Author Topic: Paying for Grad School with a Credit Card... And Getting Rewarded..?  (Read 5791 times)

kristalee453

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Hello Mustachians :)
I have the cash to pay for grad school.  But, I'm thinking it might be a good option to put each semester on a credit card (my limit right now is high enough), paying it off immediately and then cashing in on some rewards.  Thoughts?  Best card for this scenario? 

Secondly, now this is where I'm sure I'm going to get a lot of slack... It's for my boyfriend.  I want to set it up as a loan and have him pay me monthly.  Thoughts on loan terms?  He got denied for a loan without a co-signer and I'd rather him pay me interest that I can put towards our future house/wedding than to a bank and never see it again.

Thanks in advance for your advice and hopefully not crucifying me! ;)

Self-employed-swami

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #1 on: April 15, 2013, 07:18:13 PM »
Generally, people can't qualify for loans, for a good reason.  I'd make sure to know why he can't qualify on his own, I wouldn't want to be on the hook for that tuition money, if he somehow can't pay you back.

As for what rewards cards are best, if you are in the US, check out the MMM Recommends section. 

I put all my tuition on my airmiles mastercard, and used the airmiles for vacations when I was in school, but I'm Canadian, so I'm not sure about the US cards.

Fuzz

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #2 on: April 15, 2013, 07:24:35 PM »
Wow! It's really neat that you're in a position to offer that kind of financial support. I hope this doesn't come across as harsh, but I'd be very skeptical about loaning money to your BF to pay for his grad school.

Would it be a short term loan that he would realistically pay off each semester? If that's the case, why would he even need the loan from you? He could just take the loans and pay them off as he went.

Would it just accumulate the longer he goes through school? That could create weird relationship dynamics. What if he didn't finish the degree? Is it for an MFA? A law degree from a law school other than Harvard and therefore likely to be difficult to repay timely?

Also, just as a dude, I wouldn't want to take that kind of a loan from my GF. Maybe marriage would changes things, but it should be important to him to do this on his own. That's how he grows his mustache. Is this a plan you'd be comfortable sharing with your parents or close friends? If not, that tells you something.

Also, I know that my large public university charged a surcharge for tuition paid for with a CC for that very reason. I think making such a big life/relationship/money decision based on credit card points is a bad idea. 

Good luck sorting this all out.

englyn

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #3 on: April 15, 2013, 08:22:33 PM »
Well said Fuzz.
It's got the potential for causing weird relationship dynamics even if it all goes well. Either you're a committed partnership, in which case if you pay for his studies it's not a loan but a contribution to the partnership; or you're independent, in which case he needs to sort out his own funding. Would you do the same thing for your best platonic friend without worrying it'd cause friction? Your sister/brother even?

Reepekg

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #4 on: April 15, 2013, 10:33:43 PM »
There's no way I'd enter into this arrangement without being married. What recourse do you have if he doesn't/can't pay you back? There may be good will and good feelings now, but you wouldn't be the first girlfriend in history to get dumped and taken advantage of.

"He that goes a borrowing goes a sorrowing" -Ben Franklin

pbkmaine

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #5 on: April 15, 2013, 11:49:46 PM »
Never lend money. Never. I am a financial planner by training, so I have seen this play out hundreds of times. Not once with a happy ending.

AccidentalMiser

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #6 on: April 16, 2013, 04:07:16 AM »
Kristalee...

You know this is a bad idea.  Because it's a bad idea and we care about you, we are duty-bound to punch you in the face when you are gearing up to do something that could end in financial and emotional disaster.

Please, PLEASE, don't pay for your boyfriend's graduate school tuition with your credit card. 

Please ask your Dad/Grandpa/favorite Uncle what they think about this.

jrhampt

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #7 on: April 16, 2013, 05:23:18 AM »
I used to put my tuition on my rewards card (Chase Freedom) and get the points, but eventually my university started charging fees for credit card processing and it was better to pay cash.  As long as they're not charging processing fees, I would go for it.  Just be aware that they may change their payment requirements later on.

I wouldn't loan the boyfriend college money. 

nuclear85

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #8 on: April 16, 2013, 05:36:26 AM »
Besides loaning money to your boyfriend being a really terrible idea (emphasis on really terrible!!!), it's likely not even possible. Like jrhampt mentioned, many colleges charge a fee for paying by credit card, which will be around 2-3%, essentially negating any rewards. Both my undergraduate and graduate schools did this.

kristalee453

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #9 on: April 16, 2013, 07:22:40 AM »
Ahh, yes.  I was expecting a lot of these replies.  A little background--boyfriend is still paying off undergrad, medical bills from three (absolutely necessary) surgeries, and a car payment.  On top of that, his father passed this summer and he has inherited his father's house and his father's debt to other family members.  He originally was going to ask an aunt to co-sign on a loan, but as I said, he owes his aunts money that his father borrowed already--I don't think it's a good idea to make it any messier.  I know a lot of you will say, sell the house!  Sell the car!  I was from that camp too (and he is going to sell his car to for something with a smaller payment..), but the house he'll never sell because of sentimental reasons (we just built it by hand with his father last year).  I'm confident we'll be getting married within the next two years, and if we were married now, this wouldn't be an issue at all.  I don't know what to do--I know right now it's not technically my 'problem' but his debt will be both of our problems in the near future...

Dee18

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #10 on: April 16, 2013, 07:38:12 AM »
I agree with pbkmaine, never lend money.  You should only give money to someone if it is a gift.  I did give $2000 to a co-worker/friend once.  She called it a loan, hoping to pay me back, but in my head I called it a gift.  I gave it freely because I could easily afford it and she really needed it.  She paid back about $ 400 of it in the end, but because I had thought of it as a gift all along, I was able to reassure her that I did not need her to pay the money back and we maintained our friendship.

Either give the money as a gift, or get married now, or don't lend the money.  No, I am not kidding. If you are really that committed to each other, go ahead and get married.  If you are not that committed, only give BF the money if it is truly a gift. 

It sounds like BF has a LOT to deal with now.  Grad school can wait a year.  He should get a deferment, work a year, save money and get his affairs in order.  Going to grad school with so much of his life in turmoil is not a good plan.  Also, if he cannot get a position as a teaching assistant or some sort of scholarship to grad school, is it really a good career path?  It may be--if it's something like a physician assistant masters or other program where there will be a job waiting.  Has BF negotiated as much as possible regarding medical debts?  Is the house going to be rented out?  Is he hoping to negotiate forgiveness of debts on behalf of his father with family members?  All of that needs his attention now.


kristalee453

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #11 on: April 16, 2013, 08:03:36 AM »
Grad school can wait a year.  He should get a deferment, work a year, save money and get his affairs in order.  Going to grad school with so much of his life in turmoil is not a good plan.  Also, if he cannot get a position as a teaching assistant or some sort of scholarship to grad school, is it really a good career path? .....Has BF negotiated as much as possible regarding medical debts?  Is the house going to be rented out?  Is he hoping to negotiate forgiveness of debts on behalf of his father with family members?  All of that needs his attention now.
He actually started the degree--just finished his first semester with A's.  He has been working full time since 2008 (just got a decent promotion, too and work is giving $5k a year towards school), the house still needs the C.O. (septic's not finished yet but we're doing that ourselves), and then we will be renting that out to help pay back the family members--they are the mortgage, essentially.  As for the medical debts, yes and no. Maybe that's something we'll tackle more tonight.   

ace1224

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #12 on: April 16, 2013, 08:12:07 AM »
my grad school charges a fee for paying by credit card.

kristalee453

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #13 on: April 16, 2013, 08:22:24 AM »
my grad school charges a fee for paying by credit card.
  Turns out so does this school, 4% no less.  So, there goes that idea.   Thanks for your help, everyone!  I think at this time we'll explore other options.

madgeylou

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #14 on: April 16, 2013, 08:53:42 AM »
also just wondering why he's inherited his father's debt? that's not how the law works. unless he signed for the debt, it's legally not his.

not saying he should screw over his family members, but was there some sort of understanding that he'd be taking on the debt? is the debt tied to the house?

Self-employed-swami

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #15 on: April 16, 2013, 09:05:09 AM »
also just wondering why he's inherited his father's debt? that's not how the law works. unless he signed for the debt, it's legally not his.

not saying he should screw over his family members, but was there some sort of understanding that he'd be taking on the debt? is the debt tied to the house?

I was just going to ask this as well.  Or was the debt to build the house, which he wants to keep, and so the debt comes along with the house (like a private mortgage?)

DoubleDown

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Re: Paying for Grad School with a Credit Card... And Getting Rewarded..?
« Reply #16 on: April 16, 2013, 11:06:06 AM »
I think at this time we'll explore other options.

Man am I glad to hear it didn't work out. That's right. Now I just wish I was hearing that it didn't work out because you decided against it, rather than because the fees imposed by the college were too high. Because the next sentence was we'll explore other options.

You've heard unanimous agreement from everyone that loaning money to your boyfriend is/was a bad idea. It's almost unheard of for any group of people to unanimously agree on anything, but here we are. Please don't make your boyfriend's financial challenges your challenges, either through loans or any other kind of financial involvement.

You sound like a great girlfriend, and I'll assume he's also a standup guy. You can offer emotional support, be his cheerleader, help with listening or advice, but please do not get involved. There is no good outcome to it, as described above. It will either end badly because he'll end up screwing you over (either purposely or inadvertently), or it will end badly because you came to his rescue and made it all come together and he doesn't screw you over -- but he didn't handle it himself. He needs to handle it himself, it's how we learn and grow, and it's fortuitously how you protect yourself as well and let him become a Man.