Does Anyone Really Graduate with 80k in debt

Paying for College
1

<p>Interested in finding out how loan debt grows with the following walk thru scenarios. </p>

<p>I think this would clear up a lot of the "How does anyone leave college with $80k in loans?" questions. Frankly, I'm not sure how the origination fees and interest accrues either so haven't filled in.</p>

<p>Q. If parents do not take out any additional loans but students take out the maximum available to them, how much debt will they have when they leave college?</p>

<h1>SCENARIO 1</h1>

<p>** Student is offered and accepts subsidized loans all 4 yrs (3.4% interest rate)
-- YR 1: $3,500 in loans + $x in fees + $0 in interest through graduation
-- YR 2: $4,500 in loans + $x in fees + $0 in interest through graduation
-- YR 3: $5,500 in loans + $x in fees + $0 in interest through graduation
-- YR 4: $5,500 in loans + $x in fees + $0 in interest through graduation
-- YR 5: (Can students take out loans if a fifth year is needed?)
-- Total owed at graduation:
-- 1st monthly loan payment after graduation:</p>

<p>** Student is offered and accepts unsubsidized loans all 4 yrs (use rate of 6.8%; assume not paid during college)
-- YR 1: $2,000 in loans + $x in fees + $y in interest through graduation
-- YR 2: $2,000 in loans + $x in fees + $y in interest through graduation
-- YR 3: $2,000 in loans + $x in fees + $y in interest through graduation
-- YR 4: $2,000 in loans + $x in fees + $y in interest through graduation
-- YR 5: (Can students take out loans if a fifth year is needed?)
-- Total owed at graduation:
-- 1st monthly loan payment after graduation:</p>

<p>Combined Loans Owed at Graduation:
Combined Monthly Payment After Graduation:</p>

<h1>SCENARIO 2</h1>

<p>Student takes the subsidized and unsubsidized loans above, parents are denied a Parent-Plus loan and student needs/wants to take on more loans.</p>

<p>** Student is offered and accepts subsidized loans all 4 yrs (3.4% interest rate)
-- YR 1: $3,500 in loans + $x in fees + $0 in interest through graduation
-- YR 2: $4,500 in loans + $x in fees + $0 in interest through graduation
-- YR 3: $5,500 in loans + $x in fees + $0 in interest through graduation
-- YR 4: $5,500 in loans + $x in fees + $0 in interest through graduation
-- YR 5: (Can students take out loans if a fifth year is needed?)
-- Total owed at graduation:
-- 1st monthly loan payment after graduation:</p>

<p>** Student is offered and accepts unsubsidized loans all 4 yrs (use rate of 6.8%; assume not paid during college)
-- YR 1: $4,000 in loans + $x in fees + $y in interest through graduation
-- YR 2: $4,000 in loans + $x in fees + $y in interest through graduation
-- YR 3: $5,000 in loans + $x in fees + $y in interest through graduation
-- YR 4: $5,000 in loans + $x in fees + $y in interest through graduation
-- YR 5: (Can students take out loans if a fifth year is needed?)
-- Total owed at graduation:
-- 1st monthly loan payment after graduation:</p>

<p>Combined Loans Owed at Graduation:
Combined Monthly Payment After Graduation:</p>

<h1>SCENARIO 3</h1>

<p>** Student is offered the same amount of subsidized loans in Scenario 1
-- Total owed at graduation:
-- 1st monthly loan payment after graduation:</p>

<p>** Student is offered the same amount of unsubsidized loans in Scenario 1
-- Total owed at graduation:
-- 1st monthly loan payment after graduation:</p>

<p>** Student is offered the maximum amount in a Perkins Loan each year
-- YR 1: $4,000 in loans + $x in fees + $y in interest through graduation
-- YR 2: $4,000 in loans + $x in fees + $y in interest through graduation
-- YR 3: $5,000 in loans + $x in fees + $y in interest through graduation
-- YR 4: $5,000 in loans + $x in fees + $y in interest through graduation
-- YR 5: (Can students take out loans if a fifth year is needed?)
-- Total owed at graduation:
-- 1st monthly loan payment after graduation:</p>

<p>Combined Loans Owed at Graduation:
Total in Monthly Payments After Graduation:</p>

2

<p>To answer your title question, read my first few posts on this thread: <a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1475260-perkins-loans.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1475260-perkins-loans.html&lt;/a&gt; So, yes, to the question “Does anyone really graduate with $80K in debt”. </p>

<p>A student can pretty much automatically get the $5500 in Staffords freshman year, the limit raised to $6500 for the next to years and $7500 for senior year. He can also get a $4K additional amount if the COA justifies it and a parent is turned down for PLUS. That supplement and a part of the Stafford is unsubsidized and starts accruing interest at about 7% as soon as the funds are released. Then, a school can give up to $5500 in Perkins loans each year. So, yes, the $80K point can be met and that doesn’t include loans a school might privately include to the student and outside cosigned loans and private agreements a student might make on his own with others.</p>

3

<p>Thanks, cpt. I had intended to suggest this as an entry in the FAQ. I thought it would really help to have loan scenario outlined with full costs (including interests and fees) calculated at graduation. </p>

<p>As its own “question,” I think it’s pretty confusing. Sorry!</p>