Best Way and Type of Loan to support Adult Child do Masters in USA

I

ivorhead

Registered User
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Hi Folks,
Looking for a bit of advice here regarding best way to help our 27yr old adult child to pay for doing their Masters in the USA.
They have been accepted by the University and have been given a partial (50%) scholarship of $30,000 a yr for each of the 3 yrs.
So basically they would need another $30,000 per yr plus living and accommodation expenses.

We want to help if we can. Our situation at present is we are both in mid 50's
My income €44,000 gross - €35,000 net
Spouse income €4,000 gross - €4,000 net.
Mortgage Cleared
Car loan €400 per month with 22 months left.
Credit card Cleared every month

Other big financial commitments. Youngest child's accommodation costs of €8,000 per yr for next 2 yrs while they finish college​

No other loans and we are not big spenders we have a cheap week away in the sun every October and use our savings to pay for youngest child's college accommodation.

So I suppose what we would like to do is loan our child the money (€150,000) needed to fund the rest of the money they need to do their masters. (apparently the masters will open up untold opportunities in their field of work) so we would be aiming that they pay us back the loan, as our pension when we retire 10 in yrs will be the state pension plus my work pension which is approx. €80,000 lump sum plus weekly payment of approx. €80

Would we be best looking for a personal loan. Can we mortgage our house, should we draw up a contract with our child.
Or should our child look for the loan with us as guarantors, bearing in mind that they will have no income to repay the loan while they are studying for the first 3 yrs of the loan.

Thanks in advance for all answers/advice
 
Are you sure a Masters in the same area can't be done in Ireland?

Fees here are 7-9k approx.
 
Protocol said:
Are you sure a Masters in the same area can't be done in Ireland?

Fees here are 7-9k approx.
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Unfortunately not really. Its in the arts/theatre field and the equivalent in Ireland would not offer much opportunities outside Ireland and very few in Ireland as it is such a limited area in Ireland.
The only two highly world recognised location's to are New York and London, which does and will open up great opportunities and well paid positions in the states and UK and elsewhere in the world.
The person who heads up the dept/course in the USA college is world famous in their field and while working in Ireland last year our child just happened to working directly under them in Ireland and impressed them so much and was basically taken under their wing and hence the offer of a place in the USA college was offered. Very few places in this field are available each year (less than 8) and usually places for oversea students are limited to one or two
 
I mean no disrespect when I say you have a modest income.

It's clear that you have done your very best for both your children.

Once the youngest has finished 3rd level, it's time for you to enjoy yourself.

Borrowing 150k at your time of life is a very big ask in my view.

What if either of you has a serious illness? Or you have to stop working? What if the expected big earnings don't materialise as soon as you'd hoped? What if child no. 2 wants similar help?

If you put your eldest through 3rd level and they've graduated with no personal debt, then I think it's reasonable that they fund the Masters themselves.
 
And to add to Thirsty analysis, you refer to your adult daughter as your child... She's 27 no longer a child but a fully fledged adult woman. My own adult son of 28 just put himself through uni and paid every bit of his costs by working every God given hour that was available to him.

I wouldn't advise you to go remortgaging your house that would be pure madness at your ages, you probably wouldn't even get a mortgage, it's hard eniugh for the young ones to secure one these days not alone a couple not far off their sixties. .Can you daughter approach AIB and get a student loan of sorts?
 
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OP you have done your bit, you've educated your child, postgrad is on them! I did 2 postgrads, it never entered my mind not to fund it myself. And you're talking about serious money. Look to investing for yourself & your retirement.
 
I'd be advising that you don't finance this. You're talking about getting a major loan in your mid fifties on annual earnings of €39k, with another child yet to educate.

It would leave you very exposed financially and you've only got 10 years to go until retirement.

What efforts has your 27 year old made towards financially supporting themselves in this matter?

How are they supporting themselves at present?
 
Thirsty said:
Borrowing 150k at your time of life is a very big ask in my view.
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Not just a big ask. Pure madness!

Luckily, there isn't a chance you'd be able to borrow 3 times your combined salary at your age. So time to explain to your adult child that you're not going to sell the house and live on the street to pay for their masters.

Would the offer still be available next year if they deferred, and they work hard and save every penny they can to try fund at least the first year themselves?
 
I have never heard of a three-year master's degree.

If the course is availible in London I would think it would be a lot cheaper.
 
Plus I wonder about the opportunities afterwards and how lucrative they really are. Not exactly the same but someone I know borrowed 10k to do a masters that apparently would guarantee commanding a salary of 80k on completion. I did slightly query how this was figured that out but sure what would I know was clearly the attitude I was getting back. It is now years after that masters and last job was at around 45k, salary never reached the heights 'somebody' was promising the masters would bring.


At least it was only 10k borrowed, thread carefully!
 
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ivorhead said:
Its in the arts/theatre field and the equivalent in Ireland would not offer much opportunities outside Ireland and very few in Ireland as it is such a limited area in Ireland.
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The Arts is a charity dependent of state hand outs and kindly benefactors to survive. I know this because I prepared many proposals seeking finance for such projects back in the day. I also represented several artists seeking tax exemption status for their work, which in the end was not of much use because they rarely made any money. Of about three hundred clients my employer had at the time only two made any serious money and are household names today - one a director/producer, the other a band.

A good friend mine how was involved in student financing in the US will tell you that a $30k scholarship is a $0k scholarship if not paid out in living expenses. The truth is that most colleges struggle to find students for masters programs and one of the marketing tricks to attract people is to up the fees and then grant scholarships to bring it back down. A great way to massage people’s ego at zero cost - you won a scholarship to <college name> wow!

The bottom line is that you cannot afford this and it is unlikely that your child will ever be able to repay you. You have a second child equally deserving of your support, how are you going to support their dreams? Even worse what happens if you have to rely on them in old age as a result of this. This is an adult’s dream and it is up to them to finance it, not you.
 
Cheers for the replies folks, It appears the sensible decision, reading into all your replies is what my head has always being saying to me, but the heart keeps getting in the way.
I've always felt that if we could support all 3 of our Children
to go to college (eldest 29 and lives abroad since graduating 7 yr ago) then we have done right by them and it was then up themselves to fund their future after that.
And in fairness to all three of them, they worked during college to fund as much for themselves as they could and since our eldest two graduated they have always looked after themselves and lived away from home​

As Thirsty had said and no disrespect was taken, but we have managed it with just a modest income and we both feel that with the youngest having only 2 yrs to go after this summer then it was going to be our time to spend a bit more on ourselves.

It appears we need to think it over some more before even bringing up the subject with our adult child, who by the way is unaware that we are even considering this as they have always assumed that we not in a position to help financially.
 
If you look at any of those debt advise guys in the US college fees are a big part of their customers. The return on investment on many college courses are very poor. It's abysmal in creative and artist areas. I know my own college course in design area that most people never got working in that area.

However the college's would never report this accurately or far fewer would do these courses.

Also someone who funds their own courses is far more likely in my opinion to have the drive to succeed.

I think you would not be doing this adult any favours by supporting in this. If it didn't work out I think it could leave you and them in a bad place.

I would only do this if it didn't really matter if it didn't work out. That really isn't the case for you.
 
Jim2007 said:
The Arts is a charity dependent of state hand outs and kindly benefactors to survive. .
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A friend of mine did an MFA in creative writing in UCD a while back. Fees are something like €7,000 but he managed to get a lot of it funded on Back to Education Allowance (but that's another story.....).

Anyway something like two out of 15 classmates even got published, and even that's not a route to a livelihood made from writing.

There may be many reasons for doing this, but a guarantee of good-quality employment in the arts afterwards is not one of them.
 
With respect to people highlighting the perilous nature of a career in the arts, this case does seem a little different; based on the OP’s posts, it sounds a little less like spoofing around UCD and a little more like being taken under the wing of David Mamet or Christopher Nolan.

So can it be made to work?

Firstly, your child should be willing to work every hour god sends in his/her spare time to contribute to this and eat into the funding requirement. If there’s not a willingness to do this, I’d question the desire around the course in the first place.

Thereafter, I would go and speak with my local credit union; they can be quite good in terms of spreading loans out.

And would it be possible for the spouse with the €4k income to work more hours?

Best of luck.
 
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