Is undergrad school worth a 6 figure debt if I'm set on grad school?

Paying for College
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<p>I do not think a 6 figure debt for a BA is worth it. Think of how long it will take to pay off. And also think of how it will ruin your lifestyle when you are totally done with your schooling. Think about it, you will have massive student loan payments for decades upon decades. </p>

<p>Do an estimated payment plan on all that debt. 140k debt to pay off will cramp your lifestyle because you will be working almost to pay off debt and not have much left over for anything.</p>

<p>You go and earn yourself a couple of degrees with all of this massive debt. You make pals whilst earning your degrees and all of that. Your pals go on to work and eventually become homeowners and the like. Meanwhile, you will be renting out a room or something because your crippled by a 140 student loan debt. </p>

<p>I am not trying to be mean. I respect most folks just as a general rule, really. But, go to a cheap school and just do honors or something. Make the most out of the more affordable school. Make that school the alpha and omega of your academic existence and do everything you can do to earn really fair marks and network. Then, you might be able to go to grad school cheaply, even!</p>

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<p>I agree 100% with mildred's advice.</p>

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<p>I dont see how 140K will take decades. At most 8 years. if starting salary is $60,000. and 20K is the normal federal tax, then I have about $3000 per month. a studio apartment will cost about $500 a month. and $1000 for monthly expenses about. that leaves about $1500 for my loan payment per month. That comes to about 8 years. this includes no increase in salary, which rarely happens after UMICH.</p>

<p>Secondly, grad school is normally paid for by the company now, since I want an MBA.</p>

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<p>Tushar, don't do it. 140K will indeed take decades, and even worse, it's going to be on your credit report, meaning that it will be VERY difficult for you to be competitive with your peer group for things like car loans, apartments, financing your mortgage for your first home, your car insurance, etc. Even car insurance companies use factors such as your indebtedness to determine what rates you pay - their logic being that persons with higher debt are under greater stress, and therefore make poor judgments while driving, and therefore are involved in more accidents. </p>

<p>In addition, please be very aware that in nearly all fields, but even moreso in your intended field, prospective employers are going to run your credit history as part of the background check process prior to extending to you a job offer. This means that every job you interview for, if you make it to a finalist position in the process, every employer is going to see your debt, and, if they are trying to decide between candidates, someone competing with you for the same job opening but who has a better credit report with less debt may get the job, even if you have better educational credentials. </p>

<p>This is about far, far more than simply the ability to make the payments later - although that's very dicey. If anything at all happens - a difficult employment market, or you are late with payments ever, it will be disastrous for your credit report, and credit takes a very, very long time to repair.</p>

<p>Don't do this. It really, really really isn't worth it.</p>

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<p>Can someone show me hard numbers why it is going to take decades?</p>

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<p>Tushar, google any loan calculator, put the amount of debt you will have plus the interest rate (if your lucky 6.8% but think around 8%) and see your payment options. Dont forget that on top of your tuition amount you will have incredible interest added to the loan, which will make $140k about $220 to pay back. </p>

<p>We are in same situation with D you wants big name school over state school. We are trying to figure out how to pay for UMich but it looks like UMass will win out.</p>

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<p>Tush, yoou really need to look at the numbers. Including what an entry level grad with a stats and economics grad can expect.</p>

<p>You need to grab the loan calc, (I remember a good one at finaid.com) and a good salary survey (perhaps monster). Plug in your hard numbers. If you think that you'll be able to swing $1500 a month in loan payments.... I say go for it. $1500 sounds like a house and a car payment (at least) to me.</p>

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<p>okay. I think you have convinced me. If I go to UCONN, will majoring in economics and statistics be better than finance? I mean my family says that the broad subject area will give a better foundation.</p>

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<p>Tushar, in case you need it here is Taxguy's thread containing loan repayment calculations and related information:</p>

<p><a href="http://talk.collegeconfidential.com/showthread.php?t=326598%5B/url%5D"&gt;http://talk.collegeconfidential.com/showthread.php?t=326598&lt;/a&gt;&lt;/p>

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<p>Tush, even if you could afford to pay $1500 a month, it would take about 10 years to pay off the $140K debt with interest. (These are easy numbers for discussion purposes. Use a calc to find out exact numbers) Ten years!</p>

<p>As said ^^ that is about what some people pay for a house and a new car. So you will have to rent an apt and drive old cars for 10 years because you are paying off this ridiculous school debt.</p>

<p>One thing that no one has said in any debt??? discussion lately as far as I know is that a huge school debt is also a very undesireable feature in a potential spouse. Is it politically incorrect to mention this? </p>

<p>Young people often think that love is all that matters in a marriage, but in reality love is not enough and a marriage has to be practical and enjoyable too to last. Two people with huge school debts are not going to have a happy time, so that means someone with a huge debt has to hope to meet someone who has no or low debt and is willing to take on their debt when they marry. If someone were willing to settle on me with that kind of debt, I would have to wonder what is wrong with them? </p>

<p>If I were lucky enough to have one of my kids ask my advice (unlikely, I know), I would advise them that someone with a lot of debt is not marriage material. So huge debt means, in my world, not only no house and no car, but also no spouse and no family. When is the price at Big Name U. just too much?</p>

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<p>
[quote]
Tushar, don't do it. 140K will indeed take decades, and even worse, it's going to be on your credit report, meaning that it will be VERY difficult for you to be competitive with your peer group for things like car loans, apartments, financing your mortgage for your first home, your car insurance, etc. Even car insurance companies use factors such as your indebtedness to determine what rates you pay - their logic being that persons with higher debt are under greater stress, and therefore make poor judgments while driving, and therefore are involved in more accidents.

[/quote]
</p>

<p>Yep. You are making reference to ones debt to income ratio, eh? That is a serious thing with regards to financing most anything as well as employment opportunities. And, I am not even referring to a high roller type of lifestyle even. I am referring to just your typical normal things: housing, a car, and so on. </p>

<p>Oh gosh, you earn 50K a year, but have a debt of 140k...whoa! That would be one screwy debt to income ratio.</p>

<p>And, there is no getting out of most student loan debt. Maybe you can teach something in demand at an at risk school? The school will not clear all 140K of your debt. Maybe you can join the Peace Corps? The Peace Corps will not clear all 140K of your debt. And, so on and so on. </p>

<p>
[quote]
Tush, even if you could afford to pay $1500 a month, it would take about 10 years to pay off the $140K debt with interest. (These are easy numbers for discussion purposes. Use a calc to find out exact numbers) Ten years!

[/quote]
</p>

<p>Yep. And, interest is not always perfectly set in stone. I mean, it can be sometimes. But, just having that interest accumulate over the course of ones schooling is scary. Lawd. It is not worth it. </p>

<p>Going to University is very much worth it, just in general. But, having a 140k debt for University is not worth it. Think of your future tushar707.</p>

<p>
[quote]
okay. I think you have convinced me. If I go to UCONN, will majoring in economics and statistics be better than finance? I mean my family says that the broad subject area will give a better foundation.

[/quote]
</p>

<p>Oh yeah! If you major in Economics as well as Statistics, you will have a lovely major which is very fluid. Employers will love you and you will have a great many employment options upon graduation and the like.</p>

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<p>Ugh, I'm in a similar situation. I had applied to a few ivies, but "luckily" those didn't work out, so I don't have to choose between a state school and $45k per year. However, my choice now comes down to either UNC Chapel Hill, where I'd likely spend my last two years at their Kenan-Flagler business school (US News considers it the #5 undergrad business school in the country, and BusinessWeek considers it #11), for $32k a year, versus SUNY Binghamton (where I'm in-state) for $17.5k a year. My parents are contributing about $12k a year, so my choice is between $80,000 debt for UNC or $22,000 for Binghamton. </p>

<p>I figure I could (and likely will) get internships, or at least some sort of work, during the summers. I think I want to go into finance, and internships at top finance companies pay about $8,000 to $10,000 per summer, but of course, there's no guarantee I'd get one. </p>

<p>And I was also thinking that there's a possibility that I'd earn more money after graudating, if I went to UNC. I visited Binghamton and talked to a woman in the recruiting department, in charge of relations with the companies that recruit on campus, who said although Binghamton doesn't specifically record their recruitment and pay levels, the general starting salary for finance jobs (including investment banking) is about $46-48,000. Kenan-Flagler at UNC does [url=<a href="http://www.kenan-flagler.unc.edu/Programs/BSBA/careerServices/placement.cfm%5Drecord%5B/url"&gt;http://www.kenan-flagler.unc.edu/Programs/BSBA/careerServices/placement.cfm]record[/url&lt;/a&gt;] these stats, and there the average starting salary for finance-related jobs is $54,000. Investment bankers (which I probably wouldn't do, except possibly for about two years just to get my foot in the door) make like $58-59k. Because Binghamton's numbers were just an estimate, I don't know how far you can take them, but if there really is a $5-10k pay differential between Binghamton and Kenan-Flagler, that would compensate for a lot of debt. </p>

<p>Of course, part of the problem with this is also that I've been thinking more recently that I might want to go to law school instead of going into finance, in which case that last paragraph would be moot.</p>

<p>So I'm not sure what I want to do. I didn't really like Binghamton that much when I visited it.. the people seemed nice, but there doesn't seem to be much to do on campus. UNC seems great, but it is pretty expensive. So I'm not entirely sure what to do...</p>

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<p>Oh, I just wanted to add that if I did go into finance, this could very possibly be my terminal degree. And even if I did get an MBA, I wouldn't get it for at least several years, at which point there's a good chance that my employer would pay for it.</p>

<p>Obviously if I went into law, it'd be a different case.</p>

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<p>Please heed the advise given and do NOT take on huge debt for your undergraduate degree. Attend the cheaper school you will be much happier in the end.</p>