<p>My son will soon be choosing between many good options. He is considering 9 schools, 8 of which we have visited and like. He is a kid that has worked his behind off and we would like this to be his choice. The options currently on the table will cost us anywhere from $40k-$200K+ depending on the school chosen. Before all the costs are known, we would like to establish a financial criteria prohibiting him from incurring any debt above a certain threshold. He will be studying either chemical or nuclear engineering, and is well prepared for the challenges. He will have the ability to pay back his loans. Can anyone suggest an amount of debt that we should limit him to? We are able to pay for half his costs at the most expensive option. He has a younger sibling that is 3 years younger.</p>
<p>He has been accepted at the following Schools</p>
<p>Notre Dame, Rice, Vanderbilt, Case Western
Michigan, Purdue, Penn State, Texas A&M, Clemson</p>
<p>Texas A&M, which we have not visited yet , will be the least costly, about (10-12K per year due to several merit scholarships)
Case Western, Purdue, Penn State will cost about 25k per year with scholarships. Clemson a little less.
The other schools are the name schools where we expect to pay $45-50k per year. He could easily owe $100k after 4 years. However, these are dream schools. However, for example, the difference in total cost between A&M and Rice could be $160,000. My wife and I paid our way through school, so we have little experience to evaluate the dream school options. Do people really have an opportunity to make contacts in college that will matter? </p>
<p>Again, I want this to be his choice to weigh his future debt vs. his college experience. He would fit in culturally at all these radically different schools. </p>
<p>Good question, desilu. I'll be interested to hear what others think. We are wondering the same thing. How much debt is 'worth it'...that's a tough question. Good luck to your son, that's great that he has a number of super choices.</p>
<p>desilu - Congrats to your S on acceptance to a wonderful group of schools. Is there a bad choice in there? I don't think so. Answering your question would be easier if S had just two or three top choices. Eight excellent choices -- wow, where to begin? I guess I'd start by dropping the three most expensive schools and see how your S feels about the remaining five. Then perhaps you can drop the two most expensive schools from that group. Good luck with your journey.</p>
<p>Same question as Erin's dad. Rice ED is binding, so how has he been accepted to Vandy and Notre Dame? Maybe likely letters.....?. Re: just to clarify about Rice student debt. Rice caps student loans at $10,000 ($2500 per year). Any other debt would be from you asking him to pay you back for some of the costs of his education or from private loans.
And how much debt for undergrad? I would cap it at $20,000.</p>
<p>Honestly , there is no set answer here. Frankly, I would advise any kid from having more than $50,000 in total debt upon graduation from undergraduate school. This means that the total debt should not generally exceed about $12,000 per year and, if possible, much less. Certainly, having over $80,000 of debt is completely unacceptable to me. In fact, If it were a choice between even paying $10K per year at a very decent school vs. $45 K per year at a school with a big name, I would save the $35 K per year and use it to buy a home and pay for a wedding. In fact, they will still have money left over!</p>
<p>I also would strongly advocate that NO PARENT compromise their retirement funds to pay for the child's college. Retirement savings is just too precious and take too many years to recoup.
This becomes particularly true if you have other younger kids who will also be attending college. You need to save for them.</p>
<p>Why do I feel attitude about debt or about spending a lot of money for named school tuition? I have seen a number of schools. I have attended several of varying difficulty and taught at several universities. Honestly, the text books are pretty much the same. The faculty teach the same things at most schools. The top kids are pretty much even at most decent schools especially at good state schools. What does differ is the average kid and the bottom of the rung student. Some schools have a much higher average kid. However, the education is frankly very similar. Thus, what are you getting for your extra $35K? Good question. I guess you are getting better contacts.....just maybe..... and a better name. However, most research studies seem to show that the name or cache of the undergrad school doens't translate to any more income over a lifetime. Thus, I keep asking again: what are you getting?</p>
<p>I wouldn't let my kids borrow more than $10,000 a year, $50,000 tops for undergrad. That assumes they're NOT going to graduate school. If one of my kids was planning to go to graduate school, I'd definitely be steering them to a less expensive option. I got a perfectly fine education at an inexpensive school that most people have never heard of, and was admitted straight from that school into a top 10 law school, from which I could write my ticket.</p>
<p>Our limit for borrowing is the maximum first unsubsidized Stafford loan (not including the new supplemental limit). For our kids that ranged from $15,000-20,000 for the four year total.</p>
<p>Rice is very likely (based on his chat with an admissions counselor while attending a recent recruitment weekend); he has not been officially accepted. ND was Early Action non-binding. Vandy was a "congrats, you're in, we're telling you early" letter.</p>
<p>This is my oldest child so I have never seen my official EFC. I am expecting 0-10K of need based aid (NBA) from schools costing 50K per year. Being an engineer myself, I am planning on 0-5k of NBA. I would be smiling from ear-to-ear if his total undergrad debt were anywhere close to $20k. While I would not ask for anything to be repaid. I believe he should have some stake in financing his education. This is both for his earning self-esteem and to feel committed to his work. There is clearly some play in my figures. That is why I would like to set some objective criteria before the numbers come in.</p>
<p>I am trying to stay in the range of 1 years tuition, fees and room and board should be the total debt for 4 years of undergrad for the student. And yes, I agree they need to have some skin in the game.</p>
<p>As my son studying engineering has had to face, while engineers start at high salaries, they hit a ceiling quickly. They make comfortable livings, but don't become rich unless they start a company or get very lucky with a pre public company.</p>
<p>And engineers don't get paid much more if they go to a top school. They have access to more interesting jobs, but the salaries tend to stay in a small range.</p>
<p>$100K plus in debt is therefore probably a burden an engineering student doesn't need. It will delay buying a home and many other things. I'd make certain your son looks at the cost benefit analysis here. While this could make sense for a future businessman, for an engineer it doesn't IMO.</p>
<p>For engineering majors, I don't see much difference in all the schools you named. All have good engineering programs. Go to the least expensive school.</p>
<p>We felt & feel that our S's "skin in the game" is his merit scholarship which provides >$80K total over the 4 years of his undergrad years (providing he continues to get his excellent grades) and are not having him or D take out any loans. We are having them pony up spending money from their savings and gifts given to them over the years. My parents paid for all of our educations and to the best of our ability, we are trying to do the same. D's "skin in the game" is her spending money and her semesters of community college to be able to transfer to the 4=year college she's now attending.</p>
<p>Both of my sons are engineers and sophomores this year. They will graduate with about 18K in debt each. We capped at stafford subsidized limits and that has worked well. I pay my EFC or about 13K a year for each son or 26K total out of my pocket for two kids.</p>
<p>Texas AM is a great engineering school if Texas is an acceptable location.</p>
<p>You say that your S wants to study engineering, and that as a result he would be able to pay back college loans. Please be aware that many kids start intending to major in engineering and change their majors. So I would try to keep the loans as small as possible.</p>
<p>A note about "skin in the game." I like the pride in D's voice when she talks about almost paying off the first of her loans in the first year of her post-college employment (modest salary, too). I think it's essential, no matter what the family circumstances, for the student to have "skin in the game." D had scholarships and she worked 7-10 hours a week and she had her own loans. I think it was a good combo.</p>
<p>As to the OP, the one school that really stands out in a particular way in that list is Texas A&M, which has a very distinct, ahhh...culture.</p>
<p>I don't like seeing an undergrad have more than $20K in their own loans, fwiw.</p>
<p>Find out the starting salary for chemical/nuclear engineers. Figure out a budget (housing, food, taxes, transportation, beers with friends after work, etc), and how much is left over for "debt". Then you can back into the number.</p>
<p>It will be amazingly low. It also helps the kid to understand "why" $40k is the limit. If an engineer can't appreciate the numbers, then he should find a different career. He can then decide if he wants to live like a pauper and go to the more expensive school, or live a more comfortable life and go to the cheaper school.</p>
<p>You can take it one step further by comparing average salaries for engineers from the different schools. i.e. engineers from the better school may have starting salaries $10k higher. After taxes, that is how much more debt to attend that school?</p>
<p>Thank you for all your posts. I'll be booking a flight to College Station, TX for my son today. It's the one school we have not visited, but there is an event he can attend there this Thursday and Friday, including a night with the Corps of Cadets. Membership in the Corps is a requirement if you want to be in the Marching Band. I guess I'll start a thread on Aggie culture. </p>
<p>I also have something to contribute. The January, 2009 issue of "Smart Money", the Wall Street Journal Magazine, from which there is a link available from the Purdue web site looked at salaries vs. the cost of attendance. Purdue was very proud of its #9 ranking and rightfully so. Of the colleges on his list, Michgan #27, Penn State #17, Clemson was ranked #8 and Texas A&M was ranked #1. The Ivies and elite LAC are right behind the state schools. None of his private schools ranked in the top 50. It's tough to draw conclusions since the article considered all degrees.</p>
<p>Operadad says much the way I feel too. The main point of spending for college is an investment in one's future- the joy of a chosen career and raising one's standard of living.
One does not normally think of attending a college to lower one's standard of living. Every debt one has lowers discretionary spending and similarly affects a standard(quality and joy) of living. If this grad pays off a 200k debt for many many years after college he will likely be soon sick of not having the extra for a nicer car, nicer house, maybe even not have extra money for the beers after work. That isn't a happy life. That's not what one goes to school for, to make for an unhappy life. So I say, dream about hitting the lottery- but make the college choice a cold hard business investment judgment. I know people that live in a huge, grand house facing a famous golf course, that can't afford to furnish the upstairs of their home. They can afford a nice dinner out for 2 only once a month, despite both adult making very good money. All their dough goes to mortgage payment. I'll admit they chose their situation, and are reasonably happy with it, but I don't think many would be.</p>
<p>On a related note, I am wondering about overpaying for S1 at the possible expense of S2. In our case, we were good savers, meaning that we won't qualify for any aid. S1 is accepted at UIUC engineering (OOS) and MSU (in state). Scholarships are an unknown at this point. We have enough for MSU debt free, but if will dig into our second son's funds if we go for UIUC. </p>
<p>With how aid is calculated, I am wondering if we should just go ahead and do that, and both will then qualify for aid when S2 starts in two years? I am thinking less than $40k in loans (whether to bank or grandparents).</p>