This last month has been the repeating nightmare of getting into school after school, but being told I can afford none of them. My family’s financial situation puts us in an interesting spot where we aren’t eligible for financial aid, yet we can’t just comfortably pay for anything out of pocket. Luckily there are two schools that are still possibilities, but we are just trying to get an idea of post-college finances.
One of those schools is the University of Chicago, which has been at the top of my list for months and months. It was unbelievable that I got in, but also got a scholarship. It’s only $5000 a year, but they are so notorious for rarely giving out merit scholarships that it was unbelievable I got anything. If you add up the scholarship, the money my parents would be willing to contribute, and the money I could earn during the four years, I would be walking out with about $80,000 of student loans. This number might make some gulp, but the average salary of graduates from UChicago goes way above that of other schools, especially majors I am interested in such as chemistry, economics, physics ect. My parents are justified in being anxious about seeing me tack on this debt right out of high school, but I was wondering if anyone knew anything specific about this school that could give a different perspective.
My other option in Lawrence in Appleton, Wisconsin. It’s another really great school, but it definitely hasn’t been the center of my attention. With the scholarship they gave and help from my parents, I would basically walk out with no debt, which sounds perfect. The only problem is that the scholarship money is contingent upon me joining the music program to ultimately become a jazz saxophonist. Music has been a huge part of my life for years, but with that salary I would hardly be able to support myself on a musician’s salary, even with no debt.
Any input would be greatly appreciated, but I am mainly interested in what you guys think is an appropriate amount of debt to take on to study at a school like the University of Chicago. I believe I would be more successful and happy if I went there, but the debt aspect kind of throws a wrench in that. Thank you!
Non-starter. Take the victory of getting offered a scholarship and move on. I do have to point out the average award is $43K. http://www.collegedata.com/cs/data/college/college_pg03_tmpl.jhtml?schoolId=327
What are the other schools you applied to besides U Chicago and Appleton? There must have been others.
If your total debt is going to be $80,000 for four years…then your total cost is FAR more than $5000 a year. It is actually $20,000 a year.
Who is borrowing $80,000 because you can’t borrow that much yourself.
Lawrence is a great school…and NO DEBT is a huge difference from $80,000 debt. Lawrence usually allows and encourages double majors. Have you explored that option…music and a second major?
Did you get a full free ride to Lawrence?
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would be walking out with about $80,000 of student loans. This number might make some gulp, but the average salary of graduates from UChicago goes way above that of other schools, especially majors I am interested in such as chemistry, economics, physics ect. My parents are justified in being anxious about seeing me tack on this debt right out of high school, but
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that is way too much debt, even for those majors.
You can’t just compare salaries of various schools blindly like that. Of course, the avg graduate from an elite smallish private might make more than the avg graduate of a large public which includes the general masses, but that’s not because of the school itself. The UChi econ, physics or chem graduate will not be earning more than the - say - econ, physics or chem graduate from UIUC or Purdue or ?? .
I think OP’s annual scholarship is only $5000 per year and $20,000 in loans a year.
Yes, $5k per year merit… $20k per year loans, and the rest parents are paying. The OP says that in the first post. $80k is too much debt.
I understand now…well…a $5000 scholarship is less than 10% of the cost of attending U of Chicago. The school meets full need…and is a FAFSA on,y school. If you got NO need based aid, your oarent annual incime has to be $150,000- $200,000 a year…or so.
What have they told you they will pay for you to attend college?
What do you consider to be the threshold for the appropriate amount of debt to take on for this school/major? And yeah I would agree that 80k is way more than I’m comfortable with, but how does that compare to the very low salary of a musician? (most make around 25k a year) Double majors are an option, but require an extra year at Lawrence, which would put me 30k in debt (my parents would only cover the first four years)
You don’t have to be a professional musician just because you major in music. You can also take other courses at Lawrence and go into business or teaching or politics. You must have liked something about Lawrence when you applied. Go there.
Were you accepted by any Colorado public universities? Might there be a third option?
At Lawrence, is your scholarship through the conservatory specifically?
80K of personal debt (of which your parents would have to cosign for about 2/3) sounds like too much, at tempting as Chicago might be.
My cousin’s niece got a full ride opera scholarship to UNC-Chapel Hill a few years back. I can’t remember what her other field of study was. She is now employed in the corporate sector with a six-figure salary just a few years out of college and sings on the side.
Normally I’d consider this a no-brainer (in favor of Lawrence) but the requirement to major in jazz performance would be a concern if I were your parent. That’s a rigorous and time-intensive major–and a field that would be notoriously difficult to make into a profession.
These are really extreme choices, didn’t you apply to other schools? What is your in-state option?
Do you have any choices that are affordable with no more debt than the federal direct loans ($5,500 first year, slightly increasing later years), without a requirement to study a specific major?
If not, then your options are likely to start at a community college with a goal of transferring to a state university, or stay out of school for a year, work to earn some money, and apply to a merit seeking list of colleges. A merit seeking list would mean colleges like those listed here:
http://automaticfulltuition.yolasite.com/
http://competitivefulltuition.yolasite.com/
http://nmfscholarships.yolasite.com/ (if National Merit)
Neither sounds like a good alternative to me if you don’t want to major in music. $80,000 is too much debt, even if you’re coming out of the University of Chicago. As for Lawrence - what do you want to major in? Is it possible to double major in jazz performance and something else that interests you and still maintain your scholarship? What’s your in-state option? Personally, I’d take a gap year before settling for a school that didn’t excite me and a major I didn’t want just because of a big scholarship.
I don’t think that $80,000 is too much debt for UChicago if you are going to go into something lucrative from there and do well. It is certainly risky, but it might be a risk worth taking. The good news is that you can borrow that much in 4 incremental steps, $20,000 at a time. If you find during your first year, that you are not up to the rigor of UChicago, by all means transfer to a cheaper school. However, if you find that you can excel, and are going to study something that is likely to be lucrative, then it’s not too crazy.
I have people who work for me who when they started owed $75K. They live like students, pay down their debt and get on with their life.
You are often worth investing in and UChicago is special.
Oh my - at Lawrence you most likely would be able to take advantage of double majoring while still completing the required music. I went to a small private in WI and was able to double major with honors many years ago all in eight semesters. Smaller colleges are often very willing to be flexible to work out these situations. Have you visited Lawrence? What is Lawrence’s CH, PH, Econ like? Have you looked and asked about how the classes are scheduled and if you could take the sequences of classes in the music and the other track as well? Music requires the practice hours, so you definitely would need to be willing to put the time into two tracks.
The U Chicago deal is un-affordable. Yes it has name recognition and prominence. You don’t want to be saddled with the debt.
Even if you minored in something else at Lawrence, coming out debt free is big. You can always continue into graduate or other program after Lawrence.
At a smaller school, you will be a bigger fish. You can seek out all the opportunities the school has to offer.
My uber smart nephew went to a very good private for UG, he triple majored and would have finished on time except he did a semester interning with his US Senator (one of three positions; the other two students were politically connected). Took advantage of every opportunity on campus. Was a Rhode’s Finalist. Finished a very good PhD program with little debt. After teaching university courses, tenure track for four years (and saved money), is now in law school debt free with full tuition scholarship, and is interning over the summer at what may be his chosen career law firm in NY. He is 33.
I actually know a fella that is studying Jazz sax at a private. He is from a smart family. Parents are helping him with costs. Don’t know what he will achieve professionally but he is putting it all in music. I know another student who is putting his all into his music and he easily has the aptitude to study something else (going to in-state with full tuition scholarship and is the top on his instrument; he is seeking out major orchestra/PhD on his instrument and professor as career goals, but he can always go to plan B because he will also have no school debt after UG).
At a large school, may not have as much flexibility, and may not be such a big fish so other opportunities may not come as easily.
I do understand what you thought were possibilities, but you do need to determine what is important to you. I do think Lawrence may be a good opportunity in comparison to in-state publics (which may actually cost you more) and you may not wish to do a gap year and retry with school applications.
The cream rises to the top. It is what you do with the opportunities. Wish you luck, and let us know what you decide to do.
Thinking ahead, article in today’s newspaper real estate section dealt specifically with how first time and young home buyers are having trouble applying for a mortgage due to their student loan debts. Only 33% of home buyers in 2014 and 2015 were first time buyers, the lowest proportion since 1987. 22% of millennials buyers said saving for a down payment was difficult and 54% of that group cited student loans. They said if you plug in $25,000 of student loan debt, you’ll discover that is equivalent to about 60% of the average down payment to buy a home. It is equal to about 2.4 years of average rent payments.
I think 80k is a lot to owe for an undergrad degree. You might decide to go to graduate school or into a field that is not overly lucrative. Then what?
At Lawrence you will be paying with your time by loosing electives to double major (which it seems you need to if you go there) and free time due to music commitments. At U of Chicago you will pay with 80k+ hanging over your head from the time you graduate until you can pay it off. Which payment do you want to make?
I place my vote with those who said Lawrence and do a double major (the one required for your scholarship and whatever other one you can/want to do)…and leave college debt free.
And under the current mortgage approval requirements, the lenders can’t just overlook the student debt. It is part of the debt ratio and even if you have a job that pays $$$, the lender has to stay withing the debt ratio for the repayment. The government may allow you to be in an IBR plan, but the debt is still there
I used to be a ‘no debt, ever ever ever’ person but can now see why some debt may be okay IF planned for and managed. My nephew’s rule is he’ll borrow for tuition but not living expenses, so he works almost full time and takes 12 credits. Others borrow only the stafford loans. Some feel it is okay to borrow for an elite school but not a public one.
I’ve worked in consumer credit for 30 years and seen a lot of justification for borrowing. It’s okay with me as long as the person knows what they are borrowing and how much it will cost them.
@twoinanddone I thought the article exposed some other ‘strategies’ that one should really get their head examined with their level of debt: “(Home) Buyers who are married and don’t live in a community property state might be able to reconfigure the income and liabilities to overcome a DTI hurdle. Let’s say the H stays home with the kids and the couple has a joint auto loan that is truly the dad’s truck. I’ve seen people refinance out of their existing auto loan and put it into the spouse who doesn’t have the income. The income-earning spouse then applies for a mortgage w/o the deb-burdened spouse.”
Another strategy for a FHA loan, was to have the student loans deferred for at least 12 months, and the payments can be excluded from DTI.
Really what should be done is get consumer/school loans paid off so that debt is much reduced and 1/4 of household income can go to mortgage payments. Otherwise one is risking losing the home when an emergency happens and the homeowner gets behind on their payments. Life happens.
It used to be easier to exclude the total student debt owed (in the olden days, student loans were often not reported on credit reports, good or bad, and applicants just didn’t include them on the mortgage application) but now it is much harder to say “Oh, my payments are only $130/mo on the student loan.” True, under a deferment or IBR plan they might be low, but now the bankers can’t just ignore that there is $45k in debt out there, or $150k. It would require a lot of overrides and the bank would be limited to how many they could do.
If one spouse doesn’t have a job, I don’t know many lenders who are willing to ‘refinance out’ an auto or other loan. Why would they? The author ‘may have seen that’ but I haven’t and I would not approve such a deal if it came across my desk. Why would the bank switch a loan to a person who couldn’t have qualified for the debt in the first place? Who will the auto loan lender go against if the loan defaults?