College quandary - parents perplexed

[AboutThere]

We saved for DD to attend State U (a Big 10 university) and be pretty much free from student loan debt.

However, DD got accepted to Cambridge University in the UK, which means $50,000 additional, which we would pay using Parent ("PLUS") loans. We can't afford to write a check for the additional $50,000, but we can afford the payments on a PLUS loan.

I think the default answer here as between, say, U of Illinois and Northwestern would be "go to U of I" - but I'm wondering if the twist of the exceptional opportunity to study in the UK changes that equation for any posters here.

Appreciate your thoughts.

 

[REWahoo]

If DD is smart enough to get into Cambridge then she should be smart enough to figure out how to pay the added cost. Let HER take out the loans if she believes it is worth the difference - which it very well may be.

EDIT: To make it clear (if it isn't already) I think young adults should have some skin in the game with regards to their college education. Getting a free ride on mom and dad's expense account is short-changing them on part of their education - a very important part.

 

[MichaelB]

If DD is smart enough to get into Cambridge then she should be smart enough to figure out how to pay the added cost. Let HER take out the loans if she believes it is worth the difference - which it very well may be.

EDIT: To make it clear (if it isn't already) I think young adults should have some skin in the game with regards to their college education. Getting a free ride on mom and dad's expense account is short-changing them on part of their education - a very important part.

This. +1

 

[imoldernu]

What REWahoo and MichaelB said:
+1

 

[Whisper66]

If DD is smart enough to get into Cambridge then she should be smart enough to figure out how to pay the added cost. Let HER take out the loans if she believes it is worth the difference - which it very well may be.

EDIT: To make it clear (if it isn't already) I think young adults should have some skin in the game with regards to their college education. Getting a free ride on mom and dad's expense account is short-changing them on part of their education - a very important part.

+1 That is exactly what we did with out kids and they grew a lot because of it.

We offered to pay for what we had planned for...four years at a good state college. Anything beyond that was negotiable. But in general, if they wanted to go to a more expensive school or get a second degree, we told them we'd only write checks amounting to what our plan covered and and let them work out the rest. That position led to each giving a lot of thought to picking a degree they would stick with rather than bouncing around (since we only planned for 4 yrs). Also made them think a LOT harder about the value of going to a private school when we had very good state schools available. We also told them we would not take on additional debt beyond our plan meaning we would not sign for any of their additional debt responsibilities. If they were going to take on much debt (only one did), they would have to show us their plans for paying it off before we'd support them with our planned funds.

All got their planned degrees in reasonable time.

One went on to get a second degree on their own and paid off the school loans (we didn't sign for them) per their plan in just a few years by working two jobs.

One took a year or so longer to get a degree. We supported this after they developed a plan of action that made sense to us. The plan was revisited/reconfirmed each semester before we paid for the next semester.

Another came up with an unrealistic plan to go to a very expensive college that would have left them in heavy debt for many, many years. We rejected the plan and said we wouldn't provide any funding for that plan. Ended up getting a degree at a good state college that we fully paid for.

All did fine in school, got jobs immediately afterward and were independent of us financially as soon as they finished their school.

The above made a lot of sense for our family and built on how we brought up our kids. Our goals were to always strive to help them become financially aware / stable and independent members of our society. Clearly there are many ways to address this topic, your situation may be quite different.

 

[AboutThere]

In the UK there is no extension of time to get degrees and no part-time. One is admitted to a specific degree and they finish that degree in 3 years or start over.
So no concern about changing majors or taking 5.5 years or any of that stuff that is common in US schools.

 

[ExFlyBoy5]

What REWahoo and MichaelB said:
+1

And +1 to the mix. My parents paid ZILCH for my education. Some how I figured out how to get 3 associate's degrees, 1 bachelor's degree and 1 master's degree (and working on a JD now) and haven't gotten a PENNY from my parents. And you know what? I don't hold a grudge and am a better person for it.

 

[AboutThere]

And +1 to the mix. My parents paid ZILCH for my education. Some how I figured out how to get 3 associate's degrees, 1 bachelor's degree and 1 master's degree (and working on a JD now) and haven't gotten a PENNY from my parents. And you know what? I don't hold a grudge and am a better person for it.

Is that your goal for any children you have or might have?

 

[Texas Proud]

Not quandary for me...

DS is about to graduate... he applied for State U and Rice... was accepted to both... but, I had told him that we are paying a specific amount of money toward his education... he can spend it how he wishes..... if he went for a 4 year program and was smart about it he would not have any loans....

But, he chose a 5 year program at State and a 6 year at Rice... Rice is much more expensive so he knows that the money would run out pretty quickly... he chose State U....

Now he did choose the 5 year program... so unless he economizes he will have skin in the game... we are going to start him off with the federal loans since they do not accrue interest when in school.... we plan to take out loans each semester since I do not think he will be able to get his degree within his budget.... but, if he is able to get his degree inside his budget they will be paid off by us.... if he cannot, he will at least have the cheapest student loans to pay off...

 

[Bamaman]

My father worked for the power company and my mother was a housewife. When it was time for my sister and I to go to college, my mother went to work at the IBEW. We were fortunate to both get out of a big city state university in 4 years and get out of our parents' pocketbooks. They provided for us long enough, and we were no longer any burden on them financially.

Our daughter started at a state university, married and had a child. She continued her education and finally got her accounting degree @ 25 years old from a private university. She had some minor student loans which we paid.

My question about the original posting is whether going to graduate school in the U.K. will result in a marketable career that's going to provide a really good living? A friend's daughter graduated last Fall with a doctorate from Cambridge University in Art History. Needless to say, it's a degree that will not provide a living other than teaching at the college level. Huge student loans should only be taken if the education provided will result in a Return on Equity.

 

[Bestwifeever]

Congratulations to your DD. She must have worked very very hard to be at that level. What does she want to do? Does she know how much you saved for her college expenses and how much more the Cambridge education will cost? Was there an expectation on your and her parts as to how that excess would be paid?

It's hard imo with kids who work so hard and achieve so much to put late restrictions on where they can go if there is already an understanding that you would pay for college. If it wasn't important to you that she have skin in the game before and you can still afford it now using the Plus plan or however, then (ducking--totally understand the skin in the game POV) I personally would pay the difference if that's the school she chooses.

 

[Big_Hitter]

We saved for DD to attend State U (a Big 10 university) and be pretty much free from student loan debt.

However, DD got accepted to Cambridge University in the UK, which means $50,000 additional, which we would pay using Parent ("PLUS") loans. We can't afford to write a check for the additional $50,000, but we can afford the payments on a PLUS loan.

I think the default answer here as between, say, U of Illinois and Northwestern would be "go to U of I" - but I'm wondering if the twist of the exceptional opportunity to study in the UK changes that equation for any posters here.

Appreciate your thoughts.

I got accepted into Brown and my Dad refused to pay the $12K a year. No financial aid and no schollys. It turned out okay.

This was back in 82 when $12K was a lot of scratch. He had two other kids to put through school and was making maybe 60K a year at the time.

 

[Fedup]

Simple rule. If you can't afford it, you can't afford it.
My kid did summer study abroad in London and Paris for international experience, her major is difficult enough to study at a state u.

 

[harley]

Talking about what we did back in the 70s or 80s doesn't have anything to do with what's going on now. Apples and oranges.


I'll put my +1 in with REW and Michael and the gang.

 

[Silver]

I'd explain to DD that you will pay the additional costs for the college she chooses, but that it is a loan with whatever interest you are paying to borrow that money. You don't gain anything, but don't lose anything either....and it's a win for her. Be sure to get a legally binding contract for the loan so she understands the re-payment requirements.

 

[Big_Hitter]

Talking about what we did back in the 70s or 80s doesn't have anything to do with what's going on now. Apples and oranges.

man I'm glad I never had any kids then - couldn't afford them!

 

[Lsbcal]

Part of answering this is to understand what Cambridge offers other then an excellent name. If you don't have that information, maybe a source like the site "Quora" would be a good place to ask such a question.

Also I got some interesting hits with a Google search on "Is Cambridge a good university".

And have you visited the school?

 

[Fedup]

It's not Apples and Oranges. What my kid earned one summer is enough to cover her tuition. However, I decided to pay her education because we can. But if we can't afford it then she has the money to pay for it. My kid is also a tutor and TA so she earns decent money during the academic year. I think somewhere between $500-$600 a month.

 

[rayinpenn]

A sheepskin from Cambridge will make your daughter very impressive to employers - Should she choose it I suspect she will never be wanting for a job. However I'll wouldn't fund an expensive university if she wants to be an English teacher who will earn the same as her state u colleagues...

She's wants Cambridge great let her fund it Not you!


Sent from my iPad using Early Retirement Forumh

 

[dadu007]

Talking about what we did back in the 70s or 80s doesn't have anything to do with what's going on now. Apples and oranges.

+1
Yes, please stop these comparisons, as I have an irrational and knee-jerk reaction to attack and correct such outdated thinking.
- My undergrad tuition in 1979 was $275 a semester (in-state).
- In-state tuition is now ~$25,000. And we all know real wages have remained flat or gone down. IOW, everything costs a helluva lot more than it did back in the disco days. And undergrad degrees are now a prerequisite for any mainstream corporate job, which means their instrinsic value is now lower.

 

[ivinsfan]

Have you really factored in the total cost of Oxford..did you factor in transatlantic flights, the cost of where she will live in the Summertime if she doesn't come home. The idea that she is in Europe so she "might as well" go to Paris and Rome while she has the chance? Things in Europe can be pretty expensive. I suggest you have your daughter do a complete budget so she knows what she can and can't do overseas. At that point I'd probably borrow 1/2 of the extra costs and put the rest of the loans in her name. This seems like a good compromise and will ensure your DD is fully aware of budget constraints.

 

[Fedup]

+1
Yes, please stop these comparisons, as I have an irrational and knee-jerk reaction to attack and correct such outdated thinking.
- My undergrad tuition in 1979 was $275 a semester (in-state).
- In-state tuition is now ~$25,000. And we all know real wages have remained flat or gone down. IOW, everything costs a helluva lot more than it did back in the disco days. And undergrad degrees are now a prerequisite for any mainstream corporate job, which means their instrinsic value is now lower.

It's $13k here for UC a year. If you qualify for Pell Grant, I think you get $5500. So you end up paying about $8k out of pocket. If you commute from home, I don't think it's outrageous. My kid after sophomore year earned $20k for her summer internship, let's say she could save half or 1/4. She could save from $10k-$5k on her own money.

 

[AboutThere]

Have you really factored in the total cost of Oxford..did you factor in transatlantic flights, the cost of where she will live in the Summertime if she doesn't come home. The idea that she is in Europe so she "might as well" go to Paris and Rome while she has the chance? Things in Europe can be pretty expensive. I suggest you have your daughter do a complete budget so she knows what she can and can't do overseas. At that point I'd probably borrow 1/2 of the extra costs and put the rest of the loans in her name. This seems like a good compromise and will ensure your DD is fully aware of budget constraints.

Yes. The actual cost of tuition (it being a 3-year BA) is actually not far off from State U's 4 years; it's the flights and housing and some wiggle room for the exchange rate.

 

[AboutThere]

Part of answering this is to understand what Cambridge offers other then an excellent name. If you don't have that information, maybe a source like the site "Quora" would be a good place to ask such a question.

Also I got some interesting hits with a Google search on "Is Cambridge a good university".

And have you visited the school?

It's a very different educational experience than a US school. All programs (that is, every degree, e.g., Euro History) are ranked by the government. It's a world-class program that she has been accepted to.

As to the visit: UK parents are not involved in touring schools or handling housing or anything like that: one parent told me: "we put him on the bus and we went to the bar." We have not been there. We did speak to a counselor who has sent several kids there with high recommendations.

 

[Philliefan33]

Your DD has a unique opportunity. I agree that the choice is not the same as "big state U with no loans vs. U.S. private school with $150K in loans". If I were in your shoes I'd be inclined to want to make it possible.

Some things to consider:

Is DD your only child, or have you/will you be funding other college educations? I have two daughters, and while I've never worried that "fair" = "spending the exact same amount of money", I believe it's fair to keep the spending somewhat equal. If taking on large loans for DD means that a younger sibling will have limited options, I wouldn't do it.

You say you cannot afford to pay the extra $50K per year but can afford the loan payments. Is it just a cash flow problem, or will the loan payments adversely affect your ability to run the household/save for your retirement? I would be adverse to so much debt but I don't know the details of your finances.

As far as the posters advising your daughter should get her own loans, that is not likely to happen. Student loans in the US are limited to $5,000-7,500 per year for the student. (I don't know if Stafford loans are even available for students attending college in another country). Additional private loans are available, but someone will need to consign for her. What bank is going to lend $50,000 to an 18-year old student with little income and no assets?

Disclosure, because our experience colors our opinion: DH and I paid about $250K (total) to send our two DDs to college for their BS degrees. There was no need-based financial aid offered, and we were able to pay by using savings and current income. There were no loans.