If a parent has the means to do so, it may seem like the obvious choice for them to pay for their child’s student loans. However, that might not be the best option for their child.
A kid will miss out on a valuable lesson if their parents pay for their college experience: determining their own financial futures and making their first big financial decision (for the most part, anyway). Having a loan teaches them how to meet their due dates and will help them to understand budgeting. Additionally, they’ll also be able to vary their credit utilization from earlier on, which can only help boost their credit scores down the line.
Image via The Credit Repairman.