Are high loans really so terrible?

Paying for College
1

<p>I am in the midst of deciding which college to go to, and the prices are scaring me. *I have received at least half the cost of attendance to every college I am considering, but I will still wind up graduating with about $150,000! However, I am in a five year program, so will have $150,000 and a masters degree in a job area that it won't be difficult to find a job in. *</p>

<p>The college I want to go to, my dream college, will result in about 150,000 in loans, the second choice college will be about 120,000, and the third choice (last choice... Only three I'm seriously considering) would be $80,000. Again, graduating with a masters degree.</p>

<p>My basic question is... Are student loans this high really that terrible?*</p>

<p>I've been researching and everywhere you look it says I will be miserable, in debt forever, regretful, poor, etc. If I take out this much, and I should go to the lowest price college.</p>

<p>But it is several years of my life that I am going to be spending at this school, where I am defining my life, making friends, etc so shouldn't it be somewhere I love? *</p>

<p>Everyone has loans, some higher than these ^ if they go to the same schools I'm considering, and didn't get as high a scholarship. <em>Wont they have higher loans? Is it really that big of a deal?</em></p>

<p>If you CAN get a good job after graduation, and pay the $700-900 student loan costs per month, is it worth it to go to the school you want to go to and just have to pay this for longer?</p>

2

<p>Yes,</p>

<p>None of the schools that you have mentioned are good financial choices for you. In addition, you will not be able to borrow the monies to attend any of them without a co-signer.</p>

<p>for a 150k debt, you would be paying 1726.20/month </p>

<p>Run your numbers through the student loan calculator to get an idea as to how much you wil need.</p>

<p><a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid;

3

<p>My parents will be cosigning the loan</p>

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<p>You do realize that your parents will have to qualify each year, for the loan. The more they borrow, the less they will be able to borrow in future years. Why, don’t your parents just pay the $$</p>

5

<p>Dont go anywhere you cant afford/you need a cosigner to get money to attend.</p>

<p>Will your interest rate be lower than cost of living increases?</p>

<p>If not, dont even think about it.</p>

<p>[Why</a> It’s Hard to Modify or Refinance Student Loans - Businessweek](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>

6

<p>That is a $1800 a month payment for ten years. I’m sorry but I do not feel this amount of loans is something to consider.</p>

7

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<p>So many people thought they’d graduate into a “great” job only to find that it did not materialize. Your “if” is a pretty big one. Also, I think you are being overly optimistic if you think that you will “only” be paying $700-900 per month for $150,000 of student loans with interest accruing. I am also concerned that you specify a range, “$700-900” per month, as if the $200 monthly difference is just chump change. It does not sound as if you have really thought this through. Don’t trade some compromise and discomfort now for misery later. Don’t overidealize the college years. Avoiding huge debt will make your future ultimately better, and that future is more important than the present.</p>

8

<p>Often loans will begin accruing interest while you are still in school as well, so if you borrow $150K and don’t start paying back until after college, your debt will be even higher.</p>

9

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<p>Think about that number. It’s huge.</p>

<p>You also need to think about the fact that taking on this kind of debt is something that previous generations never had to do . . . so you can’t look at your parents and say “Well, they survived it, so I’ll be fine too!” Your parents NEVER had to take on the kind of debt that you’re contemplating.</p>

<p>You are looking at: not being able to buy a car, not being able to buy a house, not being able to get married, not being able to afford to have kids . . . and the list goes on and on. And this is not a brief interlude - this is for DECADES. (And if you question my inclusion of marriage on that list, think about it. Who in their right mind would marry someone with that kind of debt???)</p>

<p>All this to spend five years at a school you love? Talk about selling your soul to the devil . . . :rolleyes:</p>

10

<p>If you CAN get a good job after graduation, and pay the $700-900 student loan costs per month,</p>

<p>The fact that you grossly underestimated the amount of the payments is more proof that you really don’t understand this level of debt. </p>

<p>What is your major? What is your career interest? How much do you think you’ll be earning upon graduation? </p>

<p>How much will your parents be paying each year towards your college costs? </p>

<p>What is your EFC?</p>

11

<p>*Everyone has loans, some higher than these ^ if they go to the same schools I’m considering, and didn’t get as high a scholarship.
*</p>

<p>No. Not “everyone” has loans. And the fact some very naive people might have larger loans doesn’t mean that it’s ok, nor does it mean that slightly less loans would be better. </p>

<p>the average amount of loans at graduation is about $20-25k. So, the amount that you’re talking about is unbelievable. </p>

<p>*</p>

<p><em>Wont they have higher loans? Is it really that big of a deal?</em>*</p>

<p>??? We don’t know if others will have higher loans. Some may have parents that are paying the costs. Some may be getting more aid. </p>

<p>Yes, it really is a huge deal. </p>

<p>Frankly I’m shocked that your parents would even consider taking out those loans. If their income is sooooo high that they can qualify to cosign for that much debt, then why can’t they help you pay for this school? </p>

<p>Are you saying that all of your aid is “merit”?</p>

12

<p>$150,000 is $37,500 per year. There are tons of cheaper options out there. You just have to look. The most debt anyone should take on is the unsub and sub loans federal loans which I believe is around $30,000, but even that is a lot and should be done with caution. </p>

<p>What is the COA at these schools?</p>

13

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<p>No, for the OP’s 5-year program, it’s $30k/year.</p>

14

<p>I REALLY hope this is a ■■■■■.</p>

15

<p>Ha, ha, Iron Maiden, when one reads these posts, yes, one does hope that the person is kidding. Even if he is, there are lot of people under this bridge, and some of them are seeking those loans and hot to sign not even taking a second to think about the situation. At least the OP is thinking.</p>

<p>I am going to start my answer very postively. Yes, these loans can be wonderful, valuable and doable. But they are not YOUR loans. YOU cannot take these loans. There is not a place around that is going to let an 18-23 year old with no credit history, no job and just using and costing money without some cosigner or some material thing that can be taken away–some collateral. Even secured loans would be tough for you to get So YOU are not taking any loans, because no one is lending you any money except for the federal governement that is limiting you to Stafford, and maybe Perkisn, but they do tend to subsidize them somewhat. So it’s your parents who are taking on the loans, make no mistake about it. By having you sign too, they are just taking your credit history, job prospects hostage as well, which means they don’t trust your parents to pay either.</p>

<p>Not a problem for parents to take out loans either. The government makes it easy-peasy. Just take out the Direct Parent Loans which takes about 5 minutes to do and get approval in the privacy of you home and you got them. So if your parents want to take out loans to help you get though school because they do have a bit of a cash flow issue, and they are responsible people with ok credit and the income and wherewithal to afford the loan, and they believe it’s a great investment in you, then they can go to it. PLUS makes it very easy with a credit check that does not include income verification, and hardly asks any questions’ they just can’t have 60-90 day outstanding bills on their credit report. Interest rate a bit high IMO, but they’ll be getting tax deductions on it if they start making the payment right a way, and are getting the college tax credit to defray some of this, so this is a GOOD thing for those who are responsible planners to stretch their college payments over 10 years for each year of college and get this thing done in 14 instead of 4 years. No problemo. If the parent who takes the loans out dies, or you die. the loans are forgiven. </p>

<p>So what’s the deal with you cosigning them? WHy are you going to those lenders out there who are going to put the screws on you AND you parent? Why can’t your parents just take out PLUS and write up a contract between the you and them so an outside party isn’t involved? First of all, they are not cosigning the loan. They are taking out the loan AND you are taking out the loan so that the lenders can go after EITHER of you and ruin both credit histories and the loans will stick around as long as either of you are alive. Bankruptcy is no protection. They aren’t under the usual statute of limitations. They can and will impound your parent’s social security check (yes,it’s happened) and will botch your credit if they payments are not made. So how good have your parents been about making their payments in life, and handling finances? Like what is their credit score? Are they late on a bunch of payments already? Are you really going to get them involved in this when it will mess up their credit history and prospects even more if you and they can’t pay? Remember if you drop out, die or are disabled and can’t pay, they are still on the hook. </p>

<p>A lot of these programs have high drop out rates. Kids can’t or don’t want to handle the subject matter/work load. You might just decide you don’t want to do this. Or a bad grade might make that decision for you. You are just 18, and the chances of you even finishing college in 4 years are not that hot, if you look at it. Jimmy the Greek would have long odds on you, baby. You are full of yourself and optimistic and determined but the demons of mental illness have not popped up, the temptations of youth, and all that jazz have not all entered your life in full force yet. Statistically, you are a bad risk, despite your straight A’s and great SATs and your Most Conscientious Award that you have gotten. And if your parents are not in great shape financially, you really should not be dragging them into this uncertainty. They aren’t thinking straight either. I’m not looking at you with their googly eyes, and I don’t think you are a good investment that way. Why? Because a school has not decided to make that investment and are throwing it all into your laps. There are schools and programs that will give merit money to kids that they think are worth the risk, and even they don’t make the odds as often as one things. No one’s gonna pay for you except for Mama and Papa, and they are a bit biased, which is fine, but are they also financially grounded? Like I said, the money is there for them to borrow, but are they in the position they should be doing this? Considering going to those sharks out there that want both you and the parent is not a good sign. Borrowing, fine. Having to go to those dealers, no. Big difference.</p>

<p>I know of many in your situation, but one in particular still hurts me as I helped both parent and student in the college process. They ignored my advice and they are now just about ruined financially, and I don’t see them picking up and getting the loan monster out of control I’ll tell you about that one later.</p>

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<p>Better yet you could be one of those many kids that the money ran out in your 4th or 5th year. Many kids don’t get past the 1st year. Sure mom and dad have enough collateral to cover a year or two but by year 3 no more collateral(house, car and other monetary things the bank can take to pay off the loan) or enough income to cover the loans. </p>

<p>No degree is worth that much debt. Believe use when we tell you that it doesn’t matter where you get you degree for most people. For few exceptions to the rule.</p>

17

<p>People are not completing degrees in 4 years. It is taking them 5 or 6. Not saying this will happen to OP but it is something to think about. Additional time means additional cost. Also plans change, majors change, money changes. Think about it. With a couple clicks of the button you are already $15,000 (this would cover 2 years at a state school to commute with no scholarships or loans) in debt for the first semester. </p>

<p>I know this has been stated before but Parent Plus loans are in the parent’s name. If the kid decides to drop out, the parents are on the hook no matter what. The idea that the kid will pay the loan when they graduate sounds great, but with this debt level it is not realistic.</p>

18

<p>If you are comfortable with the idea of a high possibility of living in your parents basement into your 30’s, then go for it. </p>

<p>No guarantee of a job, loan repayment will be MUCH higher than what you stated. </p>

<p>You will be happy no matter where you go if you decide to be.</p>

19

<p>I think most young people grossly under estimate how much they will be paying for taxes and (health) insurance. My husband and I bring home roughly half of what our gross is. </p>

<p>So for example IF you are lucky enough to find a job starting at say $50,000 a year you would probably be bringing home $25,000-30,000. Out of that almost $21,000 will be going to loan repayments. Which will leave you between $5,000-9,000 for the YEAR to live on.</p>

20

<p>My very dear friend and her daughter, whom I’ve known since she was a little girl took out a lot of loans for the very same sort of thing you are considering. A five or six year program where she would get her master’s and the work prospects were airtight. It was a wonderful investment. She was an A student with good SAT scores. Could have gone to her state U tuition free but they either did not offer the program in that form or she did not get into it. THe idea of taking courses there and then going to grad school for get the certification or master’s either was dismissed when I brought it up. They had a bird in hand. Why take the time and chances even though it would have meant getting a 4 year degree with no loans if she commuted, and with less than $30K of Stafford loans if she were to do it up living on campus. The family business was not doing well at that time, and the parents credit was not so good. In fact Papa’s credit was downright bad and some family bills were more than 60-90 days late so Mama cosigned some outside loans with the daughter who also took out every bit of the Stafford she could including the extra one can take if the parent is denied the PLUS. The school was an OOS public with an excellent reputation and the program was solid. And the job prospects for graduates outstanding.</p>

<p>A year or so into the program, the girl changed her mind. I don’t know why but she did. I guess at that point, the family should have pulled the support and made her come back home and commute, but she had her arguments, was happy and on her way to getting a degree from this illustrious school. She graduated in 5 years, majoring in Philosophy, and got a wonderful education, marvelous experience including travel abroad, two minors, including one in foreign language. Everything was great. Except for the loans. Lots of loans. And the family business had failed, Papa left, and Mama who signed for them was on the hook and at the same time trying to find work, and save the family house.</p>

<p>That’s been about 7-8 years. Those interest rates escalate the loans to a ridiculous amounts. The government has taken preemptive moves at this point. Both have ruined credit and the loans have ballooned to over $200K. I kept writing $90K and was appalled, but the way interest works and penalties or service frees or whatever, it’s $200K. And to have that kind of monkey on your back means you can’t get a job due to the credit check many of the positions have. Can’t buy a car except at usurious rates with the repo guy skulking around the corner to take it if you are a month late on the payment. Can’t do much of anything. You can’t even get utilities in that state without paying a deposit up front if your credit is bad. </p>

<p>She works 2 jobs, makes little money, has no health insurance, and needed care recently. Mom is in the same boat with younger kids in the picture. Papa is in and out of the picture and the financial issues are a huge problem with the relationship too since he wanted her to go to State U and commute the first year. It’s big, big problem. </p>

<p>If something should happen to the young lady, the mom would still be responsible for some of the loans. I truly think these loans may remain outstanding for the rest of their lives, particularly the mom’s. and we all hope the young woman finds some sugar daddy to pick up the payments. I don’t see any other way.</p>