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| Wednesday, October 08, 2008 |
| The Next Bailout: Your Adult Children? |
The Wall Street Journal asks: The Next Bailout: Your Adult Children? It appears families with college students or recent graduates are very worried by the current economic environment. Few jobs and high student loan and credit card debt are worrying older parents more than normal. It is bad enough to deal with your own sinking financial ship - but having to bail out the children just when you thought they were finally getting off the balance sheet is particularly galling. Two of Mr. Allen's three children succumbed to credit-card pitches on campus and took on $700 each in debt very quickly. After scolding the lenders -- "Haven't you credit-card people taken enough money from innocent young people already?" -- the Allens made the large initial payment demanded by the credit-card vendor. Then, they required their children to step up their work hours and split remaining payments 50-50. "They have to have some skin in the game" to learn responsibility, Mr. Allen says.
Now, Mr. Allen is worried about his children's college debt. He has co-signed student loans for all three, ages 25, 23 and 22. All have been industrious students, worked during college and hold jobs now. But one has deferred payments on his loan and another is planning to enroll in medical school, likely increasing her debt load.
"You can make speeches and say, 'I'm going to let you handle this yourself and you'll pay the consequences," says Mr. Allen, an ex-Marine who works two jobs. But for parents who have co-signed the loans, "that's stupid ... because the minute they start taking water on their credit, you're coming up in the gunsights" of creditors. Labels: Recession Obsession |
| posted by Boston Gal @ 12:04 PM *
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| 4 Comments: |
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That's scary. I feel for parents with kids in school now. We can only hope for the best
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Why is it that we think going into huge amounts of debt just for an education is a good thing in this country. You should encourage your kids to go to a state school where tuition is subsidized, and yes you can find ways to pay your way through, I went to a private college and paid it all in full, no loans, no help from parents. I had scholarships and worked hard summers and during school.
Parents shouldn't be bailing out their children, that sets up a cycle of enabling. Just ask Mr Chiot's grandparents who did that with him mom and are still doing it now 35 years later. Let their children live with the consquences of choosing an expensive college and racking up debt.
This is exactly why we have financial problems in this country. No one is teaching fiscal responsibility to their children.
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One more reason I'm glad I've chosen to remain childfree.
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When I was 21, 22 and 23, I recall several times I felt I needed my parents to help me with a car repair bill, or have asked them to cosign a loan. Each and every time my parents firmly said NO!
While at the time I was upset feeling that my parents simply did not understand my situation. Looking back, its quite clear the understood it 100%. I am glad they refused.
It taught me PERSONAL ACCOUNTABILITY. Most 20 somethings today have a very poor perspective on personal accountability. I am glad my parents forced me to work through the problem myself. I am a stronger person as a result.
If your are a parent and your kid is over 18. Let them go!
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That's scary. I feel for parents with kids in school now. We can only hope for the best