Can anyone that has taken out $80k+ of student loans for a undergraduate degree describe the position that they are in now? Good or bad. And also describe the process that got them into the position that they are in?
This question applies to anyone. Those that have payed off 80k+ debt. Those that are currently paying it off. Those that are currently in their undergrad years taking these loans out. Those that personally know someone who took these loans out.
As an undergraduate student, the only way you are going to have 80k in debt is that if your parents are co-signing for the loan. Have they stated that they are going to do this?
The most that you can borrow as an undergrad student is
$5500 freshman, $6500 Sophomore, $7600 junior senior
Apparently your parents are not willing to or cannot pay the 80k. Are they willing to borrow it?
If paying the difference themselves, borrowing through a Parent plus loan (bad idea), cosigning for you to borrow 80 k (really bad idea), then you will have to move on to an affordable option
I graduated from law school in the mid 1980’s with $28K of debt. I understand this this is close to $100K in today’s dollars, so I will respond to your question.
I had no choice because my parents not only refused to pay for my education, but they demanded that I pay them rent for the privilege of living at home. That’s why I ha to take out the maximum loans allowed. In those days, it was $7500 for undergrad and the rest for law school. I attended a commuter CUNY school and a brand new law school that offered me the largest scholarship. I was accepted to schools like Syracuse and BU for undergrad and GWU for law school and had to decline.
The impact? Well, I wasn’t able to put as much into my retirement accounts as I would have liked during the first years of my career. I paid about $300 a month in loans and to put that into perspective, I earned $300 a week at my first job as an attorney, before taxes. I had to continue to live at home longer than I would have liked. I had to put off having children until I was in my 30’s; initially, I had decided not to have kids until my loans were paid off, but I ended up giving that up. I couldn’t buy a house until my mid-30’s. Even though I paid my loans off in 1993 and my H’s were finally paid in 2004 (he had about the same amount but was on a deferred plan), the after-effects are still with us.
I have never regretted anything but my struggles have informed my adult life and the way I raise my children and conduct my life. For instance, my family has never had a vacation together other than camping trips and I hate camping. Faced with the choice of saving for retirement or going to Disney, my 401k won out. I am going to Europe this summer for the first time in 30 years and only because I have been invited to stay with my D’s bf’s family. We drive only used cars. However, the main way that I have been impacted is that my children’s college choices were limited. I had to choose between saving for retirement and saving for college and retirement won because I saw first hand what happened to people (my parents) who lived for the day and didn’t save for retirement. I was able to provide a SUNY education for those of my children who opted for it and leave them without debt. My D is able to work a job she loves and in the 3 years since graduation has traveled extensively, lives in a trendy area and has the single life I didn’t because I was struggling under student loan debt. Although she fought me at first, she now thanks me and was helpful in convincing S17 that SUNY was the way to go.
I am forever grateful for student loans. Without them, I would not be an attorney and would not have had a career I love. Do I wish I could have sent my kids to private LAC’s? Sure, but maybe they will be able to send my grandkids - but without debt.
Bottom line - if student loans are the ONLY way to go to school, and by that I mean you have no cheaper option, take them out but judiciously. I would not have the life I have without student loans, but I wish that I had had parents who cared enough to help me with school, without sacrificing their retirements. Don’t take student loans to go to a more expensive school if you have less expensive options. College is only 4 years of your life. I hated every day of my college career, but I powered through it and moved on with my life. I had friends and a bf and jobs outside of school. I went to class and worked hard and went home or to work. It’s possible. Remember, college is not the prize - the adult life you want is… college is just a way station to the rest of your life. If all you can reasonably afford is a commuter school and that sucks, you know what? In just 4 years, it will be a memory. I graduated from college almost 40 years ago. Those 4 years were a blip in my life and I don’t miss the college experience I didn’t have. I gave that life to three of my kids.
Good luck with whatever you choose.
If you have to borrow ~3 times the federal loans for a college, I think it’s unaffordable. It’s risky to enroll at Michigan without having been accepted to Ross. What are your other options? Do you have any acceptances that you can afford with just the federal student loans?
Don’t do this to your parents.
What are your choices? Why would you borrow 80k?
It hobbles your life.
Well here is my situation. This might be a little long so bear with me.
I have been accepted to multiple schools and I have narrowed it down to 3: University of Oregon (Clark Honors), Villanova, and University of Michigan. My state school is the University of Oregon and I could go to it and the cost of it would be fully covered by my parents. Villanova gave me a financial aid package that would leave me with 80k debt. 80k means the 27k I get in federal loans plus 53k in private or parents plus. NOT the federal loans and 80k on top of that. I have yet to hear back from Michigan regarding my financial aid package.
Now, let me give a little background of my parents. My parents immigrated to the States in the 90’s. They are risk takers. Everything that they have today is because they took a risk. My mother is pushing me to take my own risk and go out of state. To either Villanova or Michigan. Her belief has been encouraged by a family friend who had a daughter go to Oregon (also Honors) who said that if they were to do it again, they would have taken out loans to go to school out of state. My dad, although also a “risk taker”, has a more conservative perspective. He is aware of the fact that he is 7-8 years away from retirement. As much as he would love to help me pay off the loans (if I chose to take them), he cannot guarantee that he will be able to.
There is nothing more that I want than to go out of state, to Michigan especially. I am ambitious and motivated to work. But I can’t lie and say that 80k of loans is something that I am not somewhat concerned about. I have a dream of working on Wall Street. Obviously, Oregon is not a target school for the Street. Michigan and Villanova are. I also want to go to a top MBA program (Harvard/Wharton/Ross etc), and I feel like my degree at Oregon will not be appealing to these programs no matter how much good my grades are. However, this is way down the road after I have worked for some years.
If it is not clear, I am in a predicament. My mom wants me to take the loans. Our family friends are telling me to take the loans. My dad is in between because he wants me to get a top notch education but does not like the idea of so much loans.
Somewhere in Pennsylvania and Michigan, there are two kids whose unaffordable dream school is University of Oregon.
Take the undergrad option that allows you to graduate debt free. Go somewhere swanky for grad school if you wish- and borrow as much yourself as you want to go there.
Don’t have your parents borrow $ right before one of them is set to retire. Clark honors is excellent.
Also, it’s probably been said many times in this thread- you- just you- can only take $27k in undergrad loans spread out over the four years. Your parents are paying taxes that help support U of O. They needn’t pay even more to support an OOS public or private.
Will your mom co-sign those loans?
What is your family income…Michigan gives full tuition to all students in and out of state below a certain number
@billcsho ??
Excellent points. If it comes to extra loans, who is going to volunteer to also be responsible for the additional $53k in borrowed money?
Even if you do decide to borrow $80k, you’ll really have two loans 1) the direct $27k loan with a good interest rate and some options for repayment and 2) private loans with a higher interest rate and very few options for repayment. When you are repaying them, they will be two payments due every month.
It is possible to refinance them into one loan, but that will be with a private lender at the terms set by that loan consolidator. You’ll give up the federal protections on the $27k, but it might be a more manageable payment.
OP ,
YOU , as a student, CAN’T take out $$80K in students loans.
your PARENTS have to be the ones borrowing $57k $$. ! are THEY willing to do THAT?
if not, then whether or not they want you to “take a chance” is irrelevant.
that’s the bottom line.
Go to Oregon.
I know people who are hobbled with this kind of student loan debt. It’s not pretty. The situation is a bit different than what most high school students would see, as the people I know in this situation were a bit older and took on the debt on their own (age 24 and going to college part time at a private school). 80K in student loan debt means about $1200 per month. It’s a significant amount of take home pay, once you factor in health insurance, 401K, and taxes, especially right after you graduate. Are you able to afford that?
@thumper1 My dad would be the consigner. My family income is 150k. My mom makes 15-20% of the income. My dad makes the other 80%.
My mom is older than my dad. So she is probably close to retirement as well.
@BelknapPoint Technically my dad would be the one responsible for the 53k. But I would be the one paying it off. If my parents are in position to help pay for it, then they will. But they said they can’t guarantee anything.
I have a second situation with a cousin who took out parent plus loans to cover her son’s $55K per year tuition. He graduated at the height of the downturn in 2008/9 and it look him a very long time to find a job. My cousin and her husband ended up remortgaging their home to discharge the plus loans when they realized just how bad that deal was for them, especially when their son was not able to pay anything towards the loans at all for a good 9 months after graduation. Their retirement plans were set back at least a decade if not more.
If your parents can’t guarantee they can help you IF they need to be called upon to pay this extra loan…so NOT take out this extra loan amount.
If something happens and you can’t pay…they, as co-signers, will be responsible for repayment. If they can’t pay…and you can’t pay…it’s called default. And this will ruin your and your parents credit.
While it might not seem like a lot of money now…that $80,000 total in loans will be about $1000 or more in repayments for ten years. Think of that.
Do YOU want to start out with a $1000 a month loan from the get go?
Do you want your retired or almost retired parents to be paying $1000 a month?
Think twice.
ETA…you dad will have to be approved as a qualified cosigner each year. What happens if he can’t get approved in subsequent years?
To clarify, what is the actual cost to your family for Oregon? In-state COA is 27k per year. Do you have a scholarship? How much would your parents pay annually for Oregon?
Villanova would involve 80k total loans, student plus parent, over 4 year, so 20k per year, roughly 5k student and 15k parent? Is that after some annual contribution from your parents similar to what they can afford to pay for Oregon?
The student can take a private loan in his name, but the parents most likely will have to co-sign for it. The loan is to the student, and in his name. He is first on the line for repayment, then if he defaults the co-signer is next in line.
This may all be an agreement between you and your parents, but that’s not how the private loan would be set up. Either you would sign as the borrower and your parent as the co-signer or guarantor, or it is a loan in your parent’s name. Either way, they ARE guarantying to repay the loan.
Flash forward to six months after graduation. Payments on both loans are due. Who’s going to make the payments? The payments on your $27k loan (estimated 4.5% interest) is $280/month, and on $50k at 5% interest for 10 years would be $560. However, that doesn’t include any accrued interest on either loan.
That is a really big payment, for a new college grad or for parents trying to build a retirement fund.
@thumper1 I was just trying to ferret out whether the projected Villanova parent loan amounts were after subtracting some annual contribution from the parents, since it seems they could afford to pay some amount annually for Oregon. Maybe the family is in the proverbial donut hole, but I’m curious about the net prices for each school.
@evergreen5 I received a 6k scholarship from Oregon. I could go to Oregon debt free. My dad is providing 80k for my education.
Villanova has given me a grant that leaves me with 80k debt.