Equal v Fair question

[rosiebear]

Our daughter is going to graduate from college this spring, with a degree in elementary education. She is still looking for a job, but I am fairly confident that she will find something, even if it is not exactly what she wants. Our son graduated about a year and a half ago, is on his own, and recently paid off his approximately 7K in student loans all at once.

When our daughter graduates, she will have approximately 18K in student loans – nearly all subsidized federal loans. The higher amount is due to her higher housing costs on campus, and to be frank, her much less frugal spending habits over the college years.

The “equal versus fair“ question comes because I will have about 10K left over in their college fund. I had never planned on paying for grad school, and neither child has immediate plans for grad school anyway. What should I do with this money? Split it equally, even though our daughter has a higher student loan burden? Split it in an amount proportionate to the student loans they had when they left school? Take the small tax hit and keep it for myself?

What says ML?

[Deleted]

As the child who was always frugal... I would split evenly.

But it's your money and you can do with it as you see fit. Your kids don't even have to know.

[maudefindlay]

I'd split evenly.

[cville]

Usually I go for fair over equal. Not here. Equal IS fair.

ANECDOTE: my parents paid at least 4x more to put my brother through college (because it took him 3 years longer and because I had scholarships).

I think we've been loved and cared for equally by our parents. The way they treat us is usually fair. They paid for my wedding and not his.

But if I think about it long enough I get hella pissed about the education funding disparity. They told me 4 years in state tuition was covered, so I hustled for scholarships to cover room and board and got out in 4 years. They told him the same and then covered it anyway when he needed rent...and more years of tuiton...and to replace a car...and and and. And I took on $150k in loans for law school, which would have been a lot less if they'd equalled us up in higher education spend.

[mofongo]

I would split it equally as well.

[wildrice]

I would split it evenly if you want to give it to them - or, I think it's totally fine if you wanted to keep it for yourself! Alternatively you could also "keep" it and set it aside for a wedding or down payment fund.

I don't think I'd give different amounts. Your daughter could have made the same choices as your son (presumably) about spending habits and cost of school, and I don't think your son should get less because of her more expensive choices. If there was some kind of circumstance where she was disadvantaged/had an emergency/higher health spending/etc where it wasn't actually her choice then that's different, I guess.

[bee20]

I'd say equal is fair if your oldest was more frugal. Sounds like they're both doing well, but $5k early in life is definitely helpful.

[jlt19]

Did you have one 529 for each set up?

I have one for each kid, so I plan on keeping them separate. If there’s any left over, I’ll roll it into their Roth IRA.

But mine are 11/13 so who knows what will actually happen.

[noodleoo]

Split it equally or keep it. Definitely don’t give daughter more unless you want to start resentment between them.

[rosiebear]

Thanks for all the thoughts- keep em coming! Info that might be relevant that I forgot in the original post:

Son went to tech school for a year and a half and lived at home during that time before transferring to the university. I totally spaced that fact. He didn’t do this to be frugal, lol, but it turned out that way. Now that I think about it, if he had not done that his student loan burden would’ve been closer to hers. Still, it is very fair to say that he has lived much more frugally in every other way.

Daughter went to a more expensive liberal arts college, but except for the housing cost, the tuition and other costs were on par with sons in-state university because of the generous, grants and scholarships that school offered. I feel that both children made appropriate choices as to the right educational path for them.

[tacokick]

Yeah, I think even equals fair here.

[pierogigirl]

I'd probably split it equally, or keep it for future life events. I would help your daughter to look into the best way to repay her student loans (PSLF or the new income-based repayment plans that forgive after 10 years of payments).

[fluffycookie]

I would split it equally.

[litskispeciality]

OP, I think your son living at home, even if it was by default that the school didn't have housing, was a sacrifice in that he had a different college experience.

Splitting the remaining funds in half is more than fair

I'd recommend your daughter find out if she has to get a graduate degree, and how soon? In my state you have 5 years to keep and/or move your license up, although you'd be surprised how many people wait and play chicken with extensions. Her district may give her some money to get her Masters, or she might want to look in to a TEACH grant. Teachers in my state can also get a lane change after earning degrees or a chunk of credits. Her district should have someone to help her navigate that.

Looking in to PSLF or another income based repayment is good advice too.

Congratulations on getting two through higher ed!

[aspentosh]

Split equally if you're going to give anyone the money now.

[flygirl]

Even split. You said it yourself she was much less frugal so it would feel like rewarding that by giving her more than your DS.

[havarti]

Did your older child get a better financial aid package because there was another dependent child still at home? Just food for thought.

[rosiebear]

Feb 22, 2024 18:29:52 GMT -5 havarti said:

Did your older child get a better financial aid package because there was another dependent child still at home? Just food for thought.

That’s a good question. He actually didn’t get much financial aid at all because he went to a public in-state university. All of his financial aid was in the form of these loans. He didn’t need any loans to cover the cost of his tech school.

Our daughter, on the other hand, went to a college with an astronomical sticker price, but extremely generous grants and scholarships in the school’s endowment. Except for the housing/boarding cost, her net tuition was actually less than his most years.

[jewel]

Split it equally or keep it for yourself and take a nice vacation.

My in-laws we/are pretty generous with their kids when they *need* it. My SIL chooses to spend her money a lot more recklessly and has always gotten a lot of financial help from her parents, even as she nears 50. It is very frustrating for my H. He’s never said anything to them, and never would, but he feels slighted for being more responsible.

[jennistarr1]

My gut feeling is to split it evenly

My question though is, why didn't the money already get spent on tuition 

And to throw some overthinking in to it...have you figured out how much out of pocket expenses each kiddo incurred. Like not scholarships, but what you paid from the savings and otherwise out of pocket. 

Assuming that doesn't figure out to be "wow, we paid a lot more out of pocket for him then we did her", I would keep it equal. But it could be the argument for giving her more

Bigger picture...both of your kids graduated with pretty minimal debt...THAT SHOULD BE CELEBRATED!!!

[rosiebear]

Feb 22, 2024 19:22:31 GMT -5 jennistarr1 said:

My question though is, why didn't the money already get spent on tuition 







Bigger picture...both of your kids graduated with pretty minimal debt...THAT SHOULD BE CELEBRATED!!!

Aw, thank you!

Why the entire 10k isn’t already spent: I started saving much earlier than my ex did and we split most expenses either down the middle or in thirds with our daughter. I probably could have picked up more of the tab but I didn’t want to subsidize him.

[waverly]

Why wasn’t the 10K spent on their college already?

Is there a tax benefit to paying off student loans i.e. using it for education as was originally intended. As opposed to getting the tax penalty to use on non education purposes?

If there is no tax penalty then I would use the 10K to pay off daughter’s loans. And then the remaining 8K would be her portion of not being as frugal. Unless you felt that she was really bad at overspending.

If there is a tax penalty no matter what then I would either split the money or keep it for myself depending on the financial situation for everyone.

[mcmel]

Absolutely 50/50. That’s very kind of you.

[isabel]

Maybe sort of special snowflake, but I would split it evenly into Roth IRA accounts for both of them. Your daughter could use it to pay down part of her student loan burden, but I think she will reap the benefits of compounding interest by investing it now and continuing to pay down her loans as she's able. The caveat to that being if you are concerned she may not be able to pay down her loans in a reasonable time frame due to a low salary.

[sadlebred]

I'd split it equally three ways-you, her (with the caveat that she needs to use it towards her loans), and him.

[plutosmoon]

When you look back at what you already paid, is there a discrepancy? I wasn't clear if you paid more already for one kid vs the other.

Also keep in mind, a younger child would have higher costs given the increased cost of inflation each year. Even if your kids had done everything the same for college her costs would have naturally been higher. My parents had a set contribution for each of us, but my mom adjusted her set number annually for inflation, so I got a little more than my older sister and my younger brother got a little more than I did.

I'd account for what you already paid for each and decide based on that.

[loira]

I'm a bit of an outlier here, but my parents have absolutely paid more for my siblings' education and it doesn't bother me. However, there's an 11 and 14 year age gap between us (I'm the oldest) and economic and family circumstances changed over the years. My brother ended up doing 3 degrees, while my sister needed longer to complete her one (which also cost more). The cost of tuition rose steeply between when I went to uni and my siblings went. My parents paid for my undergrad but then could not afford to pay for my master's at the time. But my parents also let my H and I live with them on multiple occasions while we tried to save up for various goals, so while I'm not sure the amount of money was exactly equal, I feel like their support of us was. Which to me seems very fair.

I think either way, your kids probably know how much you support them and are grateful (or will be someday!).

[ellipses84]

Is this in the US with all the loans in her name (not yours) and is the savings in a 529? If so, she will likely qualify for PSLF to have loans forgiven in 10 years. It makes sense to do if the cheapest monthly payment plan x 10 years of payments is less than what she owes. This program was problematic in the past but the Biden administration has fixed the issues and people are being forgiven as they hit their 10 years with reasonable monthly payments. Extra 529 savings can now be transferred it to a retirement account for the children. I can understand if you’d rather help her pay off the loans sooner though.

If you aren’t going to split it equally, I’d ask your son if he’s ok with the plan to use the college fund money for her. I don’t think you always have to be equal with money to be fair, but if there turns out to be a pattern of constantly helping one kid out and never helping the other one it can be damaging. Maybe just plan to help him out or give him a big gift in the future when the need or occasion arises.

[heygrey]

Can you give $5k to your son out of this money since his loans are paid off?

Do your kids know that you have this money in savings still?


I think I would split it fairly or keep it for myself. I don't think I would give more to daughter now just because her loans are higher unless you felt you helped your son more in other ways while he was going to school and this would balance it out.

I really like the idea of splitting it and putting it into a retirement account for each child. $5k in your early 20s would be a catalyst to a financially secure retirement.

[rosiebear]

Feb 23, 2024 0:06:41 GMT -5 heygrey said:

Can you give $5k to your son out of this money since his loans are paid off?

Do your kids know that you have this money in savings still?


I think I would split it fairly or keep it for myself. I don't think I would give more to daughter now just because her loans are higher unless you felt you helped your son more in other ways while he was going to school and this would balance it out.

I really like the idea of splitting it and putting it into a retirement account for each child. $5k in your early 20s would be a catalyst to a financially secure retirement.

We’d take a small tax hit on the 5k I’d give to my son. The retirement fund is something I’d never thought of.

In broad strokes, I’ve probably given them about the same amount of $$ over the course of their college years. It was in different ways, though, so it would be hard to calculate exactly.

I appreciate all the feedback!