How much debt is too much at UR?

Colleges and Universities A-Z University of Rochester
1

<p>I recently got accepted and received my financial aid report, which was then updated just yesterday. Basically, I'm not sure what to do. Rochester is my best offer right now although my appeal to Case Western is pending. </p>

<p>The updated tuition is $59,384 with 2,840 included in that figure for books and misc. expenses. </p>

<p>Overall, I have received $53800 in financial aid, 9,500 of this is in loans (2000 unsubsidized, the rest are Perkins and Subsidized loans).</p>

<p>This leaves $5,584 that I must pay out of pocket. I'm not sure I can manage ALL of that, but I can probably manage within 1-2k of it with my summer job. Due to my family's financial situation, my parents will be contributing nothing. </p>

<p>Basically, the loans would leave me with close to 40,000 in debt. This seems like quite a lot. There's also that small amount that I'm not sure I would be able to cover.</p>

<p>There's also the idea that I could get another job aside from work study on campus if that's possible. That would probably help me greatly in reducing the amount of loans I would have to take. I plan on going into Electrical Engineering, so take that into consideration.</p>

<p>Any advice on how to treat this financial aid package would be great. Perhaps the extra added in for books/misc. expenses has a lot of fluff room? Any insight into this matter would be great. For now, Rochester is where I plan to go, but this updated financial aid has me worried.</p>

2

<p>A few different schools of thought. One being no more total debt than the expected first year salary. I believe electrical engineering starting salary could be in the 50 - 65k/yr range.</p>

<p>You can also buy used books and given the location and nature of the school, I wonder if you even really need much miscellaneous $ at all. I think that 59k is a little high.</p>

<p>If you choose engineering and do internships over the summer, are those paying jobs? I’m really not certain, but something to ask about.</p>

<p>Are you applying to all kinds of local scholarships right now? Every $500 amount will help. There are tons of local scholarships, from your town’s optimist club, local government officials, etc</p>

3

<p>You should call and talk to your aid counselor. </p>

<p>I’d say the question is one of comparison. Are other schools cheaper? I know you have to consider both loans and out of pocket expenses. If another school is cheaper, is it a good school. By good, I mean good enough that the difference in cost is worth it to you. You can take a sheet of paper, write out your choices and start to put your own values on the differences. I suggest you write down columns for short and long term. That will help you focus. </p>

<p>UR is offering you a very good aid package.</p>

4

<p>There are places you can cut corners on the personal expenses; however, I think $40K plus in debt is too much–even if you’re an engineering major.</p>

<p>Why?</p>

<p>1) the fall out rate for engineering majors is quite high (around 40-50% of freshman engineers don’t graduate in engineering, but with a different major. Pre meds are even higher: 60-75%.)</p>

<p>2) eyeamom’ estimate for starting salaries is a bit high. (More typical would be $35,000-$55,000. See: [Engineering</a> Salary Calculator - Entry Level Engineering Salaries](<a href=“http://www.engineersalary.com/entry.asp]Engineering”>http://www.engineersalary.com/entry.asp)) Starting salaries are highly dependent on geographic location and job title. Higher salaries tend to correlate with high COL areas where any benefit you’ll get from the the increased starting salary gets absorbed by the COL</p>

<p>3) engineers may have higher starting salaries than many degrees, but their pay does not increase as rapidly as it does in many other careers. (Typically 3-5%/year)</p>

<p>4) the unemployment rate for newly graduated engineers is around 8-9% nationally</p>

<p>5) about 15-20% of all newly graduated engineers go onto grad school (which is usually funded) but with your debt-load you may not be able to do so because you’ll need to work to service your debt</p>

<p>~~~~</p>

<p>w/r/t working a second on campus job-- you won’t have time. Engineering is a time-intensive major. You won’t just have lectures, you’ll have recitations, labs and plenty of problem sets and computer programs to complete. (Programming is a huge time-suck.)
Also if you look at the suggest sequence of classes for EECE majors, you’ll see you’ll need to overload courses just to graduate in 4 years.</p>

<p>~~~~~</p>

<p>w/r/t to the misc expenses estimate. I do think that’s a bit high; however, depending on here you live, UR’s estimated travel allowance ($500/year) is ridiculously low. So it may be a wash.</p>

<p>~~~~~</p>

<p>You need to ask FA if you are guaranteed to get a Perkins loan every year. (Perkins loans are a federal program, but the amount allotted to a college varies–sometimes wildly–from year to year.) Each college decides how to allot its Perkins. You may or may not get another Perkins next year. You need to ask FA if you don’t get a Perkins, how they will replace the funding. Grants? Private loan?</p>

<p>Also understand your expected personal [student] contribution will increase each year you’re a student. </p>

<p>~~~~~</p>

<p>Aside from these 2 private colleges you’ve mentioned, are there any other colleges possibilities? Does your state have a low income grant program? (Like TAP in NY) Do you qualify for it?</p>

5

<p>I somewhat disagree, WOWM. Not with the analysis, but because it’s all relative. Is $40k too much versus $0? That’s more likely “yes” than $40k versus $30k or even $20k - depending on the schools being compared. Is $40k too much versus not going to school full time? Is it too much versus going to a community college? Your career is different if you take those options. </p>

<p>Unfortunately, because of the financial pressures put on students by our educational system, the expectation now is that kids or their families will take on debt. I have strong feelings about this but that’s the way it is. </p>

<p>In terms of debt load, the line I draw for “you’ve got to be kidding” is higher. I’ve been asked about $100k+ debt loads. No way. My advice is always: don’t do it. $80k? Don’t do it. $40k is below that line for me but it’s above the “don’t worry about it” line too.</p>

6

<p>There is reasonable debt load and then there’s too much. (My kids have debt, but are at or below the Stafford limits of $27K.)</p>

<p>The issue for this student is will he be able to afford to attend UR NEXT year? Perkins are not guaranteed from year to year. He has a gap he cannot fund this year and the expectation is that his contributions will only go up the longer he is in school. While it’s true that some engineering majors do quite well in terms of internships and side jobs while in school, not all of them do…</p>

<p>D2’s roomie sophomore year had to leave UR in part because she and her family could not afford the increasing amount of loans required to attend.</p>

7

<p>Thanks for the input guys. I’m stressing out about this really badly because Rochester is the best deal that I have. About private scholarships, I have been told that in gaining those, I would lose grant money which is most of my aid.</p>

<p>It seems like I need to call UR and talk with them about it, but if you guys have any more thoughts, I’d love to hear them. I’m going crazy thinking about this…</p>

8

<p>Good luck, Jeff. I hope you can get something worked out.</p>

<p>FWIW a $40,000 education loan would require ~$480/month repayment for 10 years. You might play around with some imaginary budgets to see if that’s an amount you feel you could manage.</p>

<p>(When looking at salaries/budgets, don’t forget to deduct federal taxes, state & city taxes and social security taxes first from your gross. For some reason students always forget to do that.)</p>

9

<p>Jeff, it isn’t the worst situation to be in. Lots of kids come out with more debt. You’re right about scholarships offsetting aid in the usual course; aid is figured out by need and those reduce need. You should bring this up with your counselor. Your main goal, as I look at the situation, is bridging the gap, not reduce your loan amounts. There are expectations about what a family pays in the system. Go over this with your counselor.</p>

<p>As a general rule, it isn’t uncommon for kids to miss a term of school. I’m not talking about UR at all but in general. Finances are what they are. I remember my dad telling me stories of working in a steel mill to afford school. When he sent his deposit to the first medical school which admitted him, he had to drive there to ask for it back because he had no money to pay the deposit for where he really wanted to go. He couldn’t come up with $50. This problem is why kids at state schools tend to take longer to graduate. That’s the way of the world.</p>

10

<p>You also have to remember that at U of R and at all schools, costs go up every year. Tuition and fees increase and the housing cost for upperclassmen dorms are greater than freshman dorms. You can save some money by living off-campus but not a huge amount. Not sure if this package included work-study but while there is some opportunity for jobs on/off campus for non-work study students, there is a not a huge amount. There are opportunities for off campus jobs in restaurants/stores on East Ave but hard to rely on public transportation for those kinds of jobs. Once they build the new college town area closer to campus there will be more opportunities off-campus in the immediate area but not happening in the near future.</p>

11

<p>Luckily, work study is included in my financial aid package. Also, I come from a <50k/year family and after speaking with a UR Financial Aid representative, I was reassured, albeit not in completely solid terms, that since my aid is need-based, it will sort of flow with fluctuating tuition costs. </p>

<p>Still a lot of thinking to do, but I’m feeling a lot better after talking to UR Financial Aid and my family about it. Luckily, I have a steady job and I can definitely take advantage of that.</p>

12

<p>They will adjust your aid year to year.</p>

13

<p>I was a mechanical engineering major and graduated from UR two years ago with about $25,000 in federal loan debt. I went directly to grad school and took out an additional $5,000, bringing my total debt to $30,000. I was recently offered a job in NYC with a $57,000 salary. Even with NYC’s high cost of living I will be able to afford my $350 a month loan payment and all of my other bills with enough room to enjoy myself while putting money into my savings account. From my experience, I would say that $40,000 in debt is doable, but you may not be able to do everything you want to do when you first start out. Also, I wouldn’t recommend taking on that much debt to people pursuing majors with starting salaries that are lower than that of an engineer. As other posters have mentioned, it is a good rule of thumb to graduate with less debt than what your expected starting salary will be. For an electrical engineer, $40,000 would be a relatively safe bet, but I would be weary of going any higher than that.</p>

<p>Be careful with work study. The financial aid office expects that your entire paycheck will go towards your cost of attendance (e.g. books, tuition, room and board). If you end up spending some of the money you earn on something that isn’t included in the cost of attendance you may have to pay out of pocket or request additional loans to cover your cost of attendance. That being said, the cost of attendance is pretty generous, so you may find that you have extra money at the end of the semester. Also, depending on how many hours you work, you may or may not be able to earn as much work study wages as the financial aid office anticipated. Again, this may put you in a situation where you will have to use additional loans to pay for things.</p>

<p>Thankfully, the outside scholarship policy has changed and they now reduce your work study and loans before they adjust your institutional need-based aid. Still, you need to be careful with outside awards because they will calculate your sophomore year aid package with the assumption that all of the outside awards you received your freshman year will be renewed. In my case I had several “one and done” scholarships that created a financial aid gap my sophomore year since UR thought I was receiving more outside aid than I actually was. I was able to get my institutional aid increased after I told them the situation, but it wasn’t enough to cover the gap completely. Be sure to notify the financial aid office if your outside awards will not be renewed before you submit your financial aid application.</p>

<p>Although I did have some issues with financial aid at UR, I believe it was a good investment. Furthermore, I am fortunate enough to have less debt than a lot of my friends and most of them went to much cheaper state schools. That being said, if you are offered a significantly better financial aid package at another school you should seriously consider if the burden of debt that you will have from UR will be worth it.</p>

14

<p>Thanks lilspike, there’s some good information in that post. </p>

<p>It sounds like UR will be doable and unless Case decides to totally change their aid offer, it’s going to be my best bet. A bit scary going into college looking at debt like this, but I do have good news.</p>

<p>I just got a $.50 raise at work today. :slight_smile: That is a huge relief as I’ll be putting in close to 30 hours/week this summer. That adds up rather quickly.</p>

<p>Being a chronic worrier, I really need to stop analyzing the numbers. From what I’ve read and been told from UR staff and family members, the COA that’s provided is on the high end and it’s likely that I won’t need as many loans as it appears. I’m going to Rochester on Monday, so perhaps I can clear up some of my questions then.</p>