The debt dungeon or not...

[Anonymous]

Hi, IOBA,

Good luck on your final decision.  Your friend considered education debt as a *good* one, mainly because it has positive externalities.  To me, whenever you borrow money, it becomes *unfriendly* as it comes with strings (interest or others). 

I understand that most (if not all) professors have their own research grants, they can use the grants to waive outstanding student research assistance's tuition or workshop/conference travel fee, membership fee, and so on.  I am sure that your son is a determined student who knows what he would like to pursue, why don't give it a try? 

Just a kind reminder to your son, when he budgets his expenses, please consider the possible increase in tuition for the next three to four years.

Just my 2 cents :-)  My best wishes to you and your son's education!

[Jazzzy]

I can empathize with the decisions you are making. My husband and I have a very different attitude than most parents. In our case, it has worked very well for us and for our children. It's difficult to generalize because children and families are all different, but this is what our belief system led us to do.....

We have 5 children. The youngest is now a freshman in college. The oldest has just turned 40...so we had quite a spread in ages. Our children were raised to know that they could go to ANY college, in ANY location, and WE would pay their expenses. We wanted them to dream big and to understand that they had every possibility open to them. Whatever they dreamed they wanted to do in this life, they could do as long as they were willing to put in the work and earn their way by being successful in school. School is hard work.

We didn't always know how we would make it happen, but we knew that we WOULD make it happen. The understanding was that they may have to take student loans in their names at the time, but that we would then pay off those student loans after they graduated. That is what we have done,. We have a small amount of student loan money coming out of our checking account each month for child #4, and now we have one subsidized loan in place for child #5. (We didn't have the need to take any unsubsidized loans for #5 this semester.) You can tell by the fact that we qualified for a subsidized loan this last year that we are not high-income folks. Next year we likely won't qualify for subsidized, so we may have to take unsubsidized if the need is there.

This is how it played out:

Child #1: Attended MIT for undergrad. He paid for his own graduate school (MBA) at USC (wouldn't let us pay). Is working in his dream job as a VP and treasurer of a publicly traded company and makes $350k+ per year.

Child #2: Attended a state college for undergrad. He paid for his own graduate school (PhD) and is now a clinical psychologist in private practice. He wouldn't let us pay for grad school either.

Child #3: No college for her. She works full time and loves her job....and she knows if she ever wants to go to college that she can do so, and we will gladly pay.

Child #4: Attended a private college at first and transferred to a state school. Has her undergrad and is working in her field. She may go on to grad school, and she is in a field with a modest salary, so we have offered to pay for grad school. Hoping she takes us up on that when she is ready.

Child #5: Freshman at a state school and chose to live at home this first year. She has a combination of scholarships that make it close to full ride, especially with her living at home this year. Expenses will increase as she goes on and lives elsewhere, but we will pay those expenses.

All of our children have worked part-time jobs while in school, but they always knew that when a new semester rolled around that tuition, books, and living expenses would be covered by us.

Was all this pretty tough at times? Sure it was. I remember one tuition bill out in Boston for $17,300 for one semester. That one sticks in my mind. But we made it all happen. We live modestly, and we have a good life and do a fair amount of traveling. We don't drive fancy vehicles. We don't have a boat. We don't have a motorcycle. We don't have a camper. In fact, we don't have any of the popular toys. Is our retirement smaller than it should be? Probably. But we'll get by and live a good life on it. It's amazing what you can afford if you watch your priorities.

There is no satisfaction in the world like that which we get when we look at these 5 kids. They all worked very hard in school. No one ever flunked out and all who went graduated and are very successful in their chosen fields. Not a bad outcome for a family with 5 children from a small midwest town where all went to a small public school. I understand that we are different and have different beliefs. This wouldn't work for families if the kids didn't have the work ethic instilled in them...but it worked for us. I even went back to school in my 50's....maybe my encouragement to them through all these years finally rubbed off on me. 

I wish you luck on whatever you decide for your son. I suppose some would look at us and consider that we were in a "debt dungeon" at one time...but we worked our way through it and everyone came out with their dream at the end. It was well worth it for us because that "debt dungeon" is a temporary solution to a long-term, lifelong gain.

[llecs]

Awesome success, Lynette.

[aussiesareforever]

---

@LynetteM wrote:

I can empathize with the decisions you are making. My husband and I have a very different attitude than most parents. In our case, it has worked very well for us and for our children. It's difficult to generalize because children and families are all different, but this is what our belief system led us to do.....

We have 5 children. The youngest is now a freshman in college. The oldest has just turned 40...so we had quite a spread in ages. Our children were raised to know that they could go to ANY college, in ANY location, and WE would pay their expenses. We wanted them to dream big and to understand that they had every possibility open to them. Whatever they dreamed they wanted to do in this life, they could do as long as they were willing to put in the work and earn their way by being successful in school. School is hard work.

We didn't always know how we would make it happen, but we knew that we WOULD make it happen. The understanding was that they may have to take student loans in their names at the time, but that we would then pay off those student loans after they graduated. That is what we have done,. We have a small amount of student loan money coming out of our checking account each month for child #4, and now we have one subsidized loan in place for child #5. (We didn't have the need to take any unsubsidized loans for #5 this semester.) You can tell by the fact that we qualified for a subsidized loan this last year that we are not high-income folks. Next year we likely won't qualify for subsidized, so we may have to take unsubsidized if the need is there.

This is how it played out:

Child #1: Attended MIT for undergrad. He paid for his own graduate school (MBA) at USC (wouldn't let us pay). Is working in his dream job as a VP and treasurer of a publicly traded company and makes $350k+ per year.

Child #2: Attended a state college for undergrad. He paid for his own graduate school (PhD) and is now a clinical psychologist in private practice. He wouldn't let us pay for grad school either.

Child #3: No college for her. She works full time and loves her job....and she knows if she ever wants to go to college that she can do so, and we will gladly pay.

Child #4: Attended a private college at first and transferred to a state school. Has her undergrad and is working in her field. She may go on to grad school, and she is in a field with a modest salary, so we have offered to pay for grad school. Hoping she takes us up on that when she is ready.

Child #5: Freshman at a state school and chose to live at home this first year. She has a combination of scholarships that make it close to full ride, especially with her living at home this year. Expenses will increase as she goes on and lives elsewhere, but we will pay those expenses.

All of our children have worked part-time jobs while in school, but they always knew that when a new semester rolled around that tuition, books, and living expenses would be covered by us.

Was all this pretty tough at times? Sure it was. I remember one tuition bill out in Boston for $17,300 for one semester. That one sticks in my mind. But we made it all happen. We live modestly, and we have a good life and do a fair amount of traveling. We don't drive fancy vehicles. We don't have a boat. We don't have a motorcycle. We don't have a camper. In fact, we don't have any of the popular toys. Is our retirement smaller than it should be? Probably. But we'll get by and live a good life on it. It's amazing what you can afford if you watch your priorities.

There is no satisfaction in the world like that which we get when we look at these 5 kids. They all worked very hard in school. No one ever flunked out and all who went graduated and are very successful in their chosen fields. Not a bad outcome for a family with 5 children from a small midwest town where all went to a small public school. I understand that we are different and have different beliefs. This wouldn't work for families if the kids didn't have the work ethic instilled in them...but it worked for us. I even went back to school in my 50's....maybe my encouragement to them through all these years finally rubbed off on me. 

I wish you luck on whatever you decide for your son. I suppose some would look at us and consider that we were in a "debt dungeon" at one time...but we worked our way through it and everyone came out with their dream at the end. It was well worth it for us because that "debt dungeon" is a temporary solution to a long-term, lifelong gain.

---

That is great. I pray to be able to do the same for my kids someday!

[Jazzzy]

Thanks llecs and daisydvm for the kind words.

We always wanted to have the feeling when we looked back on it that none of our kids gave up their dreams due to finances when we had the ability to make those finances work out. It really puts the burden of responsibility back on them. If they failed, they had no one to blame but themselves.

[IOBA]

The story warms my heart.  

Our story started out like that.   The oldest kid has graduated from college.   The middle kid is set to graduate from college this May.  The youngest one changed things up and asked to go to a private high school for four years.   We said yes - we support their education and their dreams.   Four years of high school tuition was too much for us.  We had all three kids in tuition schools for three overlapping years.   While we had planned to pay cash for them, where they wanted to go, we just didn't expect to be start four years earlier with the youngest.  

To afford the youngest one's high school tuition - we had to cash out all of the investments we had set up for his college, early.   We went from a two car family to a one car family.   There are so many other things we did, so many other things happening in life at that time, that we went bare bones.  

When I describe bare bones, I mean no heat/no air conditioning (single digits in the winter, triple digits in the summer), one car with more than 121k miles, each ultity bills in between $15-25 a month, no cable/satellite, no internet at home, no texting on the cell phones, clothes wearing very thin, a couch, a table, two chairs, and that is about it for furniture.   We have had strangers living with us, to help with living expenses.   We have done so much to maintain paying cash and supporting the kids educations.

Through a miracle, we have been able to come up with a down payment for a house.   (We actually qualify for no down payment financing!)  The first deal fell through.   It was a probably a good thing as we were already looking/interviewing room-mates to help with the costs.   The second deal we pray will fall through.   We realized that we didn't really want a mortgage or roomies.   Although, to make his college doable, we will have roomies in the small space we are in.   I know it's probably nuts, but we were seriously going to purchase a house, get roomies to pay the mortgage and provide extra money to pay for our son's living costs.

When it comes down to the penny, the last penny, we have given up comfort, some basics, some privacy, and definitely retirement to support the kids education and dreams.  

I can't even borrow enough money to pay for one year at his dream school.   He can't take out student loans becuase the school is in a foreign country.   The US will not let him have loans for school over there.   Over there says he's a foreigner not eligable for student loans.   Working on a student visa is forbidden.

So, yeah, it's sad he has to settle for a more affordable option.   But I really don't see how I can give up anything else or work any harder to bring in more money.   I have already sold all that I can.  His going to a private high school was to set him up for an almost free college ride.   And he will pretty much have that at the school he will be going to (second choice school), but we still have to pay all living expenses and some school expenses.

We have lived frugally for years.  We have saved up and invested for years for the kids to go to school.  

I am glad it worked out for you.     I do have one very smart, ambitious teen who graduates from high school this summer.   He's looking to be adopted, or sponsered, by anyone who can help support the college dream.      AND he will do windows too!   He's had a paycheck job since he was 14 so he can save for school too.   He's a real blessing who appreciates the hard work, the planning, and the reality.  Doesn't like the reality, but accepts it.

I sincerely hope to be posting in four years that he has graduated from college with his two degrees and no debt.  

[teenastie]

No matter how this situation plays out I'm sure there will be a happy ending after all I was actually thinking (I have no idea why your story has touched me the way it has) what is the possibility of going to a state school for his AA then finishing at the foreign school?

[Jazzzy]

IOBA...you have been through a lot. I don't think we would have made it had we had to pay for high school as well. We're lucky that option isn't even available in our town.

The foreign school aspect really throws a wrench in the works for your son. The only way we made it was to be able to get school loans in the kids' names. We have paid back most of those loans...but we wouldn't have been able to give the support we have if we hadn't been able to get reasonable school loans. The low interest rates and the extended payback periods are what made it possible for us. Also, one child that we are still paying on works for a nonprofit. After a few more years we may get her remaining balance forgiven. I took school loans to get my masters recently. I work in the medical field with an underserved population, so that means that the bulk of my loans will be forgiven in two years. Depending upon the field your son is contemplating, some of that forgiveness may be available when he's finished. It might be worth considering.

I admire what you've gone through. Sounds as if your son has a good head on his shoulders. He'll make out OK.

[IOBA]

teenastie - The degree programs are very different over there.    You pick your degree and they put you on your path, with your classes picked out.   Their degree programs are a little more concentrated and do not focus on have a bunch of core subjects before taking related degree classes.   It's one of the things that he likes about the degree - no math!  No science!  No PE!  The classes are all about the degree major!!

The way the schools run their programs, they do not accept or acknowledge any other school or credits.  You enter into their school, you pick your program, and you stay on that path until either you drop out or your finish.   If you drop out, you have to start over again,   If you start over at the same school, you might be able to jump back into the program and use previous credits.   If you start at a different school. You are starting all over again.  No credits/classes will transfer.

It's a good idea.  It's one I had suggested.   But it won't work.  

LynetteM - Yeah, high school tuition definitely changed things up.   And three kids in tuition programs hurt.   I am happy to say the oldest graduated with no debt.   The middle one will graduate with no debt.  (We didn't take out student loans.)   Just working on the youngest.   We have been blessed that the youngest is the most frugal and the most hard working.   He's so conscientious of other people's money.   The youngest is not interested in the military or in a field that might forgive student loans later in life.   He's already firmly announced that he will be getting his PhD.