Degrees of Debt

[doom&gloom]

The boomerang bust...

http://www.nytimes.com/2012/11/12/bu...nted=1&_r=0&hp

When Michele Fitzgerald and her daughter, Jenni, go out for dinner, Jenni pays. When they get haircuts, Jenni pays. When they buy groceries, Jenni pays.
A Guide: Ways to Help Children Pay for College

Parents have a number of options when trying to borrow money to pay for their children’s undergraduate education. None of them is perfect, alas.

---

It has been six years since Ms. Fitzgerald — broke, unemployed and in default on the $18,000 in loans she took out for Jenni’s college education — became a boomerang mom, moving into her daughter’s townhouse apartment in Hingham, Mass.
Jenni pays the rent.

*snip*

[dcarrigg]

Re: Degrees of Debt

The boomerang bust...

When Michele Fitzgerald and her daughter, Jenni, go out for dinner, Jenni pays. When they get haircuts, Jenni pays. When they buy groceries, Jenni pays.
A Guide: Ways to Help Children Pay for College

Parents have a number of options when trying to borrow money to pay for their children’s undergraduate education. None of them is perfect, alas.

---

It has been six years since Ms. Fitzgerald — broke, unemployed and in default on the $18,000 in loans she took out for Jenni’s college education — became a boomerang mom, moving into her daughter’s townhouse apartment in Hingham, Mass.
Jenni pays the rent.

*snip*

It had crossed my mind, that were one so inclined, one could stay signed up half-time (2 classes per semester) at university starting in Retirement as a hobby, use student loans to pay for school and pad Social Security, defer student loans until you cannot physically go to class anymore, then declare hardship until the end. This way here, you never get the negative credit effect of student loans, and never have to pay them off either.

The only thing stopping this with federal loans are caps. But if you go to a relatively cheap state school, and found yourself in a nice college town, you'd have undergrad caps of $57,500, and graduate and professional caps of $138,500. That's $196,000 you could bleed out, about $20k/year for about 20 years (all these numbers would get adjusted for inflation as they always do, so just think of it in today's numbers). $10k-$15k go to the school each year, $5k-$10k come back to you. But there's a health plan built in there that supplements Medicare. And maybe even free drugs. Plus the extra $500 or so per month even at the low end ain't bad. And 20 years is a good long time in your 60s.

I'm sure there are few, if any, people doing this. But since they made mortal illness and death the one way out of the suckers, they've functionally set up a nice small pension plan, complete with activities and friends and a health plan, and this time, instead of an annuity, you're betting with the house (actuaries' tables). It seems almost fool proof for anyone in good enough health and so bold as to take it.

Plus, even in the off chance you've got a whole lot of energy and longevity very late into life, you'll have become a university fixture for two decades. There's probably some job in it for you if you need to cry broke at that point.

[ER59]

Re: Degrees of Debt

Thank you for sharing! It really got me thinking.

[vinoveri]

Re: Degrees of Debt

It had crossed my mind, that were one so inclined, one could stay signed up half-time (2 classes per semester) at university starting in Retirement as a hobby, use student loans to pay for school and pad Social Security, defer student loans until you cannot physically go to class anymore, then declare hardship until the end. This way here, you never get the negative credit effect of student loans, and never have to pay them off either.

The only thing stopping this with federal loans are caps. But if you go to a relatively cheap state school, and found yourself in a nice college town, you'd have undergrad caps of $57,500, and graduate and professional caps of $138,500. That's $196,000 you could bleed out, about $20k/year for about 20 years (all these numbers would get adjusted for inflation as they always do, so just think of it in today's numbers). $10k-$15k go to the school each year, $5k-$10k come back to you. But there's a health plan built in there that supplements Medicare. And maybe even free drugs. Plus the extra $500 or so per month even at the low end ain't bad. And 20 years is a good long time in your 60s.

I'm sure there are few, if any, people doing this. But since they made mortal illness and death the one way out of the suckers, they've functionally set up a nice small pension plan, complete with activities and friends and a health plan, and this time, instead of an annuity, you're betting with the house (actuaries' tables). It seems almost fool proof for anyone in good enough health and so bold as to take it.

Plus, even in the off chance you've got a whole lot of energy and longevity very late into life, you'll have become a university fixture for two decades. There's probably some job in it for you if you need to cry broke at that point.

Good point.
I think in view of what's transpired over the past several years, the idea of fairness and doing one's duty under "social contract" has been severed, and now that everyone sees that the wealthy game the system writ large, it is "everyone for themselves" as each tries to leverage whatever free lunch he/she can. It may take a while, but this baby's going down unless ....

[globaleconomicollaps]

Re: Degrees of Debt

It had crossed my mind, that were one so inclined, one could stay signed up half-time (2 classes per semester) at university starting in Retirement as a hobby, use student loans to pay for school and pad Social Security, defer student loans until you cannot physically go to class anymore, then declare hardship until the end. This way here, you never get the negative credit effect of student loans, and never have to pay them off either.

Many schools no longer permit part time students. I think this tax dodge is the reason.