Pay off future DIL's school loans?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
User avatar
praxis
Posts: 444
Joined: Sun Sep 06, 2009 1:51 pm

Pay off future DIL's school loans?

Post by praxis » Thu Feb 01, 2018 10:56 am

Our son graduates in 3 months with a DPT (physical therapy) and accepted a good job at one of the clinics where he did an 8 week practical that is across the country. His fiancé has an Sociology degree and $50K in loans. They will move there together and she is worried about pursuing an advanced degree once she relocates because she would add to her loan. She and our son share all living expenses now. She is working full time and barely covering expenses and her loan payment. She is smart (4.0 undergrad) and hardworking and quite mature. She got no help from her own parents (couldn't afford it) and worked throughout undergrad. We want to encourage an advanced degree (she is leaning toward an RN degree).

Our son paid for much of his undergrad costs with scholarships and jobs. He took out a loan for half of his grad school expenses and we are paying for the rest. My wife and I plan to pay off his loan sometime after his graduation, but feel it is good experience for him to spend time living on a salary and budgeting for his loan payments first. He will owe about $50K on his Sallie Mae loan.

We think they show remarkable savvy in money management together so far.

We can afford to pay off both loans and help her with part or all of grad school, but I am not sure that is wise at this point.

Our plan is to see how the partnership weathers the move to another town and into independent financial responsibility first. He will start with a salary of about $60/year. She needs to find a job or return to school or both. Should we simply stay on the sidelines and let this play out while watching for an opportunity to help financially? Or be proactive by making some form of offer. We don't need to attach strings to our gifts, but are concerned that removing these financial challenges will remove opportunities for them to develop financial and life skills.

We frankly have few targets for gifts that mean as much to us as their happiness together.

What would you do?

Jon H
Posts: 102
Joined: Sun Jan 21, 2018 2:50 pm

Re: Pay off future DIL's school loans?

Post by Jon H » Thu Feb 01, 2018 11:01 am

It's up to you.

I would revisit this topic a little while after they are married.
Consider gain and loss, but never be greedy and everything will be alright (fortune cookie)

forgeblast
Posts: 125
Joined: Fri Oct 13, 2017 8:45 am
Location: PA
Contact:

Re: Pay off future DIL's school loans?

Post by forgeblast » Thu Feb 01, 2018 11:37 am

My gut feeling is wait and see. It would be one heck of a wedding gift.

ByThePond
Posts: 88
Joined: Thu Dec 31, 2015 11:21 am

Re: Pay off future DIL's school loans?

Post by ByThePond » Thu Feb 01, 2018 12:02 pm

forgeblast wrote:
Thu Feb 01, 2018 11:37 am
My gut feeling is wait and see. It would be one heck of a wedding gift.
^This

Big Dog
Posts: 761
Joined: Mon Sep 07, 2015 4:12 pm

Re: Pay off future DIL's school loans?

Post by Big Dog » Thu Feb 01, 2018 12:04 pm

It would be one heck of a wedding gift.
Exactly. (I would not recommend paying them down prior to the wedding.)

NotWhoYouThink
Posts: 1964
Joined: Fri Dec 26, 2014 4:19 pm

Re: Pay off future DIL's school loans?

Post by NotWhoYouThink » Thu Feb 01, 2018 12:04 pm

If you know you are going to pay off your son's loans, do that first. Then decide what else to do.

Whatever you do, don't "hint" to them that you may pay off his or her loans or future tuition. That leads to the situation where they aren't sure what to expect, so they aren't sure how to plan, and then they start resenting you and feeling manipulated. Make a decision and then carry it out. Any of the gifts you mentioned would be generous.

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Pay off future DIL's school loans?

Post by Pajamas » Thu Feb 01, 2018 12:17 pm

praxis wrote:
Thu Feb 01, 2018 10:56 am
We can afford to pay off both loans and help her with part or all of grad school, but I am not sure that is wise at this point.

Our plan is to see how the partnership weathers the move to another town and into independent financial responsibility first. . . . Should we simply stay on the sidelines and let this play out while watching for an opportunity to help financially? . . . We . . . are concerned that removing these financial challenges will remove opportunities for them to develop financial and life skills.
I think the plan and line of thinking that I extracted from your post and quoted is the wisest course of action.

I would wait a year or so to allow them make it on their own and evolve and understand what their "natural" lifestyle can be given the choices they have made in the past and for the future with education, careers, finances, etc. In other words, I would not want to change the course of their development and transition into full and responsible adulthood more than necessary by injecting a large sum of cash into it at what seems to be a critical point. It won't have so much of an effect later. I would not even pay off your son's loans immediately but do it all at once.

Also kudos on being such thoughtful and successful parents! :beer

EDIT: My thoughts on this are strictly from the viewpoint of a child, not a parent.
Last edited by Pajamas on Thu Feb 01, 2018 12:36 pm, edited 1 time in total.

JoeRetire
Posts: 1373
Joined: Tue Jan 16, 2018 2:44 pm

Re: Pay off future DIL's school loans?

Post by JoeRetire » Thu Feb 01, 2018 12:21 pm

praxis wrote:
Thu Feb 01, 2018 10:56 am
We can afford to pay off both loans and help her with part or all of grad school, but I am not sure that is wise at this point.

Our plan is to see how the partnership weathers the move to another town and into independent financial responsibility first. He will start with a salary of about $60/year. She needs to find a job or return to school or both. Should we simply stay on the sidelines and let this play out while watching for an opportunity to help financially? Or be proactive by making some form of offer. We don't need to attach strings to our gifts, but are concerned that removing these financial challenges will remove opportunities for them to develop financial and life skills.

We frankly have few targets for gifts that mean as much to us as their happiness together.

What would you do?
We got both sons through college graduating with $0 debt.
When my son got married, our daughter-in-law had $70k in school loans.

We decided to help out by giving her a gift to put toward her loans each year. It took 7 years but we cleared her last $17k last year. No more student loans! Before we started to help, we sat them both down, told them what we planned to do, and made sure they understood that this was for eradication of the student loans and nothing more. And we expected them to continue to make monthly payments. And if our personal financial situation dictated otherwise, we would stop.

Our daughter in law asked for help determining which of her loans to tackle first, so she gave us access to her online Navient account. Periodically, we checked in to make sure she was continuing to stay current with the loans. She did a great job and never missed a payment.

I think you are smart to go slowly. I would suggest waiting until after they are married and settled into jobs, etc. (Just in case)
This certainly won't relieve all financial burden from them, so they will still develop their skills.

And if something unexpected happens in their life, or in your life, you always have the option to stop further contributions on your part.

I think you are considering a terrific gift. I know my son and daughter-in-law have been very appreciative.

Just remember, once you give a gift you don't have a say in their financial life. So make sure you can afford the gift(s) and are willing to let whatever happens happen.
Last edited by JoeRetire on Thu Feb 01, 2018 12:25 pm, edited 2 times in total.

mortfree
Posts: 1132
Joined: Mon Sep 12, 2016 7:06 pm

Re: Pay off future DIL's school loans?

Post by mortfree » Thu Feb 01, 2018 12:22 pm

house downpayment instead? if that is a goal of theirs to be homeowners...




.

Nate79
Posts: 3067
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Pay off future DIL's school loans?

Post by Nate79 » Thu Feb 01, 2018 12:24 pm

Call it old fashioned but debt should not be mixed until after marriage. No exceptions. Once married the debt becomes their debt together and then you and they can do as you wish.

John Laurens
Posts: 375
Joined: Mon Nov 14, 2016 7:31 pm

Re: Pay off future DIL's school loans?

Post by John Laurens » Thu Feb 01, 2018 12:26 pm

As of now SHE has student loans. Once married, THEY have student loans. I would wait until they are married.

Regards,
John

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: Pay off future DIL's school loans?

Post by itstoomuch » Thu Feb 01, 2018 12:33 pm

tough scenario because their and her decision will be based current cash flow.
Moving to new location, means new expenses and challenges beyond just money.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

SoonerD
Posts: 34
Joined: Tue Jul 21, 2015 8:28 pm

Re: Pay off future DIL's school loans?

Post by SoonerD » Thu Feb 01, 2018 12:40 pm

OP, could this be perceived as an insult to DIL’s parents?

Put yourself in their shoes.

I imagine your generosity would make you feel great!

User avatar
praxis
Posts: 444
Joined: Sun Sep 06, 2009 1:51 pm

Re: Pay off future DIL's school loans?

Post by praxis » Thu Feb 01, 2018 1:13 pm

itstoomuch wrote:
Thu Feb 01, 2018 12:33 pm
tough scenario because their and her decision will be based current cash flow.
Moving to new location, means new expenses and challenges beyond just money.
Yes, their decision will be based on current cash flow. I think you've hit on my concern. By helping them/her now, will I encourage them/her to look at the big picture and push on to get her advanced degree even though their current situation (without the gift) would be too tight to consider it? She is concerned enough about adding more debt that I expect her to decide not to continue her education.

I am leaning toward waiting for a while. Even until after they are married and even if she decides not to go to grad school. I know that the universe is a better teacher than I could ever be. If we jump the gun with the gift, we could skew the universe's plan for them.

Her parent's sensitivity to our generosity is not a deal killer. I would not choose to hurt them, but I don't believe they even know the balance of their daughter's loan.

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: Pay off future DIL's school loans?

Post by itstoomuch » Thu Feb 01, 2018 1:24 pm

^ that was my thinking, but didn't want to outright say it.
Good luck, a very difficult option
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

GreenGrowTheDollars
Posts: 347
Joined: Fri Dec 18, 2015 11:09 pm

Re: Pay off future DIL's school loans?

Post by GreenGrowTheDollars » Thu Feb 01, 2018 1:36 pm

I'd wait at least a year after the marriage. There is a lot to be learned from having to pay on debt and making lifestyle choices accordingly.

Then, if financial circumstances permit, I'd offer a challenge -- whatever they pay in student debt during the year, you'll match it, or you'll match 50%, or you'll match it up to $x.

Dottie57
Posts: 3976
Joined: Thu May 19, 2016 5:43 pm

Re: Pay off future DIL's school loans?

Post by Dottie57 » Thu Feb 01, 2018 1:43 pm

Don't pay the loan off. Wait for 5 years. Neighbors paid off DIL LOANS, wedding and in 3 years she divorced the son. Told parents all the things they had done wrong in raising him.

Don't do it. Put the money aside and see if you want to give to them at a later date.

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Pay off future DIL's school loans?

Post by Pajamas » Thu Feb 01, 2018 1:48 pm

praxis wrote:
Thu Feb 01, 2018 1:13 pm
By helping them/her now, will I encourage them/her to look at the big picture and push on to get her advanced degree even though their current situation (without the gift) would be too tight to consider it? She is concerned enough about adding more debt that I expect her to decide not to continue her education.
That makes it slightly different. I think it is generally a shame for anyone to be in a situation where finances alone make it impossible or extremely difficult to pursue education. You might want to wait until further in the process of her decision about her future education. If you think the financial aspect is the critical factor in that decision, you might consider offering some assistance for that reason. ("No, she won't be going to graduate school right now because we can't swing it unless she works part-time and there are no part-time positions available. Hopefully she can start in a couple of years.")

bhluckyusaguy
Posts: 43
Joined: Wed Apr 02, 2014 7:10 am

Re: Pay off future DIL's school loans?

Post by bhluckyusaguy » Thu Feb 01, 2018 2:04 pm

While I have no children, I explained to my niece and nephew that I would help them with their student loans - if I had extra funds. Both were 7-8 years out of college - nephew is married with kids while niece is single. They provided me with their Nelnet log in info. Over 2-3 years I made some lump sum contributions and was able to see if they were being financial responsible. Long story short, in the 4th year, I paid off most of the nephew's $30K student loan - I wrote he and his wife a letter explaining why I did this (proud of them, financially responsible, LBYM, etc.). I also mentioned they had 3-4 months left to pay off the balance so that they can feel how it is to pay off the last amount themselves.
The niece is still a work in progress even though I can pay down her $24K balance.

User avatar
Taco Knight
Posts: 187
Joined: Mon Apr 06, 2015 11:02 am

Re: Pay off future DIL's school loans?

Post by Taco Knight » Thu Feb 01, 2018 2:05 pm

Why not wait until she has a job, either in a hospital or otherwise after she takes out loans for RN?

While without a job = unemployment deferral on loans.
While in grad school = school deferral on loans.
While working in a hospital (the vast majority of which are public or non-profit) = likely eligibility for the 10 year PSLF program with minimum income-based payments after she graduates. Given your son's expected income, their payments will likely be a couple hundred dollars a month for 120 months and then the balance is forgiven.

This is a few assumptions on my part, but unlike a PT I don't expect very many RNs go into private practice...

senex
Posts: 57
Joined: Wed Dec 13, 2017 4:38 pm

Re: Pay off future DIL's school loans?

Post by senex » Thu Feb 01, 2018 2:06 pm

Here's an older-school perspective: going 50k in debt for a low-value degree shows poor judgement. If a fairy drops $50k in her lap, what will she learn? How will she structure the rest of her life with your son?

If you tie a child's shoes every day, he never learns a valuable skill. Struggle is good. It's good to let a person have that difficult learning experience.

In this case, that could mean taking no action for 3 or 4 years. Then, if you want to provide relief you could match their payments dollar-for-dollar (matching is better than gifts). Think how much they will learn from that experience. It may cultivate a lifetime of good habits. Verses a magical bailout may cultivate a lifetime of bad habits, future problems, and expectations that you will constantly bail them out.
Last edited by senex on Thu Feb 01, 2018 2:09 pm, edited 1 time in total.

pkcrafter
Posts: 12914
Joined: Sun Mar 04, 2007 12:19 pm
Location: CA
Contact:

Re: Pay off future DIL's school loans?

Post by pkcrafter » Thu Feb 01, 2018 2:08 pm

praxis,
Yes, their decision will be based on current cash flow. By helping them/her now, will I encourage them/her to look at the big picture and push on to get her advanced degree even though their current situation (without the gift) would be too tight to consider it?
You don't know the answer to that, but your involvement might put pressure on her or the relationship. Your son seems like a smart guy, let him deal with it once they are married.
She is concerned enough about adding more debt that I expect her to decide not to continue her education.
Again, you don't know that. If she is smart and determined, she will find a way.
I am leaning toward waiting for a while. Even until after they are married and even if she decides not to go to grad school. I know that the universe is a better teacher than I could ever be. If we jump the gun with the gift, we could skew the universe's plan for them.
Ah, you've hit the bottom line, don't interfere with their plans or their relationship, your generosity may create other problems.


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

macman_65
Posts: 37
Joined: Fri Jun 16, 2017 8:27 am

Re: Pay off future DIL's school loans?

Post by macman_65 » Thu Feb 01, 2018 2:11 pm

GreenGrowTheDollars wrote:
Thu Feb 01, 2018 1:36 pm
I'd wait at least a year after the marriage. There is a lot to be learned from having to pay on debt and making lifestyle choices accordingly.

Then, if financial circumstances permit, I'd offer a challenge -- whatever they pay in student debt during the year, you'll match it, or you'll match 50%, or you'll match it up to $x.
I like this idea. It forces them to learn how to budget, live within their means yet still provides them some relief.
When the loan is paid off and you still want to help them you can give them the 50% that they had paid as a gift.

PhilosophyAndrew
Posts: 409
Joined: Sat Aug 13, 2016 10:06 am

Re: Pay off future DIL's school loans?

Post by PhilosophyAndrew » Thu Feb 01, 2018 2:16 pm

This is a wonderful way to support your son and his partner - kudos to you!

Your description of their maturity and level-headedness provides no warning signs that would justIfy delaying one or more years — as an engagement or wedding gift, your generosity would increase the joy in this special time in their lives.

Edited to add: If you wish to give a gift to these young people out of a sense of generosity, do it wirhout concern for testing the couple, manipulating them to improve their financial habits, waiting to make sure they stay together, etc. I read your original post as expressing an interest in acting generously. Attaching strings or tests or attempting to manipulate would change that motive — if you want to give a generous gift to these two responsible people and can afford to do so, don’t let fear or uncertainty or a desire to control their financial decisions dissuade you.
Last edited by PhilosophyAndrew on Thu Feb 01, 2018 3:01 pm, edited 2 times in total.

Liberty1100
Posts: 237
Joined: Fri Nov 21, 2014 12:36 pm
Contact:

Re: Pay off future DIL's school loans?

Post by Liberty1100 » Thu Feb 01, 2018 2:18 pm

I strongly suggest you wait until they are married. I would also keep your possible intentions away from them as they are not married yet and could cause some stress. Once your son is working, getting a paycheck, they might be able to pay down her loans faster. It would be a bigger accomplishment for them as a couple if they can pay for them themselves than if you just wiped out the loan. I would feel more comfortable if my In-laws paid for a nice vacation, for example.

In terms of going back to school for graduate school, she needs to have her own motivation, rather than you paying for her loans. Graduate school is so much harder that college and not just in school work. As a part-time student and full-time worker, I have to make severe tradeoffs when to do my school work. Will I take a personal day to complete an exam? Will I work throughout the week so that I can watch the superbowl? Can I sacrifice taking a night off to hang with friends (who aren't in school, by the way)? Are they planning on having children quickly (makes going to school a bit more difficult)?

getthatmarshmallow
Posts: 187
Joined: Mon Dec 04, 2017 9:43 am

Re: Pay off future DIL's school loans?

Post by getthatmarshmallow » Thu Feb 01, 2018 2:50 pm

Oh, this is a tough question. I think your generosity is to be commended! But I'd wait till they're married without question, and give it without conditions if you give at all.

If you're 100% fine with the gift, I'd do it as a wedding present. Here's why. $50K is significant, and if they're at all smart, going to affect what they're going to do -- work second jobs, change careers, buy vs rent, etc. Some of those decisions are hard to undo once they're done -- imagine your son giving up a chance to continue to study more because he decides to take a second job to pay off her loans, or give up the company match because of the loan debt, or she decides against becoming an RN because she can't figure out how to swing the loans, or they move, or delay a family. (I can write more O Henry stories if you need!) If they're already responsible young adults, the gift is only going to help.

Now, there's nothing wrong with them doing it on their own, and something to be said for them making it on their own. But there seems something off to me about letting them make decisions based on incomplete information when the stakes are so high; the universe doesn't have plans -- they do. And while I see the point of the other posters' concerns about the value of paying off your debts, giving a gift only if they've proved themselves worthy or responsible really rubs me the wrong way and I think would run the risk of being controlling -- we'll pay off your loans, but only if you do X, Y, and Z has the potential to ruin a lot of relationships. If I were thinking there needed to be conditions, I'd nix the gift and put it toward the 529s of my eventual grandchildren.

GoldenFinch
Posts: 1580
Joined: Mon Nov 10, 2014 11:34 pm

Re: Pay off future DIL's school loans?

Post by GoldenFinch » Thu Feb 01, 2018 2:51 pm

If you pay off the loan before they are married and either one of them has a change of heart there will be a big problem. I would wait until they are married for a while and let them figure out life together independent of parents. There will be many opportunities to help them out in the future. I can think of several examples in my own extended family where generous parents or in-laws unintentionally caused mixed feelings as a direct result of their generosity (control or indebtedness for example, and of course the squelching of motivation).

You are very kind and good parents and I wish you luck in your decision, but remember there really is no urgency here so you can take your time.

Theseus
Posts: 423
Joined: Sat Jan 23, 2016 9:40 am

Re: Pay off future DIL's school loans?

Post by Theseus » Thu Feb 01, 2018 3:00 pm

I would wait till they get married.

But when you do, instead of paying off the student loan how about paying for her advance degree with a caveat that she continues to pay for the current student load. This may ensure 1) she has a motivation to work while pursuing advance degree 2) you are not paying all of the amount at once 3) you can make it contingent on her maintaining a certain grade. 4) Letting her pay for the debt she took on is a good lesson in life.

Just my 2 cents.

financiallycurious
Posts: 16
Joined: Mon Nov 21, 2016 4:43 pm

Re: Pay off future DIL's school loans?

Post by financiallycurious » Thu Feb 01, 2018 4:06 pm

You could pay off your son's loans as planned, then use the extra money for 529 plans for future grandchildren? That way the money is guaranteed to stay in the family, but you also relieve them of the stress of funding their children's education. My parents paid for my and my siblings and undergrad and grad school, but the issue of our spouse's students loans was never even raised. Worked for our family.

Post Reply