing conditions that limited how much coverage I could get. Heck, I would be ON a disability claim right now if it were not for the pre-existing condition. I am PRO, PRO, PRO disability. I’m just trying to get Oldfort to understand it doesn’t pay out as well as he thinks it does on a standard group plan. By all means EVERYONE should have disability coverage. The point, if you go back, is that taking on extra debt while on disability is NOT affordable.</p>
<p>expat12–I realize you didn’t read the posts but the question isn’t whether you should help pay for college or not, it’s should you take out loans to do so. It’s not the same thing.</p>
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Again, I don’t think it is plain and simple because everyone’s financial situation is different. In our case, we are barely over 50, I will be working 10+ more years. If I had to push my retirement back by 5 years (60 vs 65) for my kids to go to the right college, I would do it. I wouldn’t do it to get a dream vacation home. Different values.</p>
<p>Like you, oldfort is a she, Steve.</p>
<p>Plus, I don’t see anything in the OP’s post about being near retirement or touching retirement funds. Not sure where that came from.</p>
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Many years ago, I worked at an insurance company, studied to become an actuary. Part of my job was to calculate premiums for various coverages. Since then I am the financial planner for my family. I don’t think any insurance company would allow people to have 100% LTD coverage because it would encourage too many people to go on disability. One thing to remember also is that when people are not working their costs associated with a job also go away, like commuting, food, clothes. Tax on LTD benefit is complicated. It is best to consult an account. I would hesitate to advise anyone on CC how much they would be able to take home. For people who get a hefty bonus may not be able to get that covered either.</p>