@ClassicRockerDad <<< If a parents wants to borrow money for their kids education, they can figure out if they can or can’t afford it. Why assume that everyone is incompetent?<<<
The parents are saying that they will co-sign the loans. That doesn’t sound like their intention is to pay back all the loans.
I don’t assume everyone is incompetent. I don’t assume that you are incompetent.
But THIS student has provided the info that the parents all have good incomes, yet no money saved…no assets at all besides their home. What does that suggest to YOU? Financial wizards???
[QUOTE=""]
I think it is hard to grasp the full implication of $XXX per month without understanding all the other expenses for an adult. You can guess at a salary, but rent, utilities, food, car, etc is all just noise unless you have been there.
<<<
[/QUOTE]
Oh my! So true!! We often hear kids say, "I’m going to get paid $50k per year when I graduate. If I have to pay $24k per year in student loans, I’ll still have $26k per year to live on. lol…these no-deduction kids don’t know how they’ll be hit with fed and state taxes, FICA, health insurance, and so forth. And when they think about housing, they only think about rent…no electricity, water, cable, internet, etc. It’s all just noise to them right now.
My son (pre-med) graduated recently from a top 50 private university, where the COA was close to $60K per year. He was fortunate enough to have gotten a full tuition scholarship and had to pay for his Room & Board, most of which was covered by his Prepaid College Fund. He graduated with zero debt. One of his college roommates graduated after 4.5+ years with an engineering degree from the same institution with $230K debt (I did not know that this amount of debt for UG was even possible)! His roommate got a job offer for less than $50K to do something outside of his engineering major and it is not clear how he or his parents will ever afford to pay off this debt. He had two other siblings who graduated college recently, so the parents might have some debt associated with these two other college grads.
My son’s grades were not good enough for medical school and he is busy trying to repair his grades to get into medical school. The private university he graduated from, was a poor fit for him, but was his “dream school”. He was accepted to a number of less “prestigious” universities that offered a much better environment for him and one where he could have done academically much better and be on his way to medical school.
^ $230k is a lot of college debt and is many times of national average. It is about the same amount as my mortgage 12 years ago. It is going to take a long time to pay back.
<<<
My son’s grades were not good enough for medical school and he is busy trying to repair his grades to get into medical school. The private university he graduated from, was a poor fit for him, but was his “dream school”. He was accepted to a number of less “prestigious” universities that offered a much better environment for him and one where he could have done academically much better and be on his way to medical school.
<<<
<<<
One of his college roommates graduated after 4.5+ years with an engineering degree from the same institution with $230K debt (I did not know that this amount of debt for UG was even possible)! His roommate got a job offer for less than $50K to do something outside of his engineering major and it is not clear how he or his parents will ever afford to pay off this debt.
[QUOTE=""]
[/QUOTE]
To borrow that much his parents would have been required to co-sign all that debt. His payments would likely be around $2k per month. If he’s living at home to save on living expenses, which may be why he has the job he does, such a large percentage of his take-home pay goes towards that debt. The remaining dollars probably just pay for his car and personal expenses.
Very sad.
Stories like this make you wonder…did anyone ever “do the math”? I realize that an eng’g major certainly would be capable of “doing the math,” but sometimes even smart people will not “go there” if it means that reality will burst their dream bubble.
Families get caught up in the hype of college. They are told that college is the answer, and they interpret this to mean “at all cost.” It doesn’t help that college really was an affordable thing for the parents of today’s kids, and they have not been paying attention to how much things have changed until the last minute, when it’s too late to do any useful planning. So they take the plunge and make really bad mistakes. Very sad.
"Families get caught up in the hype of college. They are told that college is the answer, and they interpret this to mean “at all cost.” "
In my very practical corner of the world, this really isn’t true. A very common pattern is CC for the first 2 years then UIUC for the last 2. Affordable and you have a well regarded name on your diploma. Don’t you think this Ivy or bust mentality is regional and limited to certain SES classes?
[QUOTE]
my parents combined really cant pay a lot (around 20k), and they said they will help me take out loans to cover the rest and help repay them over time. [\QUOTE]
Ok, well that IS a lot! Do you realize in order to do that they have been saving 400-500.00 a month for at least the past 5-7 years? That is plenty of money for a great state school.
Your dream university is all in your head. You can make your dream come true at any school if you put the time and effort into clubs, leadership, etc. You will have well over $200K in loans after med school. I would not recommend additional undergrad loans at all. You will barely be making $50K a year for your first few years of residency…it would be smart to avoid as much debt as possible.
In my very practical corner of the world, this really isn't true. A very common pattern is CC for the first 2 years then UIUC for the last 2. Affordable and you have a well regarded name on your diploma. Don't you think this Ivy or bust mentality is regional and limited to certain SES classes?
[/QUOTE]
Probably the “Ivy or bust” mentality is regional or SES-related, but we see parents getting so caught up in the idea that their child (even with modest stats) should get to go to the sleep-away school of his choice, and the parents are more than willing to take on $100k+ of Plus Loan debt to make it happen. Some of these people are single parents who aren’t earning the big bucks.
As for your neck of the woods, UIUC is an expensive public, with little/no aid. I can see where many parents, with incomes around $100k living in a high property tax area, with 2-4 kids to put thru college, would need to opt for the 2+2 route. The end result would still be about $70k per child, I would imagine.
One reason why “big merit schools” have been so successful recruiting high stats kids in Illinois is because their kids can get the 4 year college experience for a lower total cost.
I know people in debt up to their eyeballs for Hofstra, Goucher, GW, Quinnipiac. Fine colleges all but none of them have the financial aid policies that Harvard and Yale do- which likely would have made the heavy borrowing unnecessary.
Why do these otherwise rational discussions always devolve into a commentary on how everyone in the Northeast is prestige-%^& ?
I actually wasn’t even thinking in terms of ivies; in my experience, most ivy-worthy applicants have families with a pretty good plan. I was commenting more on the average joe type who is plugging along with life, knowing that college is the ticket to a better life for his/her kids and knowing that it’s expensive, but not taking the time or effort to financially plan for it. And then not getting as involved in the kids’ application process as he/she should. When the acceptances roll in, these parents are caught with their pants down and some will foolishly take desperate measures to fund poor choices.
Does someone really think that Hofstra with big loans is a better decision than SUNY Stoneybrook with small or no loans? But the decision gets made on the fly- in April- with imperfect information- and it takes the shock of seeing the first bill in August (and the flurry of home re-fi or what-not when the parents don’t have the cash on hand to pay that bill) to give a reality check-- “I’m in hock for Hofstra?”
My son’s GF dropped out of a directional state U after 3 semesters and allegedly has $30-$40K in loans. That’s crazy! She didn’t even like the school. Her parent both went there and “made” her go. I ran the EFC on it and told my son no way when I saw how little aid they gave.
<<<
My son’s GF dropped out of a directional state U after 3 semesters and allegedly has $30-$40K in loans. That’s crazy! She didn’t even like the school. Her parent both went there and “made” her go.
<<<
Weird…I wonder how parents can “make” a child go to a school when they aren’t paying for it? And, worse, how can they “force” her to take out loans? Maybe she didnt’ realize that she could just not have taken out the loans.
This may sound nasty, but I hope they were co-signed loans and she doesn’t pay them…forcing the parents to pay them.