<p>I'm trying to be realistic when it comes to student loans/the worth of a schools education and have been battling with myself about the decision for a while now. What are your opinions on student loans? What do you believe is an acceptable amount/ how much is too much? Is a well known school with loans better than a not as well known school without loans? What if you plan on going to graduate school? What situation are you in or have gone through?</p>
<p>the consensus here is that the federal limit of about $27K is about as much as you should borrow for four years. You’ll spend a good car payment paying that back for 7-10 years.</p>
<p>Obviously, doesn’t this depend on one’s – and one’s family’s – financial circumstances, future plans/aspirations, and probable requirements (e.g., a family with a $2M educational trust fund, or with hopes for several children to attend medical school, or with dependent parents and in-laws is very likely reach different resolutions to this issue than one that lives “paycheck to paycheck”)? Since we have no knowledge of your situation, how can we reasonably judge? I respectfully suggest that there is no single pro forma answer to this question. </p>
<p>The amount should change based on what you plan on doing after college. Generally, you shouldn’t borrow more than what you’ll make in a year. </p>
<p>Let’s try that scenario, nickxx. If one makes 40K the first year and has 40K in loans (27K at 4.7% and 13K at 8%). The student chooses to repay those loans over 10 years (!). One’s monthly payments will be approximately $440. </p>
<p>If one wants to try to pay it off in 5 years, it will cost 770/month.</p>
<p>Let’s say your benefits include health insurance and life insurance and your take-home on 40K/yr is 28K. That’s 2330/month. For purposes of national averages, rent and utilities is 1000/mo; food is 400/mo; car is 400/mo; entertainment 200/mo. That leaves you 330/mo for college loan payments and everything else including car repairs, clothing, and emergencies.</p>
<p>This is why associating indebtedness with predicted income is not a good idea. 40K in loans means you will be paying off those loans for more than 15 years unless your salary vs. inflation grows dramatically. Having a job that pays more means even more hardship paying off loans.</p>
<p>@jkeil911 the majority of jobs don’t pay the same salary 1 year in vs 5 or 10 years. Realistically, with a college degree, we can say that person making 40k will make an average of 5-10% more per year, so 50k a year in 5 years and 60k in 10, on the low side. Also, I did say that the amount you should borrow will vary depending on what you plan on doing post-college. In my opinion, an education major should not take any debt, while an engineering major going to MIT or a finance major going to Wharton can be far less cautious. </p>
<p>we can agree that engineers can afford a little more debt if they work in industry when they come out, and education majors should limit their debt, but the rest of what you say is not based in fact. College grads on average make 5-10% more each year? Really? I must have been doing something wrong for the last 30 years. Do the words inflation, stagnant wages, and healthcare costs mean anything to you, @nickxx? </p>
<p>@noclue2015, It’s important to remember that there’s a limit to the amount that you as a minor can borrow. Even though you may agree to repay your parents after you’re established in your career, the financial and legal responsibility will be theirs, so it’s their financial situation that we need to look at.</p>
<p>The amount of debt that is acceptable to a family depends on many factors – the parents income, age, and health; their assets and existing debt; the number of other dependents. Obviously, less debt is generally better than more, but some debt may be worth the risk. It’s impossible to generalize without knowing your family’s specific situation.</p>
<p>My advice would be to try to keep your undergraduate debt to a minimum, even if it means turning down a “big name” school for one that’s less prestigious. Lower name recognition doesn’t necessarily mean lower academic standards and graduate schools admit from all kinds of undergraduate institutions.</p>
<p>Undergraduate loan can be debilitating and severely limit your post-graduate choices. I feel differently about graduate school debt, but of course it needs to be proportionate to income potential which varies widely from field to field.</p>
<p>PS to @nickxx,I agree with @jkeil911, it’s unrealistic to expect 5-10% increases each and every year. Over the course of a career, sometimes you get big raises/bonuses, sometimes you just get to keep the job, sometimes you get the ax. </p>