Editor: Crass Cash
This article has been circulating around the financial news sites for days. According to the comments section people are shocked that this should happen, but I know the readers of this site aren't shocked because I've preached about this numerous times. Believe it or not this happens all of the time.
So go through and read the article and tell me where they made the financial mistake: http://money.cnn.com/2014/07/28/pf/parents-student-loans/index.html
If you said not having life insurance on their daughter, you're the big winner!!!
If you co-sign for a student loan you always need to have life insurance up to the amount of the outstanding loan. And since she also had 3 young kids, she should have had an ass load of insurance for them as well!
"The insurance must have been expensive though?" wrong! She or her parents could have gotten $1,000,000 worth of term life insurance for 20 years for only $1 a day. That's a third LESS THAN a basic TV cable package.
That's right all of this could have been averted for $1/day. The loan would have been paid off and her kids would have had $900,000 to be put into a trust for their well being until they graduated from high school or college. Assuming anything was left after their grandparents had to take care of them.
If she just wanted to make sure that her parents weren't stuck with the student loan bill then it would have cost her $9/month to have this paid off with a 20 year term loan.
Such a simple solution for so little money. And now everybody is going to get their panties in a wad and petition congress to have this changed. As a result people won't be able to get the student loans and/or the rates for these loans will skyrocket, much like credit card rates have. You have an unsecured debt that last for 20 years. WTF do you think is going to happen??
Here's another result. These loans go away or the interest rates increase. People look to Congress once again. Now they start to subsidize these loans with tax payers money and we end up footing the bill because they didn't do proper financial planning. Did I mention this could have been averted for $9 per month??
So go through and read the article and tell me where they made the financial mistake: http://money.cnn.com/2014/07/28/pf/parents-student-loans/index.html
If you said not having life insurance on their daughter, you're the big winner!!!
If you co-sign for a student loan you always need to have life insurance up to the amount of the outstanding loan. And since she also had 3 young kids, she should have had an ass load of insurance for them as well!
"The insurance must have been expensive though?" wrong! She or her parents could have gotten $1,000,000 worth of term life insurance for 20 years for only $1 a day. That's a third LESS THAN a basic TV cable package.
That's right all of this could have been averted for $1/day. The loan would have been paid off and her kids would have had $900,000 to be put into a trust for their well being until they graduated from high school or college. Assuming anything was left after their grandparents had to take care of them.
If she just wanted to make sure that her parents weren't stuck with the student loan bill then it would have cost her $9/month to have this paid off with a 20 year term loan.
Such a simple solution for so little money. And now everybody is going to get their panties in a wad and petition congress to have this changed. As a result people won't be able to get the student loans and/or the rates for these loans will skyrocket, much like credit card rates have. You have an unsecured debt that last for 20 years. WTF do you think is going to happen??
Here's another result. These loans go away or the interest rates increase. People look to Congress once again. Now they start to subsidize these loans with tax payers money and we end up footing the bill because they didn't do proper financial planning. Did I mention this could have been averted for $9 per month??
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