WWYD - Parents offering to pay off (or pay down) student loans

emelsea · Nov 18, 2010

My dad recently recieved a big settlement, and for the first time in his life, he's financially secure. He's offered to pay off my and my sister's student loans because he says he couldn't afford to pay for our college when we were younger and now he wants to do this. 
 
On the one hand, it would be really great to have my student loans paid off or paid down. We're getting by right now - we can pay our bills, but there isn't much left over, and if there was a big expense (if one of our cars breaks down, or our son runs up another $900 phone bill) we'd be in a tight spot. By far, my student loan payment is our largest bill each month, and freeing that money up would give us an opportunity to save for an emergency fund or pay off our other debts at a faster rate.
 
On the other hand...I've never asked my parents for help with money, mostly because they never had any to help me out with. I paid for my college education almost entirely with loans - I made this bed and up until now, I've had to lie in it.
 
I'm afraid that my mom will hold this over my head for the rest of my life. "We paid for your college education and now you owe us ____________." Fill in the blank with what ever you wish - she'll threaten it at some point. 
 
My mom has often said that she "has a list of how much it cost to raise you girls (my sister and me) and it wasn't cheap!" This was how she justified not helping us out with college in the first place. (But, as I said, they never had money to help us out, so I never expected it, nor was I bitter about it. It was what it was and I wanted that college degree, so I knew I had to pay for it myself.) It's also the phrase she drags out every time money comes up in conversation. 
 
My sister has suggested that we pay them back by setting up an account and depositing money into it so that if, in the future, they need money we'll have that waiting for them. I am more inclined to consider this.
 
I guess another issue is my pride. I've always been very proud of myself for putting myself through college while working one full time job and one part time job. I've made it to my late 30's and never, ever once asked my mom and dad to loan me money. There were times when I was in school that my grocery budget for a week was $10, but I got through it on my own and never complained to them or had to ask them for help. 
 
Lastly, yesterday I was talking to my Dad and he asked me how he could give me the money without me having to pay taxes on it (he wanted to know how much he could give me in one year) and I didn't know the answer. I said "I don't know, Dad, no one has ever given me more than $100 dollars as a gift." And he replied "Well, don't get used to it!" It really hurt my feelings, since I didn't ASK him for this, and I certainly didn't expect it. His tone was just so nasty - it made me feel like this was a taste of how he might be, too, if I let him pay part of my student loans. 
 
So I keep going back and forth. It would be so great not to have this big bill each month, but on the other hand, I'd feel beholden to my parents, and that makes me uncomfortable. Any advice?

Imogen · Nov 18, 2010

Wow this is a tough one. When I first started reading your post my instinct was to say 'Take it, take it' ~ But then you discussed more about your relationship with your parents and now I'm not so sure. I think that your concerns are very valid regarding them throwing it in your face, especially your Mom, judging by what you've said.
 
What would likely be their response if you were to discuss your concerns with them?
 
Peace

mamalisa · Nov 18, 2010

Me personally, I wouldn't take it. They sound like the type of people to remind you how great they are for doing it and I'm not the kind of person who wants help anyway.
 
Could you ask them to make a fund for the kids instead? As in "we're fine with money and doing well enough to pay off our debts, I'd much rather secure the kid's college than pay off my loans".

SleeplessMommy · Nov 18, 2010

Gift tax is only for gifts over $13,000. So mom + dad can give you $26,000 per year.
 
<a href="http://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax/INF12036.html" target="_blank">http://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax/INF12036.html</a>

laohaire · Nov 18, 2010

Yeah, same here. "Take it" was my initial stance but if your mother is going to hold it over your head... no thank you. No money is worth strings like that.
 
Of course, now I'm thinking that if your parents are really bad like that, they might spend the rest of their lives telling you "well we OFFERED and YOU SAID NO" lol.

laohaire · Nov 18, 2010

Also, I am not sure but I wonder if your dad writing a check to the student loan company, and not you, might exempt the tax thing.
 
I know anybody can write a check to my credit card bill, for example. It doesn't have to be me. My mother, my boss, my neighbor could write a check and as long as it references my account, it gets applied to my balance.

emelsea · Nov 18, 2010

When he first suggested it to me, I told him that it wasn't necessary and that maybe, someday, we'd need help and could turn to him. I also said, as gently as possible, that I was afraid that Mom would hold it over my head for the rest of our lives and he 'poo-pooed' that (sometimes I wonder if he is completely ignorant of how my mom treats my sister and me). I'd never tell my mom I felt that way. She's a <a href="http://www.mcafee.cc/Bin/sb.html" target="_blank">sociopath</a>. Trying to have that conversation with her would result in a great deal of drama, and I no longer play that game with her. (I know that sounds mean. I really stuggle with my relationship with my mom, but her personality disorders have colored every aspect of my life.) 

<div class="quote-container">Quote:
<div class="quote-block">Originally Posted by Imogen <a href="/community/forum/thread/1280232/wwyd-parents-offering-to-pay-off-or-pay-down-student-loans#post_16055453"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border-bottom:0px solid;border-left:0px solid;border-top:0px solid;border-right:0px solid;"></a> Wow this is a tough one. When I first started reading your post my instinct was to say 'Take it, take it' ~ But then you discussed more about your relationship with your parents and now I'm not so sure. I think that your concerns are very valid regarding them throwing it in your face, especially your Mom, judging by what you've said.
 
What would likely be their response if you were to discuss your concerns with them?
 
Peace
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hopefulfaith · Nov 18, 2010

I paid for my own education with scholarships and loans as matter of course - my mom didn't have enough money, and I grew up knowing that. It wasn't a big deal then or now.
 
However, when I read the thread title I got excited for you: TAKE IT!
 
Now, I'm thinking your intuition and reaction to this is right on: I think you would be reminded of this frequently and have it held over your heads for the rest of your parents' lives. Given what you've said about your mom, I think this is is exactly what would happen, and I, frankly, wouldn't want to deal with that during every interaction with my parents. Manipulation is exhausting.
 
However, I love the idea a pp mentioned about securing your children's education with the money if they really are offering money to your family (open a 529?). It might not bother them to be reminded of it by their grandparents (if your parents would do that to them, as well) as much as it would you, given your parent/child relationship and your history with them.

Evergreen · Nov 18, 2010

I'm inclined to say take it also. My parents feel really badly about not being financially able to help us with college. I know if they got a settlement of some sort it would be one of their first offers. That's just how they are.

mariamadly · Nov 18, 2010

The money sounds as though it costs too much.
 
It also seems reasonable to believe they might make it cost your child/ren just as much. My MIL made an offer to help pay for DS1's education (including her willingness to do the same for DS2), but it was very subtly tied to having input and being the one to control access, decisions, make judgments, etc. We were effusive in our gratitude and turned down the offer. Full disclosure: DH had begun pulling in six figures in the last couple of years, so we are beyond lucky in our ability to turn down this sort of help.
 
If you're looking at education planning, there are colleges that "meet full demonstrated need" (the most common wording I've encountered). To find out what your family's need would be, there are worksheets at <a href="http://www.fafsa.ed.gov/%C2%A0" target="_blank">http://www.fafsa.ed.gov/ </a> It's a very helpful point of reference.
 
P.S. Just noticed it sounds as though you have a son old enough to run up large phone bills, so I may be speaking to something you've already done; sorry if that's the case. In any event, I feel for you as you try to carry the weight of your mom's issues. Good luck navigating!

CrunchyChristianMama · Nov 18, 2010

I would only take the money if I sat down with them and had a long conversation about your fears and was reassured that the money truly came with no strings attached.

MeepyCat · Nov 18, 2010

<div class="quote-container">Quote:
<div class="quote-block">Originally Posted by laohaire <a href="/community/forum/thread/1280232/wwyd-parents-offering-to-pay-off-or-pay-down-student-loans#post_16055476"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a> Also, I am not sure but I wonder if your dad writing a check to the student loan company, and not you, might exempt the tax thing.
 
I know anybody can write a check to my credit card bill, for example. It doesn't have to be me. My mother, my boss, my neighbor could write a check and as long as it references my account, it gets applied to my balance.
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 Nope, no go there.
 
If someone buys you something really expensive (like a house or a car or the payment of your outstanding debt), there are still gift tax implications. Writing the check to the student loan company doesn't change anything - the student loan company won't care, but the IRS will.
 
There are two exceptions to this rule: if someone directly pays for your educational or medical expenses, there are no gift taxes on those. But by "directly paying", they mean "writes a check to the college," not "waits twenty years and then pays off your loans."

enkmom · Nov 18, 2010

Hmm, this is my plan when I am more financially stable. My children are currently college age (only 1 is enrolled) and I plan to help/pay the loans they take now because I feel terrible that we are not able to help them more now. I'm betting this something your dad always wanted to do, and will make him happy to do. Your mom is another story. 
 
I would have a serious talk with your dad and tell him your fears. If he puts you off again, I would take the money and any time mom starts up I would tell her "talk to dad" and end the discussion. I have a mother much like yours sounds, and when I reached my breaking point once with what I "owed" her I brought out my checkbook and started writing a check. She refused! to take it. She got much more joy out of moaning and complaining about all the things she did for me than she ever would have gotten from the money. I would really fear for your kids if a college account was set up for your kids, as she could start early with how much grandma loves them and they won't even x, y or z.

Chamomile Girl · Nov 18, 2010

Well, whether or not you take the money you are going to have to deal with the reprocussions. It sounds like your mother is the kind of person that will bring this up regardless (like when you are in a financial tight spot in the future..."well if you had taken the money we offered blah blah...".
 
I say take it.
 
I totally understand the pride as I also put myself through college. I don't know about you but I have always felt a bit of resentment about it because it was expected for me to go to college. My parents made it very clear that was the only acceptable path (even though neither of them have a college degree). But they did nothing to financially plan for how it was going to happen, nor did they council me as to what the financial reprocussions would be when I funded my experience with loans (and, yes I also worked but that was not enough to live...sorry).
 
So OP if you come from a "college family" I can see why your dad is eager to pay down your loans. They set you on the path and now they can remove the burden its having on your life. Take it, take it, take it!

limabean · Nov 18, 2010

It sounds like your gut is telling you the right thing to do. Your dad hasn't even given you any money yet and he's already making weird comments about it. I think I'd decline the money and preserve my autonomy.

Mulvah · Nov 18, 2010

That's a tough one. 

<div class="quote-container">Quote:
<div class="quote-block">Originally Posted by hopefulfaith <a href="/community/forum/thread/1280232/wwyd-parents-offering-to-pay-off-or-pay-down-student-loans#post_16055667"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a> I paid for my own education with scholarships and loans as matter of course - my mom didn't have enough money, and I grew up knowing that. It wasn't a big deal then or now.
 
However, when I read the thread title I got excited for you: TAKE IT!
 
Now, I'm thinking your intuition and reaction to this is right on: I think you would be reminded of this frequently and have it held over your heads for the rest of your parents' lives. Given what you've said about your mom, I think this is is exactly what would happen, and I, frankly, wouldn't want to deal with that during every interaction with my parents. Manipulation is exhausting.
 
However, I love the idea a pp mentioned about securing your children's education with the money if they really are offering money to your family (open a 529?). It might not bother them to be reminded of it by their grandparents (if your parents would do that to them, as well) as much as it would you, given your parent/child relationship and your history with them.
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I agree 100% with everything written above, including the fact that I paid my own way. Though, my parents would have (happily) paid if they could have.
 
That said, I could not deal with a family member, especially a parent, holding that type of thing over my head. So, I would probably secure my child(ren)'s education with the money they are offering. I think it's a great compromise. (ETA: The reason I suggest this is because I do wonder if they will use the fact that you didn't take the money against you. If that's the case, I would definitely use the money to pay for my child(ren)'s education.)

HappyMommy2 · Nov 18, 2010

I don't think you shoudl take it. It sounds like they will feel entitled to judge and criticize you afterwards. Just tell them that you hope they put it into a safe account for themselves, for their own future/retirement.

sahli29 · Nov 18, 2010

I would take it.Either way your parents will make comments.Pay off the loan and ignore the comments.

Katwoman · Nov 18, 2010

<div class="quote-container">Quote:
<div class="quote-block">Originally Posted by emelsea <a href="/community/forum/thread/1280232/wwyd-parents-offering-to-pay-off-or-pay-down-student-loans#post_16055405"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a> 
I said "I don't know, Dad, no one has ever given me more than $100 dollars as a gift." And he replied "Well, don't get used to it!" It really hurt my feelings, since I didn't ASK him for this, and I certainly didn't expect it. His tone was just so nasty - it made me feel like this was a taste of how he might be, too, if I let him pay part of my student loans.
 
<div class="quote-container">
 
 
Quote:
<div class="quote-block">Originally Posted by limabean <a href="forum/thread/1280232/wwyd-parents-offering-to-pay-off-or-pay-down-student-loans#post_16056228"><img alt="View Post" class="inlineimg" src="img/forum/go_quote.gif" style="border:0px solid;"></a> Your dad hasn't even given you any money yet and he's already making weird comments about it.
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Only you know your Dad. But I wanted to throw out a different angle on this. I don't see what he said as being all that weird, IF it was a defensive response to not being able to help you before. In my family, what you said would have been deemed "taking a shot" at your Dad for not helping with college in the first place. (I'm not saying you were. Just giving it a different angle.) Even if it wasn't taking a shot at your Dad, I could easily see how a Dad who would have wanted to give you more when you were growing up would get defensive when you pointed out he hadn't. 
 
Not that my post helps with your actual dilemma. 
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em123 · Nov 19, 2010

No way, I would not take it with the details you've provided. It wouldn't be worth it - sure you save money but you're "paying" for it for a long time in other ways.

WWYD - Parents offering to pay off (or pay down) student loans

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