This has been a hard post to write (struggled on a title for quite awhile). I write it mainly to get all my thoughts out, secondly if anyone wants to chime in that would be great. Those of us that have children always want whats best for them and we want to help whenever we can. It hurts when you can’t but sometimes you also have to draw a line and consider yourself and the rest of the family.
Preface
Through out my son’s last year of high school I had talks to him about college and I thought he was settled on going to a local JC then transferring to a 4 year local college. You see we are not that well off that I can just pay for his college and we discussed the best route would be to go to a JC while working. He could get his general ed out of the way and be saving money for the transfer. Also, by going through his general ed first, he can look at his future course listings and decide which route he wants to take in college.
I would also be better off helping him at that level as it is not that expensive, compared to Washington State where he wanted to go. He would also save money by staying at home by not having to pay room and bored. Even if he decided to transfer to Washington Sate after JC he would hopefully have some money saved up and would be easier to start on his own out of town.
Well after graduation he decided he wanted to stay with his mom so he moved up with her (about an hour drive north of here) Hadn’t heard much from him since, poked him and commented his Facebook now and then. Didn’t make into the local JC there so next thing I know he is applying to Washington State, which he didn’t get in but he did get into Idaho State. Next think I know he is up there (his grand parents live close to the campus) and I get a phone call from his mom talking about the money situation.
Parent Loans
Yes they have things called ‘Parent Loans’, if the student doesn’t qualify for enough then the parents can borrow on their behalf. My son qualified for so much in financial aid and I think a small student loan but not enough to cover the $15,000 a semester. So they are asking me to do a parent loan to cover the rest. I went ahead and applied because if I am turned down then he can get an extra $5k in financial aid. Figured my FICO score was about 630 no way Id get approved. Forgot this is a Federal loan and of course they are just dishing out money, they approved me…
Now comes the dilemma I’ve been struggling with for the past week. Do I take on a $10k loan so he can go to Idaho State? I mean he’s my son and I should do everything I can to help him along right? But I just started trying to get out of debt this year and nearly done with the credit card debt. That is just me, the wife still has student loans as well and she is on a teachers income. Do I take on another monthly payment for what could be up to 19 years, paying over $9k in interest.
After much thinking I have decided that I could not do the loan. If there were other ways I could help out I would but I have to think about the family at home as well. Im 20 years away from ‘retirement’ and I am self employed with income having its ups and downs. I just got my emergency funds at a comfortable level and have restarted my retirement investing in hopes that I will have an income in 20 years as well.
Be prepared
I guess the lesson here for everyone and myself is to be prepared. I did have a college fund started for him at one time. It got used elsewhere, and I do regret that, but even if it remained it wouldn’t have been more than a thousand or two, as it was started quite late and then the crash occurred. I am also thinking of refinancing the house, for one to get a lower rate but also perhaps I can get some extra out to help him with what ever route he ends up with. I am a bit more comfortable taking some out bundled with the house at 4% rather than the 8% of the parent loan. If it happens it won’t help now as he needs it by the 4th.
I also have a daughter that is currently 8 yo and need to start something for her, even if it ends up just being a thousand or two it will help her out.
It hurts me not being able to help him and Im sure he’s not to happy with me at the moment. I hope I am doing the right thing and that he will see that in the end. I am curious what some of you would do in this situation..
Wow, Jeff, that’s a tough one. I have a lot of thoughts on this subject and I don’t know where to begin.
My parents took out loans to fill in the gaps for all four years (as far as I know) of my sister’s college education. They also took out a loan during my first year; after that I was married and qualified for enough loans and financial aid to cover tuition on my own. While I was grateful for the help at the time, now I regret the fact that they’re stuck paying that money back.
Financially, I wish I would have gone to community college for 2 years, then a state school. Instead, I did all 4 years at a private school. Did I get a good education there? Sure did! But did it make a huge difference in my career, earning potential, or future? Not really. I would have been much better off saving money instead of worrying about my “college experience.” Yeah, try telling that to any 18 year-old.
It’s become an expectation that parents pay for their kids to go to college, but I don’t necessarily agree that we HAVE to. As much as your son may resent you for awhile, if you force him into the less expensive option, he’ll thank you when he’s older. When all his friends owe $50k or more and he only owes a fraction, yet they all qualify for the same pay range, he’ll be glad you were “mean” enough not to give him a free ride.
I know there are people who will disagree, but I don’t think you’re a bad parent for hesitating to make your own financial situation more precarious to help your son start out adulthood with a buttload of debt.
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You have already fulfilled your parental obligations by giving the guidance of why it financially makes sense to go the JC and then four year university. He chose not to take that route. As hard as it has to be to watch it is ultimately his mistake (and life lessons) to learn.
I think you did the right thing. I took out my own student loans for myself (went to a four year school and lived on campus). I don’t regret them at all, but it was MY decision, so it is MY debt.
I think if you want to help him, set up a certain amount per month or semester that you’ll give to him. Or pay for his books each semester. Or his car insurance, or some other specific expense.
Another thought is that once he graduates and is paying back his debt, you may be in a better place, to where you could offer to match his loan payments for a period of time or something like that.
Finally (I’m really going on and on here) while it’s great to start thinking about your daughter now, keep in mind it could cause resentment with your son if you fund something for her that you aren’t able to fund for him. Not that it has to match penny for penny, but my BF resents the fact that he got no help during college from his dad, but that he then paid for his sister to live on campus at a four year school when she got there. Not saying your shouldn’t start saving for your daughter, but it’s just another thing to keep in mind.
LBC Teacher recently posted..Being Practical with Gift Cards
Parenting choices can sometimes be brutally difficult. The bottom line is that there are more affordable options that will allow him to achieve the same ultimate goal. We often have to prioritize the needs in our lives and right now, going back into debt would not be a reasonable option for your family as a whole. Thank you for sharing such an honest glimpse into the tough parenting choices many of us may face.
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Wow, what a tough situation. I think you are doing the right thing though. He can go to a JC for much cheaper and put his way through school for the first couple of years and save up for the last two years of college.
Learn from the mistakes you made though and at least try and help out your 8 year old daughter…
Newlyweds on a Budget recently posted..2011: A Year in Review
You may want to talk to him more in depth about your current finances. When I was applying for college my parents told me not to look at the tuition costs because they would take care of it. I knew that they had a (very) small amount saved and would be paying for my tuition primarily through loans the way they had for my older siblings. High school students, however, have no concept of money. Even if they’ve had jobs and have dealt with their own money, it’s very difficult to understand how much of an annual salary actually comes home in the paycheck, how much needs to go toward housing and necessities, how much you’re putting toward your credit card debt, etc. If I could go back, I would have worked more, interned, co-oped, or found other ways to bring in money so my parents wouldn’t need to take out as many loans. (I wouldn’t choose a different school for a variety of reasons, all of which are beside the point here.)
I think that paying off your current debt and saving for your own retirement is more important right now than paying for your son’s college, but it might help him to understand if you can show him where your money is going now and how difficult it would be for you in the future if you took out loans for him. I would also echo LBC Teacher and caution you about helping one of your children with college and not the other. I wouldn’t say not to do it, but maybe start a college fund for her and a smaller fund for him that he could put toward a house or paying down his student loans. Or maybe if he needs to take out private student loans to cover the difference (evil though they are) you could help him pay the interest on them until he gets out of school.
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I think you did the right thing by not taking out the loan. Did you explain to him why you weren’t doing it? My son is in college now too and I’m helping to pay for his tuition, but if I didn’t have the money he’d have to fund it himself, switch to a community college, or both. So far he’s paid for his first semester, and I paid for this one. I think sometimes saying no is the best thing you can do for a kid. But it’s very hard.
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Hi Jeff,
Can I just add insight from a a recent graduate’s side of things? I don’t have any children, so can’t say I know what you’re going through, but I thought I’d add my 2 cents as they say in the US.
OK, so I recently (ish) graduated from a university in the UK, with loads of debt. I didn’t expect any financial help from my parents at all and had no other way to pay. However, my father gave me access to a £2,000 savings account which he’s had for me. However, he didn’t call it a ‘university fund’ at all, as none of it was going towards my university fees.
Anyway, although I am grateful that my dad saved this money for me, I didn’t expect it or become dependant on it at all. And I don’t think anyone going to university should except these things. Actually, most students I knew were resentful towards those whose parents paid for anything. It’s a time of becoming independant and learning about money and stuff. Not just buying things with your trust fund and Daddy’s credit card.
Although debt isn’t necessarily good, I find it’s a good learning experience. As long as you guide your son with money matters, whether or not it involves giving him money for these things is irrelevant – I’m sure he’ll be happy of your support.
Hope that didn’t come out the wrong way!
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I would never have expected my parents to pay for my education… and, after my first semester they didn’t I would also certainly not expect them to take on debt on my behalf! I’ve got more time to pay off the debt than they do, your son will get over it, though it sucks for now. If parents can give towards education, that’s great, but it should never be an obligation or a must.