<p>So I have been admitted to and recieved my aid packages from NYU and Mount Holyoke. My first choice is NYU, but as expected it's aid package is not all that affordable: $10,000 in scholarship, $5500 in direct loans (subsidised and unsubsidised), and my parents are to apply for a Parent Plus loan of about $36,000. Mount Holyoke on the other hand is a lot more affordable with grants/scholarship/workstudy, making my parents contribute only about $15,000. Now the issue obviously is that though both schools are great, my parents know that NYU is my first choice, and also know my (unenthusiastic) reaction to when I visited Mount Holyoke. Therefore they seem insistent that they take out the parent plus loan so that I can attend NYU. My question however is that is it actually realistic for them, or anyone, to take out a loan that will put them in debt for about 120k (i think) when I graduate? My dad says he'll start paying back the loan while I'm at college and according to the calculator/estimator thing on the parent plus loan website, that'll be about $312 per month. We only recieved my financial aid packages a few days back(due to delayed applications and complications that'll take long to explain) which probably accounts for all this confusion. Is it even realistic that my parents will be granted the $36,000 loan or does NYU know what they're talking about when they ask my parents to apply for that much?
I'm just really confused, I obviously REALLY want to go to NYU, but I don't even know if my parents will even get the parent plus loan, and if they do, I'm not sure if the debts they'll incur will be worth it. They seem insistent upon it though, even though I've said that I'd be fine going to Holyoke since it's so much more affordable, which is really nice of them and all but I don't think they have any idea either of how realistic it is to expect that much of a parent plus loan, or how much it'll cost them to pay it back.
So basically...what would you suggest my parents do?
(Sorry for the ramble. I understand that Mount Holyoke is really an amazing back up to have, but still we know NYU would be better for me experience wise (1st year Paris, internship opportunities, just studying in the city) and my parents seem to value the NYU experience a lot but I don't want them to be swimming in too much debt because of me either and as a potential literature major, I don't expect too high of a starting salary to help them out with repayment when i graduate.)</p>
<p>The $312 a month payment is only for your first year’s loans…can they afford to multiply this by 4? Since costs will go up every year, it’s likely that their final debt will be much higher! Will you actually be able to afford a study abroad on top of that, not to mention the high costs of living in NYC? I think you’re being more realistic than your parents are…good for you! Why don’t you suggest a compromise such as Mt Holyoke for two years and then, if you’re not happy there, you’ll apply as a transfer to NYU or some other school (hopefully with better FA!)?</p>
<p>What other choices do you have? NYU is a train wreck for your parents, and I hope you don’t encourage them to take that route. </p>
<p>If you don’t have other options, and you really feel Mount Holyoke isn’t appropriate, why don’t you take a gap year and do some research on schools that might be a better fit financially, academically and socially? </p>
<p>I’m beginning to see why NYU doesn’t need to do much to improve their financial aid – legions of American teenagers are ready to fall on their swords and push to take on whatever debt is required. Why should they change?</p>
<p>@ sk8rmom: Do you mean that the $312/month payment will keep increasing each year for four years? Yeah, I think my parents get that. As for the study abroad, well at NYU I don’t have an option of not taking the study abroad freshman year, it’s part of the programme they’ve offered me. It’s costs are supposed to be around the same as a year at the New York campus. But you’re right, it would hamper my experience in Paris since I’d love to travel and stuff but wouldn’t exactly have the money for that - and I’ll probably not be allowed to work there anyways. Yes, I’m planning on telling them to just try out Mount Holyoke for a year and then I could transfer after that hopefully. But they haven’t been too receptive to the Mount Holyoke idea that much.
@arabrab: I have another college that I’m not interested in at all, plus it’s FA package wouldn’t be as good as Mt Holyoke’s anyway. And yes, I’m pretty sure I mentioned that I’m not encouraging them to go for the plus loan. I’m not keen on a gap year, but I don’t mind attending Mt holyoke too much and I’ve told my parents that- it’s just that they know how much I’d rather go to NYU whcih is why they’re so into the plus loan.
Haha, well my case might be worse because my application was so late.</p>
<p>without knowing the details of your parents finances, career plans, etc, I cannot advise you on the finances.</p>
<p>There is something more important here. You are willing to forego your dream school, cause you want to ease the burden on your parents. Your parents are willing to take a large debt, cause they want you to go to the best place for you, even though you are willing to forego it for them.</p>
<p>Whatever choice you make, you and your parents are among the most blessed people in the world. You, to have parents, like them, and them, to have a child like you.</p>
<p>Just my two cents… I know you’re not keen on a gap year, but given your choices it seems like the lesser evil to me. The NYU debt is a non-starter for me. Your parents are dears to want to take this on for you, but it’s way out of the realm of reasonable debt. Mt. Holyoke is about as different as a school could be from NYU and you don’t want to go there. If you go for a year and transfer you’ll likely get even worse FA as a transfer student. It sounds like you didn’t start with a very refined list of colleges to apply to in the first place due to the lateness of your applications. You should have choices of schools that, while not perhaps a “dream school”, you’d be happy and excited to attend with more workable FA.</p>
<p>You give us no sense of your family’s financial situation or whether your parents are financially knowledgable. Can they easily pay the $15K for Holyoke?</p>
<p>One way your parents might be looking at it is their ability and willingness to pay forever (at least until they retire) what they are paying while you are in school. I.e., if they can pay $15,000 per year now for Mt. Holyoke, maybe they want to pay $15,000 per year continuously to get you to your number one choice. Just a thought.</p>
<p>OK, so I multiply $36K times 4 years and get $144K in loans. I jump over to a financial aid calculator (search by that phrase on line) and I get that I would have to pay $1,100 a month for TWENTY years. I would pay back the $144K and another $119,800 in interest for a total of $263,800. (Interest rate of 6.8%)</p>
<p>Now, I go back and try $15 K times 4 years and get $60K in loans. The calculator tells me that this would be $690 a month for TEN years (total paid = $82 K) or $458 a month for TWENTY years (total paid = $109 K). </p>
<p>So, several questions that are really, really important here:</p>
<p>1) If your parents cannot afford to pay $1000 a month right now for your education, what will be different for them in four years? (sometimes people know a big inheritance is coming, but other wise . . . )</p>
<p>2) What will your major be? If it is something that will be a big money maker, then maybe you could shoulder these loans once you graduate. But please know most people overestimate how much they will make straight out of college. </p>
<p>This is a huge maturity moment for you. You really want something badly. You have to assess the fairness of it for yourself and your family. That’s not to say that you should give up your dreams. (Can you load up on courses and graduate in 3 years? Can you cut costs by living in a triple or eating modestly? Can you work at a high paid internship each summer?). </p>
<p>I think you need to have a heart to heart this evening with your parents. Know you are loved. But make sure your dad understands that financial aid calculator. Paying $312 a month starting the freshman year will help but you are looking at a very long road. </p>
<p>There are many unknowns for us here – we don’t know if you have younger siblings – or what your major will be – or what your family is expecting to have happen over the next few years (Dad in line to be made partner, Mom finishing her degree and starting work again . . .whatever). </p>
<p>So, time for some in depth conversation. Good for you for taking time to figure out the details and not just zooming off to buy an NYU t shirt. </p>
<p>Good luck!</p>
<p>Well what’s your parents EFC?</p>
<p>My daughter went to NYU and had a full exposure…On the other hand I did visit MHC campus and felt depressed. So her obvious choice was NYU. Follow your heart and life has a strange way of fitting your desire.
Good luck!</p>
<p>
Life also has a way of beating down those who make decisions without considering the outcomes.</p>
<p>This is a decision to discuss with your parents. We did this with our oldest. We have a 6 year period when we will be paying for 4 years of loans. We were willing to do this and told him to pick the school he wanted. </p>
<p>These days, we can’t make such a commitment for my other kids. Different financial situation. And we told them so. Talk to your parents and ask for a true assessment of their financial situation and risks in taking on this responsibility.</p>
<p>This kind of debt is insane!</p>
<p>Did you only get accepted to two schools? What about your other schools?</p>
<p>If your parents cannot afford to pay $1000 a month right now for your education, what will be different for them in four years?</p>
<p>Olymom is right. I don’t know why so many parents think that they can afford to pay back a big loan, but they can’t pay much at all in real time!</p>
<p>I talked to a mom today. Her son was accepted to the honors program of the flagship state univ. and also to a private college, which he’d prefer to attend. He got more financial aid from the private, but with the higher sticker price, the difference ends up being about $13,000/yr more for him to attend the private than the state u. The parents are divorced, both of extremely modest means (already carrying some debt), and they have decided to take on loans to help him go to the private. She called me to see what I thought, and it’s all I could do to not say “Are you nuts?”</p>
<p>She said $13000/yr of debt shared by two parents doesn’t seem like such a huge deal and shouldn’t keep him from having this college experience he would prefer. Well, yeah, maybe not $13,000/2… but after 4 years of that when she doesn’t make enough to pay her bills as it is? But people say things to her like, ‘the money will work out, let him have this experience’ and things like that. Neither of these parents has been terribly practical with regard to money in their pasts. I gave her my (very debt-adverse) perspective and told her to make sure to run some debt calculators to understand what they’re actually getting into. </p>
<p>Today is the acceptance deadline. Because their son qualifies for FA at the state school, they can accept admission while deferring making a deposit, so I told her to accept there anyway even though they are depositing with the private school so they have more time to let this decision settle and consider its consequences. Oh my. These people are adults and they get to make their own decisions, but it causes me such dismay.</p>
<p>It’s not as though there is a huge difference between academic opportunity since their son did get into the quite selective honors college at the state flagship. There is a difference in the cohesive community feel, but is that worth $52000+ in loans (above what their son will be taking out in student loans)? Not to my mind, but different strokes…</p>
<p>^^</p>
<p>I’d be too afraid that an ex would reneg on the agreement sometime in the near future. Or what if one or both couldn’t qualify for these plus loans next year or the next?</p>
<p>I think some think qualifying is automatic…and they forget that each year they will have to qualify with the burden of the previous year’s debt on their history.</p>
<p>Yeah… I talked to her about that. The ex has good credit, but no collateral. She has less good credit but some property to secure a loan. They’ll probably just be taking out the amount each one is able to over time… it just doesn’t seem wise to me when they have an excellent option that would also require some borrowing, but significantly less.</p>
<p>He’ll only have “good credit” the first year. Once he takes out the first loan, his “good credit” takes a hit.</p>
<p>True enough. She said, we’re going to take it year by year, re-evaluating each time around. Then, she says, if it’s getting to be too much he can transfer back to the state school. Problem is he’ll lose the freshman-admit FA he has now and won’t likely be able to get back into the honors college unless he wants to extend his undergrad years to complete the requirements. It’s not as simple an adjustment financially or academically as it might seetm. But, yeah, he could certainly go the state univ. general undergrad with far worse FA than he is currently being offered… it just doesn’t make sense to pragmatic me. :-/</p>
<p>I can’t imagine taking on debt for a pricey school and then getting the diploma from a cheaper public. What’s the point of that. LOL</p>