College Loans

Colleges and Universities A-Z University of California - Berkeley
1

<p>I'm thinking about transferring to a UC, but it looks like i need to take out loans at about $50000 for two years. Is this logical? is it too much? If i do this i assume i'll be taking out 20-25,000 each year. My parents really can't help me out with the financial situation considering that even though they are in a moderate to high income bracket, their investments won't allow them to help me taking the current economic situation in account. Can anyone advise me on how to take loans?</p>

<p>Someone gave me a website simpletuition.com that says if I take a 50,000 loan i'll be paying for a Stafford loan for about $100 a month for 20 years and a 42,500 private loan at 350-450 a month for 20 years. I'm not sure my degree will net a salary that will be able to sufficiently pay off those debts, and what if i choose to consider law or graduate school, do i postpone the loans adding more debt?</p>

2

<p>$100/mo for 20 years isn’t even equal to half of the loans you’re talking about taking out – and doesn’t include the inevitable interest accrued, either. That is an impossible figure. You are looking at something closer to $300/month regardless of whether the loans are private or not.</p>

<p>$50,000/year is taking out full expenses every year. There is almost no reason to do that, especially if you’re not in a financial position to do so without asking this question. There are scholarships and grants, and you really should not be taking out more than $25k in loans for 4 years, not twice that for half the time.</p>

<p>Seriously consider whether this is worth it to you. There are VERY few jobs where you’ll be in a position to pay back $50,000 in loans after a Bachelor’s degree. The university won’t provide that much in loans to you anyway. You’re maxed at a significantly smaller number per year ($5500 or so), and that’s likely to be entirely unsubsidized (meaning interest accrues even while you’re in school) given an income bracket that would exclude you from all other aid. That means you’d need to take $20k per year from a private source, and good luck finding someone who will give you that.</p>

<p>No, consider all your other options first. Scholarships. Working and saving. Working while going to school. Grants you may be eligible for. Other schools.</p>

3

<p>SimpleTuition.com calculates loan amounts based upon several variables including the data you input, current interest rates, graduation dates, “Borrower benefits,” government limits for certain loan types, loan details from lenders, and other variables. </p>

<p>Be sure to fill out all of the data correctly at the site since seemingly irrelevant information, such as your year in school, graduation date, and tax status, can impact federal loan limits, deferment calculations, and, ultimately, the monthly payment and/or total loan amounts displayed in association with certain lenders. We do work with lenders to ensure that the math is right.</p>

<p>If you select both Private and Federal loan types, SimpleTuition will run calculations such that you first maximize federal loan options (see both tabs). This raises a different and complex topic but we strongly believe all students should maximize federal loans before turning to private loans and the site is designed to do this by default. If you don’t see both loan types, visit simpletuition.com directly by typing in [Find</a> Student Loans: Federal and Private Student Loans. Apply Online](<a href=“http://www.simpletuition.com%5DFind”>http://www.simpletuition.com) in the browser vs. following 3rd-party links to the site.</p>

<p>The former post correctly comments that, beyond certain loan amounts, schools will often trim the amounts you can actually borrow (most private loans are now certified by schools vs. being a deal solely b/w students and a bank). We have little data feedback regarding these decisions, however, so we do not speculate about them on our site. Other than the schools’ certification processes, the loan amounts and calculations displayed should be accurate (with some variation based upon your actual credit score) based upon the data you input, lenders’ data, etc. So, if the numbers appear to be wrong, go through the site again and pay close attention to each data point you input and be sure to look at both loan type tabs in the results, etc.</p>

<p>Finally, the former post also points out that all students should develop a keen understanding of the earning potential related to the degree they seek… before loading up on debt. We could not agree more. Albert Einstein once referred to compounded interest as the greatest mathematical discovery of the century. Accordingly, there are only two types of people financially: those who benefit from compounded interest, and those who pay it. Don’t bite off more than you can chew even if your school will let you. Take a look to see if the total cost of your loan(s) is rational in the context of the improved INCOME your education may yield. </p>

<p>Sincerely,</p>

<p>The SimpleTuition team</p>