<p>I will be attending a school that costs around 50k next year. My parents make a good salary (120k) but can't pay for my college right now because all of their money is tied up in the stock market(can't sell when it's down 50%). Basically I will need to get loans for most if not all of my education. How should I go about doing this? Will they give me a loan for this large an amount of money? What is a typical interest rate? How long will I have to pay it off? I'm pretty clueless about this stuff. I'm willing to take these loans because I am confident that I will be able to get a good job after graduation, but I just want to have some more general knowledge. We have done CSS profile and will be doing FAFSA soon, but we aren't counting on a lot since my parents make a decent salary. Thanks</p>
<p>nelnet.org</p>
<p>XC, I won't pretend I can give you the same expert advice you will get from others here. The one thing I can tell you (and I will get nearly 100% agreement from those experts on this point) is DO NOT borrow $50,000 per year for ANY undergraduate degree from ANY school. That kind of debt will consume your life. What other school options do you have?</p>
<p>Borrowing that amount of money is a great risk. That college had better be worth a great sacrifice to you and your parents. You do understand that those stocks may well be a done deal for a long time if you're lucky, dead gone if you are not. </p>
<p>If your parents have a good credit history, they can borrow through PLUS. You can personally borrow about $6500 ?? (check it, maybe more if your parents get turned down by PLUS, but no more thna about $9500) by getting an unsubsidized Stafford loan. Hopefully, you are working weekends and looking for a double job over the summer so that you can maybe save up $10K for school. Even then, you and your parents will be borrowing a lot.</p>
<p>My son goes to a college that costs about $50K He has a $10K scholarship from the school, a $5k outside award, has taken $3500 in loans and worked this summer, had money saved up to pay a good portion of the cost. We are paying for a portion of the cost through savings and income, but borrowed some as well. In his case, we feel it is worth it, but we are talking borrowing $40-50K ourselves and for my son to take out about $15-20K over the 4 years.</p>
<p>Before you even think of doing this please go and run your numbers through a loan calculator like the one here
FinAid</a> | Calculators | Loan Calculator
so that you can get a good and realistic idea of what your debt will be and what a burden it will become. If you are not able to pay the interest on the loans as you go along don't forget to add and compound the interest to figure out how much your debt will actually be. </p>
<p>As an example if you borrow $50,000 a year and the interest is 8% a year and is compounded annually then at the end of four years your debt will have grown to $243,000. This will require a monthly payment of *$2,948 every month for 10 years *. You will end up paying a total of $354,000. These payments will start as soon as you complete college. Can you really imagine what it will be like to make payments of almost $3,000 a month before you can even start to pay for the basics such as food, rent, transportation. </p>
<p>If you are able to get a loan where you can make repayments over 20 years you will still pay a little over $2,000 a month every month for 20 years and will end up repaying a total of around $487,000. If you make all your payments on time you will be in your 40s before you have paid off your student debt.</p>
<p>Don't do it. No undergrad school is worth starting your life with a debt like this.</p>
<p>I agree that the student and parents have to do some number crunching. WIth a $120K income there is hopefully some money that can be used for college, and maybe some savings also. I am hoping that the student does get a job and start saving for school as well. It is possible with a $120K income, depending on the value of assets that some financial aid is forthcoming and maybe merit money depending on the stats of the student and if merit scholarships are available at the school. Few people borrow every penny of THe $200K + that some private colleges are costing. THere are combinations of parent/student loans. Parent/student savings. Parent/student income. Maybe the college can throw in a bit too.</p>
<p>Just so that you understand what is available to you ... a freshman may borrow up to $5500 in subsidized & unsubsidized Stafford loans. Of that, up to $3500 MAY be subsidized (cost of attendance - expected family contribution - grants/scholarships = need; subsidized awarded up to the lesser of $3500 or need). If your parents try to borrow a PLUS loan & are denied credit, you can borrow another $4000 unsubsidized Stafford. If you need more money than what is allowed under the Stafford guidelines, and if you are not awarded any Perkins or school loans (not available at all schools or to all students at schools where available), you will have to borrow an alternative loan. These generally have higher interest rates & do not offer the ability to consolidate the loan like you can with Stafford.</p>
<p>PLUS borrowers can now put off the repayment (on DIRECT PLUS loans borrowed after July 1, 2008) until student has been out of school 6 months (like Stafford loans). Interest accrues, of course, just like with unsubsidized Stafford. </p>
<p>I agree that borrowing $50k per year is not wise. Please try to find a school that is more affordable. Look for merit, 100% need-meeting, lower cost, etc. Hedge your bets by applying to schools where you might get such help & compare the offers in the spring. Choose a school you like that won't bury you in debt. I can't even fathom a student loan payment of $2k or $3k per month. That's NOT worth it.</p>