<p>Turn down Wes. Total cost is really $250K+. How are your parents planning to pay for it all? If they don’t have their share ($100K) in the bank or trust, waiting for withdrawal, then were they planning on borrowing on their house for that amount as well? Something to ponder.</p>
<p>More specific to you, $150K is a large sum of money for anyone but especially a new grad. You may not be able to buy a house, maybe a nice car, choose that cool job in your dream city because it pays less, or maybe even live with roommates for several years. You will find your life choices limited because you have this enormous debt. Prestige counts for some points but there are graduates from these colleges who are in relatively low paying jobs. Not everyone ends up wealthy.</p>
<p>It wouldn’t surprise me were there more to the story than that. The OP’s family would not be the first to decide it made more sense to borrow money at today’s low interest rates rather than cash-in a major asset or part of their stock portfolio. People make that decision all the time. And, who knows? If the asset appreciates enough over the space of the next twenty years, the parents may be willing to forgive the balance of the"loan". I would follow the parents’ cue on this.</p>
<p>Sure there are parents for whom borrowing is an asset management method when they otherwise would have the money to pay cash. But there is no assurance that that is the case here.</p>
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<p>There is no assurance that this is the case; the more likely scenario is that the parents do not have the money, so $150,000 in debt will endanger both the student’s and the parents’ personal financial situations.</p>
<p>There’s no assurance, but there is a strong indication: Wes considers them to be full pay. (Of course, as I said earlier, this could be because the $100K not spent for the OP’s older sister is not in her name and thus shows as available for the OP’s education.) Another way the parents might be looking at this is that they do indeed have that money to spend on the OP, and that if the older sister chooses to go to grad school that is not funded, they could use home equity then. Much depends on what they told the older D about that money.</p>
<p>We chose to use a HELOC to help S pay for journalism school. The interest rate is less than 50% of that available to students, and it is tax deductible for us, and unlike student loans, can be discharged in bankruptcy. It is an infinitely better deal than conventional student loans. He will have to pay us back for whatever he has to use, and we will set up a payment plan when we know how much that is. (He is very frugal, got an outside scholarship, etc.) But in our case, he is an only child, so he is the only one who stands to lose, ultimately, if there is an issue. That makes a big difference. And, of course, the amount is going to be WAY less than $150K. Even wit a favorable HELOC, those payments will be significant.</p>
<p>I continue to be disturbed by the vagueness of the parents on this one. I agree with those who suggest that the student consider taking a gap year and reapplying to a list of schools that is less likely to leave the student with this rock-and-a-hard-place choice, OR see if the schools with places in May are a better and more affordable fit. There are always schools such as College of Wooster, Eckard, and Goucher on that list. (And if there is a gap year, I wonder if the parents could not improve the FA situation by transferring at least some of the money to the sister, if it is truly committed to her.)</p>
<p>Sorry to be confusing; I do have the option of a state school. My sister is doing grad school in a state school, and my parents insisted that they completely prepared for this scenario of me getting into an expensive college…my parents did say their home-equity loan would have a way lower interest rate. Like 2 or 3 point something percent? They even told me they wouldn’t make me pay it back if I ended up not being able to…which confused me even more. In any case, I guess they’re saying I wouldn’t have to go on the conventional student loan route? </p>
<p>^^Your parents don’t sound stupid. It sounds like they have given the situation a great deal of thought and that you shouldn’t be the one worrying about finances at this point. You are very lucky to have such parents.</p>
<p>FullOut, So it turns out your parents have all along had a financial strategy that means you can afford Wesleyan, and they’re not serious about making you pay them back. It was just a ploy to make you feel guilty and grateful. So all is forgiven and everyone’s happy. </p>
<p>Except us poor chumps who lavished 4 pages of sympathy/suggestions on poor unfortunate you? Jeez. Suggest you don’t try pull this bring-out-the-violins routine at Wes.</p>
<p>I’m really sorry about that actually ;-; I really did think the situation was different and whenever I brought up the money situation in the past, they just avoided it and changed the subject. I’m still somewhat hesitant to spend so much on an undergrad education, but I’m really grateful for all the suggestions people have given or helping pay it back.</p>
<p>It can be hard to get a good sense of the finances available for college. If you are still planning on repaying $150,000, that still is A LOT of money. We paid back $200,000 and it took us about 25 years to do so. It was called a mortgage.</p>
<p>If I had to choose between repaying $150,000 and getting a full ride so I wouldn’t have to repay $150,000, I know I’d choose the full ride in a heartbeat. College is really what a student makes of it. I and 5 of my sibs all went to huge state Us and graduated without debt. It’s a very freeing feeling that I highly recommend. I’d hate to have had the debt to repay and only NOW be free of it in my 50s! This would put off many other things we needed our money for, including buying a place for ourselves, buying cars, paying for our expenses and those of our kids, and saving for retirement.</p>
<p>$150,000 is a LOT of money, especially if your folks are taking out loans for that amount.</p>
There is no “if” – you won’t be able to pay back $150K loan based on any job you are likely to get with an undergraduate degree. At what point in time would your parents be willing to “forgive” the loan they took out that you can’t ever pay back? As a wedding gift when you get married? Or is it something that they will still be griping about when you are age 50? </p>
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<p>I don’t know your parents so I have no way of knowing how your family handles money, and whether they are just calling a gift a “loan” as something they can tell your older sister if she feels she is being shortchanged – or if they are the type who will never let you forget that you “owe” them, no matter what happens in your life. </p>
<p>But I do know that the advantage of a conventional student loan is (a) they won’t let you borrow more for undergrad than you can reasonably expect to be able to pay back; (b) you retain your personal independence. If you fall behind on student loans, you’d get letters in the mail and maybe even phone calls from creditors – but it won’t be the subject of an argument at the Thanksgiving table. </p>
<p>So think long and hard about your relationship with your parents and family dynamics before you take a big “loan”. If your parents do not see it as their responsibility to supplement the $100K they have already put away… you still come back to the reality that the $100K plus the roughly $22K you can get via student loans plus whatever you can earn over the summers is your college “budget”. </p>
<p>If your parents really want you to go to Wesleyan – and it looks like they do – then they need to step up to the plate and acknowledge that they are willing to take on that extra cost as their own responsibility, without expecting any sort of pay back from you. If they want you to have some skin in the game and want to agree to a smaller amount that will be a realistic for you to pay back post grad – that’s a different issue. </p>
<p>Unfortunately, the mixed messages and vagueness from your parents about cost and debt are probably having the opposite effect from what they intended. Someone planning life and personal finances conservatively will naturally assume the worst case scenario, which is that the $150,000 of debt is too big a risk for both you and your parents.</p>
<p>If they really have the money and really want you to go to Wesleyan, they should just offer to pay the full price, or the full price minus just the federal direct loan amount, instead of giving you the mixed messages and vagueness about whether Wesleyan is really affordable.</p>
<p>FullOut, I’m actually more exasperated by your parents than you. I agree with CalMom though. Your parents’ ambiguity puts you in a stressful situation. Are they financially able to shoulder the loan burden with good grace or are they going to pour on the guilt every time you buy a new pair of shoes instead of paying down the loan. </p>
<p>You’ve made progress in getting them to clarify their intentions, but it seems you still have a way to go. Family dynamics are tough for outsiders to fathom. And money can bring on serious rifts, in your case not only with your parents but potentially with your sister. Keep probing until you reach a transparent consensus that you’re all comfortable with. Don’t export this conflict to the future.</p>
<p>Agree with @momrath above. Get a transparent consensus ASAP, so you can weigh your choices appropriately and chose what all of you can comfortably live with. Don’t make assumptions about whether your folks REALLY want you to repay or likely DON’T. It’s important to get a much more concrete understanding and not guess and have this return to haunt your relationship for decades.</p>
<p>Possibly a relative – Aunt/Uncle, Grandparent – or clergy who knows your family could talk to your parents on your behalf. You may be internalizing the dilemma and your parents may not realize the pressure they’re putting on your shoulders.</p>
<p>How do the price and academic suitability of this state school compare?</p>
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<p>If they really do not want the OP to worry about finances, they would just say that they will pay the cost of Wesleyan (or the cost of Wesleyan minus the federal direct loan limit of $27,000), rather than putting the OP in $150,000 of debt that may or may not be forgiven at the discretion of the parents. This non-transparent way of debt and possible forgiveness does not set a good example.</p>
<p>What worries me (and probably the OP) is the likelihood that the parents will come back 10 years after s/he graduated from college and say “when you are going to pay us back?” and “You promised to pay us the $150,000 back”. I agree with everyone that the parents should just say upfront that they will pay for Wesleyan. I’m still wondering about the parents’ financial security and that’s the reason they can’t be more transparent.</p>
<p>One thing for the OP to consider are his parents’ ages. Are they over 50? How far away are they from retirement? This may be one factor why the parents are so maddeningly ambiguous about what they’re going to pay.It’s one thing to send your child to an expensive college if you’re going to be working for the next 20 years; it’s quite another if you’re looking at retirement within the next 10 years. (When my son is college bound, H and I will be retirement age so it’s on my mind a lot. We won’t be able to borrow, even on HELOC, a lot of money.). It sounds like the parents want to send their child to Wesleyan but don’t know if it is truly affordable. </p>
<p>Another issue is that many people don’t know how secure their jobs are. Many folks are surprised to have to job hunt or retire in their 50s, which may be a decade or two before they had planned. There are many reasons to consider more affordable options if the folks can’t be more definitive that they will definitely pay ALL college costs minus the $27K stafford loan. Talking with a trusted elder that your parents respect might be a good option.</p>
<p>Fulloutpanic it is crazy to have that much debt for undergrad. Consider max what you could earn in one year, so maybe $50K at most. Do you want to have a payment the rest of your life or hamper your parents’ retirement? Or have them never pay off their mortgage?</p>
<p>There is absolutely no way the cost/benefit analysis would have that be correct.</p>
<p>I imagine your parents want to match your abilities with the best educational opportunities.</p>
<p>Take the better scholarship/lower cost school alternative and be happy. Do the best you can and take advantage of every educational opportunity that comes your way.</p>
<p>With any significant loan, be sure to have term life insurance on everyone involved. Income earner should have 10 - 12X earning covered in term insurance.</p>
<p>Have you ever heard of Dave Ramsey “Financial Peace” he has several books.</p>
<p>You are smart enough to not fall into the huge loan hole!</p>
<p>I’d just like to add an element to the equation: 10 years post high-school graduation, my son was married and the father of a newborn son. Wife was at home, earning -0-. I’m sure that his mental picture of where he would be in 10 years included visions of career and income… but not the responsibilities that came with fatherhood. But life happens.</p>
<p>My son didn’t have to worry about debt. </p>
<p>But the point is that life brings other responsibilities – it’s not just a matter of living frugally while loans are paid off. There is no such thing as “frugal” when you are a parent - children are rather expensive acquisitions. (And sometimes, like my grandson, their arrival is definitely not part of any pre-conceived plan.). </p>
<p>My guess is that the parents know very well that their child will not be able to easily pay off a $150K loan… but they aren’t willing to let go of the prospect of being paid back. Maybe in their mind it’s a form of insurance – something they will be able to fall back on if they run into hard times. But it’s just not a good idea, and especially not a good idea if (like me), they think grandchildren in the future is a good thing, equally as valuable as a college degree for their offspring. </p>