<p>"So if I have kids, and I expect them to attend college, I probably know that early on."</p>
<p>Don't assume a constant income or that we anticipated these kinds of college costs (who knew he wouldn't go to State U?). My sister-in-law put her money in a 529 and it couldn't be used for the school my niece went to, as well. Lots of surprises.</p>
<p>but even if you put "something " away, the student would not be looking at loans for the entire cost.
I don't assume a constant income, we never do. Why we are still living in our starter house is due to lay offs and strike, which depleted savings and even incurred credit card bills for groceries and medical care.</p>
<p>I don't know a lot about 529 plans, are they new?
I don't understand why the money couldn't be used for any school unless it wasn't accredited.
<a href="http://money.howstuffworks.com/5297.htm%5B/url%5D">http://money.howstuffworks.com/5297.htm</a></p>
<p>My parents make enough where I will get very little if any financial aid. Bottom line. My parents have been saving, but it was through some state plan, it got frozen, so I end up with very little savings. My older sister didn't get much, but I get even less than four. And my parents have to put 4 kids through college, within 7 years. They have nowhere close enough to pay near the full tuition I'll have to pay withoout any fin. aid. I have 2 more siblings, one of them just two years younger. For my personal situation, 6 figure debt isn't worth it, especially since I'm thinking about pharm school. But you must decide for yourself, if financially you're comfortable with being in that much debt, and if grad school is in your future.</p>
<p>"Your oversimplification by using averages is not at all answering the OP's questions. People are in serious debt from education all the time.</p>
<p>Bottomline is, you are wrong. I know many people, and I am sure if you did any amount of thorough investigation beyond superficial averages you would see that a six figure debt is not at all rare."</p>
<p>I think that it's rare for people to carry a six figure debt to send one child to a college like HPYS. </p>
<p>Frankly, I think that it's rare for people to carry a six-figure debt to send a student anywhere for an undergraduate education. </p>
<p>I have seen students posting on CC in the spring saying they would have to carry that kind of debt to attend the school of their choice. In every case, they could have avoided that situation by:</p>
<ol>
<li><p>Making sure that they had a safety school that they could afford without crushing debt and that they would enjoy going to.</p></li>
<li><p>Avoiding applying to colleges that did not guarantee to meet 100% of demonstrated financial need. Yes, we all know that colleges that guarantee to meet need like this still will usually not pay all that families feel that they can easily afford. However, I repeatedly see students here and elsewhere pinning their hopes on colleges that state on their web sites that they meet only 60%-80% of students' demonstrated financial need. No surprise, that aid packages from such school may require students to take out $80 k or more of loans.</p></li>
<li><p>Applying ED while assuming that of course the school will give the family all of the financial aid the family requires (and while that financial aid will all be in grants).</p></li>
</ol>
<p>My parents assumed that I would be going to a state school and saved accordingly (actually they saved about half the price of a state school, with the assumption that I'd pay for the rest). Ivy prices and financial aid have been a bit of a shock, though it looks like we'll be able to work it out.</p>
<p>One problem with your argument Northstarmom is that not all students can get admitted to schools which meet 100% of demonstrated need. It is usually the elite schools which offer 100% funding for need and as you know these are the most difficult to get into. So if you have a B+ student who doesn't test very well with less than outstanding EC's who also has several siblings ready to enter school in a few years, a lot of debt can be accrued if they decide to go to a private school.</p>
<p>I agree with Northstarmom that you should check again and first make sure that your debt truly would be that large before you decide that you can't go to a particular college. And then, if it truly would be that large and there's nothing you can do about it, I would say RUN DON'T WALK away from this option. Don't fall into the trap of believing that you can't have a fantastic experience at a public institution or at a less competitive private institution where you might get significant merit aid. </p>
<p>I don't believe any college is so far superior to others that it would be worth it to go there even at the expense of having to suffer financial anxiety for years during and after college. I don't think I know anybody who is paying off a six-figure loan, but I do know people my age (28) who are paying off five-figure loans. You can't count on getting a lucrative job, and even your goals may not be the same when you finish college. Paying for college may look to you like such a big hurdle that you don't properly judge the many hurdles waiting for you after that! At my age, I am thinking of saving money for a house, figuring out when I might feel OK financially about having children (especially considering that I would want to save for THEM to go to college), and saving for retirement. Thank God I'm not worrying about paying off college loans on top of that.</p>
<p>I know a guy at brown who will have close to six figure debt. Put simply, he didn't qualify for much financial aid, and his parents didn't want to pay for his education. He wants to be a lawyer, so for him it's worth it.</p>
<p>Break the question down into parts:
1.If you did have 160,000 (4years @$40K/yr) or
2. If don't have $160,000 but $60k for State Univer. (4yrs @ $15k/yr).</p>
<p>look at the different scenrios for each. </p>
<p>gotto run.</p>
<p>As with any question, there really are three possibilies. </p>
<ol>
<li>Now suppose that all schools cost the same (not free). Now which school do you want to attend and why. Alot of people, orientals as an example, tend to look past the money equation and look more to the future possibilities, while at the same time abhor debt. </li>
</ol>
<p>GreenGem4: As a side note:
There are reasons to have education debt in contrast in Not having that debt, just as there are reasons to have a mortgage (on a home) opposed to having no mortgage. I currently want the education debt because the debt is: Subsidized by my fellow taxpayers. the Interest is deductible. Payment can be as long as a mortgage. Method of interest calculation is to my favor (different method than a comforming home loan.) Some of the principal payment will be absorbed inflation (I'm betting that most of the principal will be absorbed.) The overall System is tilted to having debt. And finally, I'm probably a better investor than if I spendt the money on avoiding the debt.</p>
<p>If the tax and economic situation changes, you can be 100% sure, that I will reexamine the question by examining all possibilities. </p>
<p>The reason why people don't save or invest, for any future goal, is because, again 3 reasons: 1. Didn't think they could do it. 2. Never got around to it. 3. Have other uses for the money that they think is more immediate. </p>
<p>We (US of A) also have a debt, a very large debt. Having that debt can be argued either way, but the current rationale is that this debt has moderated the last 4 years of economic problems. </p>
<p>I also believe that if at all possible, one should avoid debt and pay cash. But if taking on debt is to your favor, then you should do so with the ABILITY to pay that debt off quickly. </p>
<ol>
<li>Now suppose, [variation to 3] that the proposed kid and his family has No, zero, money what so ever. Which education, State college vs Prestigous U, would the kid want to attend assuming the kid well qualified and no aid is available?</li>
</ol>
<p>I've posted a comment on 529's on a thread about 529's.
Your link is absolutely correct and factual. However what is not said is probably more important. </p>
<p>Be aware that a 529 is a climax money, vehicle. By this I mean that you have limited yourself to set circumstances, and that 529 is the last stage before the money is used. You cannot go backwards with the money. </p>
<p>529 is OK and you can in the shortterm have a guaranteed positive rate of return. In the longterm you can lose money which cannot be written off on taxes. </p>
<p>Based on our tax system today, "qualified" investment programs (as 529, Coverdell, IRA's, 401k, 403b, annuities, cash value Life Insurance) have attractive features, IF the program makes money. But, If the program loses money, you lose money with no way in recouping that lose. In a "nonqualified" program, your gains are NOT taxed at your marginal rate, but at a reduced rate and any loses are deductible at your marginal rate. </p>
<p>Please see Qualified and Knowledgible tax and investment person(s). The "and" is very important. </p>
<p>My Rant and Rave: If people just spend 1/1000th of the time in learning about money than plain jane algebra. We wouldn't have a situation.</p>
<p>
[quote]
So if I have kids, and I expect them to attend college, I probably know that early on. I probably also have been earning 90K for some time, and didn't go from $20K to $90K in a couple of years.
[/quote]
</p>
<p>Let me give you a scenario...</p>
<p>A family from Vietnam immigrates over to the United States in hopes of a brighter future. The Father hops around searching for jobs and finally settles on schooling in engineering. Mother is a stay at home, well, mother. Income right now is virtually 0, but when the father does get a job in engineering, bam, there goes the welfare and any financial assistance. Income goes from 0, to, in, ten years, triple digits. By the 5th year, daughter goes to college; no financial assistance. There's barely any time to save up the money because it all gets drained into the new mortgage, some loans taken out, etc. The year after, next daughter goes to college; no financial assistance....</p>
<p>In the quest to give the family a decent lifestyle, the government gives absolutely nothing to aid the college bounded kids because their parents worked hard to earn money. The situation often leaves the parents wondering, "why didn't we just sit here and do nothing, and get a full ride for all our kids?" </p>
<p>I don't think it's safe to assume that private will always give a better financial package than state schools. And it's also not safe to assume a family with a higher income necessarily lives a better life or can afford an expensive tuition. There are way too many intangibles and loopholes in the system....</p>
<p>Another situation: </p>
<p>Basically the same family, but the parents go into a a restaurant type business. The parents have an annual revenue in the seven figure range. But, they only report income as very low, and possibly a loss, every year. ALL their kids get lunch for free, all the while wearing Jordans and a throwback jersey driving a pumped up Prelude right outside. And, they'll get a full ride to any college. </p>
<p>Yeah, life sucks.</p>
<p>"I know a guy at brown who will have close to six figure debt. Put simply, he didn't qualify for much financial aid, and his parents didn't want to pay for his education. He wants to be a lawyer, so for him it's worth it."</p>
<p>? I wonder if he's thought ahead to how much law school will add to his debt. I imagine that after law school, he'll be more than $200 k in debt. Will that be worth it to him? </p>
<p>I also wonder when it will dawn on him that people from low cost universities do get to go to top law schools.</p>
<p>My niece who is graduating from med school has taken out about $160K in debt. Thank God we eschewed all undergraduate loans, and she went to a school where she got a nice merit award. If she had borrowed heavily for a private undergraduate school, she could conceivably be over $300k in debt. And she won't be earning much for a number of years yet! But at least as a doctor, she can pretty much be assured of being employed and having a good shot at repaying these loans without too much anguish. Law school is a different story. I know a number of unemployed, underemployed and under paid lawyers, and to have that much debt on your head could be a real killer under any of those circumstances. There are way too many attornies out there, and the average salary for them is surprisingly low. Also once you are an attorney, I am not so sure your undergrad school is as important as the law school. In fact, regional contacts are very important in many fields of law, so often going to a local law school may be more helpful than a top law school. </p>
<p>Whether a six figure debt is worth it, is really up to you, but often future events that are often uncontrollable dictate the answer to that question.</p>
<p>Any student taking on a final debt of over $40K for an undergrad degree from ANY college is a sure sign of; youthful stupidity or parental malfeasance or joint hubris. But most likely, some combination of all three.</p>
<p>I agree with you, Toblin. It upsets me to see adults allowing kids to get into huge debt without having a realistic idea of how they will be affected by that. Too often kids have unrealistic ideas about what kind of income they will be making, how fast they will be able to pay off their loan, and what kind of expenses they will have when they're out on their own. Private colleges often encourage kids to get into debt like it's no big deal, selling this misconception that it's always better to go to a more prestigious school no matter how much you have to sacrifice. And I felt when I was in high school that our college counselor wanted to push people to go to big name schools at any cost because it makes the high school look good (it was a private school).</p>
<p>tryinhard wrote: </p>
<p>"Even though it's too late to apply for this year, I was considering perhaps transferring to U. Toronto. Are there any "down-sides" to a Canadian degree (thinking about how US companies view it)? Also, if I wanted to stay to live in Canada after graduation, is it difficult for a US citizen to get employment there?"</p>
<hr>
<p>It's not too late to apply to Queen's as a transfer (2/25 or 5/15 depending on program), so maybe you should look into UofT to be sure.</p>
<p>There has been some discussion of the "portability" of a Canadian degree in the CC McGill area. See:</p>
<p>It seems most US companies have no problem. Some US grad schools even recruit for their programs in Canada. One thing about professional school admissions though (Law schools and Med schools) - Canadian schools don't give out many A's, so if a high GPA is needed, Canada would not be a great option for undergrad.</p>
<p>I would have to say that a 6 figure debt is definately not a good thing. One possible option would be USMA. It is free and provides you with a guaranteed job upon graduation. However, West Point is definately not for everyobdy--it's tough!!</p>