<p>I thought interest doesn’t accrue until after graduation</p>
<p>So your out of pocket cost is $43k per year plus annual adjustment and around half of that will come from loan. Also, that $8k from 529 is per year so you have $32k in that account, right? Anyway, the total cost is $170k+. It is a bit expensive for undergraduate education, not to mention half in loan.</p>
<p>No. NYU total is 66,600 including 2,000 allocated for living expenses. I got 26,250. That makes it 41,350. My parents are paying 9,000 which makes it 32,350. I have 8k/yr in my 529 to make it 24,350. I have a work study for 3,000 to make it 21,350. </p>
<p>I will be taking this amount out in loans with the unsubsidized and subsidized loans and the perkins loans. My parents will take the PLUS loans which I will pay.</p>
<p>I am also waiting on 3 outside scholarships for 1,000. Which I have a really strong chance on at least one. One of which is renewable for all four years. It is also possible I can apply and get more scholarships for the coming years if I am more proactive.</p>
<p>I put rubin housing on my housing app for first choice which is the cheapest and is 3,000 less than what was allocated for housing in the 66,600. </p>
<p>If I get into rubin and at least one scholarship. I will be taking out 17,350 per year. </p>
<p>I will also be working a summer job to combine that with my 2,000 allocated to living expenses so I can have a comfortable amount of spending money to live in nyc.</p>
<p>4,000 of that 17,350 is a no interest loan from a rather wealthy family member. Who will give me a very flexible payment plan.</p>
<p>This comes down to 13,350 in loans that I will be paying back interest on from the government. In the first year. In the coming years. Housing will be more expensive, but I will be 18 and able to get a better summer job/paid internship, and maybe more scholarships.</p>
<p>I do not think that is completely unreasonable to pay for a world class institution that has great study abroad opportunities, academics, and network in the business world. Not to mention having a great college experience</p>
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<p>Here is my calculation based on your information: 20k+9k+8k+3k+3k = 43k
but the total from that is over 69k not 66k. That is where the error is coming from. Anyway, your out of pocket cost is $40k per year and a total cost of $160k+. It is not completely unreasonable and many people are paying even more for that. It would be fine if it is affordable to you and your family. Just let you know that the amount of loan is multiple times of an average college student debt.</p>
<p>Work study won’t go towards tuition. It will go towards spending money for me.</p>
<p>You have to know what kinds of loans can be combined. Say you do all the above, and when you graduated you have your loans ~$40k (assuming you’ve paid all interest along the way), your private loan ~$16k, and your parent plus loans ~$50k. You can’t combine these, so your monthly payment will be very very high. PLus loans can’t go on an income based repayment plan, and can’t be part of public service debt forgiveness.</p>
<p>I think the question is whether it’s worth it. I don’t think so, but if you do, realize that you will be paying over $1000/mo for years and years post grad. It will really limit your options as you will HAVE to take a job that pays what you need to live plus $1000. Year after year. No cars, vacations, saving for your retirement or your own kids’ college. If it was so easy to save/pay $1000/mo, your parents would have done it for you. If you make $36k/yr, it means you are paying 1/3 of your income to past debt, but you’ll also pay about 1/6 in taxes and that leaves you very little to live on.</p>
<p>^ The parent plus loan would be likely on his parent’s shoulder. Hopefully they are not retiring soon.</p>
<p>^^^ on the parents shoulder legally, but …the student is promising to pay. </p>
<p><<<
I thought interest doesn’t accrue until after graduation
<<<</p>
<p>what do you think Unsub loans mean? the interest on those loans will accrue. and the Plus loans also are unsub…so that interest also accrues. so, your loan totals will be MUCH higher upon graduation. </p>
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I think the question is whether it’s worth it. I don’t think so, but if you do, realize that you will be paying over $1000/mo for years and years post grad. It will really limit your options as you will HAVE to take a job that pays what you need to live plus $1000. Year after year. No cars, vacations, saving for your retirement or your own kids’ college. If it was so easy to save/pay $1000/mo, your parents would have done it for you. If you make $36k/yr, it means you are paying 1/3 of your income to past debt, but you’ll also pay about 1/6 in taxes and that leaves you very little to live on.
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<p>I agree. </p>
<p>He will make more as a CS major, but he will pay more in taxes. paying out over 1000 a month in after-tax income means that about 24k of the income is really going towards that debt. </p>
<p>and… after about 12 months of paying back those loans, he will be sooooo sick of those payments because:</p>
<p>1) he’ll know that the money could be used for other things…buying a home, buying a car, etc.
2) he will see his colleagues making just as much money, but they wont have that big debt, so they will be moving on with their lives…homes, family, vacations, etc.</p>
<p><<<<
4,000 of that 17,350 is a no interest loan from a rather wealthy family member. Who will give me a very flexible payment plan.
<<<<</p>
<p>by the time you graduate, that will be 16,000. even a flexible payment plan will still be a few hundred a month on top of the other loans. the person isnt going to wait forever for his money.</p>
<p>You cant count on other scholarships later…the most are for incoming frosh.</p>
<p>*********How much of that grant is need-based? Is it merit or need-based? In another thread, you said that you reported two in college, but your twin wont be going. NYU’s merit is often need-related.!!! Dont be surprised if some of that merit goes away once the school knows that your sibling wont be going to college.</p>
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<p>I know, but I also remember how many times I’ve made empty promise to my parents. :(</p>
<p>^
I understand. but I think when many 18 year olds make these promises to pay back these loans are well-intentioned at the time, but the child really cant yet grasp how much living expenses, taxes ((federal, state, FICA), health insurance, etc are going to cost because they arent used to those expenses. </p>
<p>Young folks think, "Im going to be making XXXXX, so I can easily pay YYYYY for loans and still live nicely on ZZZZZ. </p>
<p>^^^^ Exactly in my thought too. That is why I said “The parent plus loan would be likely on his parent’s shoulder. Hopefully they are not retiring soon.”</p>
<p>Everybody says that the student can’t take over their parents’ PLUS loans, which is true, but IF the student is making good money, has good credit, etc., s/he COULD possibly take out his or her own loan and pay off the parents’ PLUS loan balance, thereby effectively “taking over” the debt burden. This would not be wise if the student couldn’t get as low an interest rate as the PLUS loan has, but it is possible. This would be one way to relieve the parents of the debt, allow them to retire, etc. Not saying one should plan on this, but it is a possible scenario. However, not likely to actually happen, especially if the student goes to grad school and gets more loans in their own name.</p>
<p>By the way, I graduated from law school in 1992, and I’m STILL paying my student loans. I’ve never taken a deferment, except for the first 3-4 months after graduation, until I started at my first job. The loans were originally at 9% (1992, remember?), I consolidated into a long payment plan, and have only paid a little over the required monthly payments for 22 years. Got the interest down to 7% a few years ago. (I didn’t refinance into a non-government backed loan, because I wanted the ‘death protection’ for my family, but I probably should have refinanced and just bought life insurance, dumb. I made a lot of dumb moves, but so do a lot of people. You don’t think you will, but you probably will.) My payment is $231/month (pretty painless) and I’m pretty close to done; I’ve paid a HUGE amount of interest over these past 22 years. I didn’t have a lot of student debt, either, because I was debt-free in undergrad and independent with large grants in law school. I had a small Perkins loan (paid off in about 5 years), a consolidated loan of about $37,000, and a smaller loan that was also paid off in a few years (bar review loan, I think - borrowed to pay living expenses during the summer after graduation). I had less than $50,000 in debt; I started (back in 1992) at a salary of $42,500/yr., with full benefits and very nice raises every year, and was earning over $120,000 by 2008 (when I gave it all up by choice and started my own struggling business); lived a modest but comfy lifestyle with one child, a nice but not extravagant older house, decent cars, mostly driving/camping vacations. Saved next to nothing for retirement or my son’s college, and STILL didn’t have enough to pay off my loans faster. The mortgage, car loans, stuff for the family, home improvements always came first. Like I said, some dumb moves. But, consider this when you are thinking about borrowing over $100,000 for undergrad… </p>
<p>@Sweetbeet we need to copy/paste your post every time a student thinks it will be simple to quickly pay off those big loans. </p>
<p>when you had the Perkins, the consolidated loan, etc…at that point…did you owe $50k? and what was your total monthly payments then? (I know it is now 231, but you’ve paid some off)</p>
<p>There are very very few loans available to do what Sweetbeet suggests, taking a personal loan to pay off a PLUS loan. Banks just don’t make signature loans, and what collateral would a 25 year old have, especially one who has been paying $1000+ a month in his own loans, PLUS, and private loans?</p>
<p>If signature loans were available from banks, the parents would just have taken one and not the PLUS to begin with. About the closest thing there is is to take a cash advance on a credit card, which usually incur a 3% fee up front, then an interest rate of 10-18%. If you miss a payment, the APR will shoot up. Signature loans are available from finance companies (and not in that large of amounts, maybe to $5000) and Payday/check cashing loan companies, where the interest rates are astronomical.</p>
<p>Wow, I didn’t know that. My bank (First Hawaiian Bank) offers signature loans. And I remember getting one when I was just 23 (I borrowed $1200 - that’s not a typo, twelve hundred! to pay for my wedding, and paid it off in a year). Guess times have changed, but some banks do still offer them. Probably not in the amounts these students would need, though!! </p>
<p>OK, I have dug back into my Quicken (I have data back to 1993!), and I see that my consolidation loan started at $37,195, with a payment of $303.02 (9%). Went to 8% in 2006 (through a re-consolidation) and the required payment dropped to $231, but I paid $271 every month until I got really strapped in 2012, when I dropped it to the required amount. Interest rate dropped again to 7% in 2009. FYI, I have paid $22,900 in principal and over $44,000 in interest on this loan. I still owe $14,000 and will theoretically be paying until 2020 (28 years after graduating). (However, my business is growing and I will probably refinance out of the guaranteed loans soon to take advantage of lower rates, and pay this off in about 3 more years.)</p>
<p>I had three other loans: one was $5,965 (started paying about $58 per month, increased it to about $108 after 6 years, paid off in 10 years), one was $3,811 (paid $55 per month for 5.5 years, then paid off when the balance was down to $1,500), and the Perkins was only $1,500 (paid in 5 years at $30 per month, 5%). So the total was $48,471. As I said, I never took any deferment. I paid off the little Perkins first (feels good to be making one less payment, you know?). Then the smaller of the other two (they were both variable rate, I don’t recall why they weren’t consolidated, I think they were “private” loans arranged through the school FA office but not government-guaranteed or anything, so they couldn’t be consolidated).</p>
<p>So at first, my payments were $303.02 + $30 + $58 + $55, or $446 per month; when I’d paid off the $3800 one, I applied that amount to the $5,965 one, and paid those plus the Perkins all off in 10 years. But you know, by then, you are out of school for 10 years, settling down, making good money, and you feel like you deserve some things. Not to mention I had been married before law school (I’d taken a few ‘gap years’ after UG), had a child in 1996 (which is why I’m even on this forum - haha!), and by 2002 I was paying for private school. When the smaller loans were paid off I “took a breather” from my better financial habits, which just sort of lasted indefinitely. There are Legos, summer camps, braces, always something you need to buy and it’s SO much harder to pay extra on a loan than to get the treadmill you think will help you to lose 20 pounds, to take your mom out for dinner on her 80th birthday, or WHATEVER. </p>
<p>Don’t borrow too much money for college. Just don’t. I’m doing OK but I know a LOT of people who got into real trouble with their loans - be unemployed for a while, have a tragedy, take a deferment, then another… soon your balance has doubled!! I know people who started with $50,000 and ended up owing $150,000! They were HURTING. Why would anyone want to start out that way???</p>
<p>I didn’t mean that no bank make signature loans, but like the one you took, they are very small. I know some do them for a specific purpose, like an adoption, but generally they are very small and to very established customers. Banks used to make them all the time at preferred rates to their best customers, $50k or $60k, but times and regulations have changed, and most federally chartered institutions are pretty carefully watched. The examiners want to see the security!</p>
<p>I used to work for a finance company and our bread and butter was $3000 unsecured loans at a high interest rate (our default rate was high too). My friend was a manager at a savings and loan and was criticizing my company. I asked what her rate was on a $3000 signature loan and she said “Oh, we’d never make a loan like that!”</p>