Will You Mortgage Your Home For Child's College?

[Miss Tequila]

No. At this point, I firmly believe that all children should pay for their own education. My oldest is only 12 so I might change my mind at some point, but I doubt it. We have already started talking about college and why it is so important to choose an appropriate major (using my niece as an example...graduated with $50K in college loans with a useless degree). I would hope knowing that you are on the hook for the cost of school might make one think a little harder about what they could actually do with the degree they want to get.

What I might consider is paying off the student loans once my dd graduates with college...of course, I won't consider that if she picks a half-assed major that will not allow her to get a decent job (to me, that would be rewarding poor choices).

[zibazinski]

Nope, my kids understood that their tuition and books would be free courtesy of our state program that rewards students for good grades and that I would pay for their room and board for 4 years. Beyond that, no way and if they had majored in nonsense, I wouldn't have paid for room and board either unless they lived at home.

[phil5185]

We have already started talking about college and why it is so important to choose an appropriate major (using my niece as an example...graduated with $50K in college loans with a useless degree). I would hope knowing that you are on the hook for the cost of school might make one think a little harder about what they could actually do with the degree they want to get.

IMO you will much less of this. Over the past 25 yrs parents have pushed kids into college at any cost w/o much thought about the degree - ie, 'college is good, go'. That overloaded the colleges, demand exceeded supply, tuition skyrocketed.
More recently you see articles in Money magazines, financial news, etc, pointing out that college is good only if you earn a useful degree, the others join the unemployed.

[zibazinski]

Amen, if you want a low paying career path that requires college then live at home which will save a LOT of money and start at CC as well.

[justwhoever]

I don't intend to pay for my kids to go to college. IF they want it bad enough then they will pay for it their selves. College does NOT equal a career or even a job. Once they turn 18, they are adults. Time to act like one and pay your own way.

[swamp]

I have a 15 year mortgage that will be paid off just before DS is eligible to go to college, so it's an option. We're also saving money for them too, and I expect them to pay for part of it themselves.

We'll see how things shake out.........

[HappyLady]

I definitely disagree with taking out a second mortgage to pay for college, but I also strongly disagree that there is a "useless" major. The particular major itself isn't necessarily the key to a great paying job. It's what you learn overall in college (how to keep learning). My major does not relate at all to the job I have, and I had no problem getting interviews or great job offers out of college, even though i didn't have a one of the 'concrete' majors.

It really is the person and their aptitutude that will lead them to be successful, not the subject they chose to focus on in college.

No matter what the major, I caution parents from risking their own finances to pay for their child's college education. There are some great scholarships out there, and a little work for school never killed anyone.

[TD2K]

Nope. My dog's not going to college

[BeenThere...DoneThat...]

...no...

[marjar]

Uhm, why did some of you have kids?

[phil5185]

but I also strongly disagree that there is a "useless" major.

LOL - show up at our HR Dept and we'll explain about a BA in women's studies, psych, interdisciplinary studies, social work, appreciation of russian literature, yada. True, the degreed applicant is 4 yrs older and has gained much in wisdom and maturity - but it is very hard to apply the soft degrees to real and marketable work. (Compared to the applied skills degrees - engineer, nurse, accountant, teacher).

[Miss Tequila]

Mar 5, 2011 11:48:46 GMT -5 @marjar said:

Uhm, why did some of you have kids?

Tax planning purposes

[swamp]

Mar 5, 2011 12:01:24 GMT -5 phil5185 said:

but I also strongly disagree that there is a "useless" major.

LOL - show up at our HR Dept and we'll explain about a BA in women's studies, psych, interdisciplinary studies, social work, appreciation of russian literature, yada. True, the degreed applicant is 4 yrs older and has gained much in wisdom and maturity - but it is very hard to apply the soft degrees to real and marketable work. (Compared to the applied skills degrees - engineer, nurse, accountant, teacher).

Phil, you're an engineer, so you're kinda being an idiot here. Of course an Engineering firm isn't going to hire someone with a Russian Literature degree. The world needs social workers too.......

[Plain Old Petunia]

If I had any home equity, no, I would not spend it on my child's college education. I am willing to help with college costs, but not pay the whole thing. Based on my own experience and observing other students, you just care more when you have some skin in the game.

ETA: I am also not willing to put myself in a precarious financial situation to help pay for college. I am only willing to do what I can afford to do.

[Deleted]

I am not against the idea of taking out a mortgage or Heloc to pay for my kid's college education.

[Miss Tequila]

Mar 5, 2011 12:10:27 GMT -5 Plain Old Petunia said:

If I had any home equity, no, I would not spend it on my child's college education. I am willing to help with college costs, but not pay the whole thing. Based on my own experience and observing other students, you just care more when you have some skin in the game.

Those are my thoughts. If I were to pay for college, it would be after the fact (maybe paying off some or all of her college loans). And only if the degree benefited her future.

[tt00]

No .. I certainly would not. Not with this economy and job situation around the US. Cash as you go only would be my answer no loans either.

[Gardening Grandma]

No.

When my oldest graduated (with a B ave), I told him, "Here's the deal. You can live at home and attend the local CC. Free room and board and I'll pay the tuition, fees and books. And I'll buy you a bus pass. You'll need to work part time for spending money. If you do well and want to continue at a 4 yr school, then I'll help as much as I can".

He wanted to go to a 4 yr college far enough away that he had to board there. I agreed to pay the tuition, fees and books, but he borrowed the funds for room and board. That turned out to be a mistake as he only completed one year. But it was on him....

I'm putting funds into a 529 for the grandkids. I plan to have 2 years' worth funded. One does not appear to be headed for college - but the funds can be used for vocational/trade school.

My sis and BIL refinanced their house three times to put his kids through college. The kids did not have to work or take out any loans. When BIL retired, they had to sell their home because they could no longer afford the mortgage payments. It was hard because they'd always planned to retire there. I don't think the kids realize what a sacrifice they made for them...

[patchwork150]

This doesn't apply to me yet (not a parent yet) BUT my current opinion on things are as follows:

I will save for each child for college- what I can afford to save. They don't go to college, then the $ is mine. I will not under any circumstances pay for the entirety of any child's college, even if I was a millionaire.

I am putting myself thrugh college right now (well, me and DH). It is very frustrating to walk into class every day and see the kids that are not paying anything (mostly, their parents are taking care of all costs, with some student loans) NOT caring beacuse mommy and daddy are paying. This happened to my little brother too- over 60k in debt form a private college, mostly on my parents, and he is 1 credit short of an associates degree and will never go back to finish it.

If my kids want it, they'll have to earn it. I'm willing to HELP, but no way would I morgage a house/take out a ton of loans. They can work through it, and they will appricate it much more.

[lynnerself]

I would have considered it. Rather than to limit retirement savings.
Fortunately we were able to send our 2 through school with savings, inheritance and out of pocket.
We always told them we would pay for most of their bachelors degrees with in reason.
And frankly I believe that going away to a 4 year school is better for kids than a CC if you can afford it.
They are responsible for paying for graduate school.
And contrary to popular opinion, they worked hard, got good grades and did not goof off on Mom and Dads money.
I would not have limited their choice of majors, but they were both science nerds so not really a problem.
Ironically, the one with the engineering degree is having trouble finding work, while the biology major is doing just fine.

[busymom]

Nope. I love the kids dearly, but have told them that if the economy continues to tank, they will need my house to live in after they complete college & are getting into their careers. (We'll talk about the appropriate rent when the time comes.) College is very important, but we're not willing to risk the house!

[Jake 48]

No I would not. youngest son has one of those half ass degrees, he coasted through state university. Very intelligent, whiz w/ math, I really believe MIT level of school for him but he did not want to apply himself. so he at least has very little student loan debt. Now he wants to go to graduate school for same half ass degree to improve employment options. I will probably help w/ student loan payments for 1-2 yrs to get him on his feet once he pulls his head out of his ass.

[happytraveler]

I think that even people of modest means have the ability to save for a college education without having to burden themselves with a second mortgage or a home equity loan. While not everyone will be able to save $250,000 over 18 years, I think many should be able to accumulate $50,000 by investing periodically into tax advantaged accounts (e.g. 529's) using low cost equity mutual funds. Investing $140/month from the time a child is born til they are 18 (assuming a 10% average rate of return) will generate almost exactly $50,000. While $50K may not pay for Harvard or Yale, it should be sufficient to make a pretty decent sized dent in the tution and room/board charges that most public universities charge. Add on the potential for merit or need based aid (other than loans), and I think a college education is in reach of the majority of people in this country without having to mortgage the house.

[Deleted]

No way would I have done that. I paid for DS' education out of current income; fortunately we'd moved to a LCOL area, which really helped with the cash flow. His aunt and uncle also paid for part of it. He went to a private university but if there would have been less money I would have encouraged him to go to the local state university rather than get himself encumbered by massive loans.

And do we have to start again on the rants about how all the kids whose parents pay for their education are lazy, spoiled brats who don't appreciate the value of their degrees? I may be here to refute your arguments, but my siblings (a CPA who's a partner in a major accounting firm, a CFO an engineer and a doctor) aren't here to defend themselves.

[spartan7886]

I don't think we will have any reason to unless our our financial situation changes significantly, but I do not believe we would. Both of our parents did pay for our educations in full, but they were in a financial place to do so without hurting themselves. If we could not afford to pay for our children's education in full without resorting to such measures, then they would have to take out loans. Just because we would intend to pay does not mean that we intend to raise an entitled child. Payment would be contingent on a B average and some sort of reasonable post-college plan by at least sophomore year. I like the way my parents did it. Sophomore year and on, I worked to cover spending money with the understanding that whatever amount I shorted my Roth IRA for the year would be shorted in the next tuition bill they paid. It got me on an early retirement savings kick when I was in a very low tax bracket.

[patchwork150]

Mar 5, 2011 15:24:30 GMT -5 @athena53 said:

And do we have to start again on the rants about how all the kids whose parents pay for their education are lazy, spoiled brats who don't appreciate the value of their degrees? I may be here to refute your arguments, but my siblings (a CPA who's a partner in a major accounting firm, a CFO an engineer and a doctor) aren't here to defend themselves.

so far no ranting has occured yet

I don't think everyone who's parents pay for their degrees are spoiled or waste the money. But I have seen so many that do, I'd love to see statistics on kids that pay their way vs. kids that don't, and see the %'s of success.

For example, If my parent's had supported me rather than my brother, I would have more than made use of it. They picked the wrong child. But that's a whole other argument!

But, I was raised on a farm, and I do believe that hard work does everyone good. So, no harm done if a child has to work their way through school- there are some benefits to it.

And I agree, you should NOT have to overextend yourself to help your child in college. I plan to start saving for a child's college once I start trying to get preggo ;D

[Elizabeth]

Hell no. I do contribute monthly to 529 accounts through Upromise for both DDs. Hopefully it will be enough or at least half of the college costs since I started them when DD1 was almost 2 and DD2 was just born. I am going to encourage them to work for scholarships and grants, but I am also going to encourage them to save their own money towards it as well.

[Deleted]

Mar 5, 2011 16:31:01 GMT -5 patchwork150 said:

I don't think everyone who's parents pay for their degrees are spoiled or waste the money. But I have seen so many that do, I'd love to see statistics on kids that pay their way vs. kids that don't, and see the %'s of success.

I would absolutely agree that the success % (defined as finishing with a marketable degree and decent grades) would be higher among people who paid their own way. I saw plenty of girls in my dorm who were there because Mommy and Daddy thought they should attend school, who had no real love of learning or career aspirations.

[WannabeWealthy]

Nope.

However, I am saving what I can in a 529 plan. Whatever it is by the time my daughter reaches 18 is what our contribution will be for her to go to college.

-M

[debtheaven]

No way.

I do think that college is one of the best gifts parents can give a child, if they can. We are in Europe and for now it's more affordable here. But like Athena, I firmly disagree that having your education paid for by your parents = you are a mooch and a slacker.

One of the best gifts parents can give an adult child? Having a home with either a paid-off or small, affordable mortgage, so your kids won't have to worry about having to take you in. (Especially out of guilt, because you remortgaged your home to pay for their education.)