LibraryScenariosWhen families make education financing decisions with different assumptions
Scenario

When families make education financing decisions with different assumptions

My daughter and I are cosigning a loan for her graduate school but I think we're both focused on the monthly payment amount instead of the total cost, and she's way too optimistic about what she'll earn after graduation while I'm probably being too conservative about the whole thing.

Zera
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More people experience this than they realize.

What we've seen

You're both using different mental frames and probability assessments, preventing you from reaching a realistic shared understanding of the financial commitment.

Ideas that help explain it
Worth thinking about

“Where Are You with Behavioral economics — biases in financial decisions?”

If this sounds familiar, the Library can help you find the bigger picture.