Would you guys have taken loans if your parents were willing to pay for your schooling?

[MyNameWasUsed]

So my mother talked to me about paying for my PA education by selling one of her houses recently (i know this is premed but the PA forums are so dead =/). I never expected or wanted her to cover my graduate education cost as she already paid for my UG. However, I wanted to hear out people who has taken out loans' opinion on this situation. For me it's kind of a pride/i feel bad thing if i accept the offer. How much easier would your life be without those loans? Does it even matter?

---

Members don't see this ad.

 

[NotASerialKiller]

So my mother talked to me about paying for my PA education by selling one of her houses recently (i know this is premed but the PA forums are so dead =/). I never expected or wanted her to cover my graduate education cost as she already paid for my UG. However, I wanted to hear out people who has taken out loans' opinion on this situation. For me it's kind of a pride/i feel bad thing if i accept the offer. How much easier would your life be without those loans? Does it even matter?

Well that depends completely on your parents' financial situation as well as your relationship with them. Personally I wouldn't accept their money, but they also wouldn't offer!

If I got along with my parents.... I'd be a completely different person so I can't even guess

 

[sliceofbread136]

My parents paid for my UG and are paying for my med school. I don't see why I shouldn't accept their generosity.

If they were hurting for money it would be a different story

 

[MyNameWasUsed]

Well that depends completely on your parents' financial situation as well as your relationship with them. Personally I wouldn't accept their money, but they also wouldn't offer!

If I got along with my parents.... I'd be a completely different person so I can't even guess

My mother's financial situation is above average and I do have a good relationship. I have a younger brother and he will be attending college soon. I should have mention that in the post but he doesn't know where hes going yet so it could be inexpensive.

 

[WedgeDawg]

My parents had enough money to pay for my undergrad (with the financial aid that was given) and I'm taking loans for med school (+ financial aid, again). Particularly given the fact that I am not an only child, I would see no reason here to have them pay hundreds of thousands of dollars for me to go to medical school, especially since my earning potential should be enough to mitigate the full impact of the loans that I have.

Now, speaking hypothetically, it would have depended on my parents situation. If they were millionaires and offered to pay for med school, I would have accepted graciously, but they are not, and so I have no trouble taking loans.

 

[Romz]

My parents want to pay for my medical school but I've declined. They worked hard for their savings and I'm sure if I was in trouble they help dig me out, but I'd like to go through the process of getting a loan, living on a budget and all that jazz. Many before us have done it and I don't see why I can't do it as well. Personally, I'd feel just a tiny more accomplished than if mommy and daddy helped pay my way through.

Edit: I don't usually get along with my parents. I would hate to have the fact that they are paying my tuition hanging over my head.

 

[On Eagle's Wings]

My parents are paying for all my education, and I and they would not have it any other way.

To be fair, we are doing it in a very cost efficient way. I went to community college for two years before transferring to a fairly cheap state school. I also got a lot of scholarships during undergrad, and we ended undergrad with very net expenses.

If you parents offer to pay for your school, by all means take it. It makes life a lot easier. That's what parents are for- raising and supporting their children until they are fully independent, working adults.

 

[DocFarnsworth]

You can also always offer to pay them back the cost at 0% interest rate. They get their money back, you dont accrue interest on loans all while still feeling good for paying them back later in life for an awesome gift they gave you, which they can use to enhance their lives post-retirement.

 

[Wiesal]

It varies on the situation. Generally, I would consider it acceptable to make use of your parent's generosity as long as they're not financially destroying themselves.

 

[On Eagle's Wings]

You can also always offer to pay them back the cost at 0% interest rate. They get their money back, you dont accrue interest on loans all while still feeling good for paying them back later in life for an awesome gift they gave you, which they can use to enhance their lives post-retirement.

Agree with this post. I may have to help pay for my younger sibling's schooling later when I am a physician, so that we can continue the circle of everyone receiving an education debt-free.

 

[RedPhys]

No
If anything, as @DocFarnsworth said, just make sure you pay them back. Better a 0% interest loan than a 7% ...

 

[CaliforniaDreamer]

It would be an all around bad financial decision, for you and your parents (unless by paying for you they become destitute/bankrupt). As others have mentioned, you can pay them back at 0% interest (or more because they are your parents but the point is you aren't going have your home foreclosed if you are late on a payment)

 

[snowflakes]

It would be an all around bad financial decision, for you and your parents (unless by paying for you they become destitute/bankrupt). As others have mentioned, you can pay them back at 0% interest (or more because they are your parents but the point is you aren't going have your home foreclosed if you are late on a payment)

Even if you pay them back with interest, wouldn't you rather your parents get the interest amount than a lending agency? I'd take the help from your parents and come up with a plan to pay them back...whether it's treated like an explicit loan, or you just help them out whenever they need it and however much you can.

 

[Rainbow Zebra]

The agreement in our family is that if we did instate public undergrad, they would help pay for grad school (we didn't qualify for financial aid). My brother and I both did instate undergrad, so they are paying for medical school at the instate public rate (if we go out-of-state or private, we'll take loans out for the difference). They felt strongly you could get a fine education at public schools if you applied yourself, and I now agree (though those fancy country club colleges in California were very tempting at the time). We are both very grateful for winning the genetic lottery.

 

[md-2020]

I will be fully self-funding my medical education despite numerous offers from my parents to pay for me. Since they've already footed the bill for my undergrad+mph, I'm willing to take loans if necessary to exhibit some financial independence.

Strictly speaking is it financially reasonable? Probably not.

 

[Wiesal]

I will be fully self-funding my medical education despite numerous offers from my parents to pay for me. Since they've already footed the bill for my undergrad+mph, I'm willing to take loans if necessary to exhibit some financial independence.

Strictly speaking is it financially reasonable? Probably not.

It is reasonable maturity wise.

 

[MyNameWasUsed]

yeah i thought about that too. I can pay them back at 0% interest which would be so much better than dealing with actually loans. Thanks guys!

 

[NghtSky04]

So my mother talked to me about paying for my PA education by selling one of her houses recently (i know this is premed but the PA forums are so dead =/). I never expected or wanted her to cover my graduate education cost as she already paid for my UG. However, I wanted to hear out people who has taken out loans' opinion on this situation. For me it's kind of a pride/i feel bad thing if i accept the offer. How much easier would your life be without those loans? Does it even matter?

Hey I am doing this for medical school and so far it is going fine. Remember though that if you get a family loan at 0%, it will count as a gift rather than a loan. As a result, your parents will get a double whammy tax (when they "loan" u the money and when you "pay" them back).

In order to avoid this, you must set the loan's interest rate at an IRS approved rate. It's usually 3%-ish (which is pretty much the historical rate of inflation, so no real money gained or loss by you or your parents). You can look up the rate for this month.

If your parents can afford it, it'll save you a ton of money. You avoid the fee for getting a new loan. You get a cheap loan while your parents get an okay-ish return at 3-4% (lower than equities or bonds, but hey it's always nice to help a relative out). You can always work out a better return for your parents if you want (Grad Plus Loans at 7.8? Give her 5.5%).

Get disability and death insurance otherwise if you get injured or (god forbid) pass away, your parents will be stuck with the bill. Other than that, don't drop out of school. Anyways, hope I wasn't too late with this post.

Edit: Oh yeah, get a contract with a scheduled repayment plan. Better to be as business-like as possible.

 

[bumblebee611]

Hey I am doing this for medical school and so far it is going fine. Remember though that if you get a family loan at 0%, it will count as a gift rather than a loan. As a result, your parents will get a double whammy tax (when they "loan" u the money and when you "pay" them back).

In order to avoid this, you must set the loan's interest rate at an IRS approved rate. It's usually 3%-ish (which is pretty much the historical rate of inflation, so no real money gained or loss by you or your parents). You can look up the rate for this month.

If your parents can afford it, it'll save you a ton of money. You avoid the fee for getting a new loan. You get a cheap loan while your parents get an okay-ish return at 3-4% (lower than equities or bonds, but hey it's always nice to help a relative out). You can always work out a better return for your parents if you want (Grad Plus Loans at 7.8? Give her 5.5%).

Get disability and death insurance otherwise if you get injured or (god forbid) pass away, your parents will be stuck with the bill. Other than that, don't drop out of school. Anyways, hope I wasn't too late with this post.

Edit: Oh yeah, get a contract with a scheduled repayment plan. Better to be as business-like as possible.

I was a bit confused when I read this because I thought you were saying that the entire amount of the loan would count as a gift rather than a loan if it were at 0% interest ... and that didn't sound right to me. I thought it was well explained here, though:

http://blog.taxact.com/family-loans-does-the-irs-care-if-i-lend-my-kids-money/

 

[Turkishking]

My parents are just paying for UG. I don't think they can afford medical school.. So I'm probably going to have to take out loans.

 

[CaliforniaDreamer]

It is reasonable maturity wise.

Honestly? Making a bad financial decision as a way of showing how "mature" you are makes me think the opposite.

 

[GiveMeThatMD]

I really think it depends on the person/situation. My mother (single at the time) worked through her degree with 4 children under barbaric conditions. After paying off a severely crippling amount of debt, getting married, and snagging a killer job, I wouldn't accept a dime of her money. She is much better off now, but I was raised under the impression that working hard pays off, and the debt is basically an investment in myself. However, if your parents were well off to begin with, pay it back later!

 

[md-2020]

Honestly? Making a bad financial decision as a way of showing how "mature" you are makes me think the opposite.

My parents' $$ is not my mine by right. My post probably could have been clearer though:

There's a good chance I'll be able to pay for my medical education w/o loans, having been well compensated for various jobs during UG and now in my gap year. My parents have already shelled out: $160,000 for my high school education, $200,000 for 3 years of UG, and $75,000 for my MPH. In addition to misc costs such as car, 2-3 sports for a decade+, UG/med app+test+interview fees etc. They've already called all costs my wedding, that will happen at some point within a year or two.
TLDR, they've piled cash on me for my entire life already.

While they're well off and can certainly again foot the bill for medical school, I think that my twenties is high time for me to start taking responsibility for such costs, even if I dip into the red a bit and need a reasonably sized loan.

 

[CaliforniaDreamer]

While they're well off and can certainly again foot the bill for medical school, I think that my twenties is high time for me to start taking responsibility for such costs, even if I dip into the red a bit and need a reasonably sized loan.

If you feel like you need to be independent and to feel mature thats fine, but I think doing it at the cost of debt is not the answer, especially if they offered to pay. Why not just pay them back?

 

[wasteofspace323]

My parents' $$ is not my mine by right. My post probably could have been clearer though:

There's a good chance I'll be able to pay for my medical education w/o loans, having been well compensated for various jobs during UG and now in my gap year. My parents have already shelled out: $160,000 for my high school education, $200,000 for 3 years of UG, and $75,000 for my MPH. In addition to misc costs such as car, 2-3 sports for a decade+, UG/med app+test+interview fees etc. They've already called all costs my wedding, that will happen at some point within a year or two.
TLDR, they've piled cash on me for my entire life already.

While they're well off and can certainly again foot the bill for medical school, I think that my twenties is high time for me to start taking responsibility for such costs, even if I dip into the red a bit and need a reasonably sized loan.

If you want to spend $14,000 to jerk yourself off, go ahead. You certainly won't be the first physician to do so. If taking a loan is babying, then it shouldn't really matter where the dosh comes from. You're just being babied by the state this time around, buckaroo.

 

[StudyLater]

College students financially dependent on their parents want to feel independent/mature. They are socialized by media, peers, and probably (ironically) to some extent their parents, to want to do this. Not uncommon. Totally understandable feeling given the social training you've had.

The only question is this: Is the cost of tuition + interest a fair price for your complete independence (from your parents, you'll trade them for being someone else's b*tch however) during those med school years?

What you consider a fair price is entirely up to you. Purely from a financial standpoint, however, it makes absolutely no sense to refuse their offer, unless being financially independent of your parents somehow affords you a greater profit than the cost of tuition + interest.

Plenty of people, however, and particularly the types of people we see on this board, are not entirely focused on financial gain. That independence may be very important, particularly in a case where parents act as a....negative influence, outside of their financial contributions. Just consider the above question carefully and come to your own answer.

 

[md-2020]

As I've already mentioned in my previous post I'm not going to be taking out some massive loan from the federal government just to prove a point.

I've been fortunate enough to save up a substantial amount from some very well paying work experiences, and will, at most, be looking at $50k-75k in loans for MS4 year.

IMO this is very manageable and worth the independence. To each his own.

 

[allantois]

I will be fully self-funding my medical education despite numerous offers from my parents to pay for me. Since they've already footed the bill for my undergrad+mph, I'm willing to take loans if necessary to exhibit some financial independence.

Strictly speaking is it financially reasonable? Probably not.

Oh please, you will get a full ride

 

[allantois]

Hey I am doing this for medical school and so far it is going fine. Remember though that if you get a family loan at 0%, it will count as a gift rather than a loan. As a result, your parents will get a double whammy tax (when they "loan" u the money and when you "pay" them back).

In order to avoid this, you must set the loan's interest rate at an IRS approved rate. It's usually 3%-ish (which is pretty much the historical rate of inflation, so no real money gained or loss by you or your parents). You can look up the rate for this month.

If your parents can afford it, it'll save you a ton of money. You avoid the fee for getting a new loan. You get a cheap loan while your parents get an okay-ish return at 3-4% (lower than equities or bonds, but hey it's always nice to help a relative out). You can always work out a better return for your parents if you want (Grad Plus Loans at 7.8? Give her 5.5%).

Get disability and death insurance otherwise if you get injured or (god forbid) pass away, your parents will be stuck with the bill. Other than that, don't drop out of school. Anyways, hope I wasn't too late with this post.

Edit: Oh yeah, get a contract with a scheduled repayment plan. Better to be as business-like as possible.

How about they pay money directly to the school and you buy them a house later on? No need to be so complicated.

 

[md-2020]

Oh please, you will get a full ride

Don't want to get ahead of myself here, but thanks for the kind words.

Also some schools don't give merit aid, and my family won't qualify for grant aid. In that case I'd likely be paying sticker price.

 

[StudyLater]

To each his own.

What it comes down to.

 

[StudyLater]

Don't want to get ahead of myself here.

Also some schools don't give merit aid, and my family won't qualify for grant aid. In that case I'd likely be paying sticker price.

K here's the plan:
1. Pretend you were estranged from them at birth.
2. Profit.

 

[allantois]

Also, I think everyone who is getting help from their parents should disclose their Asian ancestry

 

[StudyLater]

Also, I think everyone who is getting help from their parents should disclose their Asian ancestry

Wha??? Since when did it become so out of vogue for rich white kids to have their parents pay for everything???? Old money new money, I suppose.

 

[Strudel19]

If your parents want to finance your education, let them finance your education. Don't be a hero. The best thing you can do is finance your kid's education.

 

[Promethean]

How is this even a question?

Yes, absolutely, if someone wants to front you the cash for medical school, you should let them. If she wants to sell "one" of her houses to pay for it, then she can probably afford to do so, at least on the short term. When you have an attending salary and no debt, you can give her the money back very quickly indeed. And still be ahead yourself.

Even if you pay her back WITH interest, you will come out ahead.. and then so would she. This is a no brainer. Don't make a banker rich. Keep that money in your family. Pride is very expensive, and foolish pride most especially so.

 

[StudyLater]

How is this even a question?

Pretending to not need anyone (i.e. being mature) is more important to some than $300k. Strong morals, some people.

If she wants to sell "one" of her houses to pay for it, then she can probably afford to do so, at least on the short term.

I'm glad someone else caught on to that.

 

[JustintheDoctor]

I would take it, I'm not getting a dime towards my UG education.

 

[StudyLater]

I would take it, I'm not getting a dime towards my UG education.

Yeah but don't you feel so grown up?

 

[golfman7]

If your parents can afford I would accept their offer. Unfortunately I took out loans for undergrad and will be taking out loans for med school. I would have loved to have been able to have my UG paid for.

 

[genericpremedstudent]

ah, to be privileged enough to not have to worry about student loans. what a life.

 

[ChiefBlackhawk714]

So my mother talked to me about paying for my PA education by selling one of her houses recently (i know this is premed but the PA forums are so dead =/). I never expected or wanted her to cover my graduate education cost as she already paid for my UG. However, I wanted to hear out people who has taken out loans' opinion on this situation. For me it's kind of a pride/i feel bad thing if i accept the offer. How much easier would your life be without those loans? Does it even matter?

"one of her houses"? so if she wants to pay for your higher education, has the ability to do so, and will not suffer, I would just accept the generosity and repay her in some fashion when you are older and have income for yourself. if she's putting herself in a non-ideal situation by selling her home and paying for your education then maybe you should seriously consider a loan. They're not impossible to pay off with proper budgeting and adherence, just annoying.

 

[JustintheDoctor]

Yeah but don't you feel so grown up?

Yeah i do, but all that debt to my name is bad lol

 

[Psai]

Take the money and pay them back by taking good care of them when they are old. Don't put them in a nursing home

 

[deleted158872]

No, unless my parents are very rich and having tons of money to spare...

 

[ortnakas]

"one of her houses"? so if she wants to pay for your higher education, has the ability to do so, and will not suffer, I would just accept the generosity and repay her in some fashion when you are older and have income for yourself. if she's putting herself in a non-ideal situation by selling her home and paying for your education then maybe you should seriously consider a loan. They're not impossible to pay off with proper budgeting and adherence, just annoying.

I concur. If "one of her houses" implies she has ample financial security, accept the generosity. If it means she might have to dip into her 401(k) prematurely in case of an emergency, or for any reason might be less financially stable, don't. You could also consider splitting the difference-- take her gift for tuition but borrow for your living expenses, or vice versa.

 

[Vox Nihili]

I will take any money anyone is willing to give me.

 

[lemmonhead]

This is nuts. I'm in a similar situation and will absolutely be taking the assistance from my family.

Here are the economics...

The COA, on average, for a private medical school is ~$80,000 per year or $320,000 for four years. If one takes out the maximum amount of Stafford ($224,000) at 5.84% and covers the remainder with and Grad Plus ($96,ooo) at 6.8% the lifetime COA assuming a 30 year repayment plan is ~$700,000. This implies the bank will receive $380,000 in interest payments. This figure does not include the loan origination fees.

Applying the same logic to an intrafamily loan at an interest rate of 2.18% (the rate determined by the IRS for such products) the total COA over 30 years is ~$436,000. As @Promethean stated above this $400k+ stays within the family and is available to your parents in old age and you come out $364,000 richer in the long run. If it makes you feel better, consider this cost savings money you can then use to provide for your parents later on in life. You can take your entire family on multiple vacations later in life for $364k.

Assuming the OPs parent's can afford it, it would be foolish not to take the money out of a sense of pride or independence or whatever you want to call it. $364, 000 over the course of one's life is a TON of money to line banker's pockets with considering the average American family would have to work 9 years to even EARN that amount and will probably barely save that much for retirement.