Best Way for Parents to Help?

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AP-375
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Best Way for Parents to Help?

Postby AP-375 » Mon Apr 25, 2011 3:34 pm

So, my parents are considering helping me out with some of the costs of attending law school, but they don't have a big chunk of money to put down on tuition. What's the best way for them to do this? I'm just looking to bounce the idea off tls and see if I'm missing an option.
Because of my personal situation (married with a kid), my actual COA is more than the school's estimated COA. So, it looks like private loans for me. However, I think (?) my parents are willing to cover the difference between estimated and actual COA, maybe more, idk. I only see two ways for my parents to help here:
1) My parents send me money every month for living expenses. Pro: no private loans. Con: I'll feel like I'm 17, forever. (I really would like to avoid this option.)
2) I take out the private loans to meet my needs, and my parents can make payments on them. Pro: I'm not relying on my parents for money each month. Con: I take out a big private loan.
I'm leaning towards option #2, because my folks can make payments on the private loan without penalty while I'm in school, and if they stay consistent, the interest won't accumulate much. I'm really grateful that they are thinking about doing this, but I don't think I'm up for the drama that comes from relying on them for groceries each month.
Am I missing anything here?
Many thanks in advance.

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bk1
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Re: Best Way for Parents to Help?

Postby bk1 » Mon Apr 25, 2011 3:36 pm

I think if you talk to the finaid office you can get your GradPLUS loan amounts adjusted upwards because you have a higher CoL and a legitimate reason for it.

AP-375
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Re: Best Way for Parents to Help?

Postby AP-375 » Mon Apr 25, 2011 3:37 pm

bk1 wrote:I think if you talk to the finaid office you can get your GradPLUS loan amounts adjusted upwards because you have a higher CoL and a legitimate reason for it.


Wow, I had no idea that was an option. Thanks. Will pursue.

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powerlawyer06
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Re: Best Way for Parents to Help?

Postby powerlawyer06 » Mon Apr 25, 2011 3:38 pm

Have them pay for your living expenses. I.E. Rent, Cell Phone, Utilities, Car Payment, or Insurance.

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Upton Sinclair
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Re: Best Way for Parents to Help?

Postby Upton Sinclair » Mon Apr 25, 2011 3:39 pm

So you want to make them pay interest for no reason?

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powerlawyer06
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Re: Best Way for Parents to Help?

Postby powerlawyer06 » Mon Apr 25, 2011 3:39 pm

powerlawyer06 wrote:Have them pay for your living expenses by actually paying the bills. I.E. Rent, Cell Phone, Utilities, Car Payment, or Insurance.

AP-375
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Re: Best Way for Parents to Help?

Postby AP-375 » Mon Apr 25, 2011 3:40 pm

powerlawyer06 wrote:Have them pay for your living expenses. I.E. Rent, Cell Phone, Utilities, Car Payment, or Insurance.

Ok, so you're saying just set up automatic bill-pay on their account? That's doable. Thanks.

flexityflex86
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Re: Best Way for Parents to Help?

Postby flexityflex86 » Mon Apr 25, 2011 3:41 pm

you're just lucky your parents are not deadbeats.

i'd love to have my parents stop asking for me to send them money every two weeks. whenever i send them money, they spend it on stupid shit and then i'm responsible for their groceries again because they use it to order in sushi.

AP-375
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Re: Best Way for Parents to Help?

Postby AP-375 » Mon Apr 25, 2011 3:43 pm

Upton Sinclair wrote:So you want to make them pay interest for no reason?


No, of course not. But my understanding was that they wouldn't have to pay much interest if they are keeping the principal down. But you bring up a good point, which is why I'm glad to have brought the question here.

AP-375
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Re: Best Way for Parents to Help?

Postby AP-375 » Mon Apr 25, 2011 3:43 pm

flexityflex86 wrote:you're just lucky your parents are not deadbeats.

i'd love to have my parents stop asking for me to send them money every two weeks. whenever i send them money, they spend it on stupid shit and then i'm responsible for their groceries again because they use it to order in sushi.


Yeah, you're right. No doubt I'm feeling very fortunate. I've been planning on doing this on my own for some time, so I'm surprised and grateful that they're talking about this.

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powerlawyer06
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Re: Best Way for Parents to Help?

Postby powerlawyer06 » Mon Apr 25, 2011 3:44 pm

flexityflex86 wrote:you're just lucky your parents are not deadbeats.

i'd love to have my parents stop asking for me to send them money every two weeks. whenever i send them money, they spend it on stupid shit and then i'm responsible for their groceries again because they use it to order in sushi.


+1 to this, I helped my parents buy a house and a bought them a car but they still can't seem to stay on a budget. It honestly makes me sad.

flexityflex86
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Re: Best Way for Parents to Help?

Postby flexityflex86 » Mon Apr 25, 2011 3:55 pm

Honestly, I'd use the cash from your parents to pay for your COL.

In the worst scenario (i.e. you're short one semester), a law school will be more forgiving and more likely to work with you than a landlord who does not care about you one bit. Schools want their students' money no doubt, but education is a tad more interpersonal than things like housing and food.

Conversely, it's important you learn to budget as well, which not getting $ from them will teach you - finding cheap rent, saving on groceries but still eating healthy - these things will teach you the value of money, which in turn will make you a better husband and father in the long run, and someone who at the very least will always survive.

Personally, I'm debating having my dad run my small business my first year while I'm in LS and giving him the majority of the profits so my parents would have financial support, I'd make some money without influencing my 1L grades and I won't lose the brand I've developed. However, my dad has been sued countless times, never won and has been let go from every job he's ever had. Consequently, I'm afraid he can turn my virtually 100% happy client rate and damage the company. I would like to be able to go back to running it for 4-5 hours a day during my 2 and 3L years when school is less intensive.

flexityflex86
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Re: Best Way for Parents to Help?

Postby flexityflex86 » Mon Apr 25, 2011 4:00 pm

powerlawyer06 wrote:
flexityflex86 wrote:you're just lucky your parents are not deadbeats.

i'd love to have my parents stop asking for me to send them money every two weeks. whenever i send them money, they spend it on stupid shit and then i'm responsible for their groceries again because they use it to order in sushi.


+1 to this, I helped my parents buy a house and a bought them a car but they still can't seem to stay on a budget. It honestly makes me sad.

sweet on the house and car.

did you do this while repaying your loans?

bigben
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Re: Best Way for Parents to Help?

Postby bigben » Mon Apr 25, 2011 4:15 pm

Private loans can be good because they offer a lower interest rate, but you lose the protective features like IBR. I'd avoid private loans unless you want to make a gamble to save interest and you are quite sure that you will be able to repay.

I'd avoid taking much help from your parents if they don't even have that much money. You can:

-live more cheaply
-have your wife(/husband?) earn an income (obviously not ideal with kids)
-save more money before school starts, by living more cheaply and working more
-work part time during school
-get extra loans as someone mentioned above

But if your parents are going to help you, just take whatever they give you and add it to your bottom line. In other words use it for your living expenses as you have said. I see no reason that you would be forced into private loans because of this. At the most, you might seek a small amount of private loans on top of your federal loans, just to cover the difference. However, I don't know why you think that private lenders would be more inclined than federal lenders to give you money above the usual COA.
Last edited by bigben on Mon Apr 25, 2011 4:20 pm, edited 1 time in total.

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Upton Sinclair
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Re: Best Way for Parents to Help?

Postby Upton Sinclair » Mon Apr 25, 2011 4:20 pm

bigben wrote:have your wife(/husband?) earn an income (obviously not ideal with kids)


It's 2011, FYI.

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mpj_3050
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Re: Best Way for Parents to Help?

Postby mpj_3050 » Mon Apr 25, 2011 4:20 pm

What about asking them to set aside some money for post-law school?

flexityflex86
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Re: Best Way for Parents to Help?

Postby flexityflex86 » Mon Apr 25, 2011 4:25 pm

do you have siblings? i always feel queasy taking money i didn't earn, especially if it'd mean less money for someone else. that's just me interpersonally. professionally, i'd do whatever it takes to squeeze out some extra cash ;-)

AP-375
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Re: Best Way for Parents to Help?

Postby AP-375 » Mon Apr 25, 2011 4:30 pm

mpj_3050 wrote:What about asking them to set aside some money for post-law school?

And graduate with the full debt load, but a large cash gift? Could work, but I think it's more prudent to just keep the debt down. Plus I'm pretty sure cash gifts are taxable over a certain amount.

bigben
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Re: Best Way for Parents to Help?

Postby bigben » Mon Apr 25, 2011 4:36 pm

Upton Sinclair wrote:
bigben wrote:have your wife(/husband?) earn an income (obviously not ideal with kids)


It's 2011, FYI.

And? There really isn't any doubt that outsourcing your child care for young kids is generally not as good, all else being equal. Anyway, OP's post clearly implies that his/her spouse won't be working, so I'm merely acknowledging that position.

zephyr36
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Re: Best Way for Parents to Help?

Postby zephyr36 » Mon Apr 25, 2011 4:39 pm

To piggyback a bit: My parents have offered a bit of money. There's no way they could afford to pay tuition or anything like that, but I was thinking they could at least pay down the interest on the Gradplus loans for my 1L year and perhaps beyond. Does anyone have any experience with this?

AP-375
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Re: Best Way for Parents to Help?

Postby AP-375 » Mon Apr 25, 2011 4:39 pm

bigben wrote:
Upton Sinclair wrote:
bigben wrote:have your wife(/husband?) earn an income (obviously not ideal with kids)


It's 2011, FYI.

And? There really isn't any doubt that outsourcing your child care for very young kids is generally not as good, all else being equal. Anyway, OP's post clearly implies that his/her spouse won't be working, so I'm merely acknowledging that position.

Before this blows up any further, I'll just add that my wife is an interior designer, so she'll be able to work from home, but the income is impossible to predict and will vary based on her success and clientele.

AP-375
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Re: Best Way for Parents to Help?

Postby AP-375 » Mon Apr 25, 2011 4:42 pm

zephyr36 wrote:To piggyback a bit: My parents have offered a bit of money. There's no way they could afford to pay tuition or anything like that, but I was thinking they could at least pay down the interest on the Gradplus loans for my 1L year and perhaps beyond. Does anyone have any experience with this?


My only experience with this is what I've learned in this thread, where the idea is to put a gift directly towards your expenses, as opposed to towards your debt.

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JamMasterJ
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Re: Best Way for Parents to Help?

Postby JamMasterJ » Mon Apr 25, 2011 4:48 pm

Calculate how much they will be able to give you and take out whatever loan you need minus that amount. No point in them just paying interest when they could be keeping your principle lower instead

flexityflex86
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Re: Best Way for Parents to Help?

Postby flexityflex86 » Mon Apr 25, 2011 4:56 pm

if your parents have some preconceived figure they're giving you, and don't need to go year to year i'd get it all up front and use it towards your first year bec. most of the loans accrue interest while ur in school.

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mpj_3050
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Re: Best Way for Parents to Help?

Postby mpj_3050 » Mon Apr 25, 2011 6:57 pm

AP-375 wrote:
mpj_3050 wrote:What about asking them to set aside some money for post-law school?

And graduate with the full debt load, but a large cash gift? Could work, but I think it's more prudent to just keep the debt down. Plus I'm pretty sure cash gifts are taxable over a certain amount.


I was thinking maybe along the lines of a little bit of a cushion in case you are unable to secure employment by graduation or something else happens where you would need money in the bank.




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