True or false regarding college loans?
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  1. #1
    Registered User SallyC's Avatar
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    Default True or false regarding college loans?

    Is this statement true or false in the current economy?

    Colleges seek to loan money to the students' parents rather than to the students themselves.

    ******

    I'm not seeking a loan, I'm just wondering who is responsible for student loans the days.

    Thanks,

    Sally

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    Super Moderator josantoro's Avatar
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    that makes sense to me, as the parents have more ability to repay, usually.

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    Registered User Zoolook's Avatar
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    Yes they're looking for a guarantor. The guarantor is ultimately responsible for seeing the loan paid off.

    The upside for the student is they may get a slightly lower rate... the downside is, you might feel like you're effectively borrowing from your parents (if you're the student), and if the worst happens and you can't pay it back, you've burdened them with a debt.

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    Registered User nodmicks's Avatar
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    Having just went through college orientation with my son the loans are definitely geared towards the parents. The college bound young people were in a different meeting about dorm life if that tells you anything! . They went through 45 min telling us parents what kinds of loans were available at banks etc because most student aid is tiny compared to the cost. The student aid package generally for most kids was only $5000 in unsubsidized loans for the year. I am so thankful to be prepared. There were a lot of upset parents in that room.

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    Super Moderator josantoro's Avatar
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    I went through college in the 70's with no loans. Got financial aid, including work-study, but no loans. Are they a recent thing? Anyone else my age that can chime in?

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    Registered User MsBookWorm's Avatar
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    Yep more student loans are aimed at parents who are more likely to have better credit, assets, and stable jobs to be able to pay them back later on. I would say this is a fairly recent thing though because I was in undergrad from 2000-2004 and very few of my peers had parents who took out any loans. It was an option, but not the most pushed one. It certainly doesn't surprise me because shortly after that the economy started changing for the worse and college/university budgets began to shrink as tuition went up. Now just about every undergrad I know has a parent who took out a loan for them.

    I would tell any parent not to borrow for their kids college education. Put that money in your retirement and tell them to work harder to earn scholarships/grants, take out their own student loans (you can still get the federal ones with better repayment terms and lower interest rates without a credit history), work their way through and take a little bit longer, or a combination of the above. I put myself through undergrad and grad school, have worked, been laid off, struggled and not struggled, and yet always been ok. Why? Because there is no one I can go crying to for a bailout and I chose my own career path to suit my own skills and interests as well as industry projections. Borrowing for your kid teaches them nothing about financial responsibility or even selecting an appropriate degree or adequate career path. If they drop out, spend the next 10+ years changing their major, or graduate and can't get a job then it is the parents left to pay off those loans and not them.

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    Registered User imagine's Avatar
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    When I went through college in the 80s student loans were in the students name not the parents name.

    Here is some info I found
    " How do I tellthe difference between student loans? There are many different kinds of student loans. First, know the difference between federal and private student loans. You should always use federal loans first. They carry lower, fixed interest rates and often have better terms than private (or alternative) loans.Second,knowthedifference between the types of loans in your financial aid award.

    Subsidized Stafford Loans: a federal loan for which the government pays interest while you are in school
    Unsubsidized Stafford Loans: a federal loan for which interest accrues while you are in school but may be deferred until repayment
    PLUS loans: federal loans for graduatestudents and parents ofundergraduate students Private loans: loans from banks or other non-government sources

    If you need to use private loans, consider all of the costs. Private loans can have origination fees, different ways of compounding interest, and higher interest rates than government or federal loans. You should also know your credit score. The lower your score, the higher your rate will likely be on a private loan. If you are an undergraduate student, you will almost definitely needa cosigner to be approved for a private loan. Fees and penalties can be higher with private loans than with government-backed or federal loans, and your repayment terms may not be as favorable." http://www.simpletuition.com/student...ame&brand_hnd=
    Last edited by imagine; 07-03-2014 at 05:07 PM.

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    Quote Originally Posted by MsBookWorm View Post
    Yep more student loans are aimed at parents who are more likely to have better credit, assets, and stable jobs to be able to pay them back later on. I would say this is a fairly recent thing though because I was in undergrad from 2000-2004 and very few of my peers had parents who took out any loans. It was an option, but not the most pushed one. It certainly doesn't surprise me because shortly after that the economy started changing for the worse and college/university budgets began to shrink as tuition went up. Now just about every undergrad I know has a parent who took out a loan for them.

    I would tell any parent not to borrow for their kids college education. Put that money in your retirement and tell them to work harder to earn scholarships/grants, take out their own student loans (you can still get the federal ones with better repayment terms and lower interest rates without a credit history), work their way through and take a little bit longer, or a combination of the above. I put myself through undergrad and grad school, have worked, been laid off, struggled and not struggled, and yet always been ok. Why? Because there is no one I can go crying to for a bailout and I chose my own career path to suit my own skills and interests as well as industry projections. Borrowing for your kid teaches them nothing about financial responsibility or even selecting an appropriate degree or adequate career path. If they drop out, spend the next 10+ years changing their major, or graduate and can't get a job then it is the parents left to pay off those loans and not them.
    Thank you for this. Why is it that many parents today seem to think they have to pay for their kids college/university. We have three boys done their post secondary training. Two went through debt free and one (who studied for six years) graduated with only $5000 he owed to his grandparents. They all worked part time jobs and full time in the summer and, even from a very young age, knew they had to save for post secondary themselves. Most of their paper route money (from the age of 12 onwards) when into savings and they also had to use some of that money for clothing if they wanted brand new.

    Having kids pay for their education makes them take it seriously. This past year, our one son in trade school mentioned that one of his class mates only shows up for classes half the time but his parents pay for his education and he doesn't seem to care. How pathetic is that!

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    Registered User MsBookWorm's Avatar
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    Quote Originally Posted by momoffiveboys View Post
    Thank you for this. Why is it that many parents today seem to think they have to pay for their kids college/university. We have three boys done their post secondary training. Two went through debt free and one (who studied for six years) graduated with only $5000 he owed to his grandparents. They all worked part time jobs and full time in the summer and, even from a very young age, knew they had to save for post secondary themselves. Most of their paper route money (from the age of 12 onwards) when into savings and they also had to use some of that money for clothing if they wanted brand new.

    Having kids pay for their education makes them take it seriously. This past year, our one son in trade school mentioned that one of his class mates only shows up for classes half the time but his parents pay for his education and he doesn't seem to care. How pathetic is that!

    Exactly! I sat next to many students like this and it really ticked me off. Here I was working my tail off and grateful for an opportunity that I knew darn well many people would kill for. What were those students doing? Farting around, wasting their parents money, and taking up a seat for a truly deserving student. None of that will change when that kid becomes 25 or 30 or older.

    I understand parents wanting to help their kids only if they have the means, but help doesn't mean do everything. As an undergrad if my parents could have helped with anything I would have begged for health insurance. I got kicked off their plan at 19, none of my low paying part time jobs offered me benefits, and I couldn't afford to buy a plan on my own. Having to pray I didn't get sick or sacrifice money for living expenses when I did have to go to the doctor was awful. In my grad program my parents occasionally offered gas money or groceries and I was thankful every time. It wasn't easy covering the cost of everything else, but at the same time it was my choice to go to school and therefore my responsibility.

    Traditionally my family (both mom's and dad's) hasn't valued education, but that is rapidly changing as I've gone through and many of my cousins have as well. We have all funded ourselves, are employed, and provide financial assistance to the family as needed. Now the family attitudes about education are shifting because our parents and grandparents are finding it is a source of pride to brag to their peers about our accomplishments and how we have done it on our own. What parent/grandparent would want to brag about the amount of loans they took out on behalf of their kid/grandkid lol.

    By the way, congrats to you on raising such responsible and motivated kids!

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    Registered User larabelle's Avatar
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    I have a coworker who allowed her child to pick out her own college ( interpret expensive) then allowed her child to choose her major (interpret stupid) and then my coworker paid via borrowing from her retirement and taking out student loans which she guaranteed. The child has graduated with a bachelors degree and decided she does not want to use it...but instead wants to return to school for a different major. My coworker is now financing the second degree for this child. Oh might I add this child has not worked thru this time AND my coworker pays all living expenses for this child.
    My coworker asked me what I thought about the whole scenario and I had to bite my tongue to keep from saying " ARE YOU NUTS!!!"
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    Quote Originally Posted by larabelle View Post
    I have a coworker who allowed her child to pick out her own college ( interpret expensive) then allowed her child to choose her major (interpret stupid) and then my coworker paid via borrowing from her retirement and taking out student loans which she guaranteed. The child has graduated with a bachelors degree and decided she does not want to use it...but instead wants to return to school for a different major. My coworker is now financing the second degree for this child. Oh might I add this child has not worked thru this time AND my coworker pays all living expenses for this child.
    My coworker asked me what I thought about the whole scenario and I had to bite my tongue to keep from saying " ARE YOU NUTS!!!"
    Clearly raiding a retirement fund and going into debt to pay for a child's education aren't the best decisions, but "allowing" a young adult to choose her own school and major sounds pretty normal to me. I certainly didn't consult my parents before choosing my major, and would never dream of expecting my children to do so.

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    Registered User MsBookWorm's Avatar
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    Quote Originally Posted by Virginia Gentleman View Post
    Clearly raiding a retirement fund and going into debt to pay for a child's education aren't the best decisions, but "allowing" a young adult to choose her own school and major sounds pretty normal to me. I certainly didn't consult my parents before choosing my major, and would never dream of expecting my children to do so.
    I'd say I agree with this to a point. Yes its important for said child to study something they're interested in, can develop the appropriate skills for, and will lead to a stable career. Many kids are able choose wisely and then post graduation go out in the world and do just fine. For the kids who don't think about or choose to ignore that last piece, when they graduate and can't find jobs in their field or living wage jobs period they're quick to blame everyone else for their choices. Not long ago this was a popular topic within the "occupy" movement.

    For the kids that are choosing a path of study that is known to lead to a life of near starvation its important for parents to chime in with their 2 cents, especially if they're insisting on footing the bill. I am a huge lover of the arts and humanities, but rarely do those fields pay the bills these days. I see nothing wrong with the parents of these students strongly encouraging them to consider a double major with the other major being something more marketable or keeping the arts/humanities as a minor to pair with a marketable major. I used to think the school counselors/admissions advisors did this, but after going through school myself I realize they aren't. They don't care what you're studying as long as enrollment numbers are up and your tuition bill is paid.

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    I think anyone under 25 who wants student loans now must have adult cosign...Insurance companies have new group of parents to whom they are selling adult kid life insurance to pay off the student loans should anything happen to the kids. I should add, STUDENT LOANS ARE NEVER DISCHARGED BY BANKRUPTCY, ONLY IF YOU BECOME DISABLED ENOUGH TO GET SOCIAL SECURITY DISABILITY PAYMENTS OR SSI. If kid doesn't work, parent will pay on these loans even if garnished until paid off.

    Most community colleges are $100 an hour for classes so one could pay cash for college working minimum wage and live at home until they earn Associates...Well chosen Associate degree can pay $30k starting or more. Many businesses are even asking for secretaries with Associate or Bachelor's degree...(They call it admin assistant now as company fired the 3 secretaries and now a college-educated person is doing 3 persons' jobs making $12 starting.) Banks frequently start at $11-12 an hour with opportunity for lots of hours, benefits and opportunity for advancement if person had 6 months cash handling experience and learned 10-key from typing tutor program from best Buy. With Associates, some companies will pay for responsible employees with potential to get Bachelor's degree for free.

    Private colleges are frequently $100k+ now for same education as public university @ $40k (for Bachelor's degree in useless subject EVEN!)...These private colleges do have some good master's programs or degree completion programs with lots of flexibility but will get no one hired any quicker than a university degree from public college...However, private schools give lots of scholarships for 4.0 students, lesser athletes and even choir so can be an excellent option if student is scholarship recipient....Having attended public university, community college and private college myself through my education, I found no need for additional religious training environment provided by private college and determined student could ignore all the public university distractions just fine by working and avoiding greek life while living with parents or off-campus studio apartment.

    Community college is only technical training for technical careers in some areas so do your research so you don't end up with no-hands-on skills with computer science degree my using 4-year-university all the way through without research...talk to HR people, business owners and recent graduates to see what skills they wished they had received and which program failed them....In other situations, community college is do dumbed down, it was nice option for high school students who spent their time socializing or received GED. If you need remedial work to get your math/english scores up to gain admission to any school, you need to work on this at community college...

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    Registered User James Martin's Avatar
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    Most parents would do anything to help their children succeed. They put the needs of their kids first from they day they’re born all the way through when it comes time for the kids to go to college. And when that time comes and a child doesn’t have enough money to pay for school, parents might be willing to ask for help on behalf of their children by signing up for parent college loans.

    The name of these loans can be confusing, as they sometimes seem to imply that parents are heading to school to get their own degrees. In reality, when experts discuss college loans for parents, they’re typically discussing loans that parents take on so their children can enter a school. The parent might never set foot on a college campus, but the debt from that experience is the responsibility of the parent.

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    Registered User Buckeye5's Avatar
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    As a parent that has her third child, who is now a junior in college, and the older two graduated from college, there is no way my kids would have gotten a bachelors degree without my Dh and I taking a parent plus loan for them, i am often amazed at the differences in what a college charges from state to state, Ohio's public colleges are expensive compared to many other posters on here, I hate that we have them, but they have loans also. DH and I are a part of the middle class that gets slammed for pretty much everything, not rich enough to pay cash, and not poor enough to qualify for any assistance, and by the way the oldest child graduated the top 10 people of her college class, still was given very little money, and her grades were A's.

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