How much debt is too much?

I’m pretty much set on going to Boston University in the fall. They gave me a very gracious FA package in the form of a grant for 38,500 a year leaving me around 23,000-24,000 to pay. My efc is 23,000 so they fully met my “need” even though I don’t believe our efc truly reflects how much we can pay. My parents have told me they will probably be able to pay half (and I’m so thankful for that) so I would take out the other half in loans and after four years this would leave me with 46,500 in loans. Is that a normal amount of loans or too much?

You can only borrow a limited amount of Direct Stafford Loans ($5,500 freshman year, $6,500 sophomore year, and $7,500 for both junior/senior years).

If you need around $46k in loans altogether, the Direct loan program will only cover $27K. Where will you get the additional $20k in loans? Are your parents willing to co-sign a private loan for you?

@kgos16‌ I’m so new to this I didn’t even know there was a limit on the amount of loans you can take out. I really don’t want my parents to be apart of any of my loans, So there’s no way I can take out 11k in loans each year?

The only way you could do that is if you qualified for a private loan as the federal loans do have limits, which likely isn’t going to happen without a co-signer.

Private lenders aren’t going to lend to someone who has no credit record, no steady income etc. You will need someone to cosign and your parents would have to qualify to cosign all 4 years. Does your total loan amount include the interest that will accrue while you are in school and factor in that costs go up each year and aid may not.

@kgos16‌ I just went back to look at my financial aid award from boston and with the loans they suggested I take out we would actually be left with 15,000 to pay. My dad thinks we will be able to do that. Thank you! I had no idea we wouldn’t be able to take out more than the loans they put into my financial aid award.

No it doesn’t I’m going to be paying back loans for a while unfortunately @annoyingdad‌

BU alum here. Do you still think you’ll have about 46K in loans, or was it less than you thought and your parents can cover it? Either way, a) 46K isn’t terrible; it’s doable though not overly pleasant (in terms of monthly repayment amount). I had 43K in loan debt post BU and my loan repayment was between $400-$450 every month until my mom helped me pay down my private loan. b) there are ways to deflect/bring down your yearly costs once you’re actually at BU. I was an RA for 1.5 years and wish I’d done it much sooner–that saves you 10-14K a year.

Either way, that’s my pro-tip: become an RA as soon as you can (sophomore year) as that will save you room & board for the year. You can also be an RA when you study abroad to save there, too.

I’d be wary about that grant too. That will likely decrease in subsequent years. Do you have siblings in college?

As a gross rule of thumb, I’ve heard your debt should not exceed the salary you expect to make in the first year after your graduation.

Whether it’s too much depends on how much money you expect to make. You haven’t really addressed that, but you probably should.

You can calculate your true cost and investigate how much your chosen profession tends to make starting out. Be honest with yourself and choose the lower figure when budgeting income. Always better to be happily surprised than filing bankruptcy.

Now compare your true cost at a less expensive college. How long will it take you to pay off your loans? How does it affect your standard of living?

It is possible that in your chosen field, BU may produce higher initial income (you may be able to find that data as well).

We did the math when our son was trying to figure his info out. The cheaper school was a much better option for him.

Oh, and the RA thing is a good idea. Get the best education you can for the least amount of money.

Checked out your other threads & you’re a JO kid! Still need to know if your total debt will still be 46K as that will help everyone answer, but I can give you some anecdata that should be pretty relevant.

So, I got a JO degree from BU with approximately the same amount of debt, as mentioned above. I absolutely feel that BU was worth my debt, though in hindsight I would have approached loans & debt a bit differently. Alas, the parent plus loan that exists now did not when I went to school & would have saved me from chaining myself to Sallie Mae. Regardless, among my friends whose parents aren’t independently wealthy, I came out of school–and specifically BU–with less debt than most. If they’ve offered you everything but approximately 46K over 4 years, you got a generous offer. It means COM & JO want you.

Here’s the thing: you will get a fabulous journalism education & lots of great experience, and possibly job connections. But the industry is rough & pays really, really, really, really poorly. That’s if you can get a FT job: most opportunities are unpaid, low paid, freelance/contract/part time, ie: no benefits, no steady income/guarantee of a job beyond the extent of your contract/freelance gig. I didn’t become a journalist, and if I had, I would not be able to afford my loan repayments right now. The starting salary for a journalist continues to hover around 30K (HOW. IT HAS NOT CHANGED FOR LIKE 15 YEARS), and you generally have to live in a major city in order to get these jobs, where you will pay between $800-$1400 a month in rent/expenses, ie: 50-60% of your income. I recommend living with roommates.

So that is to say: 46K debt is doable, but not quite as doable if you’re going to be a journalist, unless you have a financial back-up and/or are willing to explore adjacent industries. I work in marketing, which pays twice was journalism does & is steady, and I’m very happy. If you can live at home when you first enter the industry, or are able to have a FT job + freelance on the side, you’ll be better off. Or, if your parents can contribute some money now but not the full amount, have a conversation with them where you co-sign loans together & they help you pay them off later, too. My mom’s financial situation improved years after I’d graduated & she was able to help me with my loan repayments, for which I am incredibly grateful.

@adkdad thank you you’re right the grant isn’t guaranteed for all four years so I do need to keep that in mind and no my only sibling is 12.

@ClassicRockerDad‌ @Torveaux‌ I plan on becoming a journalist so I won’t have the highest income which I also need to consider

@proudterrier‌ thank you for taking so much interest in me! Lol I’m a bit worried about paying back loans as a journalism major but I will definitely apply to be an Ra as soon as I can. Is sophomore year the earliest you can start? I agree I don’t think being a journalist can be my sole source of income when I first start out, thank you so much for the advice!

My total debt would be 38,400 @proudterrier‌

@ksum2897 I think 38.4K isn’t bad! Especially if you limit how much of that comes from private loans. Those are killer. My repayment terms for my BU & government loan were actually pretty reasonable, all things considered. I think if BU is the best JO school/that you like the best that offered the best aid, that 38.4K is reasonable.

It actually looks like RAs can only be juniors & seniors–I thought I remembered some sophomores doing it! But if you get that, you could cut your debt in half, which would be great. Here’s the info: http://www.bu.edu/reslife/about-us/resident-assistants/. Generally, they look for level-headed, mature students who would make both good mentors & good enforcers. I was an RA in a senior dorm, which meant I didn’t have to do much policing, but I moderated roommate conflicts & also had to troubleshoot when/if kids got really drunk (I’d have to call EMTs). If you’re good at organizing social events, that would be considered an asset for freshman/sophomore dorms, too. Did you get a work/study award from BU? I think working in an office on campus for 2.5 years before I applied to be an RA gave me an edge.

Ksum do you have siblings in college now or in high school?

@proudterrier‌ phew thanks. I feel a lot better. Honestly all my schools gave me the amount of aid that would leave me with my efc left to pay so they’re all about the same cost (even though some schools cost of attendance were much cheaper than others). yes I was given a work study award and being an Ra sounds like it’s definitely worth it.

@Madison85‌ my only sibling is in elementary school

Just an FYI…the RA position is a great idea IF you are selected from the droves of applicants for those jobs. There is NO guarantee that you will get an RA job. In addition, be sire you want the responsibility of being an RA. They don’t just give you free room and board…you earn it. So learn about what the JOB entails before you decide its for you. It might not be.

Discuss the finances with your parents. Only they know if they can make this work.

Good luck. Our DS is a BU alum…and proud to be!