<p>Hi fellow students and parents. I am currently a first year student at Cornell and have payed my way through the first semester with loans. Thankfully, I received very generous financial aid from Cornell, but I still have to pay approximately $45,000 total for all four years. I didn't qualify for any subsidized loans, so for 2012/2013 I took an 8% accumulating loan with Sallie Mae. By the time I graduate, with interest, I will probably owe around $85,000</p>
<p>Cornell was cheaper than my state school, and was my second cheapest option overall (cheapest option was $36,000 before interest).</p>
<p>However, I still feel as if the loan will just be too much to pay back. It's gonna take a long time for me to make that $85,000 after graduation. Am I being too dramatic or is this a serious concern? </p>
<p>I figured a lot of the parents here have experience with this and can share what they've learned over the years. Any help would be greatly appreciated.</p>
<p>I would recommend Parent Plus loans over Sallie Mae. And your parents can pay the interest monthly while you are in school. That way the principal will not increase. Attending any 4-year private college for $10.5k per year out-of-pocket is a bargain.</p>
<p>If you are able to get Staffords, the loan limits for dependent students are $5500 for the first year, $6500 for the second year and $7500 for each of the next years to a total of $31K. That would cover most of your loans.</p>
<p>Unless there’s a reason to think you can’t pay back the $45K, I think you should take out the loans and do your best there so you can get a good paying job when you graduate.</p>
<p>By the time you graduate you’ll owe roughly 51k (depending on how the interest is compounded), not 85k. Do you have summer earnings already accounted for? If not, it’ll even be less.</p>
<p>You have reason to be concerned - $85,000 is too much. (And, frankly, I also don’t see how you reach that amount after only four years - I think $51k is closer to the mark.)</p>
<p>What I don’t understand, though, is why you’re paying your way through college with loans instead of getting a job. A part-time job during the school year, combined with a full-time job during the summer (and perhaps a seasonal job over Christmas break) should cover a significant chunk of that $11,250/year. Worst case scenario, you should be able to earn at least half of that each year, and I’d be surprised if you couldn’t do even better than that. Your remaining debt after you graduate would be in the neighborhood of $30k (or less) and that’s not unreasonable.</p>
<p>And I agree with the posters above that if you qualify for that much financial aid, you should also be eligible for Stafford loans. Stafford loans plus job should reduce your debt burden considerably. (What about work study - is that already part of your FA package?)</p>
<p>I don’t understand your situation. Does your financial aid include loans? Are you borrowing the full amount that Cornell is asking you to pay out of pocket? Where are you getting these loans? Are you taking Stafford loans? Did your parents get declined from PLUS so you are taking $9500 in loans this year from Sallie Mae? </p>
<p>But, yes, if you borrow about $10K a year and not pay the interest charges while in school, the loan amounts will have accumulated with interest by the time you do start paying. Without knowing the actual amounts, interest rates and terms of the loan, we can’t tell what the amount is. If you have done the research, and you do end up owing $85k before starting to pay it off, it can be onerous. It can become a huge problem if you do not get the money to cover the interest and at least some principal each year because, yes, it can snowball into an untenable amount, and there are people out there whose lives are made so much the more difficult because of this. Government loans are not forgiven and they will go after you, ruin your credit and make it difficult to get jobs a place to live and become a real source of worry and stress if you end up unable to pay them. </p>
<p>I know a woman who went to law school and undergrad and owes over a quarter million in loans with all of the accumulated interest and she can’t find a job to even cover the annual interest payments. Yes, it is causing a lot of high level problems in her life. DH tried to hire a young man whose credit record is trashed from student loans in default and HR at his company would not let him. You need to find a job and pay some of this as you go.</p>
<p>" … I still have to pay approximately $45,000 total for all four years. I didn’t qualify for any subsidized loans, so for 2012/2013 I took an 8% accumulating loan with Sallie Mae. By the time I graduate, with interest, I will probably owe around $85,000."</p>
<p>Your math is really off, pch340. Your debt won’t reach $85K unless you are in school for MANY MANY years.</p>
<p>On a different note, you are getting one of the best educational opportunities in the world for $45K, and you are complaining?</p>
<p>If you borrow the entire cost of your education at an instate school, it could easily come to that. For OP to be at any “sleep away” college for that amount per year is a bargain. That she is borrrowing the cost is the issue.</p>
<p>Even if you took the entire $45,000 in a loan right now, at 8% interest, you would still only owe $57,000 4 years later. I don’t know where you came up with $85,000.</p>
<p>You or your parents may get $2500 of that back this year in the form of a tax credit (if they don’t earn enough to owe taxes, they will still get back $1000), and if the American Opportunity Credit is extended past this year, that will be true each year.</p>
<p>If you do end up owing $51,000 it would take you about 15 years to pay it off if you pay it down by $6000 per year. If your degree is likely to increase your income by $6,000 it’s a no brainer (I’m ignoring the lost income over the next 4 years, because it would have simply gone to living expenses anyway).</p>
<p>It’s not going to cost you any less elsewhere. Assume you went to a community college and lived at home, it would still cost you about $5,000 in tuition and fees, plus the cost to feed you for the 9 months you would not be at home, plus transportation back and forth on a daily basis. Those costs add up pretty quickly!</p>
<p>There are many people who don’t believe in going into debt, but there are good debts and bad debts. Your economic situation will improve because of this debt - if you make enough when you graduate to pay $12,000 off each year (yes, $1,000 a month sounds like a lot, but compare that $12,000 to what your salary might be), you would be paid off in under 6 years!</p>
<p>Hmm. There are some interesting differences in calculation here. If you pay 8% per year, compounded annually, in 4 years your accumulated interest is 36.04%. (1.08 raised to the power 4, minus 1.) So a $45k principal becomes $61.2k after 4 years.</p>
<p>Assuming that the rate stays at 8% per year, you pay $742.52 per month to completely pay it off over 10 years, if you leave college and start working after the UG degree.</p>
<p>In order to cover this with 15% of your gross salary (assuming that you will need to spend on a roof & food and stuff like that), you need an income of close to $60k/year. (I’m ignoring projected income increases to keep it simple.) You can do the calculations for different salary & percentage, of course.</p>
<p>Thank you for the helpful replies everyone. I did qualify for $4,000 in unsubsidized Stafford loans but that was turned into grant money by a Cornell scholarship program. So originally, it would have cost $4,000 more per year in unsubsidized loans. </p>
<p>Right now, I am working part time (15-20 hours) while in school and probably will be all four years, but I didn’t detract that from the $45,000 principal, because for example, the money I made this semester went to dorm supplies, books, spending money, etc. Maybe next semester/year will turn out different, but the $45,000 is more of a worst case scenario.</p>
<p>I don’t believe its possible for Cornell to turn Stafford loans into grant money… Regardless of whatever grants/scholarships Cornell has given you, you should still qualify to take out a Stafford loan. I don’t think Cornell can give you an extra grant and then revoke your Stafford eligibility.</p>
<p>Maybe I’m just not understanding but I think you need to look into this again.</p>
<p>I did qualify for $4,000 in unsubsidized Stafford loans but that was turned into grant money by a Cornell scholarship program. So originally, it would have cost $4,000 more per year in unsubsidized loans. </p>
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<p>You can STILL get $5,500 in unsub Stafford as a freshman even if Cornell turned your loans into grants … the unsub can be used to replace EFC. You should always use all federal Stafford eligibility before taking out private loans!! All you need to do is ask Cornell for the $5,500 unsub & you will be able to get it.</p>
<p>I’m not a regular on the FinAid boards, so please forgive me if what I’m about to say has been covered.</p>
<p>It looks to me that your tuition and fees are covered, and what’s left is room and board. Is that correct? If so, I would work really hard to find lower cost housing and dining options. Can you be an RA? Can you be a house-sitter? Bunk in a less appealing neighborhood than Collegetown? Do you need to be on a college meal plan? Look at your options. </p>
<p>And see what you can do about a job for semester time, break time, summer time etc. Many people look down on SBux, for instance, but it’s a flexible job. Work in Ithaca during the school year, and transfer to your home town for summers and breaks. One of my own employees works in the local mall at a national retailer during semester time, and then transfers to the local mall’s branch during breaks.</p>
<p>As a Cornell parent, I feel that getting your Cornell degree for what’s essentially more than a 75% discount is a wonderful opportunity.</p>
<p>How can this be cheaper than an in-state school? Especially since you are obviously intelligent and have all the credentials to get into an ivy league school. The in-state school where I live is always looking for students with those kind of credentials to literally throw money at – even out of state with ivy credentials can virtually get a free ride.</p>