<p>Hi guys. I'm currently trying to decide between three colleges. My major concern is how much in loans I should take out to attend college.</p>
<p>I plan on taking out the full max of stafford loans (about 30k), which my parent's have said they will help pay.</p>
<p>They also want me to co-sign on a loan of about 10K/year, though, if I choose to attend the more expensive of the schools. (They would provide minor insistence with this loan).</p>
<p>So, my question is, how much in loans is an advisable amount to take out? Obviously, you want to take out the least amount possible, but is there a "max" amount at which beyond that, its no longer worth it to take out more?</p>
<p>That would be 70k in debt for you. Most publics cost about 80-100k total so I don’t think it is wise to go into debt for 70k. If your parents didn’t save enough for you to attend college before you got there, they are not likely to knock much off once you are there. Is for a private college? If it is, it does not sound very reasonable for you family.</p>
<p>One rule of thumb that I have heard is to limit total undergraduate loans to no more than 50% of a reasonable estimate of first year salary following graduation with your degree. Thus, if you will major in engineering which might have a starting salary of $60k/year, you could safely borrow $30k over your four years (about $7,500 each year, but less if interest accumulates). However, if you will go into social services with a starting salary of $25k, you should limit your undergraduate loans to $12k total.</p>
<p>I agree with momof3 that if your parents have been unable to save for your education over the past 18 years, the reality is that they are unlikely to be able to help pay off loans. Their intentions and promises are noble, but their track record sounds spotty.</p>
<p>The max Stafford amount (just under $30,000) is generally considered a reasonable amount. That additional $10k/year is most assuredly not reasonable.</p>
<p>It all depends on your family situation. The problem with a cosigned loan is that it will be on your credit report as well as your parent’s. That could be an issue for you to have all that loan money at age 22, as your income to loan ratio is something examined for a number of things and can impede job opportunities, not to mention your own financial forays like buying a condo, house, etc. IF anything happens to you or your parent, the other party is still stuck with the loan. Have you asked them to look at the PLUS loans available? If they are turned down, you can get another $4K in Staffords, Application can be done totally on line and at home and answer is immediate. Thought the interest rate is higher, interest is deductible, and the payback options are more flexible These private lenders are generally very inflexible. Also there is an insurance component to the loans in that if you or your parent die, the loans are discharged. Also the loans will only be on your parent’s credit report, not yours, whereas cosigned loans hamstring you both.</p>
<p>Student wants to study Computer Science and the three schools are UMass Amherst, WPI, and Northeastern University. Student lists UMA as the cheapest choice. I would guess that the $70K loans is for the private schools but that’s just a guess. If the choice were no loans at UMA vs $70K at the other two, I’d pick UMA in a second.</p>
<p>Thanks for the advice guys - let me just clarify a bit more.</p>
<p>(My parents are divorced)</p>
<p>The 30k in federal loans will be paided off Family A and myself. Family A will pay the majority of it.</p>
<p>The 40k in other loans will be a cosign between Family B and myself. Family B is in a much tougher money situation than Family A, and has made it clear that while they might be able to contribute a little month to month, the majority of the loan payment will come from me.</p>
<p>Family A wants Family B to have some role in the college payment process, hence the 10k requirement if I choose to attend a private college.</p>
<p>Family A is willing to help you pay off $30k, and in exchange expects Family B which is in a worse financial situation right now to help you pay off $40k? Did I get that right? </p>
<p>How much, exactly, does A hate B in order to require B to take on more debt than A is willing to?</p>
<p>If you were to be fully responsible for this $70k, it would be too much. Period.</p>
<p>If one of your options will keep your debt load to the Stafford maximum go there. That way any debt will just be your own, and you can let A and B keep their fights to themselves.</p>
<p>Do you have a shot at the Honors Program at UMA? They can be pretty generous with merit money up to a full ride and you can qualify for it in any year, not just as a Freshman admit.</p>
<p>What are your relative costs for the three schools?</p>
<p>You need to consider what would happen to Family B if you were, for any reason, unable to pay off that cosigned loan. Family B would then be stuck with the debt and, for a low income family, that could mean financial ruin . . . and not just temporarily, but for the rest of Parent B’s life. Is that what you want?</p>
<p>In these circumstances, it’s not just about you . . . but about the impact this could have on Parent B. Think about it.</p>
<p>So UMA is $80K and Family A has savings or current income of $50K to contribute so your total cost would be about $30K without any further help from Family A or Family B. The other schools would cost an additional $60K in loans.</p>
<p>In your situation, I would choose UMA and limit loans to the Stafford max. I think you could be putting yourself and Family B into a bad financial situation by taking out an additional $40,000 in loans. It’s too much.</p>
<p>Yeah, that’s what I was thinking. Being able to graduate with little to no loans, and without putting a huge economic strain on my parents is a big deal to me.</p>
<p>If I were you, I would be running away from the higher priced options as though my hair is on fire!</p>
<p>Everyone needs to be able to sleep at night, so be kind to yourself and your family and get your education at U MASS. And keep those grades up high and keep applying for scholarships and merit to help out. Graduating without debt, or with as little as possible, is a fantastic gift to your future self!</p>
<p>I like this concept. I think the particular number 50% would depend on your options. I’d go higher if the option was really worthwhile. </p>
<p>In this particular case, there are really 3 different schools with different virtues. </p>
<p>UMASS is large and impersonal, but he’s in honors, and if he can get research opportunities, is by far the best department overall. Good recommendations from this faculty could lead to great opportunities for grad school. He probably has to be a little aggressive to get internships. Nothing wrong with that, but he has to do it. </p>
<p>WPI is a great teaching college. While there is research, this school is all about great teaching. If you’re someone who needs the support offered by WPI to be successful, it might be worth taking on the loans. There is no point in getting the lower cost education if it’s going to blow you away. WPI doesn’t tend to blow people away. </p>
<p>Northeastern has 5 year co-op. You can make some pretty good money during your co-ops while deferring your loans. There is value in co-op. </p>
<p>I agree in this particular case, for a strong student, UMASS does seem to offer the best combination. I wouldn’t say blindly to always take the lower cost option. I think it’s worth seeing what you are getting for the extra money. Things like a teaching college, or co-op might be of significant value.</p>
<p>I would say they have the strongest CS faculty. That’s about research. That doesn’t impact you unless you take advantage of it. It’s not about the undergraduate curriculum, and not about the quality of the teaching. It doesn’t mean that it’s the best for you. Only you can decide that. </p>
<p>As I said, each of the schools has their attributes. So in other words, UMASS may have the highest upside, but it’s still going to be big classes and you’ll have to muscle your way to get some attention. </p>
<p>Personally, I like the flexibility of the UMASS degree requirements. I think if you went there and got involved in research early, it could be terrific. </p>
<p>Northeastern give you great access to the local companies through co-op. There is a lot of value in that too. </p>
<p>You have a tough choice, and I’m not going to make it for you.</p>