Are you sure you love your kids?

Let’s face it, college ain’t cheap. I escaped with only $28,000 of debt. Many of my peers faced six figure balances upon graduation. Yikes. I loved my private education, and am extremely happy I was able to go to the college I wanted to, as opposed to the cheapest or closest one.

Obviously I try my best to be financially responsible. The goal is to have plenty set aside for my 87 baby-ninjas college tuition. I mean, college expenses have NEVER snuck up on anyone. The day your kid is born you know you have an 18 year countdown to the first potential tuition bill.

But let’s be honest, sometimes life happens. Things don’t always go as planned. You find yourself fighting major unanticipated medical expenses. You lose your job. The economy tanks and your investments are cut in half. You become disabled. What do you do then?

How far would you go to ensure your child has the education they desire?

      •  

I don’t imagine I’ll be willing to go back in to debt for my kid to get an optional education, but until I am a parent I guess I’m not really qualified to answer. How did you respond? What did your family do for you?

32 thoughts on “Are you sure you love your kids?

  1. my parents paid for half of my college education, and I paid for the other half.
    However when it came to my decision to go to university they cosigned a student loan for me. I also ended up taking out an OSAP Loan (Ontario Student Assistance Program). When it came time to pay back my OSAP they paid off the entire thing using their line of credit and then I made monthly payments to the line of credit. It allowed me to have a cheaper interest rate and not deal with OSAP’s automatic withdrawal of funds from my account.

    I’m very thankful that they helped me out, without a cosign on the loan I never would have been able to afford university, since OSAP only gives so much and I didn’t work at all while I attended university.

  2. As a lower income single mom I have only been able to help my sons out a small amount. I did cosign student lines of credit for both of them but I am confident they will make the payments and that I will not get stuck with this.

    I was giving them money every month but they were blowing too much on concert tickets, professional sporting events, clothes and stuff. No more money from me.

    It is more important that I pay my own debt and attempt to save for a modest retirement so that I am not a burden when I am older. Whenever one of them is doing something financially that I don’t like I threaten th live with them when I am old.

  3. My parents paid the interest on my student loans while I was in college. And upon graduation handed me a coupon book and said “not our problem.” Additionally, I was 17 when I went to college, and my dad co-signed the loans, and he negotiated some horrible loans (I didn’t qualify for alot of financial aid). I was paying over 10% interest on some of the loans.

    I went back to grad school, and that was all on me. I currently have 26k in student loans left, and have paid off about 25k, not including interest.

  4. My parents and my husband’s parents worked really hard to help us get through state school without loans. I just hope it didn’t actually have a negative effect on their retirement. We had such a big head start and we are trying to save now for our kids. I don’t know if we will take out loans for the though

  5. My husband and I both graduated with 100k in student loans. He’s always told me that is parent’s took out a parent plus loan at the same amount as his private loan (guessing another 50k). So guess what. After we pile through our combined 200+k we then have another loan of unknown size to tackle. We will be 35 before we will be done paying off these suckers.

    His parent’s also negotiated some poor loans and used up his one consolidation at poor times. Even consolidated his private loan to a fixed 8.1%. ARGH still kills me.

  6. I think it’s almost impossible for a 18 year old with a decent high school education and middle class parents to get thru college financially on their own. Our two oldest go to state universities ($17,000 and $26,000 per year). They had some money saved, and we had some money saved (not enough!), but we earned too much to qualify for aid (except student loans). They both received small scholarships ($2,700 and $1,000) with decent grades……

    So our deal with our 3 kids (2 currently in college, another one will start this fall) is that they get part time jobs, save as much as possible, get decent grades, apply for scholarships, and accept up to $6,000 in student loans each year…..by the time they get their BA they will have about $24,000 in student loans, which seems fair. We help pay for the difference (and we’re lower middle class so definitely a stretch for our budget). They also live very frugally as college students (no credit cards – cash only!) and have part time jobs during school for living expenses. We send the occasional care package with a $20 bill thrown in for fun! We consider it a partnership between us and so far it’s working well.

    We have had some interesting conversations over school breaks. The two oldest have realized that other students they know that have had college handed to them seem to skip a lot of classes, fail a lot of classes, and spend a lot of money on beer….so they are learning in the class and out of class!

  7. We have 4 kids, and I’m not quite sure how we’ll help them. My parents and Rick’s parents paid for zero of our educations, because they couldn’t afford to help us out. We’ll be in a position to help our kids, but I’m not sure to what extent we will. Sometimes we think about paying half, or else just giving them a big lump of cash when they’re 21 and saying “Here you go. Pay student loans, buy a house, or whatever.” We are teaching them financial responsibility, and we’re also teaching them entrepeneurship skills, so we’re hoping they’ll have the skills to make wise decisions and to help themselves. It’s a tough decision, really.

  8. I got scholarships to pay for 90% of my education. My parents gave me a stipend for three years. The first year, I received $300/month (total $3,000). The second and third year I received a stipend of $400/month (Total $8,000-$9,000). So, they paid about $12,000. It wasn’t a loan but it wasn’t a gift. My mom has asked me to pay back the money to go into my brother’s college fund.

    Thinking back if I had known my parents were going to ask for the money back, I would have probably requested for a smaller stipend and been more frugal. Even though I was pretty frugal to begin with….

  9. I was very fortunate to graduate with $0 college loans due to being born with good genes (and a lot of hard work in the weight room) to get a full ride football scholarship to a Big Ten school as an offensive lineman. It covered books and all. My wife had minimal debt that we quickly paid off in 2 years. I was then able cash flow my 2 master degrees.

    Now I have 4 kids (2 boys and 2 girls) ages 7 to 2. They have some good stock too (especially my 3 1/2 yr old mutant who is my retirement plan for when he hits the NFL. JK).. Once again here we are fortunate for college costs as my parents have set them up financially to go to school free of charge.

  10. My husband and I both paid for our own schooling through loans, scholarships, and grants. We learned a lot through the process (and actually posted about it on our blog today). But I’m not sure we’d want our own kids to have to carry that financial burden.

  11. I lived at home and took as many community college credits as I could before transferring to a nearby university. My bachelor’s came in under budget and so my single mom gave me the remaining funds in the form of two IRAs and some mutual funds and told me that I was now on my own. My second employer after college paid for my master’s degree which took me 5 years to complete since I stayed within their tuition assistance allowance. I never took out any loans.

    What punched me in the face after having a child was the extremely high cost of childcare. To date we’ve spend more than $40,000 on the care of our 3.5 year old. Everyone talks about paying for college but if both parents want to work outside of the home there is an enormous expense right out of the gate. Because of this we’ve only put away $100 per month since our son was born for his future education. When the preschool costs subside we’ll put away $500/month for him which will leave us with around $100,000 for his college education. I will still expect him to be frugal during his college years and work a part-time job, and I plan to follow my mother’s example of setting conditions on if he lives at home for any time beyond high school (my mom’s condition was that I be taking classes) and to send him on his way with a small (hard to get at) next egg to get him started in life. It won’t be okay with me for him to take on debt for college.

    • My son is in his last year of preschool. I really like your idea to apply the former daycare money to his education fund! Thanks for sharing.

  12. My parents cosogned my loans and helped me out with interest a bit until I had a good job and could handle it all on my own. I got some small scholarships but it wasn’t much given that my loans amounted to $120,000! I did consolidate at a good time and got the interest rates down in the 2 and 3% range. I will have it all paid off before I turn 35 and thank god!

    As for what I plan to do when I have kids, I might do the same thing and help a bit but I won’t pay for their school. It was pretty distressing sometimes but I learned a lot about money managment real quick as a result of the loans. Plus, I wouldn’t say the education I got was any better than one I couldve gotten at a state school for a fraction of the price. With all the other options out there of co-ops, trade schools, and online education, going to college is not the only solution and in many cases, not the best one.

  13. gosh, I would NEVER take out a parent loan for my kids. I have a 5 and 6 year old and we plan to let them live with us to complete their education since there are many university options in the metro area. I do plan to help them pay their tuition (hopefully in full) but I don’t plan to help with living expenses – so it will be up to them live within their means and balance a job with school.
    I hope that we will have been good examples to them and already teaching them about making choices with our (and their money). I also plan to be pretty up front with them about financial issues with them as they get to be teens.
    But, you can lead a horse to water but you can’t make it drink. so only time will tell whether we can influence our kids to make smart decisions about college spending.
    I did not have any college loans and I paid for a lot of my own college by living with my parents and working. My parents did provide a fairly new car and paid the accompanying gas and insurance for it. I do plan to give my own kids a car, but I think the maintenance will be on them.

  14. My father’s job paid half my tuition as long add i made grades. I worked 30-35 hrs a week on top of school to pay the rest. I had some scholarships, but the bill was mine.I plan to have our future children’s college funded ahead of time through 529 or esa contributions.

  15. My parents paid for my college tuition, and I worked during school and in the summer to pay for rent, food, books, and other life expenses. I’m incredibly grateful to my parents as it made a gave me a huge jump start in life. For law school, I managed to make it through with $16,500 in subsidized loans. I still count myself lucky for not ending up with a six-figure debt.

    My fiance and I plan on having kids, and we’d like to help them through school if our finances allow it. Some may consider this selfish, but I’m not willing to take out loans to cover my child’s educational expenses.

  16. My parents took the route of it’s your responsibility to pay for college. I was fine with that but now I am graduated and about $100k in the hole. I think if I were to do it over again I may have gone to a less expensive school, at least the first two years of college. While I was fine going into this massive debt and it has largely worked out (I have a well paying job), I wish my parents would have educated me much better on what the consequences of taking out thousands and thousands of dollars in debt were. However I don’t think they quite understood it themselves. Something tells me you won’t have the same problem with your kids.

  17. My parents had enough to pay for whatever school I wanted, but said I had 3 choices.

    1) get into a top 10 school and they will pay for it (they figured if I worked that hard I deserved it)
    2) go to the state school (we have a pretty solid one) for ~$10K/year and they will pay for it
    3) go anywhere else and I will pay the different between it and the state school tuition

    I wound up doing option 1 and everyone was excited until my parents lost half their portfolio half way through. They wound up taking a loan to pay for the rest and I took out a loan to pay for a summer semester.

    I think we will follow a somewhat similar path for our kids (hopefully without losing half our portfolio) where we will pay for an expensive school only if it took a lot of academic rigor to get in. I have some friends that went to small private schools that are not challenging to get into but cost just as much as an Ivy league education, and I don’t feel comfortable paying for that. They can go there if they want, but we’ll only pay as much as we would for a state school.

    But….we don’t have kids yet so who knows what our stance will be down the road.

  18. Paid for school through grants, loans and eventually joined the military. The military has a pretty good retirement plan so I don’t save as much for retirement as my civilian friends. That frees up some extra coin to save for my 4 yr olds education. My current plan is to contribute $50K plus a dependable car.

    Secretly, I’m hoping he joins the military and let them pay for his education. And uses the $50K to jump start a great adult life, travel, invest, etc.

  19. I was fortunate to live at home while going to university, and to get a 0% interest loan from my parents when I was short on cash. I did summers jobs, and got a minor scholarship. My degree integrated co-op work terms starting second year (school 4 months, work 4 months, etc). Paid $35k for the degree, no debt when I was done.

    For the kid….if he goes to the local university/tech school, I’m hoping to offer the 0% interest loan thing, to a max of $15k/year. Personally I hope he gets some scholarships, or earns it. No idea if he doesn’t stay local.

  20. My parents told me they’d loan me what I needed to get through school, so I worked my butt off, saved up money from part-time jobs during high school, got scholarships, worked full time in the summer, part-time during the year, and managed to only borrow about $5000 for school (which I was proud of, since I went to school for about 11 years to get my PhD). When I graduated, they told me that I didn’t have to pay them back. This was a huge gift in my eyes. For one, I thought I had to pay it back, so I didn’t borrow more than I thought I needed (I was loathe to ask for money) and then I didn’t have that debt to worry about as I was starting out. My plan is to do something similar for my son. We’ve been saving in an RESP (a wonderful Canadian invention where the government kicks in money to match your contributions) about $100/month (plus any cash we get as gifts for him). I hope to have a chunk saved that we can use when he goes off to school. That said, I agree with the comments above-if you can swing daycare (about $1100 for us) you can probably swing helping out your kids when they get to post-secondary education. At that point, our mortgage will be paid/almost paid, we’ll likely be making more money, etc.

  21. I graduated from a large, public university with just under $24,000 in student loans. I also received $9,000 in academic scholarships over the course of four years. I worked part time during the school year and full time during the summer (and was fortunate to have pretty high paying jobs for a college student) to pay for housing, books, food, etc. Although my parents didn’t set aside money for my college education, they did buy my book a couple semesters, take me grocery shopping when they visited, and gave me a little money now and then. Overall, I don’t fault them at all for not saving for my education. To some extent, I credit having to pay back my loans (which I did in only 22 months) with making me aware of the importance of making good decisions with my money and being aware of my finances. If I can, I’ll save money for my future childrens’ education, but I don’t think parents should feel obligated to do so, and it won’t be my first priority. The one thing that did sometimes annoy me was when friends of mine whose parents completely paid for their education didn’t seem grateful at all.

  22. I paid for tuition and books while my parents covered room and board as long as I stayed in on-campus housing. For my kids I most likely will do something similar since because I was paying for the education I focused more on my studies than some others.

  23. My mom bought bonds for us when we were young, and tried to match up the maturity date with when we needed the money for college. I was the oldest, and when I started college, there was $14k available for me, plus I earned a scholarship for my first year’s tuition, and my mom paid for my first year dorm costs.

    After that, I was on my own – I was lucky to get good jobs every summer and was able to make enough to pay for the next round of tuition and living expenses. I also joined my program’s work experience program, where I alternated 4 months of working with 4 months of classes – so I was able to graduate without any loans, and still had some of the original 14k left over.

    My one brother did similarly, although he travelled across the country to go to school, so he had additional travel expenses and my mom helped with those. The other brother, ended up working out of high school, and didn’t go to college.

    After finishing my Bachelor’s degree, I worked for a year, and then went back to school – this time I took out a 23k loan for tuition and because I was working before I started school, I didn’t need my mom to co-sign.

    My mom always said she would do whatever it took to make sure her kids had the opportunity to go to college, because she always wanted to and wasn’t able to. She would say “I would *scrub floors* for other people to make money for your college” – thankfully it was never needed – but it gave us a good appreciation for how important SHE felt college was.

    I don’t plan to have kids, but if I did, I would plan to help them, but at the same time, I would expect them to work when they were not in classes, and contribute to their own costs – and I would expect them to be judicious in their spending 🙂

  24. I didn’t know about the real consequences of debt and net worth when I went to college. Wish I could go back and choose differently. My parents helped me out by covering my car insurance, cellphone, and every once in a while getting groceries. They gave me $1000 cash my first year because I was making stupid decisions and didn’t have enough money to survive. After I got my crap together, I paid for school with loans and worked two part-time jobs all the way through to cover personal expenses. Even so, I wasted too much money and came out with over $30k in debt.

    I haven’t met my future wife yet so I haven’t had this conversation about what our kids will be doing. I want to teach them to work hard, so if it’s solely up to me I will not be paying for their college education.

  25. Scholarships! Start early with good grades and seeing what is available. It would be horrible to find a great scholarship that you missed one requirement for. I had one for undergrad which covered all tuition books fees and had money leftover. Plus I had another one which I mainly saved. My parents let me stay home rent free. I had another large one for law school and used the savings from undergrad for living expenses. I got 8 years for free! My parents had saved some money for school which they used partially for my wedding. No loans really helped me because my husband had school loans and it really helped to only have his.

  26. It would take roughly $167 each week for 23 years to accumulate $200,000., which is what I hope my wife and I are able to give each child from grade school thru college.

  27. In TX, we are able to.prepay tuition to public colleges in TX, at today’s rates. For about 400/mo paid now, 4 years of college will be paid in full at the time they graduate, at roughly 120 per credit, although they will not graduate for 8 and 15 years, respectively. We will pay living expenses, but if they opt to go out of state/private, they will probably be on the hook for the differenve.

  28. My parents paid for my college and I paid for my spending money by working 1-2 jobs each semester while I attended the good local University. My sister was extraordinarily smart/good in school and got a fantastic scholarship that paid most of her out-of-state tuition at a great University in the next state. My parents paid for all her spending money.
    They could do this without borrowing because my mother is a ferocious saver. She doesn’t believe in debt, but did believe in education, so she took her tiny weekly salary and saved it every single week. Of course this was back in the 1980s when you could invest in CDs that returned 9, 10, and 11%.
    When I hear people say that they’d like to save for their kids, but can’t, I think of my Mom saving that $50 or $100 every single week, year in and year out for my entire childhood. And I think of all the fancy vacations we didn’t take, and the new cars my parents did not buy…to give us the gift of education. If you want to pay for the education of your children, it is do-able. My sister started planning her kids’ educational saving when they were in utero.

Comments are closed.