University applications/Loans/ scholorship/grants

[Bubblegun]

My stepkids all got student loans: they would receive the money and then pay the fees after that.

We had to pay the entrance fee, etc though I think.

Thank you for that.
So, the loan they got. Was that paid monthly? Because my wife said the loan we applied for is transferred into his account every month. I'm of course assuming it wasn't one large sum. ( as per my understanding from the other half)

[RetireJapan]

Thank you for that.
So, the loan they got. Was that paid monthly? Because my wife said the loan we applied for is transferred into his account every month. I'm of course assuming it wasn't one large sum. ( as per my understanding from the other half)

I think they received it twice a year.

[Bubblegun]

Thank you for that.
So, the loan they got. Was that paid monthly? Because my wife said the loan we applied for is transferred into his account every month. I'm of course assuming it wasn't one large sum. ( as per my understanding from the other half)

I think they received it twice a year.

OK. Thanks for that.
We were thinking about, basically leaving the money in the post office. Then when the next set of fees comes around, we can use that money for the next semester. Then our kids will have to apply for the loan, so they will be responsible for the loan. Rather than Mum and Dad paying out 4 or 5 million yen from their savings. My original thought was MUM and DAD pay everything up front, and then when the loan comes in, that money would be paid back into our Seison account/NISA. But ZEROSHIKI thinks that would be a problem, regarding tax issues. On reflection, he is probably right, and the last thing i want is a problem with tax people.

zeroshiki wrote: ↑Mon Apr 03, 2023 4:58 pm
I'm pretty sure the loan is in the name of the student. Doing sleight of hand to say that the student loan is used for the NISA and the parents then pay the tuition (which wouldn't be assessed gift tax) is obvious and if you get audited will immediately get seen through by the tax agency.

The advice i have had over the years here has be invaluable. I had some great advice regarding bringing cash over from the UK endowment fund. Consulted an accountant and let him do his work. So thanks to everyone who has shared their experiences and thoughts.

[captainspoke]

In our experience, two different nat'l uni, one could do an auto-withdraw from my personal (regional) bank account, the other wanted an account at a specific large bank (which we then set up).

Not sure, but know that whatever school you end up with, there may (or not) be some such conditions.

[runmanTX]

May not relate directly to Bubblegun's situation but for what its worth, the JASSO loan we got was a fixed sum (120k) which is paid directly into my daughter's bank account for 3 years.
As a side note, we weren't eligible for the 500k entrance fee payment as they said I made too much money. Go figure.

[Bubblegun]

May not relate directly to Bubblegun's situation but for what its worth, the JASSO loan we got was a fixed sum (120k) which is paid directly into my daughter's bank account for 3 years.
As a side note, we weren't eligible for the 500k entrance fee payment as they said I made too much money. Go figure.

Thanks for that runman.Very useful.
I will ask about the entrance fee. The wife usually deals with all this and if i start to interfere.....well, eyse start to roll, and the tutting starts.

I certainly don't mind the 500K, although it would be better if they were responsible for the whole lot.
There are certain reasons we think our kids should be responsible for their student loans.

1) any money we have in the NISA or funds could hopefully grow at 6% a year.
2) that's way above the interest rate JASSO charge
3) if I am right, the interest starts when they graduate. So it seems better to let our money grow while they are at uni
4) if they drop out, then they are responsible for the loans.
5) if they graduate, I hope to have enough money to help pay it off.
( although I wonder if its better just to let them pay it off, and let the 5 million or so yen that would have been given to the uni grow)

This is why I need a financial advisor to work out the math.
I am assuming if the interest rate is about 1.5% on the loan, and the return on 5 million is 6%, I am better to pay off the loan after they graduate.
The difference is 4.5% between the Rate of return and the interest rate.

Is there something wrong with my thinking?

[runmanTX]

May not relate directly to Bubblegun's situation but for what its worth, the JASSO loan we got was a fixed sum (120k) which is paid directly into my daughter's bank account for 3 years.
As a side note, we weren't eligible for the 500k entrance fee payment as they said I made too much money. Go figure.

Thanks for that runman.Very useful.
I will ask about the entrance fee. The wife usually deals with all this and if i start to interfere.....well, eyse start to roll, and the tutting starts.

I certainly don't mind the 500K, although it would be better if they were responsible for the whole lot.
There are certain reasons we think our kids should be responsible for their student loans.

1) any money we have in the NISA or funds could hopefully grow at 6% a year.
2) thats way above the interest rate the JASSO loans charge
3) if i am right the interest starts when they graduate. So it seems better to let out money grow while at uni
4) if they drop out, then they are responsible for the loans.
5) if they graduate, I hope to have enough money to help pay it off.
( although I wonder if its better just to let them pay it off, and let the 5 million or so yen that would have been given to the uni to grow)

This is why I need a financial advisor to work out the math.
I am assuming if the interest rate is about 1.5% on the loan, and the return on 5 million is 6%, I am better to pay off the loan after they graduate.
The difference is 4.5% between the Rate of return and the interest rate.

Is there something wrong with my thinking?

Your rationale sounds good to me. My wife was also taking care of the JASSO application although the loan is in my daughter's name. If I remember correctly, the interest rate was very low (1.5%??) and repayment begins after they graduate university.
I also believe that children should have the responsibility for paying their own school loans or at least have skin in the game. I had to pay for my university and it was an eye opening experience. I'd pay for their school if I wasn't trying to FIRE (sounds selfish, eh ). Besides, both my kids are in foreign unis and paying international tuition fees which is outlandish. Life is expensive.

[Bubblegun]

May not relate directly to Bubblegun's situation but for what its worth, the JASSO loan we got was a fixed sum (120k) which is paid directly into my daughter's bank account for 3 years.
As a side note, we weren't eligible for the 500k entrance fee payment as they said I made too much money. Go figure.

Thanks for that runman.Very useful.
I will ask about the entrance fee. The wife usually deals with all this and if i start to interfere.....well, eyse start to roll, and the tutting starts.

I certainly don't mind the 500K, although it would be better if they were responsible for the whole lot.
There are certain reasons we think our kids should be responsible for their student loans.

1) any money we have in the NISA or funds could hopefully grow at 6% a year.
2) thats way above the interest rate the JASSO loans charge
3) if i am right the interest starts when they graduate. So it seems better to let out money grow while at uni
4) if they drop out, then they are responsible for the loans.
5) if they graduate, I hope to have enough money to help pay it off.
( although I wonder if its better just to let them pay it off, and let the 5 million or so yen that would have been given to the uni to grow)

This is why I need a financial advisor to work out the math.
I am assuming if the interest rate is about 1.5% on the loan, and the return on 5 million is 6%, I am better to pay off the loan after they graduate.
The difference is 4.5% between the Rate of return and the interest rate.

Is there something wrong with my thinking?

Your rationale sounds good to me. My wife was also taking care of the JASSO application although the loan is in my daughter's name. If I remember correctly, the interest rate was very low (1.5%??) and repayment begins after they graduate from university.
I also believe that children should have the responsibility for paying their own school loans or at least have skin in the game. I had to pay for my university and it was an eye-opening experience. I'd pay for their school if I wasn't trying to FIRE (sounds selfish, eh ). Besides, both my kids are in foreign unis and paying international tuition fees which is outlandish. Life is expensive.

Well, I think we have something in common. Yes, they should have some skin in the game, otherwise, I wonder if they will really appreciate what they are getting, and I also think it is part of being an adult. I also think that going to uni will open their eyes a bit because suddenly "pocket money" stops. I too would pay, if I was younger and had decades to go before I retire, but like you, we have to save for retirement too, It seems the governments are trying to push, uni costs onto the parents or the student themselves. ( creating some debt, either with the student or the parent can't afford to retire) and on top of that pushing everyone to save for their retirement.

Sometimes I wonder if Uni is the new high school. A way to stop millions of kids from being put on the unemployment counter. Whereas 50, 60-70　odd years ago, going to uni was probably an investment by the country in their own population to produce, engineers, nurses, doctors, dentists, etc etc. But with the increase in immigration(I know its a slight diversion) but the governments of today realised they do not have to pay or invest in their own population, because if you want an engineer, computer expert, nurse or a doctor, just poach them from a developing country where that country actually invested in their training. But if you want to keep unemployment down, just get as many students as you can into soft courses. Load the students with debt, which then becomes a profit-making organization. Anyway, I digress! And yes! Life is expensive!
I'm not trying to do fire, but if I can save enough up, I'd like to retire part-time a few years earlier and then, retire fully when the state kicks in too.
Sadly I won't have enough Japanese pension years to get their full pension. Thank god they made us eligible after 10 years. I couldn't imagine paying for 25 years under the old system and they said, you're entitled to bugger all. It would seem like theft.

[RetireJapan]

I'm a fan of people getting loans to pay for uni. This gives them skin in the game and brings it home how much money THEY are paying for the privilege. It also gives more options to the parents/guardians: they can always help to pay the loans later or pay them off entirely if they choose to, but also have the option of not doing so.

[captainspoke]

...
Sometimes I wonder if Uni is the new high school. A way to stop millions of kids from being put on the unemployment counter. Whereas 50, 60-70　odd years ago, going to uni was probably an investment by the country in their own population to produce, engineers, nurses, doctors, dentists, etc etc. ...

I'm pretty sure that, post WWII, one aspect of the GI bill was to keep all those returning soldiers from flooding the job market, or unemployment counters, or taking jobs away from the women who had been working during the war.