<p>I'm interested to see what everyone is doing to pay for college. </p>
<p>We have $100,000 saved for our daughter to attend college. Unfortunately, the school that she fell in love with for it's academics, environment and closeness to home did not give her any merit money. We also do not qualify for any financial aid. I'm extremely worried that she wants to take on $80,000 in debt without even considering graduate school. </p>
<p>Trust me, we've had many conversation with her and at 18, she thinks she knows everything! </p>
<p>Do we force her to attend a school based on economics?</p>
<p>What kind of debt is will your kids have when they graduate college?</p>
<p>How is she going to borrow $80,000? If she gets private loans she will need a co-signer.<br>
My kids have Stafford loans and that’s it. I won’t co-sign on any private loans for them.</p>
<p>Try and find some articles out there of young adults who are struggling to make rent and car payments under the load of heavy debt.
Seriously, if you have $100,000 saved that should buy a pretty decent college education.</p>
<p>IMO - there is nothing wrong with seriously factoring in economics into the decision. I really want to drive a BMW, but alas can only afford a Dodge. It still gets me from point A to point B.</p>
<p>I won’t even let my daughter date anyone with that kind of debt, much less in letting her take out that kind of loan. </p>
<p>I think 20-40,000 is reasonable if you are going into high paying job (engineering, programming, finance), not if you are going to be an artist, journalist,teacher…My daughter will owe money to us (her life really), but will be debt free for all intensive purpose.</p>
<p>My rule of thumb is that student debt should not be higher than a years tuition. Let her take out the Maximum Staffords which total less than 26,000 for the 4 years. Along with your contribution and her doing work study, she is in a great positon, better than most, to get a good education.</p>
<p>I seems that you have discussed this over time and have warned against it. If my participation (co-signing) was required, I’d be hard-pressed to facilitate that level of debt.</p>
<p>Oldfort… I’m sure you meant your comment in jest but it’s really offensive-- there are some fine young men out there with heavy educational loans. Really.</p>
<p>I’m sure there are parents of daughters who hope their D meets and marries a guy with rich parents. I’m praying my son doesn’t fall in love with one of them.</p>
<p>Thousands of kids dutifully pay off their loans every single month. They show up at their jobs every day. They stay late when needed. Their bosses love their work ethic and their diligence. They make a budget and stick with it- they take the bus or the subway since they can’t afford a car (insurance, parking, payments, etc) and they don’t complain about it. They make due with no cable and somehow they survive. I married a guy like that and I have sons and nephews like that and it seems to me that this is better preparation for being a good husband than some kids I know who spend every extra nickel on ski vacations and flat screen TV’s and don’t have to worry about making loan payments every month.</p>
<p>I would not cosign for $80,000 in loans. Much too much debt to graduate with. I don’t think a teenager really has a real understanding of what such a debt will mean to her future and the limitations it may put on her choices. Have your daughter run the numbers through a loan calculator such as the one here</p>
<p>So that she can see in black and white what her loan repayments with such a debt would be. make sure she understands that if the interest is not being paid on the loan while she is in school then it is being added to the debt and she is paying interest on the interest. The debt will have grown considerably by the time she graduates. For instance if she is borrowing $20k a year for 4 years at 7% then by the time she graduates (undergrad, not grad), her debt will have grown to @ $100,000. That would mean payments of $1100+ a month every month for 10 years.</p>
<p>Yes, the “borrow or not to borrow?” conundrum. My D is deciding between our well-respected public state university (about $7K/year after a merit scholarship) and a highly-regarded private (about $40K/year after a merit scholarship). If she chooses the big-ticket, it is likely she will come out with the $25K or so that taking just Staffords will bring. Our son is at a Public Ivy but OOS so his costs have been fairly high - he will graduate with about $23K in loans to repay. </p>
<p>We are lucky that we have the income to be able to just swing these great schools for our kids with minimal loans. I like the rule of thumb of limiting loans to one year’s tuition (is it just tuition or is it COA?). Another would be to limit it to no more than what the average graduate in your field earns in the first job. If it is more than that, then it is not really doable.</p>
<p>No, I meant what I said. I don’t need my daughters to marry rich, just debt free(or debt they could afford to pay off). I didn’t work so hard to make sure my daughters are debt free when they graduate so they would be free to do what they want, so they could help someone else to pay off their debt.</p>
<p>Is her college close enough to home to live at home? That would save oodles of $$ and could facilitate her getting through college without taking on more than $25K of debt.</p>
<p>Most parents/students pay for college through a combination of pots of money: savings, current cash flow, parent loans, student loans, student campus jobs, student summer jobs, a parent going back to work, etc. </p>
<p>You have a lot of savings, for which you are to be commended! I would sit down and list realistically how much money can be added to the pot a year through these other sources. It’s not just about savings and student loans. </p>
<p>We’ve been lucky and have been able to send one kid through college without any parent and student loans. #2 is off to college in the fall and we hope to be able to do the same with her also. </p>
<p>The oldest really appreciates the freedom of being debt free. Debt free means being able to take a low paying job because you want to and not take the high paying job that you’d hate to do. Debt free means not having to move back in with your parents for years. Debt free means being able to make graduate school plans without worrying about having to work first to pay down the undergrad debt. </p>
<p>PS: I’m sure oldfort was trying to be funny, but I can see where she is coming from. I have to say that I would be VERY worried if my D wanted to get married to that boy in Seattle who had $150K college debt and a $40K a year job. But kids will love who they will love…</p>
<p>Edit: OOPS! Oldfort wasn’t trying to be funny…</p>
<p>Go to a school you could afford. I would have loved to have a Tiffany engagement ring when I got married, instead I got a little tiny ring from Macy’s (couldn’t even see the stone), but I did get married. You don’t to have pick a school that costs 40,000+. This has nothing to do with someone is rich or not, it has to do with being responsible.</p>
<p>Those young men who take large loan to just attend a dream college are not responsible. I’m of the opinion that if you are smart you will be successful where ever you go for your college degree. But if you can afford then go to the best possible college.</p>
<p>Taking unrealistic loans to attend a college is not a smart move on anyone part.</p>
<p>I’ll second oldfort for marrying debt free and that will be the first step in making USA debt free.</p>
<p>I think the biggest thing is you have to specify what is “large” when it comes to debt? It is likely that I will end up with about $35-40k in student loans after undgergrad. I go to a small(er) state school OOS. With the merit aid I had my freshman year, I will likely end up with ~ same price tag as if I were to go to a similar school in-state. Sure, 35-40k is a lot, but without parents forking out the money, I gotta do what I gotta do.</p>
<p>That said, $80k is nuts especially if you already have $100k saved for college!</p>
<p>I was always taught not to spend money I don’t have. This mentality has kept me out of debt and stress of managing bills. A realistic loan for an 18 year old is less then $30,000, and even then, she’ll be paying it off for the next five to ten years. Imagine $80,000; does she really want to be paying that off for the next twenty years? All things considered, she wouldn’t even qualify for a loan that large unless she had a co-signer.</p>
<p>Since you’re flipping the bill, you should have the option of choosing her limitations as far as college selections go. There is no use putting yourself (or her) in debt simply because she wants to attend her “dream college.” She’ll get an equally comparable education at a less expensive school.</p>
<p>Teenagers won’t fully understand the cost of money until they are making their own income :)</p>
<p>Sorry, my son could have attended any of our local colleges and graduated debt free and gotten a nice entry level job in tech support at a local company making $9 bucks/hour. And been one of the great debt- free husband-prospects you folks are looking for.</p>
<p>I don’t think a single one of his friends from MIT graduated debt -free; every one of them is employed (some with start-ups making modest salaries but with stock and options; some with established companies earning good salaries; many at companies that are happy to pay for grad school among other lucrative benefits.) </p>
<p>I read the moaning here on CC about how to pay for grad school if you’ve wiped out your undergrad college fund and am happy that there are still ways to get someone else to pay for grad or professional school. (I paid my own way; my MBA paid for itself in two years based on my pre and post MBA salary, and although it wasn’t fun paying off the loans I managed to have kids and buy a house while I was still making payments.) A friend of my son’s is being sponsored by his company at a top 10 law school (to do patent law- he studied engineering undergrad which is apparently a very potent combination).</p>
<p>It is short-sighted to evaluate someone on the basis of their educational debt. In real life I find that the people who are the most risk averse when it comes to college and grad school loans are the ones who don’t read the fine print when financing a big screen TV or a new car. They are happy to take out a loan (well, they put in on a card which doesn’t FEEL like a loan) for a depreciating asset, but want their kids at the cheapest school possible regardless of the kid’s potential.</p>