<p>What is ok for a student to have in loans? We have recv'd an aid plg and the first year she will have over 4,000 in loans, To me it looks like it goes up every year and by the time she graduates it will be over 22.000.</p>
<p>I have a Sr. and am reviewing this kind of thing right now. There are several things to look at. $22,000 in a loan to be paid over what 10 years at a relatively low interest rate doesn't seem to me to be too high of a long term debt obligation, but I am an adult, with pretty stable income and a reasonably secure future. Look at it this way. (Hypothetical) I will (at some time in the near future) finance a new automobile, I'll put a coupla thousand down on a $25,000 car. So call it a $22k loan.... I'll pay about 5% interest for a loan period of say 5 years. (Dont have my calculator in front of me here so bear with me).</p>
<p>Say my monthly payment is $350 a month (again not actual). This car by the time I am done paying for it will depreciate by at least half.</p>
<p>Can I afford a $350 payment for the next 5 years??</p>
<p>Depends on my income doesn't it? Will my salary increase over those next 5 years....most likely yes.</p>
<p>Bottom line, run the numbers for your actual loan amount, int. rate and term. What are the monthly payments? What does your child expect to do after school? If the answer is hanging in your basement playing video games, perhaps this payment is a bit high. If they plan on working, what is the expected income? What does Revenue minus Debt look like? Will the (former) student be able to live a life that they desire? </p>
<p>There is your answer. Again, I dont think $22k is a lot of loan money, especially considering some of the horror stories of students and debt. ie. $110K of loans and coming out of college making $30 k per year. You'll have to run the numbers though.</p>
<p>Some folks here are real helpful. Mebbe they will run the various scenarios using your actual numbers and give you the actual monthly payment. Then you and your college bound senior can decide whether to go ahead, or look at other money saving college strategies.</p>
<p>GL</p>