<p>So say I go into engineering and I make 55k or so out of college. How much debt would I be able to handle when college is over? I'm trying to figure out how much financial aid would be "acceptable". Am i going to need enough aid that I can only take a 2k gap in finances? Or can i take a bigger hit like 5k? how bout 7-8k? I know I will need as much financial aid as possible but I'm curious how much leeway I will have.</p>
<p>Less is best, but definitely not more than your REALISTIC first years income IF you have every reason to believe that you will be employed within six months of graduation. Just my opinion…</p>
<p>Unless you get accepted to a school that awards grants instead of loans, colleges generally include a Student Stafford Loan (subsidized, unsubsidized, or a combo) as part of your financial aid package. So, you could be looking at $27,000 in loans by the end of 4 years. ($5,500 freshman year, $6,500 sophomore year, and $7500 junior year and beyond. See: [Stafford</a> Loan Information | StaffordLoan.com](<a href=“What is a Subsidized Student Loan? | Edvisors”>What is a Subsidized Student Loan? | Edvisors))</p>
<p>I know that “some” say not more than one year’s income, but even that can be too high. </p>
<p>I would recommend no more than HALF of one year’s salary as a new graduate.</p>
<p>If a student takes the maximum Stafford Loans of $5500, 6500, 7500, 7500…he’ll have borrowed $27,000 at graduation. That is about half of $55k salary of an engineer.</p>
<p>Yet, that student will have a monthly payment of about $310 a month for 10 LONG YEARS…see below…</p>
<p>That is equal to about a car payment, which would be in addition to a person’s own car payment (which many new graduates have). To suggest that twice that much, $610 a month for 10 years, is a good guideline, well, I just think that is wrong. JMO </p>
<p>A payment like that would seriously impact a person’s ability to save and buy a home, etc for 10 years of their life - during the ages of about 23- 33. I think too much student loan debt seriously and negatively impacts a person’s life for many years.</p>
<p>Loan Calculator</p>
<pre><code>Loan Balance: $27,000.00
Adjusted Loan Balance: $27,000.00
Loan Interest Rate: 6.80%
Loan Fees: 0.00%
Loan Term: 10 years
Monthly Loan Payment: $310.72
Number of Payments: 120
Cumulative Payments: $37,285.87
Total Interest Paid: $10,285.87
</code></pre>
<p>I think one year’s pay is too high.</p>
<p>$55K at 8% for 15 years is $525/month, or $6300/year. This is 11.5% of your income.</p>
<p>Factor in 15% fed tax, 5% state tax, 7.65% FICA, and around 40% of your money is gone right from the get-go.</p>
<p>And this is before other major bills such as rent, car payment, car insurance, health insurance, retirement savings, etc. Food. And if you are ever unemployed you will be in a world of hurt.</p>
<p>Yes, you can afford $55K on a $55K salary, and the burden will ease slightly as your salary increases, but it will have a major impact on your lifestyle for a long time. It might be the difference between being able to buy a house or not, for example. For 15 years or more.</p>
<p>If you have the option, I would advise you take on as little debt as possible.</p>
<p>^^^</p>
<p>I agree! As little debt as possible.</p>
<p>I think the NYT printed that the avg debt at graduation is $20k, but those who go to privates average $25k at graduation.</p>
<p>And given the global economy and outsourcing, I would not be confident that starting salaries in engineering will be the same 5 years from now.</p>
<p>During my older son’s college search, he got to know several different college admissions officers, from several different colleges. I don’t know if this is true or not, but several of them, from all across the country, said that the average student college debt upon graduation has hovered between $23,000 and $26,000 the past few years. These were all private colleges. That information falls right in line with everything everybody else has said on this thread.</p>
<p>Like so many other people on this thread, I would suggest you accept as little debt as possible. If $23,000 to $26,000 is the average, well, then, so be it. That is probably an “acceptable” figure. But I strongly advise my own kids to avoid any more than that. Until you’ve been under financial pressure to “make the bills” every month, you just can’t know how much of a day-to-day burden that is. You probably don’t want to voluntarily start your young adult life with that sort of pressure.</p>
<p>If you can possibly get an education at a good college that meets your educational needs, is a really good “fit” for you, and will cost you ONLY the typical Stafford Student Loans, I think you’ll be in great shape.</p>
<p>Wishing you the best in your college search!</p>
<p>*If $23,000 to $26,000 is the average, well, then, so be it. *</p>
<p>And, we have NO IDEA of how many of those students have parents who’ve agreed to pay for some/all of that debt.</p>
<p>True enough!</p>
<p>…given that even a current Harvard undergrad graduates with an average of $8,000 - I concur - AS LITTLE AS POSSIBLE. But - you also gotta do what you gotta do. And you GOTTA get a college degree. </p>
<p>I know it’s a tough call, but…gosh debt just stinks. I’ve been on both sides of it and living within your means and knowing you can handle broken tie rods on your car and an emergency root canal are CRUCIAL. My own D will probably end up at an in state school where she can get scholarships because the OOS private is JUST too much. We can PAY the bill, but that doesn’t mean we can AFFORD it. To quote Mrs. Lovitt from Sweeney Todd…“Times is hard”.</p>
<p>Well obviously I want the least amount of debt. Thats easy. But I want to go OOS REALLY bad. My only in-state options are Virginia Tech and VCU (which isn’t even ranked for my major). Virginia Tech aint a bad option but EVERYONE I know goes there. I want to do something different. </p>
<p>I mean I will by all means go to Tech or VCU if all of my OOS packages suck. I’m just trying to figure out what financial aid package would qualify as “sucking”.<br>
And it seems 20k is possible but not really advised. So a package that entails 10k or less sounds like the ideal figure. Correct?</p>
<p>I know you WANT to go OOS, so does my D. Unfortunately, we can’t always afford what we want. But I commend you for trying to understand what amount will be manageable. So many kids ( and adults!) have a “screw it” attitude and take on whatever debt they feel like. And THAT is why this country is in the mess we’re in today…living beyond our means/on credit.</p>
<p>But…teah, the actual dollar figure is just SO hard. Everyone has their own comfort level. I myself would be thrilled to only have $20,000 of debt when my D graduates from a college where she actually WANTED to go. HOWEVER, for HER to have that debt…is a different story altogether. I believe you said you’ll go straight into the job market (not grad school). So maybe you could make a budget, and see what kind of a payment will “fit” into it. Might get help online or from your parents there are SO many things one doesn’t think of when they make a budget as a young person. You’ll include rent and car and utilities and insurance. But will you include the emergency savings you’ll need when your employer doesn’t offer dental insurance and you need a root canal (or, even if they DO offer insurance…you’ll normally still pay half of that…and my daughter’s was $1000 with the root canal and crown). What about dry cleaning, Christmas gifts, a donation at work when a co-worker gets pregnant, nights out on the town, a girlfriend?, new tires, haircuts. It just goes on and on. I made a budget for my daughter to see, so we could discuss what I could afford for her. And I just kept a spreadsheet and DAILY thought of something new to add to it. </p>
<p>Will you have a car paid off when you start your job? New or used? If THAT is paid for, and new (because otherwise you’ll also have plenty of maintenance costs), then think of it this way - most CARS are probably about $20,000. So, if you feel you can afford a new car, then you can pay off the loans instead. And most people pay for their car in 3-5 years, so …? If you’re only paying off your debt for 4 years…that’s pretty good. I’m guessing $350 a month for a new car to be paid off in 4 years, so…same for your loans? But that’s a big guess, I didn’t do any calculations. I know I just financed $10,000 for a used car for my daughter and it’s about $350 for 2 years. I think that’s VERY “do-able”. Good luck!</p>
<p>*Well obviously I want the least amount of debt. Thats easy. But I want to go OOS REALLY bad. My only in-state options are Virginia Tech and VCU (which isn’t even ranked for my major). Virginia Tech aint a bad option but EVERYONE I know goes there. I want to do something different. </p>
<p>I mean I will by all means go to Tech or VCU if all of my OOS packages suck. I’m just trying to figure out what financial aid package would qualify as “sucking”.
And it seems 20k is possible but not really advised. So a package that entails 10k or less sounds like the ideal figure. Correct? *</p>
<p>I’m confused. Your package will be for one year of schooling. So, if it has $10k in loans in it, then that would mean at least $40k for undergrad.</p>
<p>Are you an incoming freshman? If so, then you would also need co-signers for a loan greater than $5500. </p>
<p>What schools did you apply to? Do you have the stats to possibly get some merit scholarships? Do you know what your EFC is?</p>
<p>GoOakland,
You said that you guess $20k is possible but not really advised. I’m not sure if that’s what people were “collectively” saying on this thread. I personally think that $20k, up to about $27k, is not only possible but would be just fine. As gibby pointed out, that’s pretty much the standard that you can get from Student Stafford loans, which are pretty good loans, whether subsidized or unsubsidized.</p>
<p>I think that if you can go to a school that you really want to go to (for the purpose of learning and studying and working towards your career goals – versus partying and having a ball), and can leave that school with an engineering degree and “only” $20k-$27k of debt TOTAL (for all 4 years combined), then you’ll be doing fine.</p>
<p>You just have to remember that debt is no fun. The more you take on, the less fun it is. So take on as little as you can, I would say, and no more than the nation’s average, I would say, and then be prepared to bite the bullet and be a little poor you first several years in the workforce as you pay that debt down. To me, that’s a reasonable, sound approach. You’re trading “average student debt” for a school that’s more appealing to you and (I’m guessing) more prestigious. I think it’s a wise plan.</p>
<p>But, believe me, there are plenty of college packages out there that will leave you or your family with $200k of debt, or even more! I would do (and have done) whatever I could do to strike the best balance of the best school you can afford and no more than $25k-ish debt over the whole 4 years combined. If you have good stats, there should be some “good enough” to “great” schools out there in which you can pull that off.</p>
<p>Good luck!</p>
<p>One more here agreeing that $25K is reasonable. It’s an easy choice if the possibilities are no college degree vs. a degree with $25K of debt; other choices are not so clear.</p>
<p>I agree that about a **total **$27k in debt (about the max Stafford for undergrad) is ok. That would be from borrowing…$5500 for frosh, $6500 for soph, $7500 for jr, and $7500 for senior year. Of course, you may have to go a fifth year of schooling which could further add to your debt. :(</p>
<p>However, if there are cheaper and “just as good” ways to go, consider those options.</p>
<p>But, yes, $25k in debt and a degree in engineering, is much better than no debt and no engineering degree. :)</p>
<p>Hey, I have a number of questions that kind of fit into this theme. I’m looking at a number of schools that are very expensive and I’m wondering where the money comes from to go to these schools. I just don’t see it. Granted, I am just beginning to consider the financial aspect of the college process. Before, I had always first considered whether or not I would like to go to that school, whether or not I could get in, etc. Now it seems like the deciding factor will be my ability to pay. </p>
<p>Here are my questions, and I’d really appreciate a few answers. For example, Johns Hopkins University costs a total of around $50,000. If my parents were able to put down $20,000-$30,000, could I feasibly scrounge up $15,000 + through work-study programs, scholarships, etc? </p>
<p>I read that the average student graduates from JHU with around $20,000 in debt. How does that even work? I just don’t see how the math adds up. It seems so expensive, yet how do they graduate with only that amount in debt (which is still a lot, actually)?</p>
<p>I apologize if I seem particularly ill-informed. I haven’t really looked at the financial side of going to college until recently. Thank goodness I still have some time before I have to make these decisions.</p>
<p>Oh, and I would also say that I could attend a state school and graduate without debt and be perfectly happy with my options, in all likelihood. I just wonder, if I were to really fall in love with JHU or Wash-U in St. Louis (my two top choices), would I be able to afford it…</p>
<p>* For example, Johns Hopkins University costs a total of around $50,000. If my parents were able to put down $20,000-$30,000, could I feasibly scrounge up $15,000 + through work-study programs, scholarships, etc?
*</p>
<p>Many top schools meet “determined need” without loans (or with small loans).</p>
<p>That “need” is determined thru FAFSA and CSS Profile at top privates. If a top school determines that your family should contribute $40k, then they will provide the rest thru grants, scholarships, etc. However, many schools can’t meet need, so those kids take out loans. Work-study is for kids from lowish incomes.</p>
<p>And…If the parents can’t pay that expected family contribution (EFC), then it’s a problem.</p>
<p>So, you need to find out what your family’s EFC is.</p>
<p>Yes, students need to consider the financial aspect as that often is the most determining factor as to where kids go to school.</p>
<p>Hammurabi: It’s very good that you’re looking into this. Many (most?) kids go about it blindly, assuming it will somehow just happen. That they can attend wherever they’re accepted. But that is frequently not the case.</p>
<p>Kids/parents come up with the money MANY ways. Some just HAVE the money. And MANY more kids/parents, are unable to come up with it and do have to go the cheaper route that you mentioned. </p>
<p>So you know the price of the college, that’s step one.
Then you should look to see if the college will “meet need”. Many top schools do.
Then you can look at the FAFSA estimator. You’ll need your parents financial info (savings, home equity, salary, etc), as well as your own. Plug in about 20 numbers and you will get a FIGURE.
That figure is your EFC (Expected Family Contribution).
You will be expected to pay this amount, and some colleges will provide scholarships, grants, and some loans…for the balance. So the EFC is the dollar amount (approximately!) that you and your parents will pay. If you find you cannot afford that amount, that is when the state school option comes into play (that’s what we’re pretty much headed for at our house).
Some schools also have you file a separate form, at College Board, called the CSS Profile. And a few schools even have their OWN form…either “in addition to or in place of” one or both of these forms. I’ve noticed a lot of early decision schools have their own early form too. It takes researching EACH school to which you’re applying (I JUST the other day saw Princeton has its own form…I had NO idea…I’m glad I found that!). The schools that require the CSS Profile want even MORE information from you, AND they use different formulas. Typically, they will expect you to pay more than the FAFSA only schools. </p>
<p>It’s complicated, but you’re right on track to get started figuring it out. </p>
<p>Then, if you’re accepted to a school, they’ll provide a financial aid “package” option. I will say how much you pay, and can offer some things like loans and … as you mentioned…work study. </p>
<p>Good luck getting started.</p>