Excellent input, thoughts and advice.
I disagree with Cpa Cat about the financial stress vs the corporate stress that can grind you to dust.
IMO that all depends on the individual, I thrived on the grueling corporate mill, every step forward, every exam made me feel stronger. Skills, connections and exams/certifications you will have forever - it gives you options in the world at large, negotiating power and confidence, you know you'll advance and make more money and no matter where you go from there, that exhausting training will be an asset and give you an advantage in your profession for life.
I didn't mind the overtime...
But debt - financial stress - the thought of helplessly watching while one thousand dollars interest accrues each month or worrying every damn month about whether I could make the next rent payment that is something that would grind me down within three months.
It's rough to go to work and have absolutely nothing to show for it other than dwindling debt - not a good time to press for MMM style living when one is already done for and has nothing else left to give.
Earning power is what will propel him forward to freedom, to me for instance FI matters the most - it gives you the option to RE whenever and however you want to "retire". I've always wanted that freedom of doing nothing or starting my own business and living precisely as I please.
My two cents
1. I suggest you tackle that 12.5% loan for him and are available to cover the rent if it should occasionally become necessary or contribute to the rent every once in a while. That will give him breathing room.
He does need to do the heavy lifting on his own but not having to worry about a roof over one's head is a huge relief.
2. I like the idea to have him finish a semester early - so he can get his CPA and maybe some R&R before he goes into slavery for the next five years:).
I think it would be a huge boost to his self-confidence and I imagine you can handle the one time fee.
Consider it as paying forward the kindness, money, and support that you have enjoyed in the past.
3. Time for a realistic plan and finding out where that elusive $400 disappeared to - that is unacceptable going forward, a quarter of his income!
If he cannot come up with a workable budget where every last penny is accounted for then I take that as a bad sign.
He needs to take apart every line item for optimization at least two or three times and then think again about how he could eradicate it or lower it.
I suspect he may have given up, temporarily at least, on a true budget, much less fixing his financial situation.
Staggering, overwhelming debt will do that to you.
Go slow until you know the lay of the land, both of you will have to test the waters as to what works and is comfortable - no co-signing.
Be clear in your intentions and ask the same of him, ask him to stick to a new budget for the next three months.
Continually adjusted along the way until it works well - budgets need to have some flexibility built-in to be successful.
It isn't easy to maneuver through life in a financially responsible fashion when you are that young.
The rent being $1100 is a huge chunk out of the budget - only acceptable if there really are no cheaper alternatives.
1. How hard has he tried and thought about this - truthfully?
2. How close to work is it? Is it convenient for school now, but not when he starts working?
3. Does it give respite at the end of a long workday or is it party central? A place that works while attending school may become a problem once corporate demands change your entire world and you want nothing but peace and quiet.
4. Is it convenient to walk to somewhere - a park - a grocery store/gym/cafe/store whatever is important to him.
Does it offer some other advantages of any sort?
5. What about rent increases - how often - how high?
6. What about the lease itself - will he have to move in two years or can he stay for at least another five years or so?
It wouldn't do to have to move when he has neither the money for another deposit nor the time to deal with the expense of a move and the time required to find an affordable new place.
7. What about the people he is sharing the place with - are they good for him or is it time to move on?
Some pass like ships in the night others lift your spirits...or turn you into an irresponsible party hound.
I am not advocating a hole in the wall in a bad part of town just because it is cheaper.
He may already live in a good place and it would be foolish to try to shave off rent.
Unlike mozar any time I've tried to live in a place solely because it was cheap, I ended up totally depressed, it made me feel sad, discouraged, worth less than dirt. MMM may preach living frugal but when it comes to housing he likes a nice home.
You get to know your core self after a while, I know I need space, light, color, access to the outdoors and a few conveniences/entertainment within walking distance of one or two miles.
I've moved a lot, over twenty times in my lifetime. I'll take a nice place to live over paying off debt quicker anytime.
As long as you have a solid plan and your finances are in order then all is well, regardless of whether that loan takes another two years to pay off or not.
YMMV
This is a critical time in his life - I wish him luck, there will be hiccups along the way, but this is a good time to take stock and reverse course before the ship sinks. You are a good friend to help, you are doing the right thing in lending some monetary support and guidance.
Paying it forward is a good thing:).
