I am currently a Freshmen at community college taking 14 credits. Unless something catastrophic happens to my grades, I’m pretty much lined up to get either all A’s or 3 A’s and a B (3.75). I hate going to CC, as I expected, so I decided to apply to Indiana as an out of state student ( I am from Michigan) because Kelley is a fantastic school. I really want to go there because it’s the best school I can go to. I didn’t get into U of M, but I did get in to MSU, which isn’t as good of a business school. I’m thinking about going in to either finance or entrepreneurship (realistically I’m probably going to study entrepreneurship at the very least as a minor). All in all, at MSU I will have around 48k in debt after I graduated vs 115k with Indiana. Is the better business school (IU is ranked 8th or so and MSU is top 50) worth the extra 67k in the long run?
To give some background of financial status I’m from a single-parent home going through a bit of a transition, but I am able to afford it. Obviously 67k is still a ton of money, but if it’s worth it in the long run I wouldn’t think twice about it.
You have to match up the extra costs with tangible factors in order to make a decision. So, the considerations become “I like one campus more than the other - is that worth $67K?”, or “I want to live in a city instead of a rural setting - Is that worth $67K?”
What you can’t rationally do is calculate that going to a #9 over a #15 will get you a job worth $7,000 more per year, just as an example, because we don’t know that.
Undergraduates cannot take out more than about $7,500 in student loans each year. Anything over that would have to be a loan to your parents. How much debt do your parents want to take on, or can they take on? Even if money were not an issue, there is no way that Indiana is worth $67,000 more than Michigan State. It doesn’t sound like either of these universities will be affordable though.
The “best school you can go to” is not the one you can get admitted to – it’s the one that you and your family can afford. And if you think that someone can take on $115,000 in debt and “in the long run wouldn’t think twice about it” you are sorely mistaken. You think about it constantly if you cannot pay your bills or do the things you want to do because all your money is going toward paying off loans. Don’t do that to yourself or your parent(s). Stop looking at schools based on business school rankings primarily and look at them based on cost.
This is a bad idea imo. That is a huge amount of debt. When someone says they can afford it, that usually means that you don’t have to have debt to pay. Having a large amount of debt means that you can’t afford it, so I am not following your logic. Either of those debt levels are extremely high and will hamper you. Ask your parent how long it took them to save that amount of money. Do some calculations on debt repayment with each of those scenarios. I am very surprised a parent would agree to cosign for that level of debt, are you sure that is going to happen? That is financial suicide for the parent.
Are you saying you are already accepted/denied for next fall?
You’re almost halfway through the year. I recommend sticking it out for another semester and applying to transfer to Michigan for next fall. Michigan is stronger than Indiana in business and most other things, and it would be much cheaper for you as an in-state student.
You’re looking at an excessive amount of debt. Focus on colleges that will meet your full financial need with a relatively low amount of debt. In addition to Michigan, you might take a look at UNC Chapel Hill, which offers great financial aid and does not have a cap for out-of-state transfer students (unlike freshman admissions).
First of all, as someone else pointed out, it may not even be realistic - you can’t borrow that much money on your own.
Second, it is extremely unlikely that you will make enough money out of college to repay $115,000 in loans. Even $48,000 is pushing it, but for a business major may be a little more feasible. You wouldn’t “think twice” about the huge difference between this because you have no idea how much impact repaying this would have on your life yet. It’s basically Monopoly money to you right now. But as someone currently in the beginning of my loan repayment, let me tell you that there is a huge difference between a $558/month payment (already pretty high but manageable on a business salary, particularly as time goes on) and a $1328/month payment. $800 a month is a VERY big difference. There are a lot (a lot!) of things you can do with $800 a month: live in a better apartment, drive a nicer car, buy better food, go out to eat more often, save more for retirement, invest, or squirrel away an additional $10,000 a year.
Consider also that you may want to go to business school, and that MBA programs are almost always financed entirely by loans. If an MBA program ends up costing you $120K, you’d be adding that onto your undergrad debt for a total of $225K. That is a truly frightening amount of debt, even for a young MBA. That’s a small house in some cities.
If Michigan State would put you $67K in debt, it’s honestly probably better to stay at CC for two years and then transfer as a junior. You also may get another shot at getting into Michigan if you do really well in CC. But if you don’t want to go to MSU, and you can’t get into Michigan, you should at least try applying for some private colleges that meet financial need for a transfer student and/or give generous financial aid.
As pointed out above, you can’t borrow that much. And it wouldn’t be worth it even if you could. Can you even afford MSU in-state for your last two years?
Absolutely not worth that much debt. No school is worth that much for undergrad.
Besides, your parents would be foolish to cosign that much debt. Are they saying that they will? If not, then neither school will be affordable.
You can only borrow:
5500 as a frosh
6500 as a soph
7500 as a jr or sr
Those limits are in place because newish grads can’t afford to pay back much…and because young students have no idea about debt and would otherwise make naive decisions and borrow too much if they could on their own.
on paper, my family looks rich. In reality, however, my family has had a lot of turmoil after my dad passed away during Junior year. He was a lawyer and owned a law firm that employed my mother (not as an attorney). My mom does not have a college education and she isn't allowed to own the law firm because she isn't a lawyer (it's a law, I guess). While we have some property, we have been forced to sell some of it just to cut our losses. So far this year she has collected a whopping 6k in income. I'm hoping that later on I could get some money, although I think it's doubtful.
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I am sorry that you’ve lost your father, but it sounds like your family has a lot of assets. I don’t know how the issue with the law firm works, but it doesn’t seem possible that your family could just lose that as an asset.
Did your dad sell the firm while he was ill? He would have likely known that your mom couldn’t own it or run it or whatever the law is in Mich.
If you are a business student, you can use yourself as a good case study. Do the time value of money calculations. Despite differences in reputation, what do the salary curves indicate for the same degree from the different colleges? Will you ever be able to make up the difference? Don’t forget to calculate in the interest on the added debt.
Most likely, you will find that unless the costs are fairly even, the difference cannot be recouped. Unless you care comparing schools with a vast difference…say something like DeVry or Phoenix versus a top tier academic school like Stanford, the differences are often so minor that the income does not differ substantially. It is really more about the higher caliber candidates that attend those tippy top schools. If you are a great student, you will rise to the top of whatever school you attend and your ability will show up in the workplace.
Why not apply as a transfer to Michigan and MSU? Your CC grades are very good and you have a good chance of getting in to Michigan, and use MSU as your backup. It is very hard to justify IU with such a large price difference. Start getting to know your CC teachers well as you will need good recommendations. Make sure you keep abreast of the admission requirements to Ross - you will need Calculus - I would talk to a transfer admissions counselor at Michigan and MSU to make sure your credits transfer.
You need to get the grades so that you can transfer into UMich or MSU.
Are you saying that even tho your dad owned the law firm that once he died, the family just lost ownership? or did the other partners buy your mom out?
Your chance of getting aid at IU as an OOS transfer is pretty poor. Not so with MSU. MSU has a mandate to help Michigan kids first. IU charges OOS an arm and a leg. Not worth it. The culture at IU has become one of over indulged rich kids who party nonstop. As a parent, I’m turned off by it. We lived there for 10 years (have lived in other college towns as well so I know the difference) The IU campus is beautiful but then again so is MSU. I would just go to MSU. Everyone has given you sound financial reasoning. Having spent a significant amount of time at both places, I’d choose MSU in a heartbeat. They have a great program, at a decent price, close to home and thats all you need.
I wouldn’t pay that much to go out of state. I would reconsider MSU, which is a reputable university with a strong national alumni base. I’ve known Oakland University business grads who ended up with great jobs.
just because you were not accepted to Michigan as a freshman doesnt mean you dont have a chance as a transfer student. Your college grade GPA is excellent.
Its worth trying…
The student needs to consider the financial situation. If the EFC is high, and mom can’t pay much right now, then finishing at the CC may help make paying for the last two years at UMich or MSU affordable.