How much skin should your kid have in the game?
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wrote on 16 Jan 2021, 02:13 last edited by
One option is to let them have (apparent) skin in the game but pay the debts for them when they leave. So they get the full incentive effect without the debt.
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The Mrs. and I are having this debate now. Trying to decide how much he should have to contribute to his education and how much we take care of... I was thinking 50/50, but as we get closer I start to feel protective and don't want to see him in major debt coming out of school. What are your thoughts?
wrote on 16 Jan 2021, 02:15 last edited by@lufins-dad said in How much skin should your kid have in the game?:
I was thinking 50/50, but as we get closer I start to feel protective and don't want to see him in major debt coming out of school. What are your thoughts?
Maybe, do what you can, he does what he can, have loans cover the rest?
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One option is to let them have (apparent) skin in the game but pay the debts for them when they leave. So they get the full incentive effect without the debt.
wrote on 16 Jan 2021, 02:25 last edited by@jon-nyc said in How much skin should your kid have in the game?:
One option is to let them have (apparent) skin in the game but pay the debts for them when they leave. So they get the full incentive effect without the debt.
That’s one option that I have been considering. Be a helluva graduation gift.
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wrote on 16 Jan 2021, 02:27 last edited by
@aqua-letifer said in How much skin should your kid have in the game?:
@lufins-dad said in How much skin should your kid have in the game?:
I was thinking 50/50, but as we get closer I start to feel protective and don't want to see him in major debt coming out of school. What are your thoughts?
Maybe, do what you can, he does what he can, have loans cover the rest?
That kind of reasoning results in your kid spending an assload of money getting a “degree” from New Zealand or something...
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@aqua-letifer said in How much skin should your kid have in the game?:
@lufins-dad said in How much skin should your kid have in the game?:
I was thinking 50/50, but as we get closer I start to feel protective and don't want to see him in major debt coming out of school. What are your thoughts?
Maybe, do what you can, he does what he can, have loans cover the rest?
That kind of reasoning results in your kid spending an assload of money getting a “degree” from New Zealand or something...
wrote on 16 Jan 2021, 02:28 last edited by@lufins-dad said in How much skin should your kid have in the game?:
That kind of reasoning results in your kid spending an assload of money getting a “degree” from New Zealand or something...
One quarter of an assload, thankyouverymuch.
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wrote on 16 Jan 2021, 02:33 last edited by
Having him be on the (apparent) hook can also help him properly value relative costs and aid packages he might get.
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wrote on 16 Jan 2021, 02:36 last edited by
Luke is an Eagle scout is he not? That would indicate to me that skin in the game will not be a big issue.
What I would look at is what can you cover without seriously impacting building your own financial security. If you can send him into the world debt free, that’s great. If not, try to keep the debt down as much as possible.
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wrote on 16 Jan 2021, 02:37 last edited by
That’s true. One thing to remember is you can borrow for college but you can’t borrow for retirement.
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wrote on 16 Jan 2021, 02:44 last edited by
Its like the tell you on the plane - put your oxygen mask on before trying to help someone else.
As harsh as it may feel, parents do not owe their children an all expenses paid education. If you can, great. If not, help as much as you can.
I agree with Jon...discuss the relative situations thoroughly with him, including what he can expect to make after graduation and how that debt will impact it.
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wrote on 16 Jan 2021, 03:12 last edited by
Not commenting on "affordability" and simply assuming that "affordability" is not an issue for you, then I'd say you just go ahead and pay for everything higher-ed. Reasons are two:
- You have had 16 or 17 years to teach your kid responsibility; maybe have a little faith in both of you in believing that you have taught it well and he has learnt it well.
- Most bachelor's degrees these days as a competitive currency is about the same as a high school diploma from one or two generations ago; so you're really paying for it like someone else paid for high school one or two generations ago. Maybe let him pay for it himself when he goes for a Master's or Doctorate degree.
In any case, congratulations on him getting accepted into one of his preferred schools, and good luck to you both.
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One option is to let them have (apparent) skin in the game but pay the debts for them when they leave. So they get the full incentive effect without the debt.
wrote on 16 Jan 2021, 03:18 last edited by@jon-nyc said in How much skin should your kid have in the game?:
One option is to let them have (apparent) skin in the game but pay the debts for them when they leave. So they get the full incentive effect without the debt.
I like this idea too.
You could also have it based on GPA. Although that could spiral badly if he has a tough start.
Maybe just require he have a job while he’s there to use for disposable income? Or at least during the summers.
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wrote on 16 Jan 2021, 03:59 last edited by
I believe kids (people) come with more of a temperament than we would like to acknowledge. I would work with that in terms of so many decisions.
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wrote on 16 Jan 2021, 05:09 last edited by
We said we'd pay off the interest but he had to pay off the principal
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wrote on 16 Jan 2021, 09:07 last edited by
We limited student loans to $7,500 per year. Graduated with < $30k in student loans.
About the price of a car.
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wrote on 16 Jan 2021, 09:10 last edited by
Student loan? What is a student loan?
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wrote on 16 Jan 2021, 09:25 last edited by
@klaus said in How much skin should your kid have in the game?:
Student loan? What is a student loan?
Lower than market interest rate loans for students.
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Not commenting on "affordability" and simply assuming that "affordability" is not an issue for you, then I'd say you just go ahead and pay for everything higher-ed. Reasons are two:
- You have had 16 or 17 years to teach your kid responsibility; maybe have a little faith in both of you in believing that you have taught it well and he has learnt it well.
- Most bachelor's degrees these days as a competitive currency is about the same as a high school diploma from one or two generations ago; so you're really paying for it like someone else paid for high school one or two generations ago. Maybe let him pay for it himself when he goes for a Master's or Doctorate degree.
In any case, congratulations on him getting accepted into one of his preferred schools, and good luck to you both.
wrote on 16 Jan 2021, 10:41 last edited by@axtremus said in How much skin should your kid have in the game?:
Not commenting on "affordability" and simply assuming that "affordability" is not an issue for you, then I'd say you just go ahead and pay for everything higher-ed. Reasons are two:
- You have had 16 or 17 years to teach your kid responsibility; maybe have a little faith in both of you in believing that you have taught it well and he has learnt it well.
- Most bachelor's degrees these days as a competitive currency is about the same as a high school diploma from one or two generations ago; so you're really paying for it like someone else paid for high school one or two generations ago. Maybe let him pay for it himself when he goes for a Master's or Doctorate degree.
This is my thinking as well. Daughter #2 is currently a sophomore.
We cover all the necessities; anything "extra" she has to pay for. We knew before we had children that we would do it this way, so we sort of prepared for it. -
wrote on 16 Jan 2021, 11:14 last edited by
@klaus generally the countries which make you pay for ambulance service also charge a tuition for education that requires you go deeply into debt.
There must be some correlation there though I’m not sure it’s obvious.
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@klaus generally the countries which make you pay for ambulance service also charge a tuition for education that requires you go deeply into debt.
There must be some correlation there though I’m not sure it’s obvious.
wrote on 16 Jan 2021, 11:31 last edited by@bachophile said in How much skin should your kid have in the game?:
@klaus generally the countries which make you pay for ambulance service also charge a tuition for education that requires you go deeply into debt.
There must be some correlation there though I’m not sure it’s obvious.
Actually, I'm even in favor of letting students pay some tuition. The "completely free" model we have over here is not optimal for creating the right incentives. My feeling is that something like $3000 or $5000 per year would be optimal. But those $60K/year things in the US is just insane.
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wrote on 16 Jan 2021, 19:14 last edited by
I told my daughter that it is coming out of her inheritance.
That's what I tell her whenever we pick up a tab.