Should I remortgage my home to send my son to medical school overseas?

Dear Ian,

I have a big decision to make. My son scored 4As in his A level but was not accepted in NUS medical school. We have found him a place in an overseas university but it will cost $700,000 for 4 years including room and board. I don’t have that kind of money so I was wondering if I should remortgage my home to sponsor my son’s education?

Mrs K

Dear Mrs K.,

My, that is a big decision, isn’t it? We normally test if a decision is strategic by looking at 3 factors: (1) does it impact more than you? Yes (2) is the opportunity cost high? Absolutely! And (3) does it have future impact? Most certainly. So this is a situation that would require the use of our strategic decision making model.

Since I only have the information you have given me to work with, I will have to make certain assumptions along the way. This will certainly not be reflective of your situation, but I hope the thinking process will help you come to a decision.

Before we start, if you are not familiar with our Strategic Decision Making methodology, please read this related article that outlines the steps that we will take.

Intent

I don’t think we need to go through any of the Five Whys because the intent is clear – “What is the best way to fund my son’s medical school education?”

Success Factors

Even the success factors are clear:

that your son comes back with a medical degree
that he works in a good medical establishment
that he earns a lot of money!

Options

Based on your intent and success factors, let’s see what the options are for meeting your intent:

you remortgage your home
he gets a student loan
he works and studies at the same time
you sell the house and downgrade, freeing up hidden capital
he reapplies for next year’s NUS medicine cohort

Thinking in time

This is the part where we look at past events and decisions to guide our decision to meet the future intent. I don’t know you or your son, so I will have to ask you to think about:

his attitude towards learning
his passion for medicine
your past actions in helping him
your efforts to pay off your current mortgage

Your past in relation to these questions will provide you with some direction towards the decision you should take.

On a side note, I want to share some information with you:

The Washington Post reported last year that, in the US, only 23% of college grads got jobs related to their degree (http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/20/only-27-percent-of-college-grads-have-a-job-related-to-their-major/);
Being a doctor is not as financially rewarding as some may think (http://www.medicalschoolsuccess.com/is-being-a-doctor-worth-it-financially/)
Also read “The million-dollar mistake” (http://www.cbsnews.com/news/1-million-mistake-becoming-a-doctor/)

These are not meant to discourage you, but I wanted you to see the not-so-rosy part of medical school and becoming a doctor.

All these will lead you to some idea of what you could do.

Constraints

A constraint is a necessary condition for a successful decision. These are things that you can do, rather than something someone else does. Looking at your intent, there is really nothing much that you can do as a necessary condition. Sure, if you decide to remortgage, you must get a bank to loan you the amount that you need. But this is not really a condition for a successful decision, it is something that needs to be done.

I suppose if I were making this decision, the constraints that I might put down are:

Provided that I can continue living in the same house;
Provided that I can retire in the next 10 years;
Provided that I can enjoy the same standard of living

Assumptions

Whenever we are dealing with higher education and careers, we are dealing with a lot of assumptions. You need to lay them out here to see the impact of your decision. Some assumptions people have made in similar situations are:

As a parent, it is my responsibility to fund my child’s higher education
I don’t mind that the money does not get repaid
When my child enters university, he will come out with a good degree
My child will pursue the career that the degree affords him

Reframing

Applying the 7 reframing techniques, we may have

Technique #1: What happens if instead of you going after the university to offer you a place, can you get the universities to come after you? Maybe your son could publish some research now even before he secures a place?

Technique #2: No current value that we can bring to the surface.

Technique #3: Instead of going into traditional medicine, can your son do a degree in non-traditional medicine?

Technique #4: Nothing

Technique #5: Nothing

Technique #6: What if your son interned in a hospital and did some odd-job there while seeking a sponsor and getting to know the environment?

Technique #7: Maybe showcase your son’s talents in a very real way, something quite close to Technique #1

Conclusion about reframing: There may be some good idea about doing research and publishing your son’s talents. Also doing a non-traditional medical degree may also be interesting. That actually allows you to question your intent and see if the decision to do medicine is really for pride and money or to help others?

In fact, this opens up another question for you: why do you think that NUS Medical School refused to offer your son the place despite his results? Is there something in him that convinces them this course is not for him? Do they see something you don’t?

Balancing options with constraints

If indeed those 3 constraints listed down earlier are the operating constraints, then, we have managed to eliminate two options: selling the house and downgrading; and remortgaging the home. Selling and downgrading would have required a change in your current lifestyle and remortgaging would have put your retirement plans in jeopardy. Both of these contravene your constraints and hence you have to discard them.

In fact, pairing the earlier options with the reframing techniques, you can actually zoom in on Option 4: to reapply to NUS Medical School again next year, with the added option of doing some research now and publishing it so that the school will want your son in as a student!

And if this fails, then you could look at options 2 and 3.

So looks like there is one year to make Option 4 work!

Conclusion

Mrs K, how does this sound to you? By all intents and purposes, if your son can demonstrate why he is the best student for the class – not based on his academic results but his aptitude for the field – he may be able to win over the judges. And if he still can’t get in, use that research to get a scholarship from the US university. They will want to have talented students like your son, if he can prove himself! So all in all, that may seem like the best option to take.

Provided, of course, my assumptions are right. Ultimately, you and your son would have to sit down and apply this same thinking process for yourselves and get the clarity that you need.

Wishing you all the best!

Any questions?

Dear readers, if you have a question like Mrs K, drop me an email at iandyason@aitrainingconsulting.com and I will do my best to provide you with a frame to look at the situation more clearly and come to the right decision.