<p>I was accepted to a public school in-state (Penn State University Park) and an out-of-state private school. I didn't get any financial aid from PSU, but I did get $10,000 in merit scholarships from the private school. However, with all costs included at PSU, it's about $23,000 a year while at the private, it's about $38-40,000. When I was making my final decision, my parents said that they expected to take out loans and said they thought I would get a better education at the private university. So, that's what I chose. </p>
<p>Now my parents are saying they're going to have to take out a $30,000 loan this year just to cover the costs. The thing is, they don't really seem to be bothered by it. To me, it seems like they think that it's just normal to borrow that much. My parents make about $110,000 a year together, and I have some money set aside for college, but I'm still worried it's going to be difficult paying off just the first year. I told my parents that I wouldn't mind transferring to PSU after the fall semester to save some money, but they seemed totally against the idea. I guess I don't see what I'm missing. I just don't see how we'll be able to handle all of this debt. Can anyone offer some advice?</p>
<p>Penn State is a fine school, and I would not have any problems with a graduate from there. It all depends on what the private school can offer you and whether it is a better match for you as to whether or not it is worth the cost differential. I know that with my son, I feel strongly that a small LAC is a better choice for him, and am willing to pay the difference. THe school he picked has opportunities and situations that make it a wonderful match for him. He is thrilled to be going there. He is in the same situation as you are, except he could have gone to state options for as little as nothing (in fact, make money) and he had some $30K private options because of scholarships. The school he has picked is costing him about what your choice is. </p>
<p>With an income of $110K, and with you being away from home, there should be some amount that they can pay towards your costs. With you throwing in some money, that should also reduce the burden. My son is taking a $10K burden out on his own from his own savings, work and loans. We are coming up with the difference from our savings, budget and loans I figure we will borrow about $10-20K a year with $15K projected for this year. But each family is different. We have gone over this with our son, and he understands the situation.</p>
<p>So many factors go into this equation. How old your parents are, how many siblings you have, how much your parents have saved for retirement, the list is nearly endless. YOU probably have an idea if borrowing 30,000 a year is going to be tough on your parents. Maybe it's no big deal because they expect to inherit money in a number of years or they expect their income will cover it, etc. I suggest that you ask them this question, while letting them know you will attend a less expensive school if that is what is best for your family in the future. You can get great education at either place! Good luck.</p>
<p>
[quote]
...they thought I would get a better education at the private university.
[/quote]
This is it, the whole reason. We feel the same way; we can afford to take on the loans, so we want to, and do so. This may be the last major benefit your parents can provide; let them have their way!</p>
<p>It's unclear to me from your original post - are your parents taking out loans that they expect to pay back themselves? Or are you expected to pay these loans back? If they plan to pay back the loans and they don't seem concerned about it then perhaps they have accounted for this somewhere in their financial planning.</p>
<p>Also, is the private college cost of $40,000 before or after counting your $10,000 merit scholarship? If $40 is the cost BEFORE subtracting your scholarship, then your net cost for this year would be $ 30,000, and that's only $7,000 more than PSU. If $40 is the net cost including your scholarship, then it's $17,000 more than PSU. So your decision about transferring to save money is a decision about saving $7,000 - $17,000/year. There would still be some loans involved, and it wouldn't save your parents the full $30k. </p>
<p>I think bessie (post 3) is right on target. Ask your parents these questions. You seem like a good kid with genuine concern for your parents' financial well-being, which is refreshing!</p>
<p>In our case, we have been regularly putting a certain amount of money aside each month into college savings plans. When the college savings accounts run out, we will take out loans. We're not worried about paying the loans, because we'll take the same amount of money per month that we were previously sending to the college savings accounts and use that to pay down the loans instead. So we know we can afford the payments, and it won't make a change in our family's cash flow. Your parents may have a similar arrangement.</p>