For a finance Major and aspiring executive, are large, private loan worth it?

Paying for College
1

Hello!

I am a high school senior, who of course, is struggling with deciding on where to attend college. I was admittedly a smidge cocky and only applied to six universities with expectations of being admitted and receiving substantial scholarships. I was wrong. I have been admitted to 5 of the 6 schools so far, but with ZERO dollars except from one school. The schools I applied to were U of Michigan, U of North Carolina-Chapel Hill, Rutgers University (my state school), USC (awaiting decision), U Miami, and finally Morgan State University. The University of Miami has offered me a substantial scholarship which I must interview for. I cannot stress enough that I got zero scholarship money from anywhere else, so basically anywhere I go, I will have to take out some sort of loan. In addition to the university scholarships, I am applying for numerous private scholarships, national and local. On top of that, my EFC confuses colleges and makes them think my family can pay for their expensive schools out of pocket.

My question is, is taking out large loans to go to a top business school like Ross (U Mich) or Kenan-Flagler (UNC) worth it or should I play it safe and go to Rutgers, U Miami (if they award me the scholarship), or even Morgan State?

I have been a huge proponent of not taking out ANY loans for college, but here I find myself in a precarious situation. I plan on going into the financial field and eventually become a C-suite executive. I have done my research of what the starting salaries of finance major graduates of these top schools, where they work, and even if undergrad matters for someone on my track and looked at Fortune 500 CEO’s undergraduate universities. The loans I would be taking out would be huge. Doing some rough math, the principal would come out to be somewhere in the $160k+ range for all four years. My thought process is that I will land a good job and be able to pay off those loans because my career trajectory is on path to make a great salary.

So simply from the financial aspect of college, is it worth taking out a large private loan (think $160k+) to attend a phenomenal business school that will have fantastic internships and connections that would further my career greatly, or is it better to go to a less prestigious business school and graduate with less debt?

I know I seem like the dumb, happy-go-lucky, la-la-land teenager that schools and banks love to prey and put in financial chokeholds for their entire lives, but I really believe in who I will become and my talents, abilities, and intellect. I hope I explained my predicament with enough detail and I appreciate any type of response I get on this.

2

Why does your EFC “confuse” colleges?

3

No.

Unless you have a crystal ball that with 100% certainty can predict your fabulous C-suite life that comes with a salary capable of paying back your huge student loans starting as soon as you are no longer a student.

The harsh ending: if you’re not smart enough to see how stupid this would be, you’re probably not smart enough to eventually end up in the C-suite.

4

Please take a course in personal finance as soon as possible.

Some of your colleges meet full need for all…so clearly, your family is not low income. It sounds like you chose a bunch of expensive OOS publics and private schools.

Can you afford Rutgers? Can your family pay the cost for you to attend there? If so…this your winner.

These other schools will cost almost double for you to attend. Who is going to co sign those loans?

Option two…take a gap year and apply to a different set of colleges where merit aid is likely forthcoming…since it sounds like your family does not qualify for need based aid.

And what is confusing bout your EFC? USC, UNC, Michigan, Miami all use the Profile…so that is where your need based institutional aid determination info would come from.

5

Nope. What we usually tell kids who want big salary fin jobs is to show some financial savvy now. Don’t assume.

If you’re in NJ, access to NYC internships, etc, is not so difficult that you have to hang your hat on some named college and go into hock for it. That assumes you have the qualities, in the first place. And that nothing happens to jeopardize the fin industry hiring. And that you actually get that first job, don’t have some difficulties of your own in the next 4 years-- health, classes you can’t master, family issues, etc. Most new hires are not making the big bucks, not necessarily on a high trajectory.

On top of that, where will you get these loans and how? After the first year, you’d have a credit history of being 40k in debt. Unemployed. You’d need a co-signer, how do your parents feel about that risk?

I suspect the EFC issue is the parents earn too much but don’t have the funds for full pay. But the colleges don’t care about discretionary spending choices.

Gap year sounds good. Maybe work in NYC or a fin firm near home?

6

No it is not worth it…at all. And it’s not you who would be taking out these crazy loans…it’s your parents.

Choose one of your affordable options, and good luck with the Miami interview. FYI Rutgers is near NYC and you will have access to internships.

I am also wondering what is confusing about your EFC?

7

Unless you do the prudent thing and find a school that’s actually affordable for your family. What makes you think any financial organization is going to put their company in the hands of someone who would take on such enormous debt?

How much can your parents pay per year without borrowing?