Amount of Loan Debt Per Year

[Pianomom12]

<p>Having just received our first financial aid package which included several thousand (and more than a few) dollars in loans and subtracting this number from the total tuition cost, it begs the question...just how much loan debt do you (i.e. parents) assume for your child and/or does your child assume for a year of college?</p>

<p>Recognizing that the private college tuition costs can be anywhere from the 30's well into the high 50's (and yes, I know that state colleges are more financially reasonable), it is baffling to me how parents either assume thousands -- and I mean thousands -- of dollars of college debt per year and/or allow their children to do so. Plus, isn't there a cap on how much money a freshman in college can assume (i.e. borrow) in terms of loans?</p>

<p>I've read so much about applying to the schools the student wishes to pursue as sometimes the higher priced colleges may actually provide more scholarships and grants than some more reasonably priced schools. But then the financial aid letter arrives and despite having a fairly reasonable EFC and need-based aid is apparent, the reality is that in order for the student to attend, either the parents need to "sell the farm" or the student cannot attend. Plus, why would any parent enter a situation with their child whereby the student would wind up graduating from college with $50-100K in loans to repay?</p>

<p>Can someone shed some light on this. I feel as though I'm missing something in this picture but simply cannot locate it. Thanks.</p>

[kelsmom]

<p>It is true that federal student loans are capped at $5500 annually for a freshman. Some freshmen may be offered additional student loans, such as Perkins. Otherwise, students will have to look to private lenders for education loans. Parents can & do assume many thousands of dollars in debt for their kids’ educations. How much is too much is a family decision. How to access needed funds is also a family decision (Parent PLUS? Home equity? Sale of assets? Private lender?).</p>

<p>My personal belief is that debt should be kept to a minimum. My own S is a bit disappointed in his college options to this point (still don’t have all aid offers, but the merit offers are not falling from the sky). However, we have affordable options … perhaps not his favorites, but affordable without debt. I just can’t justify taking out big loans when there ARE options.</p>

<p>On the other hand, my D is at a very expensive school … for a very affordable price. Her situation was different. The aid offers did shake out to be affordable for her. So yes, the expensive school CAN be affordable. It’s just that when it turns out not to be, the parent & kid both need to be realistic about what debt they are willing to take on.</p>

<p>As far as how to look at aid offers … add up REAL costs (tuition, room, board, fees). Subtract “free” money (grants, scholarships). This way, you compare apples to apples.</p>