Forget About Student Loans; What About Parents?

HowardRoark's picture
Rank: Orangutan | 347

I'm not the typical college student: when I graduate next May, I will have zero debt. I grew up in New York City, went through the usual "gifted" and "honors" programs that most of our readers are familiar with, and was fortunate enough to obtain a full scholarship for undergrad. When I apply to graduate school, I'll be taking on student loans for the first time. Despite this, my main concern isn't how I'll deal with the massive six-figure debt; rather, it's how I'll repay my parents back.

It could be the close relationship that we have, or it could be me personally witnessing the hardships my parents had to undergo to provide for my sister and I. In actuality, the desire can probably be attributed traditional Asian guilt. Regardless, ever since I understood the concept of money, I've always thought that-- aside from models and bottles-- a big part of why I want to be rich is to ensure my parents live a grand and happy life. On me.

After working absurd hours in menial jobs in my benefit for over two decades, they deserve it. It also seems that I'm not the only one with this mindset. This article talks about one's experience in having supportive parents, and the difficulties of finding ways to pay them back in the early years when money is scarce:

This entire time, my dad was quietly putting money in my checking account without even mentioning it while my mom cooked my favorite foods and took me shoe shopping. A few more unpaid gigs and anti-anxiety medications later, the feeling of being a freeloader was becoming overwhelming. I signed up with a temp agency, a job flexible enough that I could still pursue writing and theater, and made plans to use my savings to move in with friends at the end of the summer. I know that to have parents so supportive makes me a lucky bastard, but I'm worried that it also makes me a spoiled brat.

My parents have been similarly great: working extra hours for my SAT prep classes, foregoing vacations so I could study abroad, and limiting themselves career-wise so that they could be home before 5 and look after their kids. For this, the first priority after paying back loans and ensuring that I can somewhat survive in the city will be to take care of my parent's mortgage. And send them on a nice vacation. And whatever else their hearts desire.

I'm sure many of you have felt the same level of gratitude for your parents' efforts as well. What do you guys plan to do, or have done, when the real money starts rolling in?

Comments (21)

Nov 4, 2012

I feel the exact same way... I am more of a underdog story. Came from single parent family who did anything and everything to get me through school and all of that. In return she has almost zero retirement money saved and the clock is ticking. I plan on setting up a financial plan for her where I can jump start her savings. Probably give her a few of my bonuses. The combo of no longer supporting me and giving her a few bonuses is the least I can do.... Coming from this background has made me quite frugal so I can live without a bonus or two.

Nov 4, 2012

What graduate program are you going into and which school?
If money is really a big issue for you then you should be able to obtain a graduate research assistant position or fellowship or as a TA or something without any problems. Those positions pay for your tuition AND give you a stipend typically. Unless it's an MBA of course,which you shouldn't go into without work experience anyways. But seriously, grad school for non-MBAs in general with some exceptions should be paid for through ulterior methods other than loans.

73 good sir!

Nov 4, 2012

kc2siq, I'm applying to various types of graduate programs and then sitting down and seeing which path suits my interests and goals the most. I know it would be much cheaper and decide on a definite route first, but I really like to keep my options open and additionally, my parents are paying for my applications (thus adding on to the need to pay them back!).

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Nov 4, 2012
HowardRoark:

kc2siq, I'm applying to various types of graduate programs and then sitting down and seeing which path suits my interests and goals the most. I know it would be much cheaper and decide on a definite route first, but I really like to keep my options open and additionally, my parents are paying for my applications (thus adding on to the need to pay them back!).

That's fine. Just remember you SHOULD NOT have to pay for most grad schools. Only thing you should pay for is professional degrees such as a MBA, MD, PharmD, JD and even then you can probably find some kind of help.*

If you do pay for grad school when it isn't an professional degree then you're not really getting the full experience of grad school since you should be ding research under a professor to gain experience. If you are going into a Professional degree then good luck.

*I previously only mentioned MBA, that was my fault, I should've mentioned professional degree instead.

73 good sir!

Nov 4, 2012

Mine are getting back every dollar they spend sending me to college. They don't know it yet, but that's my plan. The first time around I dicked off, got a less than helpful degree (Poly Sci anyone?), and I felt I basically wasted their money. Now that I'm straight in the head, working towards an actual rewarding degree (all financed by myself) that should land me a good compensating job, I feel I owe them at least that much.

Nov 4, 2012

I had a different experience. Really crappy background and the shtiest of parents. If I could have legally got away with it I probably would have killed them (maybe a few other family members too, fck the consequences). Anyhoos, I got scholarships to cover ~90-95% or so the cost of my college tuition. I worked during all of high school while also taking college and AP classes. Fun time. I continued to work all through college and had nice paying internships so I was able to fund college and ALL living expenses.

Maybe my experience made me a mentally scarred a$$hole (it did) but oh well, you do what you gotta do.

Nov 4, 2012

Understand what you mean.. similar situation here where I have zero debt but my parents are relatively well off (aka don't need little ol' Koho trying to support them). Figure if and when I have the money, I'll buy them a trip or something of that nature.. they sure a sht deserve it.

Nov 4, 2012

Definitely along the same lines here. Was able to graduate debt-free from college and live comfortable due to my parents' hard work. I give my parents about 10% of my take home pay and will probably continue to do that for a while. At this point, it's not that much but I think it's a nice gesture that I am sure they appreciate.

Nov 4, 2012

Really good post. My situation is slightly different, but certainly feel the same sort of responsibility toward my parents and the sacrifices they have made for me. College for me was debt-free, paid for by my parents, not my own hard work. While having the ability to not pay for college probably impacted my motivation to work hard during those years (which is a whole separate subject), I now recognize the how significant it was to not have student loans affecting my job choices. I took a finance job at below-market comp to gain more M&A exposure because I didn't have student loans weighing me down.

In the second year of my top 15 mba, I am borrowing money from the bank of mom and dad, but will pay back every cent, with interest. For what its worth, im white, so I wouldn't chalk up those feelings to anything racial.

Another issue to discuss is I have two siblings who will never make anywhere near the amount of money I stand to make. I am starting to feel as though I want to make money to help support them, as that would also make my parents happy too (they have said as much).

In response to WFSS, of course they want our love and affection, and we all try to give them that (i hope). But they made sacrifices with their personal life by not spending that money for instant gratification, and I would like to return the favor and allow them to enjoy their new retirement. Im pushing 30 now, and just recently has supporting my loved ones been a consideration in my job choices.

Nov 4, 2012

Side note on this, you are going to hate the tax implications of paying back your parents assuming you don't want to do anything sketchy or set up a trust (not for a few years). The only time I have heard about this being done elegantly is by a friend who did pretty well during the crisis and bought his parent's house at a premium to fair value (but still a loss for them) and set them up in something much nicer at rock bottom prices. Paying for siblings to go to college is easier if that is an option.

You should be paying your parents back if they made significant sacrifices. Whether that was a single mother taking two jobs or your mother giving up her career. But assuming your relationship is good enough that things like this worry you, and its not just a pride thing, unless they are in dire financial straights they will appreciate your time more. This is especially true in your first few years in the industry when 1) You have very little time to give and 2) They are probably worried about you as you get comfortable in a tough/stressful profession.

Nov 5, 2012

I was actually just thinking about this today. I'm from a big family of seven, and have been blessed with both the quality of my parents and life. My parents do pretty well salary-wise, but having five kids and sending them all through private schools definitely takes its toll. I'm still astonished every time I think about how much better off they could be if they just sent us to the local public school, and how much easier their lives could be. My goal is to pay off their mortgage by the time I'm 30. If at all possible. I hope to save enough to pay the rest of their balance off in one lump sum and without them knowing. I'm pretty sure my mom would pass out when she'd try to pay their monthly bill only to find out that their debts been waved.

Nov 5, 2012

Student Loans + Broke parents (Broke extended family) = No lambo for me.

When I meet college students who come from financially secure middle and upper-class families I envy them with all my heart. Not only do these kids not have to worry about any personal debt but they have never even had to think about how their parents will retire or continue to survive. It must be easy to sleep at night when you don't have lives depending on income you have not even begun receiving yet. Watching these students concern themselves with the most minuscule of complexities just baffles me. Maybe I just need to develop an alcohol/meth habit so I don't stay so bitter...

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Nov 5, 2012
sandsurfngbomber:

Student Loans + Broke parents (Broke extended family) = No lambo for me.

When I meet college students who come from financially secure middle and upper-class families I envy them with all my heart. Not only do these kids not have to worry about any personal debt but they have never even had to think about how their parents will retire or continue to survive. It must be easy to sleep at night when you don't have lives depending on income you have not even begun receiving yet. Watching these students concern themselves with the most minuscule of complexities just baffles me. Maybe I just need to develop an alcohol/meth habit so I don't stay so bitter...

+1 on this brother. Haven't started my Analyst stint and already have the burden of thinking about how I can use that money to lift the people around me out of lower middle-class paycheck-to-paycheck living. I'm sure it's nice to know that you'll receive a fat check when your parents kick the bucket (not that a lot of people are lying in wait for that, but regardless, it's a safety net) irrespective of what you accomplish in life, but it's easy to forget that for the overwhelming majority of Americans, this ain't the case and their parents will work well into retirement age and not leave a whole lot behind.

Nov 5, 2012

One of the things you might consider would be a PhD program which provides a fellowship, ta, tuition waiver type deal. I'm assuming that since you're on this board, you're more focused on business/economics which are programs that will cover most of your costs. However, the lifestyle is far more time consuming than as an undergrad. You would be in class 12-15 hours per week and work 20 hours per week. In the beginning, you'll have a lot of time to study when working. However, in years 2 or 3+, you'll want to spend your time wisely by trying to get some articles published. Published articles work in your favor when you get out, it only solidifies your abilities to research.

It is not about the title that you have, it is about how much money that you have.

Nov 5, 2012

Still waiting for the money to roll in unfortunately!

Nov 5, 2012

I was in a similar situation. I was on a full scholarship when I was undergrad but had to borrow to pay for an ivy-league grad school MFin program. I had about 75K debt after graduation and I was able to pay it off in the first 6 months after getting a job. This is what I advise to anyone - if you don't think that you will be able to pay off your student loan within at most 5 years, then don't go to school. I know one person who is paying off 300K PhD program from an elite school with a 60K salary - that's just insane. At the same time I know people who did part-time MBA programs, which were fully covered by the employer. Although part-time MBA does not provide the same experience as a full-time MBA, it is worthwhile for those who plan to earn less than 100K after graduation. So do your homework well and research your realistic post-grad earning potential.

In the end seeing their kids successful (as in off their hands and financially independent) is any parents' highest reward.

Nov 5, 2012

SB to OP

same situation here

Nov 5, 2012
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