Ballpark payment on an $85K school loan

[twooley2]

If you go to studentaid.ed.gov you can find out about the new repayment plans available on the federal student loan portion of school debt. Of course if she has private loans those won't qualify for this type of repayment. There was new legislation passed that sets your payment at no more than 10 percent of your income for federal loans. I really haven't looked at all the details for ourselves yet. My daughter will have about 20000 in loans and that is after we have put out over 50000, so I really think 85000 isn't out of line for typical student debt. We will probably end up paying that 20,000 after school, but since it was subsidized we figured she should take those loans and we could repay them after she graduates. I have a son who took the more economical community college route so we will only have 2 years of expensive college for him thank goodness.

that is nice that you helped with the college cost. Let me tell you the cost of college is ashame but without parents willing to pay some its placed on the young adults . So getting an education can be a double sword. Either continue the path of being uneducated or take on the debt.

 

[prncess674]

Everyone is different about discussing money. I know how much all my family members make, but that is because I do their taxes and they don't pay me to do it. In fact it ends up costing ME money to do them, because we usually go out to dinner to review them and especially since Sis and BIL don't make a lot I end up picking up the dinner bill too.

I wouldn't be ready to hang her out to dry simply based on student loan debt. What are her future job prospects and future earning potential? I had plenty of student loan debt when I graduated but I also went to work for a top consulting firm and paid it off in 8 years. If she is a getting a degree in underwater basket weaving and is thinking about a job as a fry cook at McD's then you should be worried.

Student loan debt is a fact that many people have to deal with and I would be more worried about credit card debt and other frivilous financial decisions such as buy $400 shoes and handbags. They just need to have similar habits. Sounds like your son was lucky and he got the free parent ride. Maybe her parents weren't as wealthy and weren't able to provide at that same level.

 

[fitzy819]

She has been here with us this weekend and we are all trying to put together a budget for their premarital counseling requirements. All is out in the open. We are trying to help them figure out some minimum salary requirements so they can make sure they don't accept jobs that won't pay the bills. Neither has graduated yet but my son is in the process of putting resumes out there.

I think it is great that you are helping them! DH and I also sought financial advice from his father. He had been the CFO of a large company for many years so who better to ask for advice. We have a wonderful relationship with both sides of our family and we can trust them to give us good solid advice.

I'm not sure why people are saying this is such a horrible idea. In my experience it has been great. They have never tried to pry into our lives, financially or otherwise, but are always there for us when we need advice.

It is great that you have such a wonderful relationship with them and by doing this to help them I think you are only making that bond stronger!

 

[snowywhite89]

Everyone is different about discussing money. I know how much all my family members make, but that is because I do their taxes and they don't pay me to do it. In fact it ends up costing ME money to do them, because we usually go out to dinner to review them and especially since Sis and BIL don't make a lot I end up picking up the dinner bill too.

I wouldn't be ready to hang her out to dry simply based on student loan debt. What are her future job prospects and future earning potential? I had plenty of student loan debt when I graduated but I also went to work for a top consulting firm and paid it off in 8 years. If she is a getting a degree in underwater basket weaving and is thinking about a job as a fry cook at McD's then you should be worried.

Student loan debt is a fact that many people have to deal with and I would be more worried about credit card debt and other frivilous financial decisions such as buy $400 shoes and handbags. They just need to have similar habits. Sounds like your son was lucky and he got the free parent ride. Maybe her parents weren't as wealthy and weren't able to provide at that same level.

You need to stop dissing my degree. You know I make 7 figures a year at my art!!!

 

[dvcgirl]

the people who give them the money is the real problem....

Well, we've given money to family members....not when they ask for it, but when we see a need. We don't loan money to anyone....and we never co-sign. I don't think that giving money is a problem at all...provided that the money is appreciated and the recipient continues to work hard towards their own financial independence.

We've paid for the majority of our nephew's college education so that he'll come out with no loans....and doesn't end up in the position that this young lady is in....in love with a young man who is contemplating walking away from a possible marriage thanks to her student loan debt.

Our nephew is going on to grad school, and that's going to be his responsibility. So, I don't think we're "the real problem". I'm betting that his future wife will thank us.

Our nephew's parents (DH's brother) didn't save a nickel for his education...or anything else for that matter. They're going through a nasty divorce now. Both are filing BK and the house is going into foreclosure. They're on the "Alpo Retirement Plan".

It's amazing to me that my husband came out of the same family with such good financial sense, and yet his brother is a complete train wreck financially.

 

[Kathi OD]

any tips?? I have 4 years!

She already gave the tip... She and her DH have asked her parents for financial advice since she got married...a path you wouldn't travel.

 

[lillygator]

She already gave the tip... She and her DH have asked her parents for financial advice since she got married...a path you wouldn't travel.

 

[twooley2]

Well, we've given money to family members....not when they ask for it, but when we see a need. We don't loan money to anyone....and we never co-sign. I don't think that giving money is a problem at all...provided that the money is appreciated and the recipient continues to work hard towards their own financial independence.

We've paid for the majority of our nephew's college education so that he'll come out with no loans....and doesn't end up in the position that this young lady is in....in love with a young man who is contemplating walking away from a possible marriage thanks to her student loan debt.

Our nephew is going on to grad school, and that's going to be his responsibility. So, I don't think we're "the real problem". I'm betting that his future wife will thank us.

Our nephew's parents (DH's brother) didn't save a nickel for his education...or anything else for that matter. They're going through a nasty divorce now. Both are filing BK and the house is going into foreclosure. They're on the "Alpo Retirement Plan".

It's amazing to me that my husband came out of the same family with such good financial sense, and yet his brother is a complete train wreck financially.

well it is good that you can do this. Not everyone can help nor has the resources but I see people who can and that is great if done within reason but many times love and reson collide and everything becomes resonable to some parents at all cost. My husband and I both paid our whole way through college earning from serving the military and paying for some and loaning out a lot. No help we worked for it 100 percent and still do and I feel theres a lot to be said for that. work= money+ independence from others meddling or the I owe you syndrome or so the card so many people pull after they do something for someone. Oh and we arent on the alpo retirement plan by far...better off than most who live on the spend today and place the idea of retirement in the back of their minds. Of course some people never make enough to live on yet enough to save to retire. Education and circumstances can dictate this too.

 

[MrsPete]

. . . What if your son becomes disabled in the future or even her. Kinda hard or impossible to predict and base a marriage on such things. Its more about how they negotiate and compromise and their values. They will make many decisions together and not all will be in one or the others best interest. Will he keep track of daycare expenses and the years of value if she was not to work and owe her for time lost in her career from lack of experience over time? Kind of odd to me

I understand that you're saying anything could happen after they're married, and you're not wrong.

But I'm looking at it from a different point of view: I see the mom saying, "Should a saver (which is how she's portraying herself and her son) marry a spender (which is what I'm thinking for a student who's racked up 85K debt in four years)?" I'd say that it's reason to consider their financial compatibility. I'm sure that the situation includes at least 100 variables to which you and I aren't privy. Maybe he's not such a saver -- maybe everything was handed to him, and he's neither a proven saver nor spender. Maybe she has a child and her financial needs were larger than average. Maybe she took out extra loans so she could live in a cool apartment instead of a dorm. Maybe, maybe, maybe . . . we don't really know much. The real questions are 1) do they approach financial decisions in the same way? 2) what's their ability to repay a rather daunting amount on intro-level salaries?

that is nice that you helped with the college cost. Let me tell you the cost of college is ashame but without parents willing to pay some its placed on the young adults . So getting an education can be a double sword. Either continue the path of being uneducated or take on the debt.

No, the choice isn't borrow or go without.

A student who wants a college education but who lacks financial help has other options: Choose a less expensive school, join the military and then go to college later with GI bill benefits, live at home and attend a local university, find a work-a-semester, go-to-school-a-semester co-op deal, work for the university to get discounted tuition, work days and go to school at night. Of course, someone's going to say, "But I couldn't do any of those things!"; that'd be skirting the question -- there's SOME OPTION other than borrowing for every student. Those options often mean more than 4 years in school, and those options often mean a great deal of work, but they exist.

 

[StitchBuddy]

Goodness folks! I am glad I married my husband and he had student loans. We worked together to pay them off. Our debt and our money was ours, not his and hers. We also asked my parents for advice, because in addition to school loans we ran up our credit cards the first year of marriage. I know another no-no! But, guess what we have been married for 24 years. We learned to work together and not to play the blame game. I think they are being proactive in getting their finances on track early. I do not think they should put off marriage, just because of the loans. But, if they work together, they will be debt free in a couple to a few years, depends on what they make together. The lessons they will have learned about working together will help in the long run. Not to mention that when you look back at when you were young and struggled those are some of the fondest memories. It is all perspective. I wish them luck and happiness!

 

[twooley2]

I understand that you're saying anything could happen after they're married, and you're not wrong.

But I'm looking at it from a different point of view: I see the mom saying, "Should a saver (which is how she's portraying herself and her son) marry a spender (which is what I'm thinking for a student who's racked up 85K debt in four years)?" I'd say that it's reason to consider their financial compatibility. I'm sure that the situation includes at least 100 variables to which you and I aren't privy. Maybe he's not such a saver -- maybe everything was handed to him, and he's neither a proven saver nor spender. Maybe she has a child and her financial needs were larger than average. Maybe she took out extra loans so she could live in a cool apartment instead of a dorm. Maybe, maybe, maybe . . . we don't really know much. The real questions are 1) do they approach financial decisions in the same way? 2) what's their ability to repay a rather daunting amount on intro-level salaries? No, the choice isn't borrow or go without.

A student who wants a college education but who lacks financial help has other options: Choose a less expensive school, join the military and then go to college later with GI bill benefits, live at home and attend a local university, find a work-a-semester, go-to-school-a-semester co-op deal, work for the university to get discounted tuition, work days and go to school at night. Of course, someone's going to say, "But I couldn't do any of those things!"; that'd be skirting the question -- there's SOME OPTION other than borrowing for every student. Those options often mean more than 4 years in school, and those options often mean a great deal of work, but they exist.

I agree there are other ways but do let me say I did all of the above to include join the military, work, have kids, go a semester and take a break a semester here and there and am now unmarketable at 40 go figure.... and some people place merit on where people get their degrees from and . There are rules on how fast you must spend GI bill money, how many classes you must take to be full time to get the money and money you must upfront before they will start to pay out. Gi bill is chump change "in my opinion" for what college cost. People want cheap labor in todays economy. A whole other subject. What entity would loan that much knowing it wont be paid off by many until they are in their retirement years. Masters degree people wanting to guarantee their jobs? Possibly...

 

[SaraJayne]

any tips?? I have 4 years!

She left out a large part of the "story"...a large inheritance.

 

[dvcgirl]

well it is good that you can do this. Not everyone can help nor has the resources but I see people who can and that is great if done within reason but many times love and reson collide and everything becomes resonable to some parents at all cost. My husband and I both paid our whole way through college earning from serving the military and paying for some and loaning out a lot. No help we worked for it 100 percent and still do and I feel theres a lot to be said for that. work= money+ independence from others meddling or the I owe you syndrome or so the card so many people pull after they do something for someone. Oh and we arent on the alpo retirement plan by far...better off than most who live on the spend today and place the idea of retirement in the back of their minds. Of course some people never make enough to live on yet enough to save to retire. Education and circumstances can dictate this too.

Oh, I agree that quite often people give money (or even worse, loan money) to friends or family foolishly. I know a lot of people who helping their kids through college when they have little or nothing saved for retirement.

But, I can also tell you that my DH's parents paid 100% for his education and he appreciated that (as did I!) very much. I had a tiny bit of student loan debt....made my way through mostly with scholarships, grants and bit of help from my parents. But I cleaned it up quickly on my own.

Still, it was a *huge* help for DH to come out of school completely debt free....and he has paid back that "loan" to his parents a zillion-fold since then. We've paid for many things for them over the years...trips. We also paid for our own wedding. He really appreciated their help....and so I don't think that a kid necessarily has to work his way through school and pay for it 100% on his own to appreciate it.

His brother, on the other hand....turned down their offer for a paid-for college education and has been sucking off of his now 80 year old parents for the last 25 years.

When we give to family, we give and completely let it go.....that's why we give only what we can afford and never loan money to anyone. We give only out of our discretionary funds....never ever out of the money designated for retirement savings. I wouldn't even give up money that we put aside for vacations, as I wouldn't want to resent that family member if they somehow screwed up after receiving our gift and then I'm out a vacation.

I've seen co-signing and loans to family members go wrong so many times....it's soooooo not worth it.

 

[crisi]

any tips?? I have 4 years!

Well, when I married my husband - 16 years ago, he was five years out of school with $40k in student loan debt. It isn't the death knell for financial security.

It also doesn't necessarily mean her values are different. It may just mean that when she was making decisions about college at 16 or 17 years old, she wasn't very educated about what the consequences of the decisions she was making were. A person who is compatible in other ways, who is willing to undertake financial responsibility, is willing to work hard on their career, is willing to delay having kids until you are financially stable, who shares your values and goals - that is way more important that decisions they made when they were 16 or 17 years old.

 

[crisi]

She left out a large part of the "story"...a large inheritance.

Not that large, less than half our yearly income now - my brother in law got the same inheritence and has been bankrupt twice since then. The larger part of the story is living beneath our rather ample means.

 

[MrsPete]

I've seen co-signing and loans to family members go wrong so many times....it's soooooo not worth it.

I was watching an NBC show today -- the title was something along the lines of Student Loan Crisis -- and they brought up a situation I'd never considered before: A mom co-signed for her son's student loans. I don't know how much it was, but they implied that it was multiple years, a fairly large amount of money. Then the son died. Because the mom co-signed, she's now financially liable for those loans, and they cannot be discharged.

Her big point: If you co-sign a loan for someone, make sure that person has life insurance. I never, ever considered that viewpoint before, but she's living proof that it's important.

that is way more important that decisions they made when they were 16 or 17 years old.

I don't often disagree with Crisi, but I don't think the girl could've borrowed that much when she was 16 and 17. It probably took four years of college, which probably means that she didn't "wake up and smell the coffee" after her first year and then refuse to take out loans.

I do, however, agree with the point that some college students take out these loans without really grasping what they may mean to their future.

 

[J3nn78]

I am glad your son and future DIL feel comfortable discussing this with you. THey will likely have a long and successful marriage if they can be so open with each other and with you.

My DH and I are going on 15 years strong and we have always sought out financial advice from our parents. They pretty much know everything there is to know about our finances and we know all about theirs. I think it makes us all closer and helps to alleviate some of the stress when you have others you can discuss things with.

 

[jodi90]

Well, unless she's going to be making 6 figures right out of school, I'd think that it was a problem. Some of those loans have to be private student loans. Those accrue tons of interest and seem tough to get out from under from everything I've read about them. I don't think that you can get 85K in Stafford and Perkins loans...that's why I'm assuming that some of them are private.

You can get 85K in Stafford and Perkins loans if you include BA and Masters Degrees. Belive me.....I know

 

[crisi]

Her big point: If you co-sign a loan for someone, make sure that person has life insurance. I never, ever considered that viewpoint before, but she's living proof that it's important.I don't often disagree with Crisi, but I don't think the girl could've borrowed that much when she was 16 and 17. It probably took four years of college, which probably means that she didn't "wake up and smell the coffee" after her first year and then refuse to take out loans.

Sure, but the point at which you wake up, say $85k is a lot of debt, AND declare that you are switching schools to limit your debt - that's a stretch for most 17-22 year olds. Not all. And not the ones who have parents who spell it out for them. But for a lot of them it is.

I remember being in college - not too long ago - and listening to juniors and seniors state their salary expectations. They weren't in line with reality, but until they got out of school and discovered "median" does not mean "beginning" - most of them don't learn for telling them. And that doesn't make them horrible people without a future or good values - it makes them YOUNG and not yet willing to listen and not having the wealth of experience to think things through. Being young and inexperienced both fix themselves with time - if their aren't character flaws on top of being young and inexperienced.

Also, honestly, my husband and I would not be where we are today without his expensive private school education. That SCHOOL opened doors for him. Being an alum of that school still does - 25 years post graduation. Sometimes, those educations are actually a good investment. And it didn't take very long to pay off - we lived like paupers for a few years, but it was paid off long before kids (or that inheritance).

 

[FINFAN]

I was watching an NBC show today -- the title was something along the lines of Student Loan Crisis -- and they brought up a situation I'd never considered before: A mom co-signed for her son's student loans. I don't know how much it was, but they implied that it was multiple years, a fairly large amount of money. Then the son died. Because the mom co-signed, she's now financially liable for those loans, and they cannot be discharged.

Her big point: If you co-sign a loan for someone, make sure that person has life insurance. I never, ever considered that viewpoint before, but she's living proof that it's important.I don't often disagree with Crisi, but I don't think the girl could've borrowed that much when she was 16 and 17. It probably took four years of college, which probably means that she didn't "wake up and smell the coffee" after her first year and then refuse to take out loans.


I do, however, agree with the point that some college students take out these loans without really grasping what they may mean to their future.

on the flip side , if a parent signs for a Parent Plus loan, if they pass, the loan is forgiven and the student will not owe. Make sure your kid has no hidden agenda....JK...no flames, simply pointing out a fact of a parent plus loan.