<p>Hi parents, I'm not a parent, but would like some opinions/perspectives from other parents before I sit down with my own parents to pick out a school.</p>
<p>Basically, I'm a transfer student, and as a transfer student, we don't get much aid, other than at our own in-state school.</p>
<p>I just got my financial aid award at my number one choice school (University of Wisconsin) yesterday. I did get enough grant money to lower the cost to about the same as a UC, which is my state school, if I live on campus. However, my father wants to only contribute the amount that I would incur if I attend UCI (which is 10 minutes away). As such, I would need to borrow about $6,000 a year to lower the cost at Wisconsin to about the same cost as going to UC Irvine.</p>
<p>My question is: would taking out $12,000 be too much of a burden? I really want to go to Wisconsin, but understand the financial burden on myself and my parents, and would be more than willing to attend the other great schools that I have been accepted to that are also pretty dang cheap.</p>
<p>I’m studying Accounting but I also plan on tackling on a second major in Economics, since admission to the b-school is a separate process, I can take econ classes in the meantime in addition to accounting courses.</p>
<p>I actually am working right now, albeit only part time, but I do plan on getting a full time summer job, since I can’t really just sit around at home and do nothing.</p>
<p>$12,000 for two years of college is not a whole lot of debt, if that is ALL you are taking. It is going to be easily manageable for you to pay off that debt, even if underemployed after graduating. (Since you are studying accounting and hoping for a double major in econ, I’ll let you do the math – just calculate what your monthly payment will be and I’m sure that you’ll see it is manageable even if you were only earning $20K a year). </p>
<p>So the real question is two-fold: is Wisconsin $12,000 better for you than UCI – and is getting some distance between you and your family better for you than UCI? What you are really incurring is an added living expense. I can see where your dad is coming from – actually, in a sense he’s being quite generous, because he’s subsidizing tuition, and you probably are capable of earning a significant amount of money toward your own living expenses. Plus, your parents are giving you a benefit when you are living at home rent free over the summer. </p>
<p>So – again – from an economics standpoint, the question is whether the opportunity cost of Wisconsin is worth $12,000. Do also keep in mind that you are going to have to pay the costs of travel back & forth to Wisconsin, and some money on warm winter clothing. Now is the time to look at the economic realities that both states are facing – is Wisconsin facing the same sort of cutbacks as the UCs? (All I know is that there are a whole lot of very, very angry public employees in the state of Wisconsin these days, who are worried about their salaries and future benefits). </p>
<p>Look at the course catalogs from both schools – how would your major be structured in each place? Look at sites like ratemyprofessor.com – when you get to Wisconsin, what courses would you be taking, who would teach them, and what do the students generally say about those teachers? $12K is not much – amortized over the years it’s only $500/month – but it is too much if you get to Wisconsin and discover that it falls far short of your expectations – or worse, that you realize after getting there that things are worse in their public university than in California.</p>
<p>I know absolutely nothing about Wisconsin – I just know that things are really bad here in California, but they may be equally bad in some, but not all, other public universities in other states. So again, this presents a wonderful opportunity to think about economic theory and apply it.</p>
<p>As Calmom said, the $12K debt is serviceable at $500/mn ($6000/yr) which means you have to earn $9000-$10000/yr for n yrs (generally 10 years), to net the debt payment. The guy who stayed at the instate school, can take the same job, on graduation, and have a pretty good lifestyle for the next 10 yrs, while you got a extra brick to carry. </p>
<p>If you think that UWis is worth the extra $90,000 - $100,000 over 10 years, go for it.</p>
<p>You could ask the question, If you had $12,000, now, what would you do with it. Since most people don’t have $12,000 cash today, how would you compare? </p>
<p>12,000 at 8% for 10 years is $145 a month. First-year accountants make $50k, give or take $5k. So we are talking a little more than pocket change (but not a lot more).</p>
<p>However, a CPA will require 30 credits past your B.A./B.S. - just something to keep in mind.</p>
<p>I prefer to look at the debt in terms of what the student can earn now as opposed to what he can earn with the degree – because if things go badly with the educational or employment plans, the debt will still be there. </p>
<p>When my son quit college at age 20 and got a job, he was earning about $22-$25K right away. That’s smart kid + 2 years college + no skills. So I figure that any reasonably smart 20 year old can probably earn that much (at least in California, where minimum wage is set somewhat higher than many other states) – so it is very reasonable for CrownoftheSea to figure his “base” expected earnings at $25K. </p>
<p>Can he earn $50K on graduation with an accounting/econ degree? Definitely – but again, in my mind that’s kind of putting the cart before the horse. I mean, I might wnat to buy a house for $100K in a rising market (remember when?), with the idea that in a few years it will be worth $150K – but no bank is going to lend me money based on the projected future value of home. They will lend based on current appraised value. </p>
<p>So CrownoftheSea has a current “value” in terms of his earning capacity. He’s got a part time job now, he can do the math to figure out what he would be paid if he was working full time. He can borrow against that. </p>
<p>But again, his earnings are more than enough to handle the payment projected by mini (which will be less than 8% if OP is eligible for subsidized loans). So clearly $12K is affordable – the only question is whether it’s worth paying under the circumstances. He’s not trying to decide between UCI and Ivy League – it is one state university vs. another, and I honestly don’t know at this point whether U of Wisconsin is better, worse, or about the same as the UC system – I don’t even know about the quality of my home state UC-system any more with all the budget cut backs.</p>
<p>I plan on living on campus for the first year, just to get that “college experience” deal thing out of the way early on. I definitely think it is worth it, just not sure if the amount would be crazy to tack on.</p>
<p>I’m a big debt-hater, but this looks manageable to me. You are earning a very marketable degree, and as a rising junior, you already know what you’re doing in college. The risk that you’ll fall apart and be unable to finish the program is pretty small compared to the risk faced by a freshman who’s never dealt with a college-level academic challenge.</p>