Adult child and loans

lambsear1June 17, 2012

Hello,

My adult daughter-23 went to two years of community college and one year of a private college. She decided that college wasn't for her so she lived on her own and babysat for two years in another state. Meanwhile we paid for all of her college years-minus a $6,000.00 loan in her name. She also helped with living expenses with her jobs. Now she is back home and wants to go to beauty school and can't figure out how to pay for it. My husband and I want her to work full time to save up for the tuition. She wants to take out another loan on top of the loan she already has. We feel that is a bad idea. Need some advise.

Thanks

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LuAnn_in_PA

Let her try to take out the loan... but do NOT cosign for her!

    Bookmark   June 17, 2012 at 2:56PM
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Chemocurl zn5b/6a Indiana

Let her try to take out the loan... but do NOT cosign for her!

I agree.

Has she paid off the other $6,000 loan on her own, or is she still paying on it? I'm guessing that everyone is ok with her living at home indefinitely, until she is financially stable and able to be out on her own.

    Bookmark   June 18, 2012 at 12:27PM
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sushipup1

I'll add my two cents, and agree with the others. If she can get the loan herself with no help from you, that's one thing. But you shouldn't be involved.

How about if/when she graduates and gets a job that you then offer to pay off a portion of the loan?

Please be careful about the beauty schools. They'll offer financing, and it's always at the worst possible terms. And she'll have to pay it all up front, and not get a refund if she drops out.

    Bookmark   June 18, 2012 at 3:24PM
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azzalea

Best advice anyone can give YOU--is pretty much what the others have said--stay out of it. Let her make her own decisions and her own mistakes AND let her mop up after them. She's now an adult, and needs to learn to make good adult decisions. That generally means making adult mistakes, too.

For her--of course the best idea is for her to figure out a way to pay for this herself, without taking out a loan (working enough to be able to 'pay as she goes' if that's an option, or saving up before she enrolls). Of course, with a 23 year old, saving up ahead of time is both: next to impossible AND by the time she saves up enough, she'll have changed her mind yet again (but don't even suggest that--she'll enroll, taking out a loan, just to spite you, and will STILL change her mind).

    Bookmark   June 18, 2012 at 4:04PM
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emma

She is old enough to make her own decisions, just don't co-sign for her.

    Bookmark   June 18, 2012 at 8:37PM
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lambsear1

Hi,

Thanks for all the responses. To answer the question-has she paid off the student loan in her name-it's no. We have paid it every month for her since she left college. She got herself involved with a lease for a year and we always had to help her out. I noticed that she always has enough money to go shopping for clothes and eating out-even when we were sending her money to help her.

I think she should just go find a full time job, pay off the loan and then go back to school.

    Bookmark   June 18, 2012 at 9:25PM
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sushipup1

You and your husband are good parents, which is why it is so hard to use a little Tough Love. Been there, done that, most of us have been there. Time to dig in your heels and expect her to either pay on her loan, pay you back on her loan, or pay a share of household expenses. You are not helping her if she's not paying anything.

Your instincts are good, just it's so hard to carry out the plan!

Good luck!

    Bookmark   June 18, 2012 at 9:31PM
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Billl

"She got herself involved with a lease for a year and we always had to help her out. I noticed that she always has enough money to go shopping for clothes and eating out-even when we were sending her money to help her. "

Quit enabling your daughter to make bad decisions and live beyond her means. There is no faster way to teach your kid to overspend then to pay for "necessities" while they get to spend 100% of their income on fun stuff.

Personally, I'd charge her rent to live at home. I'd put the money aside and let her know that IF she completes her training, you'll but the rent money toward her loan/tuition bill. That way, she has to get used to working and paying bills, but it also digs her at least part of the way out of debt.

As others have said, don't sign for any loans. If she wants to take out loans in her name, she is an adult and is free to do so. I'd take a couple minutes and show her how much (and for how LONG) she'll be paying on those loans after graduation though.

    Bookmark   June 19, 2012 at 8:37AM
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mgmsrk

I agree with Bill it's time for her to be an adult. Stop paying her first loan and start charging her rent.

    Bookmark   June 19, 2012 at 5:47PM
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dreamgarden

"Now she is back home and wants to go to beauty school and can't figure out how to pay for it. My husband and I want her to work full time to save up for the tuition."

Good advice. I also completely agree with what Billl says.

    Bookmark   June 19, 2012 at 8:36PM
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hilltop_gw

The best gift you can give her now is help with monetary planning and goal setting. Give her a copy of Dave Ramsey's book Total Money Makeover or find a group nearby that offers Financial Peace. Help her understand the time value of money. A big wakeup call for our daughter was when I had her take a spreadsheet and plot out where her money had gone the previous months (this was during high school) and then we looked at how much each trip to the discount store (ie Target, Walmart) was costing her and how that money could have worked differently or grown had she saved it over time. Our daughter now lives by spreadsheets.

Have her work to save up the money or get the loan in her name alone. It's doubtful she can get a loan if she has no assets and a poor track record, but welcome to the real world. If she does get a loan, have her pay a small amount in rent or make plans w/ a deadline to move out.

Can you sit down with her to set some short term and long term goals using a SMART worksheet: specific, measurable, achievable, realistic and timed. Do a Google search using the words: smart goal template.

If she's somehow able to get an outside loan for courses, you could set aside funds (don't tell her) and once she gets her life in order, completes her education and has held a job for several years and pays her bills you might consider a gift of paying off part of her loan as a means of rewarding good behavior.

    Bookmark   June 21, 2012 at 8:26AM
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vnw232

A lot of people me included worked at the same time we went to school. I bused tables. Some saved and then went to college and graduated debt free. I guess in this day and age that's no longer acceptable. Buy now pay later and pay and pay and pay.

    Bookmark   July 2, 2012 at 5:40PM
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Billl

"I guess in this day and age that's no longer acceptable."

While it may be partly motivation, it's also cold, hard dollars. Tuition has been increasing dramatically while wages have stagnated.

    Bookmark   July 3, 2012 at 8:42AM
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emma

Or just ignore your college debt as my niece did.

    Bookmark   July 4, 2012 at 4:38PM
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mary_c_gw

How was that comment the least bit helpful, EmmaR?

It's perhaps better suited to one of the conversational forums.

    Bookmark   July 4, 2012 at 10:34PM
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RooseveltL

You may better serve your daughter by requesting she pay rent to live at home. She is lacking responsibility and priority in her financial decision making which won't surface while she is living rent free, not paying her loans and not tackling life/growing up.

    Bookmark   July 5, 2012 at 2:31PM
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trancegemini_wa

"Quit enabling your daughter to make bad decisions and live beyond her means. There is no faster way to teach your kid to overspend then to pay for "necessities" while they get to spend 100% of their income on fun stuff. "

I totally agree. while I do understand you want to help your daughter to get on her feet, I think you are enabling her so that she doesn't have to do the hard yards to achieve her goals. If she had to save up the money herself, she won't be so quick to quit on school because of what *she* has already invested in getting there. I don't think you did her any favours by bailing her out previously and should have made her pay off her own debts so that she would learn some valuable lessons about choices and owning her responsibilities. so far her decisions and the consequences haven't been her problem, they've been yours so what has she learnt from that? I think if you want her to become responsible and more committed to her choices then she has to own them, and that includes any fallout. It's how we become adults and it is a very useful gift to give your daughter to teach her how to be self sufficient

    Bookmark   July 10, 2012 at 7:07AM
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emma

What was wrong with what I said. It was meant to be funny. I guess you have to know my niece to appreciate it. she hasn't done a responsible thing in her life and she has gotten away with it.

    Bookmark   July 15, 2012 at 5:54PM
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Auroras_Envy

I agree that a little tough love is necessary sometimes, she'll be better off in the long run for it. I wouldn't co-sign any loans for her, and if she is considering taking out a loan I think that showing her what the payments are going to be over X amount of years is a good idea.

As someone with 6 figure student loan debt (unavoidable, dental school is expensive) the reality of paying it back sucks. I am glad my parents reminded me again and again why I was taking out the lowest amount possible and although I got tired of them telling me to live like a poor student...I'm glad they did. They didn't co-sign a single loan for me throughout the 7 years I was in school.

I feel like your daughter already had her chance for you guys to pay for school - you paid an awful lot of money for her to decide that "college wasn't for her". Easy to do when it's not on your own dime. I'd let her work out whether beauty school is for her or not 100% on her own. It'll teach her to be more financially responsible.

    Bookmark   July 22, 2012 at 8:54PM
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