There are many families in this country who work hard but live paycheck to paycheck, and financial planning isn’t really feasible. Some may end up on substantial financial aid, which is fair. I do know of families with incomes that are high enough but they have not done the financial planning that IS possible for them, and those kids suffer because financial aid isn’t available to them, only loans. And of course some families do responsible financial planning but do not get financial aid, and cannot afford high loans. And some have the money, period. I think it is hard to discuss the issue of loans without context.
Another topic we cannot discuss generically is retirement, and there are many references to retirement in these kinds of threads. What exactly does that mean? Many of my friends, whose kids did graduate, live in low income senior housing, live on meager social security, and their idea of entertainment is a $5 art class at the local senior center. They get rid of their cars because they are too expensive, and think about which grocery store has fruit for 30 cents less.
Some people really prefer to spend a lot of money on their kids’ education even if it means selling the house and living in a studio. Or if it means their old age is going to be spent in low income housing. Then again, some people want a “retirement” with travel, two homes, nice car, and lots of enrichment and hobbies. Some just want to stay in their house and be able to eat out a few times a week without stressing about money.
It is really hard to talk about how much debt parents should take on without context, but clearly debt on the part of the student is severely limiting in terms of options for work. So I think the real discussion should be, not only how much debt, but how much the student’s debt is versus parents’. If debt is taken on, I think parents should handle most of it even if it curtails the ideal retirement.
There are cases where debt is entirely worthwhile. I know a kid who works for Disney mainly because of where he went to school, and he has paid off an enormous debt in two years, not even living at home. Aside from career outcome, the experience at some schools is most certainly worth some debt, if the family can afford it. As long as it is reasonable, which is hard to define in an absolute way.
Finally, some families avoid debt entirely. They pay cash for cars, pay off the house as quickly as possible, and are frugal. Avoiding interest at all costs. Taking on college loans means interest. So another position to take is for kids to only attend schools that you can afford to pay for in cash, now. Whether you make a million and can easily do this, or you make under $60k, this is still a good strategy for many. Even if it threatens our golden years.