<p>bambee - very tough choice.</p>
<p>finaid.org has a loan calculator that lets you enter your proposed loan totals and interest rates and shows you what your monthly payments will be and the income needed to make those payments. Quite an eye opener.</p>
<p><a href=“Your Guide for College Financial Aid - Finaid ”>Your Guide for College Financial Aid - Finaid ;
<p>I posted the following on another thread
If you borrow $20,000 a year for 4 years you will have a debt of $80,000. At 6.8% interest the monthly payments would be a little over $900 for 10 years and they recommend a salary of 110k. Remember out of the recommended 110k (if you can earn that right out of college) income you will also be paying a hefty chunk of taxes as well as rent, utilities medical insurance etc etc. You may want a nice car and nice vacations. Perhaps get married - have a family? The debt will certainly limit your options for several years. And are you guaranteed to earn 110k right out of college?</p>
<p>The calculator also assumes you have either subsidized loans and/or have been paying the interest while you are in school. If you have to capitalize the interest on the loans while you are in school this would increase the amount of debt you start off with when you complete school. For instance borrowing 20K a year unsubsidized at 6.8% and capitalizing the interest would increase your debt to @ $94,556 at the end of 4 years of college. This would increase your payment to nearly $1100 a month with a recommended salary of $130K.</p>
<p>(this is based on a simplified calculation that if you borrow $20,000 in year 1 the interest in year 1, assuming a 6.8% interest rate, would be $1360 so at the end of year 1 you owe 21360. Borrow another 20,000 at the beginning of year 2 then the interest for year 2 is 6.8% x 41360 = 2812 so your debt is 44172. ANother 20K at the beginning of year 3 your interest for year 3 is 64172 x 6.8% = 4364 so your debt at the end of year 3 is $68536. Borrow another 20K at the beginning of year 4 and your interest for year 4 is 88536 x 6.8% = $6020. So at the end of 4 years your $80,000 you have borrowed has already grown to $94556. There are probably tables out there that would give you a more exact figure but this gives you an idea).</p>
<p>Is the 4 years worth that amount of debt to you? Only you can really answer that. You will be paying for those 4 years for at least the following 10years.
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<p>Such a debt is a huge burden as kenf says. It is a tough choice but think of your whole future and how you picture it - not just the next 4 years at your 1st choice school. Good luck with your decision making.</p>