Do you counsel your teenage kids about school loans?

[Smallcock]

The student loan problem is getting out of hand in the US. People are graduating with essentially mortgage payments but without a house. Granted school is a lot cheaper in Canada, but still expensive if you pursue careers in medicine and law.

If your teen requires student loans to chase a dream do you just let them run with it or provide any guidance?


"I've Paid $18,000 To A $24,000 Student Loan, & I Still Owe $24,000"
https://www.bustle.com/p/ive-paid-18000-to-a-24000-student-loan-i-still-owe-24000-9000788

 

[User 123]

isn't tuition free? At least for poor families.

 

[happ]

of course not its freee weeee dipperrss

 

[fall]

In Canada tuition is so small it does not even worth to consider: either parents cann spare $12,000 a year for the kid's tuition or student can earn that money part time or during the summer without a problem (especially now in Ontario with $15/hour minimum wage). Room and board is more expensive, but if you do not have money: go to school at you hometown and live with parents.

In U.S. it is even better: most decent schools (top 50 for sure, maybe even top 100) give need-based fellowship which depends on the parents' income. If household income is less than $60K, most school not only cover the tuition (which is usually just under $50K a year), but also give money for food and dorm. If household income is below $100K, almost all tuition will be covered. Only when household income goes above $200K, students have to pay full tuition. So, there are only two ways students can accumulate debt:
1) The parents are too cheap to pay for their kid's education even if they can afford it without major problem
2) The kids are not smart enough to get into top 50 Universities and have to go to a low-ranked schools that charge almost the same high tuition but provide no financial support. Which lead to a question: if you are not smart enough to get into the top 50 schools, why do you want to study anyway?

 

[fall]

By the way, if you click on the author's information on that artickle, you can find:

"Kaitlyn is the Editor-in-Chief of Elite Daily. She has a bachelor's and a master's in comparative literature from The American University of Paris and Trinity College Dublin, respectively. Her interests include planes, languages and attention."

So, a suggestion on how to save on tuition: do not go to a shitty university in Paris, but study better at high school and go into a decent university in the U.S. which provides generous need-based financial aid.

A suggestion on how to pay of the student debt faster: do not major in "comparative literature" and pay more than the minimum payment when you are an "editor-in-chief".

Next time people will cry when they give $20 bill for a coffee and muffin at Starbucks that cost $8 and get only $12 change back. Indeed, noone has told them that $20-$8=$12.

 

[thumper18474]

I made sure my kids were debt free when they graduated..so they could start their careers off without worrying about when OSAP was gonna come knockin.

 

[JaimeWolf]

The student loan problem is getting out of hand in the US. People are graduating with essentially mortgage payments but without a house. Granted school is a lot cheaper in Canada, but still expensive if you pursue careers in medicine and law.

If your teen requires student loans to chase a dream do you just let them run with it or provide any guidance?

Make sure they have a repayment plan. Most schools have some kind of internship program which will enable them to gain work experience and earn enough pay for the tuition.

If all else fails, there's a line of work that pays up to $1000 a day with flexible hours. No experience required... :gossip:

 

[Occasionally]

Not sure why it's that hard. I had a student loan like everyone else..... but not $100,000. All they did was put me on a 10-year loan repayment program. I think that is the default payback plan. Everything is set up for you. That was decades ago though, so I'm not sure how they handle it now.

If someone has a $100,000 student loan, hate to say this but that's your own burden. Find a cheaper place. It's like buying a car. You can go cheap or you max out your costs and go for the motherload in hopes it's worth it.

Another thing that kills a students financials is rent/dorm. Want to cut your costs in half? Find a school nearby to commute to (like many choose like me). If I lived downtown to go to university I'm sure my student loan would be double when I graduate. But I commuted by bus and subway every day.

Now someone will say..... but not everyone lives near a college or university, so they have to pay for room and board for 4 years. Too bad. Nobody said life is fair and everyone should pay the same low cost, where the cheapest cost of post-secondary schooling would be...... 1. Find a low cost local college/university. 2. Commute to school. 3. Be smart enough in high school to get scholarships

I've known people's kids who have done this. All they had to pay for is books (which isn't covered by scholarships), food and public transit. Add it up, and the 4 year university program costs hardly anything.

 

[hamermill]

Make sure they have a repayment plan. Most schools have some kind of internship program which will enable them to gain work experience and earn enough pay for the tuition.

If all else fails, there's a line of work that pays up to $1000 a day with flexible hours. No experience required... :gossip:

Much similar to how Bella Knox did it.

 

[PinotNoir]

One thing to consider when paying this student debt off over the maximum timeframe is that it is accounted for in the stress test when buying a new home. Two students with average student loans will have approximately $400 in student loan payments per month. This will reduce their new home buying power by the same amount after the stress test is applied.

 

[rhuarc29]

In Canada tuition is so small it does not even worth to consider: either parents cann spare $12,000 a year for the kid's tuition or student can earn that money part time or during the summer without a problem (especially now in Ontario with $15/hour minimum wage). Room and board is more expensive, but if you do not have money: go to school at you hometown and live with parents.

That's often not possible, either because no college/university is near, or because the local joint doesn't offer the right degree.

IIRC, when I went to university (not that long ago), my expenses were 40% tuition + fees + textbooks, 20% room, 15% transportation costs (car, gas, insurance, maintenance) for the to and from my weekend job, and 25% everything else (the biggest being groceries). My parents helped out with some minor things, but the vast majority of it was mine to pay. I graduated with $48,000 of debt, which I was lucky enough to pay off in two years thanks to a great job.

The difference between now and decades ago is an issue of supply and demand. In the last three decades, the university/college completion rate has doubled. This is a double-edged sword. Not only is competition for spots at institutions fierce (and hence, higher tuition), but the labour market is saturated with people expecting to be landing high-paying jobs, yet aren't. The cost of living in urban areas, where these institutions are largely located, is also through the roof. A runaway housing market hasn't helped one bit.

So it's not really appropriate to compare now and decades ago as if they're identical situations.

 

[essguy_]

In Canada tuition is so small it does not even worth to consider: either parents cann spare $12,000 a year for the kid's tuition or student can earn that money part time or during the summer without a problem (especially now in Ontario with $15/hour minimum wage). Room and board is more expensive, but if you do not have money: go to school at you hometown and live with parents.

In U.S. it is even better: most decent schools (top 50 for sure, maybe even top 100) give need-based fellowship which depends on the parents' income. If household income is less than $60K, most school not only cover the tuition (which is usually just under $50K a year), but also give money for food and dorm. If household income is below $100K, almost all tuition will be covered. Only when household income goes above $200K, students have to pay full tuition. So, there are only two ways students can accumulate debt:
1) The parents are too cheap to pay for their kid's education even if they can afford it without major problem
2) The kids are not smart enough to get into top 50 Universities and have to go to a low-ranked schools that charge almost the same high tuition but provide no financial support. Which lead to a question: if you are not smart enough to get into the top 50 schools, why do you want to study anyway?

I've got one kid in University and my youngest going in Sept. The days of being able to earn enough during the summer to pay for even Canadian tuition, rent/residence, books are long gone. Even tuition is tough to earn during a summer. Think about it. Even at minimum wage, you'd have to be working fulltime for the entire break (let's say 18 weeks) and after tax you would still be short for tuition. When I went to University - I never paid more than $1500/year for tuition and that included my MBA (graduated mid 80's just before the Exec MBA took off). Rent was never more than $300 - 350/month. So it was easy to pay your own way just working in the summer. Not anymore. My ex-wife and I maxed out the RESP and it's done well so that's the backstop for my kids (who are both working full-time during the summer - but will realistically only earn enough to make a contribution to tuition/residence).

 

[JaimeWolf]

Much similar to how Bella Knox did it.

There are more anonymous ways to earn money than porn, and you're paid by the hour (or half-hour...), not by the scene.

 

[richaceg]

There's a reason why RESPs can come in handy.

 

[TFZL1]

I told my daughter I would pay for college forever, as long as she lived at home.
She chose to move out, live with fucked up boyfreind. She got a job, supported herself, then, going nowhere on low wage, decided to spend 3 years in college on loans and grants, living with various boyfreinds, or roommates with drama.
I helped her out, but wouldn’t support her.
She still owes 30k. (13k provincial, 17k federal)
They’ll wait for thier money, forever. It’s gone to collection, and since she’s not working, still can’t pay it.
She has 2 kids since then.
They took her tax return which wasn’t much. No credit rating.

 

[Smallcock]

I told my daughter I would pay for college forever, as long as she lived at home.
She chose to move out, live with fucked up boyfreind. She got a job, supported herself, then, going nowhere on low wage, decided to spend 3 years in college on loans and grants, living with various boyfreinds, or roommates with drama.
I helped her out, but wouldn’t support her.
She still owes 30k. (13k provincial, 17k federal)
They’ll wait for thier money, forever. It’s gone to collection, and since she’s not working, still can’t pay it.
She has 2 kids since then.
They took her tax return which wasn’t much. No credit rating.

You gave her options and opportunity and she chose to squander it. Must be tough as a parent but you did all that you reasonably could.

"Give the people advice. If they do not listen, let adversity teach them." - Ethiopian proverb

 

[Occasionally]

I told my daughter I would pay for college forever, as long as she lived at home.
She chose to move out, live with fucked up boyfreind. She got a job, supported herself, then, going nowhere on low wage, decided to spend 3 years in college on loans and grants, living with various boyfreinds, or roommates with drama.
I helped her out, but wouldn’t support her.
She still owes 30k. (13k provincial, 17k federal)
They’ll wait for thier money, forever. It’s gone to collection, and since she’s not working, still can’t pay it.
She has 2 kids since then.
They took her tax return which wasn’t much. No credit rating.

That sucks. Unless you bail her out, or she miraculously gets a great job, she's going to be hurting for decades.... probably forever. If her situation is that bad, don't be surprised if she comes knocking to come home and live in your basement..... I've seen it happen to people. Two 35 year olds with mediocre jobs (but combined income that isn't too bad), but they had a kid, didn't have savings, and had to move home to their parents place. They are now "saving" to buy a house..... Not a starter condo or a modest home in the burbs or Kitchener where it's cheap.... but supposedly saving money to buy a home in the GTA. Good luck with that. Only way they'll get a home worth $800,000+ is if the parents die and they get the house.

The ego these people have. Half shitty jobs that don't pay great, zero savings, living at home, and somehow wants to leapfrog to a decent house like the rest of us have in the family tree.

Here's some advice. You're broke, wouldn't even be able to afford a mortgage that high, probably can't even save up a 10% down payment for 20 years, and what about doing what the rest of us did in recent decades like buy a modest condo to start. Only some people in the family tree 40 years ago were able to buy a house right away (when it cost maybe $100,000).

I swear. I don't think they even have an intention to buy their own home. Just wait it out for 20 years and hope the parents drop dead and leave them the house. I guess that's one way to score a home! lol

As I've stated (more like lectured!) in a few threads about being sound financially (budgeting and ensuring you get a decent job), I don't care what anyone says about money, being Scrooge, or being a greedy fuck 1%'er. Just because a person out there is doing well doesn't mean they are a ruthless Scrooge or a lucky ass who inherited millions. It can just mean you did well and didn't blow your dough.

Money solves lots of issues. Not only does it make things easier, but it's an accomplishment because you can support yourself and support a family without begging for dollars. So that in itself is a checkmark in life in my books..... being self-sufficient.

 

[VERYBADBOY]

There's a reason why RESPs can come in handy.

I did this with my kids, when they got into their teens I told them to plan for after high school, they did and used the funds that was set aside for them. Always educate your children about money at an early age because no one else will. My dad taught me this and it was the best lesson I ever learned.

VBB

 

[fall]

I've got one kid in University and my youngest going in Sept. The days of being able to earn enough during the summer to pay for even Canadian tuition, rent/residence, books are long gone. Even tuition is tough to earn during a summer. Think about it. Even at minimum wage, you'd have to be working fulltime for the entire break (let's say 18 weeks) and after tax you would still be short for tuition. When I went to University - I never paid more than $1500/year for tuition and that included my MBA (graduated mid 80's just before the Exec MBA took off). Rent was never more than $300 - 350/month. So it was easy to pay your own way just working in the summer. Not anymore. My ex-wife and I maxed out the RESP and it's done well so that's the backstop for my kids (who are both working full-time during the summer - but will realistically only earn enough to make a contribution to tuition/residence).

Well, 40 hours a week for 18 weeks during the summer break at $15/hour minimum wage makes $10,800 (no tax on this amount and even fro higher income there is no federal tax since tuition and room and board is tax deductible), which is sufficient to cover the entire $9,000/year tuition and books. So, if students lives at home and go to a local university and parents continue to feed him (as they did in high school), I cannot see why any debt is needed at all. If he/she had decent grades in high school, usually $1000 or $2000 per year fellowship is given, plus if he/she is smart enough, he/she can find a grader's job (that pays well above minimum wage) and earn extra money for ice cream and 3-week free time in the summer. Almost all decent-sized cities in Canada have decent Universities, so, the only money problems exists for people leaving in rural areas. However, even in this case almost anywhere (except Toronto) a room can be rented for $5000/month, which makes it $6,000/year (or even less if sublet it in the summer and it can be furtehr reduced to $3,000/year if share a room with a roommate). Assuming kids at home eat the same amount of food as at school and parents are willing to continue to feed their children (as they did in high school), we are talking about extra $5,000 a year for rent only. Now, how one can say it is not affordable? (And I assume no extra weekend work during the school year). yes, if one looks at "going to University" as a "party time" and "good care-free life" instead of getting an education, he/she can be disappointing with the proposed lifestyle.

In the U.S. the tuition is about $50,000 USD per year (vs. $9,000 CAD here), but best 50 school provide need-based fellowship to cover everything (even room and board) for low-income families and most of the tuition for middle class. People in upper-middle class need to pay a lot, but they can afford it. However, "dumb" kids who cannot get into a decent university but who still want to go to school have to pay a lot since bad Universities do not have money fro fellowships. And, I think, it is the best approach: if you are not smart enough, you should not go to the University, you should go to a 2-year college and start working. 18 y.o. is too late to start studying: student should be studying at least from grade 9 and parents should make this clear to their children. if you cannot get good grades at high school, you should not go to the University. But some people do, and since they have to go to a shitty schools paying the same $50,000/year tuition, they end up with lots of debt. And this is their own fault. The system works just fine for people who are willing to put in efforts, but people who go to college just to extend their childhood have to pay.

 

[Occasionally]

However, "dumb" kids who cannot get into a decent university but who still want to go to school have to pay a lot since bad Universities do not have money fro fellowships. And, I think, it is the best approach: if you are not smart enough, you should not go to the University, you should go to a 2-year college and start working. 18 y.o. is too late to start studying: student should be studying at least from grade 9 and parents should make this clear to their children. if you cannot get good grades at high school, you should not go to the University. But some people do, and since they have to go to a shitty schools paying the same $50,000/year tuition, they end up with lots of debt. And this is their own fault. The system works just fine for people who are willing to put in efforts, but people who go to college just to extend their childhood have to pay.

Or they get in, and flunk. Or they do pass with that Psychology or Sociology degree whose value is low. Funny thing is I know some with these kinds of degrees and they actually have zero interest in these fields. Not one job they got after graduation had anything to do with these fields. But I guess they took them because they are easy.

I think a problem is that the "pathway to success" is stereotyped as get a university degree, get hired at a good job and coast till retirement. Live the life of a white collar worker who chills at the office without breaking a sweat.

Easy for some. Not easy for others.

As you said, some students would better going to college, or doing something less academic which is costly. But they probably get pressured to do it or else they think people will see them as stupid or a blue collar slob.