<p>I'm currently a high school senior. Since I'm not so financially savvey, I was hoping that some of you might offer some advice on how big a burdon debt really is. I've talked to my parents, but I'd like to get a broader range of views on this issue.</p>
<p>I'm basing these figures on average salary for my major at the colleges that I'm considering, and the financial aid packages that I've been offered:</p>
<p>I'll have approximately a 40,000 debt when I get my undergraduate degree.
I'll get a job with a starting salary of about 70,000 dollars a year.</p>
<p>But I'd like to attend graduate school for a Phd, which complicates things more. </p>
<p>Right now, I'm convinced that attending my top choice college is worth the debt after graduation, but my parents are telling me to rethink that and consider one of the colleges where I've been given a full ride or nearly a full ride. (something along the lines of MIT vs U-Michigan) What do you guys think? I've read through the "your kid takes the top scholarship..." thread, but I'm looking for more specific information on how bad the debt will actually be after I graduate.</p>
<p>It also suggests that the maximum student debt that you take on should not exceed 8% of your salary. More than that can make it difficult for you to get a mortgage, later on.</p>
<p>If you're smart with money and know how to save, paying off even a 40,000 dollar debt shouldn't be unattainably difficult. I've always thought that getting the credentials you want from the school you want to go to is well worth the extra cost incurred by not going to a cheaper school. Others might advise otherwise.</p>
<p>$70K a year will be your STARTING salary. Layout a spreadsheet with expected pay increases over the life of the 10 year loan. I believe your loan goes back into hibernation if you return to school. Check that. </p>
<p>$70K is approximately $35 per hour (cut the annual salary in half to figure out the rough hourly wage). At $70k you'll be taking home approximately $4000 a month--and $434 exactly meets the recommendations from the lenders at 10% of your monthly salary.</p>
<p>Go for it. Sign up to be an RA for a year and reduce the amount to $32K.</p>
<p>Congrats to you! </p>
<p>My guess is that your parents didn't quite expect you to get the MIT acceptance! Have pity on them and give them lots of reassurances.</p>
<p>And make the most of MIT. Get out and meet upper classman and find out who is working on what great projects--in and out of your field.</p>
<p>I will be majoring in CS, and if I go to MIT, probably a double major in 6-2 and 15 (EECS and management).</p>
<p>My parents' main point is that since I'm almost certain that I will be attending graduate school anyways, it might be better to go to undergraduate for free and than go to MIT for grad school. They say that in terms of reputation and prestige, people care more about the grad school anyways. But they're really happy about the acceptances and ultimately will leave the decision to me; they're just making sure that I consider every angle before I commit to a college.</p>
<p>Go to MIT kiddo--but spend some time thanking them for everything they have done--and reassuring them that you will not disappear from their lives. Then set up a schedule to email them and call once a week.</p>
<p>I don't believe they think the MIT undergrad degree does not have enough rpestige. You watch and see how they tell their freinds and family about your acceptance. They are not correct anyway. An MIT undergrad degree is a marvelous experience and degree. PM Alumother about the value difference between an MIT CS degree and a UMich CS degree.</p>
<p>Your grad school choices are unlimited with a degree from MIT. </p>
<p>Be careful about overloading your plate though, Mr Double Major. Make sure you leave time for fun and --most importantly--meeting the other students and learning about their projects. Also, make sure you research your internship oppotunities. I know a St Andrews AI student who was offered an amazing year long stint at Sun Microsystems in SF--as a junior. Fantastic experience.</p>
<p>You lost me dstark but back int he day, I put together a couple of innovative deals in Silcon Valley with heavy hitters at Intel, Sun, etc. From my single data point, I'd say that Silicon Valley loves the game of one-up-man-ship. </p>
<p>I've never seen so many guys slamming their credentials on the table with such gusto--and I lived in Manhattan for 10 years and had a number of friends in the financial industry --so that's saying something! But hey, maybe it was just me.</p>
<p>Alumother has far more experience than I--her single data point would be more valuable but my gut is that on the west coast, where the CS action is happening, Larry Page aside, an MIT degree trumps a UMich degree in the job market. </p>
<p>I could ask my sister. She does HR for a couple of hot start-ups in SF/SV.</p>
<p>wired, Over the last couple of years I have gotten really negative on student debt for a couple of reasons. First of all, the industry has devolved to the point where there are many pitfalls and traps for students. I have read many stories of unscrupulous lenders that want students to make late payments and default because that enables them (the lenders) to add on very profitable penalties and extra interest charges. So first of all, be very careful about your lender and the loan program. The second big problem is that congress has placed student debt in a class almost by itself, in that it is very difficult to get discharged. If you for whatever reason are not able to make the average salary in your field, even if it is due to illness or disability, you will still have to make those student loan payments. This is very different from the typical consumer debt, where a borrower who gets in serious financial trouble can declare bankruptcy and have the debt discharged. I am not saying it is easy to declare bankruptcy and get out of making car payments. What I am saying is that it is next to impossible to get out from under student loan payments. </p>
<p>It is very easy to project your future income as starting at $70,000 and shooting up to $1mm in 3 years which will make those student loan payments trivial. But if things don't work out as planned those student loans can become a very large and heavy non removable weight around your neck. Borrower beware!</p>
<p>disclaimer: I took out student loans for grad school. But as I recall the subsidized rate at the time put the loan rate at far below market rates, so the payments were quite small. I had an MBA and had a decent job so had no trouble making the payments which stretched out for 10 years.</p>
<p>My son goes to a "very good" school, although it is not HYP,etc. Well, for the $ that we are paying, you'd think that their career office would be a little better than a high school level when it comes to internships. It's not. I am ****ed to say the least. He has to research and look for internships all on his own.......the only thing his school does for him is give him access to some database that doesn't even measure up to Hotjobs, or Monster.</p>
<p>So........do yourself a favor, go to the best school that you got in to. Needless to say, where we thought he'd have some fantastic internship this summer, it looks as though he will be going through an employment agency.</p>
<p>On loan hibernation if you attend grad school:</p>
<p>
[quote]
If you should return to school at least half time before the grace period ends, you again may postpone loan repayment while you’re in school, and you’ll be entitled to a full grace period when you terminate enrollment or drop below half-time enrollment status. You must understand, however, that once the grace period ends, you are in repayment status and must request a deferment if you want to postpone repayment. For more
on deferment, see deferment page.
<p>On 'value': The MIT degree will have more brand-name 'value' in a job search in Silicon Valley, UK, China, India, Manhattan and Boston. The MIT degree will have more 'value' in international circles for the life of your career. Asians, for example, prize the top US brand-name universities, including MIT. My opinion only--based on my experience living in Asia, my experience cutting deals in SV and my sister's HR work in SV.</p>
<p>Here is my 2 cents for working for 15 years at Silicon Valley, take it for what's it's worth, no flame please. When I was interviewing for one of the high tech companies, we rarely get MIT graduates because they all interview on the East Coast campus. However, I did interiew a lot from University of Wisconsin(highly regarded), University of Michigan, and UCB. Maybe things are changing with the internet age one can apply anywhere but in Silicon Valley, but this is my experience.</p>