How much debt is too much debt? 50k VS 80k

Paying for College
1

I currently attend a top 50 school in the U.S. (Let’s say UMiami for privacy purposes- lower end of the top 50 ranking).

As of right now I pay approx. 25k/ year for a private school and already took out 5.5k in loans for first year (sub/unsub federal loans). For the next three years, my parents will not be able to pay anymore tuition which means I would have to take out loans. After four years, no including interest, I would be approx. 80k in debt if I stay here.

However, I applied to transfer to my in-state public college this year (Binghamton University). I got accepted into College of Community and Public Affairs (which is not the major I want and I heard it is very difficult to transfer into business school-my intended major). It would be approx. 15k/year which totals to approx. 50k after four years (not including interest).

Is going to a better ranked private school worth the additional 30k more since I have to take out loans either way? How much of a difference is 30k in debt? Is it worth transferring for financial reasons since I might not be able to major in what I intend to?

2

First question…who is going to cosigner or take out these bigger loans. You, the student, won’t be able to do so alone. Will your parents be qualified cosigners and will they cosigner?

$80,000 in loans will be over $900 a month in repayments for ten years.

$50,000 in loans will,be $600 a so.

You didn’t include interest or cost increases in either if these costs…and really you should.

Is there NO SUNY school to which you could commute?

3

You can’t borrow this much money. What bank is going to lend you 15K per year?

Your parents CAN borrow this much. But will they and can they?

4

Yes, my parents will cosign. I can borrow approx. 6.5k from federal loans (included in finaid package) which makes it down to ~8.5k for loans. I have a rather low efc (~$500).

Unfortunately, no there are no SUNY schools I can commute to.

@thumper1 @blossom

5

$50k is obviously better than $80k, but either amount is too much. If you have that low efc for FAFSA only schools, you should be getting Pell grants, SEOG, and help from NY.

6

@twoinanddone

After all Pell, SEOG, Tap, and Excelsior Scholarship:
~5.5 k for first year (loan taken out from current University)
~10k for next year (COA after all grants)
~15k for junior year (I plan to study abroad so I am taking into account increase in costs- visa/travel expenses, etc.)
~15k for senior year (accounting for less aid because my sister will have graduated from college which causes an increase in EFC and less aid)

Totals to approx 45K-50K after four years even if I attend a SUNY

7

Can you commute to a CUNY? Baruch might be a great option for you.

8

@nycdancer101

  1. I know you want to study abroad...but you may not have the financial resources to do so. If it's going to be $5000 more to do the study abroad...I would,say...that needs to be reconsidered as an option.
  2. Your Pell will be reduced once your sister graduates...but what other aid will be reduced?
  3. @sybbie719 is the new free tuition program available to this student as a transfer to Bing? If so, wouldn't her full tuition be covered...and her costs would be room, board and fees? What would that be?
9

You need to really think about this. If you have an EFC of 500 that implies that your parents have a lower income and little assets except maybe for the primary home. That probably means that they will have a problem qualifying for the private loans you need. The qualifying requirements for the Parent Plus Loan are considerably looser so they might be an option however the interest rates are not that great. You also need to factor in the interest cost. These loans will grow significantly while you are in school.

Also consider the burden that this can place on your parents. What happens if you can not find a job immediately after graduating. Can your parent repay these loans until you can? The loaner will aggressively come after your parents for repayment.

You mentioned that you were not accepted into the program of your choice. Are you banking on being accepted after the fact? Based on what you wrote, it does not sound very realistic? If you are able to get into the program will you need more semesters to finish the degree? Will you be able to get the course you need to graduate on time?

Have you consider CC for a year and then transfer into a state school that will accept you into the program of choice? Or a gap year.

Back to your original question. 80k+ loans or 50K+ and hoping that you can get into the business school. Personally both sound like poor options. I would seriously look for a different option or a different major that you can be accepted into. I really don’t like the idea of paying 50K+ for a degree you don’t want.

10

Do you live upstate or do you live in NYC?

ETA: You are from NYC. If you cannot afford Bing, you can probably still transfer into Baruch if you will have 24 credits and a 3.0 gpa. Going away to college is a privilege and not a right (especially if it is going to be a financial strain on your parents).

Call me a snob (flame on), but outside or Wharton, NYU Stern, etc, I really am not a fan of a "business school or business degree. But I will admit back in the day, I learned more at Baruch than I did at NYU

No matter what you do after graduation, you will be working for a business and going into business. Unless you are majoring in accounting/computer/systems, etc, when you look at majoring in business, what does that mean to you? (I say this as a person who has a bachelors in business, and newer used it a day in my life having worked 25 years in corporate). There are courses that I took; economics, finance, statistics, math courses that helped me, but I never used the “degree” a day in my life.

are you still at U Miami? when you transfer to NY, you should only have 3 more years of college to complete.

What is your current financial aid package at bing?

How much did you get in TAP, PELL and SEOG? With a $500 EFC you should definitely receive enough to cover your tuition, so you probably will not be eligible for the Excelsior scholarship (no double dipping). It is a last payer after tap and pell and can only be used for tuition.

Any remaining monies from your PELL + 5.5k will go toward your room and board.

Perhaps you should put study abroad on the shelf; travel when you get a job and go on vacation - overseas will still be there. You cannot afford this.

11

No, this is not making sense. Going abroad with no money, going to college in a department for a degree you don’t want and ending up with a high debt load. Agree with @sybbie, finance, accounting, computer systems – specialize at the undergrad level for business.

12

Op, got into the school that she applied to

.If you did not want that school and program, why did you apply? Were you using it as a back door to get into Bing? You are there now. Will they allow you to be an econ major in the school of arts and sciences? (or double major)

She did not apply to the business school at Bing? I agree with @Dustyfeathers, if you want business, toss an application at Baruch.

She should look into a double major or a minor to pick up some transferable skills

13

If your tuition is covered at a CUNY, SUNY for the next few years with TAP, Pell/ or Excelsior (if parent income stays under Excelsior threshhold all years, and you qualify with GPA and 30 credits per year, even if brother graduates), can you pay for an off campus apt with a roommate with your student loan and work earnings? Or commute to Baruch?

14 
    What was the plan to pay for the current school? Is this a new realization about affordability or some kind of catastrophe?
15

Your parents need to understand the difference between taking out a parent plus loan (their loan) and co-signing (your loan ).

It’s still a lot of loans. You have no earnings in here. Do you work? Can you plan on a co-op to earn money before going to study abroad? My daughter is returnin tomorrow and I’ll tell you, she had fun but would have had more fun had she had more money. She now wants to go visit her boyfriend but if she does that she won’t have enough money for next year. If you want to do things that cost money like go to college or do study abroad, you have to work for it. Before you go.

16

^ just for information in case readers of this thread are thinking about it: Study abroad isn’t about having fun (although having fun is nice, you can also find it terribly hard and it’s still ‘good’). It’s about adaptability and especially, from an employer’s point if view, the ability to be placed in a totally different environment and ‘making it’. It’s like the ultimate ‘perform under pressure’ environment, even if it doesn’t look like it. You need great communication skills, adaptability, quick thinking, and, added bonus, you generally increase your linguistic&intercultural skills. For a business major it can be very valuable but it’s mandatory for an international business major as well as any language major.
The issue here is affordability.

Op:
How did you choose UM? Was it affordable?
Did a catastrophe happen and did you bring your change in circumstances to UM?
Where else did you apply/get in?

I agree you need to send an application to Baruch if you haven’t done so. SUNY Geneseo has an AACSB accredited business school and it’s slightly less expensive than Bing.
Do you have a job? Can you find one?
Look into the Excelsior scholarship and see whether its free tuition would make a SUNY affordable.

17

@MYOS1634

OP states in post #3

The Excelsior scholarship is a last payer and will pay out after TAP an PELL has been exhausted.

With a $500 EFC she will receive $5370 in PELL

www2.cuny.edu/wp-content/uploads/sites/4/…/financial-aid/…/PellChart20172018.pdf

She will also receive some semblance of TAP (probably enough to cover the $6470 tuition at Bing when combined with her Pell. Therefore, she will not receive an Excelsior scholarship.

If her family makes less than $100k and receives no TAP or Pell(or she does not receive enough pell to cover her tuition), she would receive the Excelsior scholarship. Family would still have to pay fees, room and board.

18

So…tuition at the SUNY schools,would,be covered. Remaining would,be room, board, fees for billable costs from the college. She would get a $6500 Direct Loan also. Can parents include NOTHING?

How was UM being paid for? Is there anyway parents can help with room and board costs?

19

She can take the federal loan on top of the ‘last dollar’/TAP/Pell. If she works and parents can give $500 would that be enough for room/board/books?

20

room and board is ~13k

if she borrows 6.5k, she will have to make up the balance with any leftover Pell from her tuition, work, monies from her parents (in addition to them paying their EFC).