College parents - would you consider taking out student loans?

[Donald13]

I think you should do what works for you. Not everyone can afford to pay for their child’s education no matter how long you save for. My kids will most likely need loans like we did.

 

[mjkacmom]

There is a HUGE difference between the student taking out loans and the parents taking out loans. The latter, IMO, should NEVER happen.

Loans are available for education, but NOT for retirement. If you cannot afford to give your kids college tuition, you should NOT go into debt on their behalf. Help them out any other way you can, but any loans taken out need to be taken out only by the student.
Getting that degree make take longer, or the choice of school may have to change, but stay well away from parent loans.

Students are only able to take out $27,000 over 4 years. My kids’ public college education cost over $100,000 (our state has one of the highest tuitions for in state schools), took out private loans and we co-signed and paid the monthly interest, after graduation they were put in their names only. They plan on paying them off aggressively, at least $1000 a month, in 5 years or so. Fortunately we have a great credit score so low interest rates. As for loan forgiveness, I doubt that would happen. ETA, we are definitely on track to fully funding our retirement in 10 years.

 

[Mackenzie Click-Mickelson]

Why doesn't the Federal government just increase funding to schools so they can lower tuition. And by schools I mean all schools or increase the amount of money students are eligible to receive. My husband works at a private college. They give out as much money in aid as they possibly can but costs continue to rise for private colleges (salaries, insurance, etc.) Students should be able to have a choice in where they attend school. Everyone does not need to attend college and everyone should not be forced into attending a state school. Three of my children have attended private schools and my youngest will be attending a state school. We are fortunate that my husband has worked at the same college for 27 years. He is extremely underpaid compared to his colleagues at state schools but my kids worked their butts off in high school and got grades that qualified them for tuition exchange so we have only had to pay for room and board for them. Room and board is very expensive and I would bet that would not be included in any loan forgiveness.

If you're bouncing off my comment it would be government (federal or state) aid that goes directly to the schools that I was meaning in terms of funding. Granted I can only speaking with personal knowledge with respects to my state but it's what the schools do each and every year the funding is reduced for them. They go to the State Board of Regents and request tuition raising. They also pass increases to student fees and other such things. I'm not sure you can get away from it but my husband's engineering courses had higher course fees than my psychology course fees were but that did add into his overall costs.

And to give more credence to what I'm talking about in 2019 (for 2019-2020 school year) my state increased education funding by $33 million. The Board of Regents mentioned this and advised schools they will be setting a flat rate (meaning no increase) for all schools covered by them for in-state tuition. My alma had been seeking a 1% increase. The other large University in the state had been seeking a 3.5% increase but reduced that to a 1.5% increase they were seeking and because of the Regents flat rate there was no increase that year. There was however an out of state increase of 2.5% approved.

The prior year in 2018 my alma mater raised tuition by 2.8% and 5 other major universities also raised tuition. There was a partial increase in state funding approved by the then governor but it wasn't enough to make up for the prior governor's cutting of school funding (the prior governor largely took money from the education system and roads in our state during his tenor). In 2017 the tuition was raised at my alma mater by 2.5%. And so on. The thing is for my state at least it didn't used to be soooo bad. It had its increase in tuition, campus fees, and more but it's just gotten worse and worse.

 

[MamaMermaid]

"Even if they didn't need to"? Absolutely not.

 

[aprilgail]

Instead of loan forgiveness, how about free community college for people with at least a C average?

We already have that in NY and I am sure some other states do too.

 

[aprilgail]

Something I‘m not worrying about.
DGD‘s college fund will be 200K when the time comes. Anymore than that and her parents need to kick in and I’m not a part of that conversation.

Right now my daughters college is $77,315.00 per YEAR- so depending on where your grand daughter goes she could still need 100,000 in loans!

 

[wvjules]

There are still loans that are Federal that may not qualify. I believe the figure put it at about 11% of loans that were Federal didn't qualify.

The CARES Act Forbearance applies to the following types of Federal loans:

"This forbearance will apply to only those student loans owned by ED – including all Direct and ED-owned Federal Family Education Loan (FFEL) Program loans in repayment."

That said there were updates and additional types of loans were retroactively applied for things but I don't have all the exact details in front of me.

I had no idea that there were some fed loans that didn't qualify. Thanks.

 

[Forevermarypoppins]

I plan to have my kids take out some loans just to have some skin in the game. I want them to be responsible for a portion of their education. I would also like for them to get summer jobs while in high school and internships in college.

We started the conversation with our daughter and son years before HS graduation that they would each get 2 years paid by us and the remaining cost would fall to them. They are both college graduates and are paying off their respective loans.

 

[mjkacmom]

We already have that in NY and I am sure some other states do too.

In NJ the top 15%, my son has a 3.6 unweighted GPA and didn’t make the cut, not that I’d send him there anyway (not all CC are created equal, those who end up in CC in my county pay extra to go elsewhere).

 

[NYCgrrl]

Right now my daughters college is $77,315.00 per YEAR- so depending on where your grand daughter goes she could still need 100,000 in loans!

50K per year is enough on this end. I’ve no intentions of depriving her parents of the joy of finding the rest......

 

[Mackenzie Click-Mickelson]

I had no idea that there were some fed loans that didn't qualify. Thanks.

Honestly when it first was announced and for a few months later I didn't either so I totally get it (all mine and my husband's Fed loans did qualify so we weren't really aware ourselves). I don't think it was necessarily well publicized what loans would be left out, news stories out there sure but because the majority did qualify (in terms of number of borrowers) I think it was largely not talked about.

 

[Starport Seven-Five]

I wouldn't add an expense to my budget (interest) in the hope the government is going to act. Congress has shown itself to be ineffective on passing very popular ideas and student loan forgiveness is in the 45-60% approval range depending on the poll. The only way I see it happening is an executive order but not sure if that is possible legally.

Personally, I don't see the point in loan forgiveness if the problem (ridiculously priced colleges) still exists. Need to solve the root cause before treating the symptoms.

After you pay your 35% tax, you can then use what's left to pay for your own kid's college.

Based on the number it seems like you're quoting federal income tax rates? Remember that effective rate paid is different than top tax bracket.

BUT there is also state income tax (and other taxes) that could get someone to a 35% effective rate in some locations.

 

[penn19]

Do people seriously think they can quantity "who can afford" to pay for their kid's college? I'm pretty sure we'd meet the rubrics for loan forgiveness if it comes through, but our kids have no loans. They worked, we worked extra, we made hard choices that we felt fortunate to be able to make. I watched people who make twice as much money than we do have their kids take out loans. It's not always about affordability, but about choices.

So, yes, if I thought there was a chance for "free" tuition payback vs.all the sacrifices we made to get our kids through school we'd look into making that choice. Maybe our kids could have done travel abroad or something. Maybe DH and I could have done some of thise home improvements or trips we postponed.

I try to be happy for things that help others even if they don't help me, but part of me will wish we'd gotten the "free money." I think it's human nature to want to take full advantage of opportunities.

We can afford to pay tuition NOW (well pretty much) but we haven’t always been able to afford it. We were well behind the 8 ball for a good many years. So we had no college savings. We were busy working trying to pay bills. But that doesn’t get taken into account.

 

[r1lissa]

I don't understand why people are upset about this because they paid for their education? Should we not give out antibiotics because people years ago used to die because they didn't have it? If you are able to pay for it, you should consider yourself lucky.

You keep making analogies that are not even relevant. Food and antibiotics are necessities. College education is not.

 

[r1lissa]

My lender said that loans were in forbearance and I needed to opt-out if I wanted to continue/resume payments. The message is still posted. Also checked out the coronavirus student aid website. It says the same.

Here’s what the coronavirus student aid website says.
https://studentaid.gov/announcements-events/coronavirus
are your loans private?

Nope- federal stafford loans.

 

[punkin]

Interesting question...I have a DD about to go to graduate school (I understand that's completely different from college, but it's on my mind right now). She will take out the maximum she can with government loans, but that still won't be enough to cover tuition and living expenses. I was able to pay most of her college tuition (she has a $5k loan, which she took out her senior year. That's it) with savings, current income, her work during the school year and summers, and some very nice scholarships. Now I'm wondering if she should have taken out more loans rather than less in undergraduate and we could have saved our money to help pay for graduate school now. Assuming a $25K loan forgiveness for college, we would have that much more to contribute to grad school now.

 

[mefordis]

Is there a cap of how much is forgiven?

There's a discussion of up to 50k, or 10k, and it would be limited to lower income.

They are not going to just write a 200k check to the Sallie Mae.

 

[NotUrsula]

Students are only able to take out $27,000 over 4 years. My kids’ public college education cost over $100,000 (our state has one of the highest tuitions for in state schools), took out private loans and we co-signed and paid the monthly interest, after graduation they were put in their names only. They plan on paying them off aggressively, at least $1000 a month, in 5 years or so. Fortunately we have a great credit score so low interest rates. As for loan forgiveness, I doubt that would happen. ETA, we are definitely on track to fully funding our retirement in 10 years.

That's Stafford, and while I agree that their limits are presently too low; there are other private programs with higher limits. Also, there is a difference between co-signing for a loan taken out by the student, and actually taking out the loan yourself but handing the money over to the student -- and THAT is what I'm fundamentally opposed to.

I agree that it stinks when a kid cannot go to the school of his/her choice at the time of his/her choosing because of financial limitations, but unfortunately, we don't all have the same resources, and some will have to deal with the difficult reality of limiting school choices and/or changing timelines before goals can be reached. Sometimes you even have to move. (I know a young lady who did that; her parents could not afford their state school, so she moved to another state with lower tuitions, worked for a year to establish residency, then got her education for a more affordable price that her parents could actually manage. Was it the easiest of strategies? No, probably not, and she graduated a year later than most of her peers, but she graduated with a debt load that was a lot more reasonable for the job that she was aiming for (she's a teacher.)

 

[Skippy918]

Interesting question...I have a DD about to go to graduate school (I understand that's completely different from college, but it's on my mind right now). She will take out the maximum she can with government loans, but that still won't be enough to cover tuition and living expenses. I was able to pay most of her college tuition (she has a $5k loan, which she took out her senior year. That's it) with savings, current income, her work during the school year and summers, and some very nice scholarships. Now I'm wondering if she should have taken out more loans rather than less in undergraduate and we could have saved our money to help pay for graduate school now. Assuming a $25K loan forgiveness for college, we would have that much more to contribute to grad school now.

Can she work while in school? Many companies offer tuition reimbursement for grad school. Also, would one get a discount if they are a TA for grad school?

 

[punkin]

Can she work while in school? Many companies offer tuition reimbursement for grad school. Also, would one get a discount if they are a TA for grad school?

It's a complicated situation and the answer is maybe. But for purposes of this thread, had we borrowed for college, which would then be forgiven, we would have more money now.