It’s a mistake for most students to have parents cosign loans. When parents can’t afford to pay much up front, they rarely can afford to borrow either. If they can’t save enough to pay out of savings and earnings, how can they pay off debt? It’s easy to assume you’ll just pay them back, but the federal loan limits were set for a reason – ~$27k is about the maximum debt that a new grad can handle.
Do you have anyoptions that won’t require you to take more than the federal loans (~$5500/year)?
@austinmshauri I always assumed that I would be able to take out other loans. But other than scholarships and work (and birthday money), I really don’t have many other ways to pay during college. My parents will help pay during the year as well, but I always knew I’d probably have to take out more than the $5500 in federal loans.
If you can only get $5500 freshman year, and $7500 every other year, how are students racking up $40000 in debt? By co-signing with parents?
The full Federal loans come to $27,000 for 4 years. ($5,500 freshman, $6,500 sophomore, $7,500 junior, $7,500 senior), and max of $7,500 for each additional year if you take longer to graduate. The maximum aggregate is $31,000.
https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized
If you are an independent student, or if you are dependent and your parents apply for and are denied PLUS loans, you can borrow an additional $4,000 each year, and the aggregate for Federal loans would become $57,500.
If your school awards Perkins loans, those could be as much as $5,500 per year with a maximum aggregate (if you need more than four years to study) of $27,500.
https://studentaid.ed.gov/sa/types/loans/perkins
So yes, it is possible to end up with a boatload of debt all in your name if the stars are aligned correctly.
Before you borrow one cent, run the repayment calculators, and see how big a bite your potential debt will take out of your take-home pay. http://www.finaid.org/calculators/loanpayments.phtml Remember that (depending on the tax rate) in order to pay $100 toward your student loans, you will need to earn approximately $134 before taxes.
@happymomof1 Thank you! I have also done some more of my own research on financial aid. This discussion is helping clear my mind about what I am getting myself into financially by attending Madison. Given my EFC is going to down, I expect to be eligible for Perkins loans in the future as well, which could help.
$40K in debt isn’t a whole lot to take out, but I don’t see how this shapes up to only $40K.
UW-Madison costs about $25K a year. Even if we hold costs constant for 4 years and assume you only take 4 years to graduate, that’s a total of $100K.
You already said that your parents can contribute “some” but it won’t be $15K a year. It’s unclear to me how much that means, but let’s be generous and assume your parents can contribute $10K per year, which I think is probably an overestimate. That’s $40K out of a total $100K cost.
That leaves $60K to borrow, not $40K, and that’s assuming your parents can kick in a lot. If they can only put in $5K a year, then we’re talking more like $80K.
The National Association of Colleges and Employers reports that physics majors earned an average starting salary of around $64,000 a year. The response rate on this survey was around 30%, which isn’t great for making a representative survey. Nonetheless, I think it’s safe to assume that the average starting salary for physics majors is probably somewhere between $50,000 and $65,000 a year, which is pretty decent for a new grad. You could repay loans of $40K with that easily. You could repay loans of $60K with that salary…with some difficulty. $80K would be a burden. And remember that these will mostly be private loans. Private lenders are a lot less flexible than federal lenders when it comes to repayment. There’s no public service loan forgiveness, no income-based repayment, no mandated deferment or forbearance options. There’s just…the bank. Anything you have to negotiate through them.
And you say you want to go to graduate school, which is potentially more debt.
Also, majors don’t determine salaries - jobs do. What if you decide that you want to teach high school physics? Or work at a nonprofit promoting climate change awareness? Having big debt constrains the choices you can make after college. It shackles you for years.
I think you need to get more clarity around how much your parents can actually contribute and how much you would have to borrow.
What’s your SAT (CR + M/Total) and/or ACT score? If you give us that and your unweighted GPA we may be able to help you find a more affordable school. It may require a gap year (don’t take any college classes for credit during a gap year or you’ll be considered a transfer at most colleges and be ineligible for freshmen grants).
How much can your parents contribute per year without borrowing? Ask them for a number. What’s your home state?
My guess is he has affordable options in state. For physics, La Crosse or Platteville would be good options OP.
You could also do a 2-yr UW college and then go to Madison if that was important to you.
He says above 34 ACT.
@juillet That is very helpful. I haven’t talked to my parents about the specifics, but knowing their EFC and financial situation I think they will be able to contribute $5k to $10k, likely somewhere between there. That would leave $60-80k in loans, however I also plan to work hard and get a job. I’m guessing by working during the school year I can take out at least $3000 per year. Working during breaks could also get me another $3000, at least. With that taken into consideration, I’d likely be $40-60k in debt. And that’s assuming I get low-pay jobs. I would also apply for any scholarships, save any money I can, and life frugally during college. I’m guessing this will also gain me a couple thousand dollars a year. With all that taken into consideration, that’s where my rough estimate of $40k in debt came from.
@austinmshauri My SAT is 1470/2050, and my ACT is a 34. My unweighted GPA is a 3.9.
You are both correct, it’s a good idea to sit down with my parents and discuss exactly how they can contribute to this rough budget I have. And I will also consider a gap year as well, if no good options come along.
I am a Wisconsin resident, so I do have many in-state options, public and private universities. However, the only in-state school I applied to as of now is Madison.
That’s an excellent plan, @Iggyfan56. I think a 1470 and 3.9 GPA may qualify you for merit at some schools. Check the list so you know your options.
Did U of W not give you any financial aid?
@citymama9 UWMadison gave me $5500 in federal loans, which was the max I can get as a freshman. Other than that, I got nothing else. My father is calling later today to try to appeal for more aid, because our EFC as calculated by the FAFSA does not represent our financial situation very well.
you propose Large, Well-Known, Expensive University v. Small, Lesser-Known, Cheap University. well, how about a Large, Well-Known, Cheap University?
you qualify for an automatic full-tuition scholarship at Alabama, based on your stats. Ole Miss, too. that would leave only room, board, books, and transportation, and it seems like you have a plan that would cover those expenses. you might also earn additional scholarships that would drive the costs down further.
problem is you would have to take a gap year as the deadlines seem to have passed. but you could attend UA or MIss for two years, then transfer to UW-Madison. that would still save you a bunch of money and you still end up with the UW degree.
or you could save money on undergrad and target UW for grad school.
there are lots of posts from people here who visit Alabama even though they are not seriously considering it, and immediately move it to the top of their list. same with Ole Miss. they must have some campus mojo going on.
i am not sure but you might be able to grab a full-tuition scholarship to Alabama Huntsville NOW, and start there in the fall, but you would have to move fast. then you could transfer to UW after two years, without having to take a gap year. possibly the same deal may be available at Alabama-Birmingham.
you may want to explore a double major in physics and engineering, as that would give you more options.
if you take a gap year, you probably should not take community college classes as that will disqualify you from many big merit scholarships that are for freshmen only.
of course you could do community college for two years and transfer to UW for your BS degree. that would probably be the least expensive option that still gives you a UW degree in 4 years.
here are some links to the scholarships mentioned above. good luck.
http://scholarships.ua.edu/types/out-of-state.html
http://finaid.olemiss.edu/scholarships/#8
http://www.uah.edu/admissions/undergraduate/financial-aid/scholarships/merit-tuition-scholarships
Not every university awards Perkins loans. Do not count on being able to get one. The only loans that you are guaranteed are the standard federal loans.
You need to learn more about UW’s financial aid policy. It is entirely possible that the only aid you will ever have access to there is the standard loans. If so, you will not be able to afford it.
I’m with your guidance counselor on this. You need to kick UW to the curb, and move on.
Check [url=<a href=“http://automaticfulltuition.yolasite.com/%5Dhere%5B/url”>http://automaticfulltuition.yolasite.com/]here[/url] for a list of automatic scholarships for your stats. I think you might get tuition at Alabama, but there are others.
Be careful not to count on scholarships for attendance at UW. Most money comes from the schools themselves. Outside scholarships are frequently only good for a year. Hopefully someone with more info can jump in on this.