Student loans and SAHP-ing

[qofcc]

This one aspect of Carl's situation that no one has really discussed. If Carl is going to be doing a lot relocating for his career, Mrs. C is likely to have some issues with advancing in her career. A potential employer is going to take a look at her job hopping and say that she's just going to follow her husband's career and never hire her in a leadership position because the employer will figure that she'll be moving on within 2-3 years. She will be sacrificing her career for his even if she wants to work.

I thought I brought that up in the other thread? Baby or no, stay-at-home or no, until he gets to the level where he's rewarded with a store in a desirable area where he gets to stay long-term, her career is going to suffer and if she's going to take time off from work, now might be a better time to do it then later when they're presumably both earning more and giving up more.

[wvugurl26]

Job hopping could be a problem. They look for anything to use to weed out candidates these days. On the other hand if she doesn't keep working in a public service field for 10 years total, none of her loans go away. My loans have been in IBR since February 2010. The payments I have made since then have not even covered the interest.

Her loans are in the same repayment status. Her payment went down $400/month when she switched payment plans.

He had a plan to get to the corporate office in Albany in a few years. So for a few more years she works in a job that allows her to still qualify for loan forgiveness and then she really starts her career when he's in a more permanent position. Yes, she is making a sacrifice. I don't think the fact that she is makes it ok for her to stay home when he doesn't want her to. Life's not fair and if she wanted to stay home with kids maybe she should have married someone with a higher income.

I'd have a much different opinion if she didn't owe $100k in loans. While switching jobs may look bad, it is much easier to find a job when you already have one in the current market.

[qofcc]

So for a few more years she works in a job that allows her to still qualify for loan forgiveness and then she really starts her career when he's in a more permanent position. Yes, she is making a sacrifice. I don't think the fact that she is makes it ok for her to stay home when he doesn't want her to. Life's not fair and if she wanted to stay home with kids maybe she should have married someone with a higher income.

I'd have a much different opinion if she didn't owe $100k in loans.

I agree with you. The 100k+ in student loans that she accumulated after they were together and against the advice of him and her family make a huge difference in this case. I'm not saying she should be able to stay home long term when he doesn't want her to particularly after doing that. I'm just saying the next years are going to be the low point of her career. If she needed to take a bit of time off or work less than full-time while caring for a child, this might be the time to do it. I think her arguments about the baby timing are valid. His are too, but neither is right or wrong. I think she's pushing the envelope to expect he's going to let her stay home long term after she made such a big deal about getting the best education money could buy.

[wvugurl26]

I think everyone has made valid points though about how does he make sure she goes back to work after a year or so? You can't force an adult to do something. And while she says she wants to be a SAHM, caiwau and others don't think she would like the reduced lifestyle that comes with paying their bills on one salary.

The job market is still pretty bleak so if she can't find a job there now, what is it going to look like after she has been out of the workforce for a year?

Personally I wouldn't be in any hurry to have a baby with someone who lied to me. I think they need some counseling first. And one of the things they should work through should be the baby timeline.

[973beachbum]

May 12, 2012 9:55:19 GMT -5 @tbird said:

May 12, 2012 1:13:57 GMT -5 @bonnap said:

"we are cash flowing that- no more loans. But I am the only person earning money,"

Shane,

I would have no problem using the inheritance to pay off my existing student loans in your situation. You ARE paying for his education. The argument would be that he should reimburse you for his "share" or take out student loans himself and pay those off when he gets his inheritance.

I recommend looking at the situation holistically and how the decision is going to affect you long term. Perhaps it DOES make sense to keep the student loans and invest the inheritance for retirement.

DH and I didn't have any student loan debt. We had a little bit of debt < $5000 and got that paid off before we married. However he did get a sizable inheritance which was a game changer for us. Not so much that we could both quit our jobs and retire to a Caribbean Island but enough to know we had some options.

We jointly agreed 9 years ago to relocated to AZ for his job (we could have stayed in the SF Bay Area and had me support the family for a while) and we bought a house in a location which would have made it difficult for me to commute to work from. Now I think it would be hard for me to find anything but entry level work.

This one aspect of Carl's situation that no one has really discussed. If Carl is going to be doing a lot relocating for his career, Mrs. C is likely to have some issues with advancing in her career. A potential employer is going to take a look at her job hopping and say that she's just going to follow her husband's career and never hire her in a leadership position because the employer will figure that she'll be moving on within 2-3 years. She will be sacrificing her career for his even if she wants to work.

but that will comingle the inheritance, and it will no longer be separate property in the event of divorce....

TBird, what difference will that make if they aren't in a community property state? I thought that was only important because of the comm property laws in states that had it.

[Deleted]

Student loans are structured with payback over 10-20 years . . . so noone should have kids until they are over 30? Nahhh

Everyone has to make their own judgment on their ability to support their kids independently as well as a couple, so debt is a part of that decision. Prepare financially and your life is easier. Don't prepare & you will still get through it, it just won't be much fun along the way.

I don't think there is a right or wrong decision on this.

[wvugurl26]

It is an individual decision. However, I don't think you can ignore the elephant in the room in caiwau's situation. There is over $100k in non mortgage debt and they want a house. I'm not saying they should wait to buy a house or have kids until they are paid off. However, I think it does tend to take away the option of a SAHP. Caiwau doesn't want to be the sole earner and it isn't like he earns double what his wife does. For his wife to stay home, they'd have to make a lot of cuts and he doesn't see his wife being happy with that lifestyle. Frankly I agree with him.

The fact is if she continues to work in a public service field the balance of the federal portion of those loans will be forgiven. Not sure what her mix is but a good chunk of them should be federal at least I hope!

[Deleted]

I didn't realize this was also specific to the C situation. Her federal portion of the loans is probably $35,000. How much less does she earn in public service year over year? I calculated it for my DD to work in under-served public schools & it was not even close to break even, so not worth it. Maybe Mrs C either can't or won't do the math :-)

That said, in general she sounds like she has an entitlement princess approach to life, which is totally fostered by her mom. You see it in spades in the cousins situation. I guess she learned nothing watching that train-wreck start to unfold. I think there are a lot of areas where Mrs C is giving Cawiau lip service on stuff and NOT actually aligned on goals or values.

I can't say right or wrong to divorce for them as only they can figure it out, but I think C is starting to realize that their values are different in critical areas. I could not stay married to someone who attempted intentional deception of that magnitude. Just wait & watch - he'll start digging now & more deceptions are going to pop up. Her choices are nothing but selfish personal ones. Her mom is probably willing to float her the money so she can be off work and all that. But they totally disrespected C by not involving him in those discussions. He's a man's man & doesn't want MILs money to run his family. He'll be successful in his own right, but he never gets to "own it" if others subsidized along the way.

Oh, and C isn't stupid either. What they did disrespects his abilities and potential. Conspiring against your husband would never be a recipe for success.

[Deleted]

May 10, 2012 19:12:15 GMT -5 midjd said:

So what's your view on SAHPs who have large student loans? Are they burdening the working spouse? Is it their obligation to pay off those loans themselves? Or, as long as both spouses agree to it, it's no big deal? Does it depend on the loan repayment terms? (E.g. what if someone's parent pays off the SL and the debt is then owed to the parent?)

(I'm not starting this thread to bash Carl or his wife at all. It just seems like there are some strong opinions on the subject, but I don't really have one, and apparently neither does DH )

I view debt as debt and think it really depends on the finances of the family. There are probably very few spouses who could financially swing paying off 100K in SL, even less who would want SAHS enough to make the payments.

DH paid my SL during my last year of school and while I was looking for a job. He never complained about them. The payment is only 230 a month, so not a huge hardship.

He actually still pays them, because all my money goes to taxes, daycare, and 401K. We could switch it, so he pays the daycare and I pay the SL, but what is the point. Both things still need to be paid.

[wvugurl26]

I have no idea what her mix is. I don't know how long it took her to get the masters. I finished with $19k for 4 semesters (1 undergrad and 3 masters). I also don't know what the going interest rate for private loans. I think my federal ones at 6.8% are bad enough but I'd be surprised if private ones weren't higher.

I don't think it was meant to be specifically about his situation. I was just saying my opinion on it would depend on amount of loans, other obligations and the working spouse's income/income potential.

My payment under standard would be $250ish. Thats a whole different game from Mrs. C's $1000k payments under standard. And yes they can be left under income based and be $600ish but without her working and loan forgiveness, you are stretching out the life of the loans. Caiwau doesn't seem to be ok with that and I don't blame him.

For me it is a decision for each family to make. Each family's going to have different loan amounts, other obligations and income potential. I know its hard to see past weekend plans when you are 19 but I think this is why its important to consider your future plans when taking loans.

Yes, they do seem to be apart on some critical things which is why virtually everyone has said talk it out with a counselor.

[Formerly SK]

May 11, 2012 13:42:18 GMT -5 Firebird said:

why would someone who aspires to be a SAHP get a horribly expensive education for which they have to borrow money? I understand that sometimes priorities change- you plan to go back to work but a special-needs child makes it impossible, for example-but if you start out from the very beginning wanting to be a SAHM when the time comes, then don't borrow gobs of money for some poor spouse to pay back later.

Yup, that's the part that's never made any sense to me. If you want to be a SAHP and you want to go to college anyway just for "insurance" in case you need a job later, you'd be well served to keep those costs as low as possible.

I think that's the part that would piss me off if DH had six figures of SL debt and wanted to be a SAHP. I'd want to ask, "WHEN did you have this grand revelation that you didn't want a career, and what in the hell justified you spending so much money you didn't have on school anyway?!??!"

I think a good part of the problem is it is pretty much impossible to conceptualize making payments on 100K SL when you are 19/20/21. You don't understand how much a mortgage/food/taxes take up of your income. All you know is your school is 25K/yr and that seems "normal."

I have to say that even though I always planned to be a SAHM for awhile, I didn't meet DH until after I had graduated. I certainly wasn't going to plan my life with the idea I'd meet someone who'd make me a SAHM. Heck, I didn't have DC#1 until I was 31. Course, I only borrowed 23K and we paid it off before we TTC, so I'm absolutely not defending Mrs. C, but I think there is validity to having an ideal (SAHM) but acting in a manner as if the ideal may never happen (huge SL). You just have to be prepared for the consequences (eating beans/rice for a few years to pay them off before TTC).

[wvugurl26]

Caiwau has said he doesn't think his wife would be happy with the lifestyle being a single income household would provide.

I get that plans change and all that but the rule I always heard was don't borrow more than you expect your first year's salary to be. Obviously I think there could be exceptions to this for things like lawyers, doctors, pharmacists, etc. While caiwau and his wife expected for her to make more than she does now with the masters degree, I think they are crazy if they expected she could make $100k.

It is a hard decision to make when you are a kid. And even with the one year rule when I only made $10/hr during a period of underemployment the total bills were hard even with IBR student loan payments.

[Firebird]

I have to say that even though I always planned to be a SAHM for awhile, I didn't meet DH until after I had graduated. I certainly wasn't going to plan my life with the idea I'd meet someone who'd make me a SAHM.

First, I'm not picking on you, just trying to follow your train of thought here. You "always planned" to be a SAHM, yet you weren't going to plan your life with the idea that you'd meet someone who'd make you a SAHM? How does that work?

I don't think there's anything wrong with planning to be a SAHM, and I also think that it's smart to have a backup plan and not wait around for the white knight who's going to make that happen for you. If I have a daughter and she wants to be a SAHM, more power to her but I will absolutely encourage her to have her own life and her own career in case that doesn't work out.

But I wonder what you mean when you say you always planned to be a SAHM, but you weren't planning on it.

[Firebird]

I think a good part of the problem is it is pretty much impossible to conceptualize making payments on 100K SL when you are 19/20/21. You don't understand how much a mortgage/food/taxes take up of your income. All you know is your school is 25K/yr and that seems "normal."

I don't know, I think most kids are savvy enough these days to be able to google "debt payment calculator" and figure out how much $100k in student loans will set them back.

There's no way they'd take on that kind of debt for anything else right out of high school - what bank would give an 18 year old a $100k mortgage?! - so there's no reason they should be able to get loans of that size with no plan and no concept of how they're going to pay it back. It's lunacy.

[NomoreDramaQ1015]

I think a good part of the problem is it is pretty much impossible to conceptualize making payments on 100K SL when you are 19/20/21.

really? I don't know about private SLs but with my Staffords I recieved quartely a statement showing me what the current interest rate was and what the payment at the time would be if I was interested in pre-paying.

They beat me over the head with it. I would have had to chuck all the letters I recieved straight in the waste basket to miss it.

[wvugurl26]

Yeah I used to make quarterly interest payments and it explained what happened if you didn't pay it and added it onto the loan.

[Wisconsin Beth]

May 11, 2012 17:31:04 GMT -5 qofcc said:

The ONLY reason I went to school is to be able to support myself no matter what (let's face it - no one gets degree in accounting bc they are passionate about it)

LOL - Lena, you just spoiled my image of you. I don't think I've ever heard you say what you used to do. The way you've talked about having moved here from another country and giving up your high paying career I had this picture of you as a french model.

Russian!

[Deleted]

My reasons why I don't care nor want to have a stay at home parent:

- job security: stupid I know but true for me. My wife and I are both not afraid to lose our job because in a way we are leaving off one income or if need be could live off one income for awhile.

- peace of mind: I have witness woman that were completely loss after a divorce or loss of a spouse and they have been the stay at home spouse for years. While we both have life insurance which would help in case of death but knowing that she will able to hold her own if need be provide me with some comfort.

- lifestyle: I enjoy the semi-good life and so does my wife, we are both guilty. I like being able to meet my friends 2-3 times a week at the bar or restaurant without having to fret over it, go to Vegas for a concert, go golfing or go on a road trip. These are wants not needs and unless I am making "beaucoup" bucks which I am not, having another income does facilitate that. We are able to cover all our "needs" under my income and my wife income covers some of the "wants".

-----------------------------------

To answer some questions :

- my wife have about 76k in federal loans, 27k Sallie Mae and 8-9k I believe from Hosftra University which I think are Perkins. So the bulk of her loans are federal and the game plan for now is pay off Hofstra first, then Sallie Mae and let the federal one run for 10 years till she get loan forgiveness.

- We know that job hoping is somewhat frown upon which is why I took this position knowing I will be here for at least 5 years or more and it is only an hour drive to Albany where my wife ultimately wants to be. She has been looking for job in that area and if she does get one the goal would be to move to Cobbleskill which would be halfway between both locations next year. So no it is not all about me or my career but we know that my chances of increasing my income over the next 5 years are better than hers in non-profit or governmental work.

- Most of my wife student loans are from her 4 years at Hofstra and we paid cash for her first year in grad school and put the second year on our credit card at zero percent. That is the remaining credit card debt we have now, 8k at zero percent.

- No we did not think she would be making 100k right out the gate nor plan for that. Honestly we did not or I did not know the extent of her student loans till we got married and combined finances. She graduate in May, we got married august 23rd an she started grad school on august 25th. What was done was done, we already had the debt, now we just have to pay it and get the rest forgiven at the 10 year mark.

- all of our student loans are at ~6.8% or so, I dream for those 2-3% rates I hear about all the time.

[Wisconsin Beth]

Hugs Carl.

[Formerly SK]

May 14, 2012 10:57:09 GMT -5 Firebird said:

I have to say that even though I always planned to be a SAHM for awhile, I didn't meet DH until after I had graduated. I certainly wasn't going to plan my life with the idea I'd meet someone who'd make me a SAHM.

First, I'm not picking on you, just trying to follow your train of thought here. You "always planned" to be a SAHM, yet you weren't going to plan your life with the idea that you'd meet someone who'd make you a SAHM? How does that work?

I don't think there's anything wrong with planning to be a SAHM, and I also think that it's smart to have a backup plan and not wait around for the white knight who's going to make that happen for you. If I have a daughter and she wants to be a SAHM, more power to her but I will absolutely encourage her to have her own life and her own career in case that doesn't work out.

But I wonder what you mean when you say you always planned to be a SAHM, but you weren't planning on it.

Yeah, maybe I wasn't so clear. ;D

For ME, because of my childhood I felt really strongly that unless I could do the parenting job to the best of my ability, I wouldn't do it. At the time, I felt being a SAHM was the best thing (I don't feel that way at all anymore). So yes, I planned to not have children unless I could do it and quit working for five or so years. And yes, part of my conversations with DH when we were dating is we needed to be compatible on that value. We specifically had our DC 18 months apart so I could return to work sooner. The autism thing has thrown a wrench in our plans somewhat, but that's just life.

I completely agree with you that women (and men) need to have their own life with their own career, etc. Being a parent is not the end all be all of existence. I love being busy and challenged and am surprised at how much I don't enjoy being a SAHM after all the importance I placed on it previously. I fully look forward to 25 more years of working.

[Formerly SK]

May 14, 2012 11:04:27 GMT -5 NomoreDramaQ1015 said:

I think a good part of the problem is it is pretty much impossible to conceptualize making payments on 100K SL when you are 19/20/21.

really? I don't know about private SLs but with my Staffords I recieved quartely a statement showing me what the current interest rate was and what the payment at the time would be if I was interested in pre-paying.

They beat me over the head with it. I would have had to chuck all the letters I recieved straight in the waste basket to miss it.

I got them too, but honestly they were just a number to me. In college (and I was fully independent and self supporting) I didn't have a concept of what medical co-pays would be, what TAXES would be, the expenses of homeownership, the cost of daycare, etc. So while my statement may have said I'll have a $200/mo payment (or whatever) I didn't appreciate what that meant in terms of cost of living. But maybe I was more stupid than the average kid.

[whoisjohngalt]

LOL - Lena, you just spoiled my image of you. I don't think I've ever heard you say what you used to do. The way you've talked about having moved here from another country and giving up your high paying career I had this picture of you as a french model.

Really?? Oh Lordy, I am way too short and too boring to be a model. And "I" didn't come here, my parents dragged my ass to US when I was a teenager.

Lena

[Sum Dum Gai]

And "I" didn't come here, my parents dragged my ass to US when I was a teenager.

Do you still have dual citizenship, and have you ever considered going back? Just curious by the way, I'm not like telling you to leave or anything.

[NomoreDramaQ1015]

I got them too, but honestly they were just a number to me.

You can still see the number climbing as you take out more loans.

Even if you are not a YM-er and able to calculate out future net work/living expenses from birth it should not be impossible to realize that as you take out more loans the number on the statement is getting bigger and bigger.

[wvugurl26]

At least on the old site they had calculators where you could figure out a budget. It'd give you loan payment amount and then you could plug in other expenses.

My tax accounting teacher made us do budgets. And he made us make them realistic.

[findingdeadbeats]

My son is struggling but making it through high school. He wants to go to college and I fully support that. However, his teachers/councilor at the high school constantly are telling him about going to a university right out of HS.

DS has some learning issues, and horrible organizational skills, and just isn't ready for full-time university coursework. For example, he took Algebra three times in HS and had to take Spanish 1 twice. He isn't stupid, he just totally lacks organization and takes a while to learn things well.

I see DS as the "perfect" student for the local community college. He needs the slower pace, easier classes, etc... to ease his way into college. I think sending him to a university at this point would be a HUGE waste of money. I just don't think he would do well enough right out of the gate and why pay a fortune for courses that he may or may not even pass the first time out?

The school keeps telling him to avoid going to the local CC and aim for the university. It pisses me off. While I get their point, I just don't think it is a good solution in his case. And, it irritates me that they keep telling him that he can go anywhere he wants because of student loans... Um, no, he can't. His parent will NOT be signing for student loans...

I wish the schools would spend some time explaining to the kids about the ramifications of student loan payments rather than just keep encouraging every student to go to college and take out loans to pay for it. I think it is very much doing some of these kids a disservice to discount CCs and push them to a university.

[telephus44]

Overall, I don't have issues with a SAHP parent having student loans. If the loans are so large that they have a very negative impact on quality of life then that should be addressed, but I don't think the only answer is for the SAHP to get their butt back to work.

I think in the last thread that everyone said it was ok for Carl to change his mind about having kids. A lot of time SAHP's with student loans change their minds about wanting to work. It's apparently not ok to change your mind about that?

[NomoreDramaQ1015]

I never did an entire budget with my student loans but then I am weird, I never looked at just the payments. I focused on the total I was taking out and the interest rate than was on them.

I locked them in at 4.8% and of course rates drop back down to 2.8% after I do that.

[Firebird]

For ME, because of my childhood I felt really strongly that unless I could do the parenting job to the best of my ability, I wouldn't do it. At the time, I felt being a SAHM was the best thing (I don't feel that way at all anymore). So yes, I planned to not have children unless I could do it and quit working for five or so years. And yes, part of my conversations with DH when we were dating is we needed to be compatible on that value. We specifically had our DC 18 months apart so I could return to work sooner. The autism thing has thrown a wrench in our plans somewhat, but that's just life.

Makes sense. Thanks for explaining.

I do think that having a parent at home is the ideal situation for kids, but there are plenty of factors that would outweigh that (and I'll add the caveat again - neither DH nor I plan to stay at home with our kids, at least not right away, so I'm not saying there is anything WRONG with a kid going to daycare, not at all).

[wvugurl26]

We said it was wrong for Mrs C to unilaterally decide to try for a kid right now. In the same vein it is wrong for one partner to decide to be a SAHP despite the wishes of the other party. I think both should be joint decisions. And caiwau has never wavered on the fact that he doesn't want to be the sole earner in the family.

I don't think having student loans precludes one from being a SAHP, thats a decision for each family to make. I think there are a lot of factors a family would consider when making that decision and one is can we pay our bills (no matter what they are from) on one income? Another would be what do we need to cut to make this happen if we really want to? Different couples will be ok with giving up different things. There's no right or wrong decision here.