College freshman owes me more than he can pay?

My son's school sent a partial refund for housing and dining after they closed the campus due to COVID-19, a few thousand dollars.  It was direct-deposited into his checking account (universities always handle refunds this way -- it's not their business to track who paid the bill or what our relationship is).

He claims he didn't notice, that he doesn't pay attention to his bank balance.  His debit card kept working so he thought he hadn't run through his savings yet.  By the time I caught on, he had run through his savings and about $500 of the refund.

The remainder of the refund is back in the education fund now -- but what can I do about the $500?  He can't possibly pay it back, his only income is the allowance I give him.  Most of what he bought on eBay is not returnable (it was materials for hobby projects and is not in the same state).  But I can't just say "oh well, no help for it, guess you were OK to burn through $700 but don't do it again."  I can't think of anything that isn't either draconian or wet-noodle.

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  • Maybe it's time for something draconian. Mistakes typically get more expensive from here on out.

    Have him work it off with jobs around the house. Mow lawns for neighbors. Walk dogs.  Pick up dog poop. (I'm amazed how much some services make.) Etc.

    Perhaps track him how to use YNAB.

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    • Peter
    • Professional Designer, Web Developer
    • lasty
    • 6 mths ago
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    I would say determine a sensible allowance cut that'll allow him to survive, ideally by speaking to him about it and agreeing on an amount, then pay him less allowance until you've reclaimed those $500

    Like 1
      • Herah
      • Orange_Clarinet.7
      • 6 mths ago
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      Peter I'm embarassed to say how small my kids' allowance is...since they were on meal plans, they have no expenses at all, and we cover clothes, etc. on a case-by-case basis...and we just reduced his because he's not using the laundry room any more.  I would have to increase it in order to usefully dock it, which seems circular.

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  • Why doesn’t he get a summer job??

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      • Herah
      • Orange_Clarinet.7
      • 6 mths ago
      • Reported - view

      satcook Jobhunting on Long Island is a bit problematic right now.

      He could probably get something in food service, but DH has some medical history and DD1 quit her coffee shop job in part because we weren't comfortable with her having contact with customers.

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  • He Needs A Budget.

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  • Difficult! I very much agree he needs a budget. But what to do with the money he already spent? At least repaying some of it back either by getting a job or by you withholding it from his allowance would make sense to me. And about him needing a budget: there are lots more people I think need one. And forcing it into them usually doesn’t help... Though of course with your son this might be the time to consider bringing it into the conversation.... even as part of how you decide to handle this?

    all that said: I think I’d find it difficult in your place.... Understand the draconian feeling.  Luckily mine is only eleven.

    Like 1
  • Another thought: my parents, especially my dad, wanted to look after me so well he’d tend towards solving this kind of problem for me when I was a teenager. Nice in a way. And so convenient that I would never turn things down. But a bit frustrating at the same time. Because it implied I couldn’t handle things myself....

    might make it easier....

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 6 mths ago
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      Powder Blue Pony Yes, I went the other way with my kids. I made them solve their own problems as they got older and now they are very self-sufficient individuals! I even had them do their own FAFSAs in college.

      Like 1
  • Powder Blue Pony said:
    all that said: I think I’d find it difficult in your place.... Understand the draconian feeling.  Luckily mine is only eleven.

     Perfect time to start a child on a budget (if you haven't already) and teach him at least the basics of saving for a desired purchase.  Mine are 14 and turning 12 this month.  I've got them set up on their own YNAB budgets, and they've got a couple wish farm categories, and a few basic categories that help them feel like they're contributing.  I give them (in addition to their regular allowance) enough money to cover their cell phone payment, and a little extra for toiletries that they have a category for.  

    Anyway, start small to get them used to the idea and understanding how it works.  Add things as you feel he's ready, and pretty soon you'll have a young budgeter on your hands.

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    • Bruce Yes, he has his own budget :-)  Sometimes, after receiving his allowance, he runs upstairs to the computer to put it in YNAB. Thanks for the suggestions for expanding the use.

      Like 1
    • QC
    • HaplessFinanceProfessional
    • Queenofcoin
    • 6 mths ago
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    • Reported - view

    It sounds like you expect full payment in a short period of time. Could you tell him the debt will remain in place until it’s paid? It might motivate home to find a solution when he’s able to.  I don’t think forgiveness of the debt is a good solution for anyone but if he can’t pay it back now, the next best solution is ‘as soon as possible.’

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  • Not sure if he is eligible for any government assistance due to the pandemic (here in Canada there was a student emergency benefit). In the states I believe there was an emergency pandemic payment. If he is eligible for any of that, then take that when it comes. 

    My son's school credited the account at the school so the refund went against this semester's fees.  My son had signed a lease in May for the next year which required payment during the summer (fairly common for offcampus student rentals). At the time, he didn't have a job and had no hope of getting one so I committed to paying for the summer months. He then got a job and was able to get out of the lease for September.  And since he is living at home instead of away, he doesn't need food or laundry etc money so all his earnings are sitting in his account. 

    It does peeve me a bit that he hasn't offered to pay that back to us or that he say he will pay for his 2020/21 student loan (we also agreed to pay that after he graduates when it looked like he wouldn't make any money).  Last summer he broke his humerus in June and didn't work all summer. He was originally supposed to pay for his living expenses and we would cover tuition. But since he wasn't able to work, I said we would cover both (this is for the school year that just ended) with the condition that he would cover both for this school year.  Well, bring on the pandemic and a child with no way to make money (we thought) and on the hook for a lease, so I felt bad for him and fixed it.  His school is not doing in person classes this year at all (this semester and next semester) so no need for him to move to the other city. But in the meantime, our grocery bill now includes him instead of him paying his own way away at school.  I am not being draconian by making him pay us room and board, although it would technically be the right way to proceed.  

    I just wish he would understand the sacrifices we are making with money we could use to pay off debt and get our retirement in place. I guess that is the innocence of youth.

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