I have the choice between a pretty prestigious college (Northwestern/Berkeley/WashU) that would cost around $50K per year (around $15K in loans per year, ~$60K total loans) or a state school, THE Ohio State U ($10K a year, meaning I’d spend a total of $40K for all of college) for undergrad.
Prestigious School = $140K in parent commitment and ~$55K in loans
OSU = $40K total, no loans due to scholarships and in-state
My parents have NO preference and can happily contribute $35K a year, but no more, hence the loans of $15K a year.
I don’t really think I’d go to grad school unless an employer paid me to go (MBA). Educationally, I think that I’m a pretty self-starter, and I want to be involved in the entrepreneurial world. I want to study engineering, pre-med, or accounting/finance/business. I’m interested in medical school, but not law school and don’t want to work in a bank ever."
I’m posting for my friend, I’m going to Berk, that’s why it’s not a new account haha
$15,000 per year of loans would require a cosigner, which is not a good idea.
Also, if you want to go to medical school, you probably do not want to drag a bunch of undergraduate debt along to add to medical school debt. If you go to tOSU, would your parents offer the $100,000 savings from their four year budget toward your medical school costs?
In my opinion, for most students anything more than the maximum federal student loan amounts ($5500-$7500) is too much debt. If you’re expecting medical school costs, that’s all the more reason to minimize undergraduate debt. Go to Ohio State.
Also the student doesn’t really have a firm grasp of s/he wants to do - s/he might end wanting to spend money getting an MBA. I’d go to OSU at this point.
So your friend basically has no idea what they’re interested in other than making money.
For entrepreneurship/accounting/finance/business, the better brand will help get your foot in the door. For engineering and pre-med, it doesn’t matter nearly as much.
You will probably feel different about grad school in a few years. If you stay in engineering, you will hit a plateau without a Masters/Ph.D or MBA. If you want to go to med school, that $140K will pay for 2/3rds of it.
If you are thinking about technology and startups, Cal is the best choice just for proximity. It’s a huge price difference though.
Let’s look at costs:
50K cost of attendance, net price => is that before or after the federal loans?
if 50K after loans have been deducted… it’s just not possible.
if it’s 50K after grants only, that’s -35K from parents, -5.5K from federal loans, 3K earned over the summer, and 2.5K earned in work study/during the year, your friend is still about 4K short. If there’s a way to make up the gap (grandparents? personal savings?), then it’s a possible choice, it can be thought through as long as there are no co-signed loans.
If the only way to find the extra 4K is a private loan, then don’t look back.
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don’t really think I’d go to grad school unless an employer paid me to go (MBA). Educationally, I think that I’m a pretty self-starter, and I want to be involved in the entrepreneurial world.
I want to study engineering, pre-med, or accounting/finance/business. I’m interested in medical school,
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?? Well an employer isn’t likely going to pay for med school, unless it’s the US military.
No one considering med school, particularly one with obviously strong stats, should even be considering $60k in undergrad debt. That’s just silly.
Don’t see the benefit at all of going to UCB as an OOS premed. In fact, going to an OOS Calif school is a big negative for a premed.
Unless this student is one who gets tippy top scores on standardized tests or is a URM, going to WashU as a premed seems like a waste. WashU Med is score crazy for unhooked students.
I would think long and hard about whether serious about premed. Looks like the stats are there, which suggests less-likely to be weeded out. If you went to OSU, would parents help pay for med school??
Ok, time to answer questions! Thank you all for your help so far.
@ucbalumnus the parents are giving $140K no matter what for an education or anything – they made it clear the student can decide what to use it for (it could even be a car or vacation or apartment). So it could be used for med school or business school.
To clarify, he is more interested in business school than medical school, hence the employer paying for it.
@mom2collegekids the main choice is between Northwestern and OSU, but he gets your point. Since you asked for stats, he has a near-perfect test scores and is in the top 2% of his class. I should have also clarified the med school thing – he is much more interested in business and business school.
$10K grant (his parents are in the FA donut hole)
$2.5K work study
$42K parent contribution (this is the absolute maximum his parents can pay)
~$13K loans ($3.5K fed, $9.5K private)
So that’s $52K loans total, $14K in fed loans, and $38K in private loans (co-signing parents).
OSU
$20K cost of attendance
$20K parent contribution
total $80K parent contribution, he gets $60K remaining for house/education/car/vacation/etc
His dilemma is that is that he knows a school like Northwestern has a great brand name in business circles, and he isn’t sure which choice to make with that in mind.
Federal direct loans can be up to $5,500 frosh year (but only $3,500 is at subsidized interest rates). However, that would still leave him short of being able to cover the cost of Northwestern (even with somewhat greater amounts of work earnings). Private loans would require a cosigner (usually parent), but that typically a bad idea for both the borrower and cosigner (since neither really have the money).
If it was me, and I decided to definitely go for business, I’d take Northwestern with the debt. Good name recognition helps in that field, as others have mentioned, and $50K can be paid off.
But if I decided to go with engineering or med school, I would definitely choose OSU and save the $ for grad school.
If I was undecided about what I wanted to do, I would go with OSU since the future is unknown and there’s less risk.
Does Northwestern University have a undergraduate business school or is your friend planning to major in something other than business (Econ)?` Ohio State have a huge alumni populate, so do not underestimate its impact on future employment. Being a large State University, it tends to attract a large pool of employers.
Does your friend know what branch of business he’d like to get into?
He’s right that Northwestern will open doors tOSU won’t, especially in consulting and a variety of 'prestige’boutique firms.
Having the ‘nest egg’ his parents offer will, on the other hand, give him a capital to start a venture after college, so if his goal is entrepreneurship, tOSU will serve him better.
His degree at Northwestern will likely not be in busines (only undergraduate certificates) but his major in a quantitative field- is that something he’s interested in?
Also, starting next year, amount of debt for donut hole students will be capped, so he should call northwestern to see whether that’ll apply to him and his fa package. (As I understand it, he can still take the federal loans before he takes private loans). Would his parents agree to take Parent plus loan? At least those are dischargeable if one of them dies, and he could pay those back rather than the horrible cosigned loans that follow you your whole life no matter what.
Once everything is on the table, he and his parents will have to decide whether the debt is worth it.