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Dear Pay Dirt,
I grew up desperately poor with parents who were hard workers but were stuck in minimum-wage jobs that had no hope of covering a family’s expenses, which accumulated debt. I started collecting bottles for cash at 6 and always had a job after 10. It got so bad that I occasionally helped a buddy deal drugs or did underage sex work just so we wouldn’t be homeless. I know my son isn’t at risk for this kind of life right now, but he’s applying for college, and I fear he doesn’t understand what debt really is.
He wants to go abroad or to a prestigious private college for the arts, which I love the idea of, but we can’t cover the majority of it. His answer is always “I’ll just take out student loans.” This is terrifying to me, who watched how expensive being poor and in debt is; he thinks of it as a hole to climb out of, while I know it’s quicksand. If he goes to community college for two years and then transfers to an in-state university, he’ll get the same education, and we’ll be able to cover the costs without putting him in life-destroying debt for the rest of his life. He’s a top student, and the school has put into his head that he’s too good for community college, so he’s refusing any route besides the traditional four-year college experience with grad school after. I believe in him completely, but I also know hard work and talent isn’t always enough to make you successful. I would never tell him what to study or even that he has to go to college, but I feel like I should put my foot down about this, since I’ve lived it, and he hasn’t. He says if we won’t pay for the college he wants, he’ll just go find the loans and lines of credit himself, even after I’ve sat him down and gone over how predatory student loans are for young people. Since there’s an option for him not to go into debt at all, I can’t understand taking any other route. Am I letting my own issues get the best of me, or is there a compromise here that will make him listen to me that I’m not seeing?
—Generational Debt Gap
Dear Generational Debt Gap,
I understand your anxiety about your son accumulating debt, but I would argue that there are more factors here than just whether he ends up owing money for his education. I would dispute the idea that educational programs are the same everywhere because they’re simply not. Expensive private colleges are not always better than community colleges, but it’s a mistake to think there’s not a range, academically and otherwise. It’s not that your son is “too good” for a community college; it’s probably that he might not get as much out of the experience if he’s not surrounded by students who are as academically rigorous as he is, and the programs of study he can pursue skew more vocational. Not everyone needs to go to college at all, but if your son is very academically inclined, it’s understandable that he’d want to and would care deeply about which school he attends.
I’m also a little biased here because I took out student loans to go to a fancy private university, and I think it was worth it. I was the first person in my family to go to college, and my parents had debt, too. I think I would have been fine had I stayed at home and taken a full scholarship to a local university, but my life would absolutely be very different. Leaving home and going to a school with a diverse, international student body heavily shaped my ideas about what I wanted to do and how I wanted to live, and it made a difference in terms of available teachers, mentors, and resources. College is not just a matter of absorbing facts in a classroom. It’s also about independent living, relationships you form during that period, and new interests you develop as you’re exposed to new people and ideas that you wouldn’t encounter at home. And while I don’t think the credentials matter much after a year or two in the professional world, they also opened some doors for me when I first graduated, with only internships, work study, and retail jobs under my belt.
All of that said, student loan debt is a big enough issue in this country that it’s now considered a major public policy problem. The cost of college has outpaced inflation by an order of magnitude. Your son can’t take it for granted that he’ll be able to pay off his debt easily. And you can’t make this decision for him, but where you can help is by making sure he fully understands his options and has a realistic understanding of the payoff. Federal student loans are flexible in terms of repayment and can be adjusted to income or deferred if something happens to the borrower’s employment. They are not designed to drive people into the kind of debt you grew up with. Your son should be more wary of private loans, which are less flexible (and are not going to be as sympathetic if he loses his income). The kind of predatory loans you’re talking about fall into this category.
He also needs to be realistic about what happens if he graduates in a field where salaries are modest. Even with flexible repayment plans, I doubt your son wants to be paying off loans for decades. Help him research what he wants to do afterward and get a better sense of whether it makes sense to incur debt in light of that.
But I don’t think that taking out student loans is inherently a mistake. It really depends on who your son is, what he wants to do with his life, and whether he understands the responsibility he’s signing up for.
Dear Pay Dirt,
The last year of my father’s life, I moved in with him (six hours away from my own family) and was his primary caregiver while he was bedbound and in hospice for about six months. My mother was in a memory care nearby and died unexpectedly two weeks before he did. My two sisters refused my repeated requests to see him during those last six months. I was physically and emotionally exhausted and desperately needed a break. I feel like they both abandoned him in the last months of his life and left me with all the responsibility to care for him (I had already been handling all of his affairs for a few years). I am still horrified by their cold-heartedness, and I do not see myself repairing my relationship with either of them.
My father’s will states that the three of us should split his assets equally, including his two homes. I’m the executor of the estate, and I just discovered that one of his accounts has only me listed as the beneficiary. I don’t know why, but I’m sure he set it up that way a long time ago. I thought Karma! when I found out, but the guilt set in pretty quickly. So now I’m torn. Do I share?
—Am I the Selfish One Now?
Dear Am I the Selfish One,
I think there are several issues at play here. The first is very straightforward—the issue of whether you are legally entitled to keep the entirety of whatever’s in the account that only lists you as a beneficiary. For that, you probably need to consult an estate lawyer. The answer will likely depend on the particulars of the will and whether the overall intention of an even split overrides any specific allocations that are earmarked for each of you. If you violate the terms of the will itself, it’s possible you could be removed as executor, especially if it looks like you’re violating your fiduciary duty out of self-interest, so you need to understand exactly what you’re obligated to do in any case.
The ethical question is more complicated. If you are entitled to the account legally, should you keep the money or distribute it equally? Your argument for keeping the money would be that you were your father’s primary caregiver at the end of his life and your sisters did nothing. The situation was deeply unfair to you, and you should be compensated for your effort. But inheritances are not generally supposed to be incentives or rewards for end-of-life care. Most people who are inclined toward even splits view inheritance as a way to provide for all of their children after they’re gone, not to be a prize for whoever’s there at the very end. There are uniquely horrible situations where manipulative people might utilize them that way, but given that your father’s will says he wants an even distribution, it’s obvious that he wasn’t that person.
So while I think you’re entitled to be angry at your sisters—and I don’t blame you there—I don’t think you can veto your father’s intended course of action because you feel it’s karma.
Dear Pay Dirt,
One of my oldest friends has angrily dropped me after I didn’t invest in his latest business venture. He’s complaining that I’ve been unsupportive and a bad friend. We’ve been friends for 25 years, and I’ve helped him with money and other support throughout this time. But when he launched his latest Kickstarter, I was unwell and struggling with pain and medication. I have also lost my job and while I have investments, I have little income. Even though he knows my circumstances, he insists he’s in the right and I’m a selfish person, so I worry I’m just making weak excuses. He points to the fact I didn’t share his post about the crowdfunder on Facebook, even though I don’t use Facebook much. I don’t know how to resolve this situation. He raised the money, and I’ve apologized, but he remains furious with me. We have many mutual friends, so it’s going to cause problems in the future. What do I do?
Dear Frustrated Friend,
How do I put this nicely? Your friend is an entitled jerk. (That’s the nicest phrasing I could think of.) If you had the money of Jeff Bezos and the health of an Olympic athlete, you still wouldn’t be obligated to financially support your friend’s projects. That he’s behaving this way while you’re sick and jobless is particularly appalling.
His comment about selfishness is pure projection. His concern should be for you, given your circumstances. And you are not his personal digital marketing assistant. He wants more Facebook marketing? He can hire someone to do it or do it himself. Your Facebook feed is not his property.
Sometimes it’s hard to let go of friends who’ve been in your life for a long time, but this guy has no business being angry with you, and you seem to have internalized his critiques as if they’re valid. Your mutual friends have probably been subjected to this sort of thing, too, so I wouldn’t take it for granted that they’d side with him in this dispute. If this guy is angry with you, let him be angry. It sounds like he owes you an apology (and probably a thank you for past support) and not the other way around. Until he learns how to be a good friend, focus on the people in your life who already know how to do that.
Dear Pay Dirt,
I have three siblings, and when our mom passes away, the four of us will inherit her house. The house is in an area that has pretty high home rental prices, and all of the siblings could use some monthly income, so some of us would like to propose that we rent the home out instead of selling it. But a friend who’s a real estate agent thinks this is crazy and that co-owning a home with siblings sharing the rental income will result in a nightmare of bad feelings and anger if the home needs a major repair or if one sibling wants to cash out. I still feel like the fact that the home is paid for and in a good area that we should try. How do I approach this so that it doesn’t end a sibling tragedy?
—Love My Siblings AND Money
I would argue that real estate agents generally think you should sell your house, and that this is a professional bias. It’s what they know how to do!
That said, these kind of arrangements can lead to unwanted drama and acrimony if it’s not crystal clear who’s responsible for what. If you and your siblings all want to rent the house, you should determine ahead of time what the ownership split will be and who will be responsible for maintenance, finding and managing tenants, and so on. All of this should be codified legally. Your agreement should also spell out exactly what happens if one sibling decides they want to cash out, and whether the other siblings can buy them out if that happens. You’ll also want to make sure you all fully understand the tax implications of owning what is essentially an investment property.
Conflicts in these situations arise mostly when people are surprised by the responsibility they’re taking on and haven’t worked through how those responsibilities will be divided. If you’re all enthusiastic about becoming landlords, you can work through those issues now, and when disagreements come up, you already have a roadmap for dealing with them.
I’ve always had a strained relationship with my parents, and I limit my visits to a handful of holidays and special occasions, mostly to see my little sister. About four years ago, my mother started making passive-aggressive comments to me about money and responsibility, but she wouldn’t give me any details about what was upsetting her when I asked. This year, my dad casually announced that “the reason Mom is so upset” is because he has allowed her to believe a personal loan he took out several years ago was for money I asked him for and am now defaulting on. (I haven’t asked them for money in nearly a decade.) Dad also expects me to pay this loan off for him, since “it’s outside our budget.” To make matters worse, I found out my mother is telling my little sister that I essentially stole money from them and am generally a terrible person. I’m pretty sure that this is just their way of making me the bad guy no matter what I do.