Should I incur debt for Bryn Mawr?

Parents Forum
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<p>"What this thread brings to my mind is the odd relationship Americans have with debt. Many folks seem to be against borrowing a lot of $$$ for one's dream college, yet many (and I'm not saying anyone who has posted here necessarily!) in our society have no problem putting themselves $40k, $50k, $60k+ in credit card debt,"</p>

<p>I think what you're seeing on this thread are the people who do not carry massive credit card debt. Those who say, "Sure, go ahead -- you're only an undergrad once!" are more likely to be the types to assume credit without worrying about how to pay it off. (Note: I didn't say that they did have this kind of debt, only that it seems to me to be more likely.) </p>

<p>Given the education level and the ambition of people who post on CC, I'm certain that most understand the exceptional education offered by Bryn Mawr and wish it were possible for the OP to attend. If she had said that she would have to take out $30,000 in loans, I would have been that person saying, "Go for it!" That kind of debt, while difficult for someone just starting out, is not excessive, IMO. In this case, however, I think she is better off elsewhere. The truth is that a wonderful undergraduate experience can be had outside of the top schools in the country. Yes, the OP may have to work slightly harder to find the top rate professors at her new college, but she will find them.</p>

<p>This thread brings up the deeper issue of college affordability. Schools have begun to actively recruit first generation students and the economically disadvantaged, and have set aside funds for such individuals. While the numbers are still woefully small, the result at top universities is a widening gap between the haves and have-nots. The haves (those who can fully afford a private education) can go wherever they are accepted. The have-nots can be offered wonderful educational opportunities, although they are a small minority living in a social atmosphere of haves, which must be difficult. The gap, however, is created by the have-somes. These students can compete academically with the haves (because of a somewhat privileged upbringing and opportunities) but not financially. Since the top schools rarely offer merit aid and since the have-somes' financial situation is much better than the have-nots', the have-somes are left with nothing, even though they cannot afford to pay without accruing massive debt. Most of these students are forced to go down a tier or two to find the merit aid that will make getting an undergraduate education more financially palatable. Either that, or they and/or their parents assume debt that will take decades to pay. While I believe that incurring some debt to pay for college is inevitable, I do wish that institutions had a more realistic measure of the family financial burden. The problem is that most families are already in debt when their children apply to college. With the average car price somewhere around $20,000, even two ordinary cars can cost a lot per month. In some areas of the country, the average price of a house is astronomical, forcing families to spend far more than the recommended 25% of salary on housing. These factors are not taken into consideration. (The College Profile asks for them, but I don't know what effect they have.)</p>

<p>I'm not saying that there is an answer. Universities have limited funds for aid, and they should be directed toward the underprivileged.</p>

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<p>Newchick -
I also agree that a <em>student</em> shouldn't take on excessive debt (say, over 25K) UNLESS they have pretty solid expectations of a high income or inheritances coming their way. Even then, stuff happens and it is risky.</p>

<p>My niece attended law school and racked up 163K debt. She is paying it off well - but has a very good salary (~100K first year), and has resisted the tempation to buy a fancy vehicle, a leather sofa (that was the most popular purchase among her contemporaries, lol) and so on. However, she tells me that life is tough for her classmates that have gone into public sector work. The is some loan forgiveness - but this is really something to investigate. Again, recall that nothing is for sure - but if law is in your future, you need a 7 year plan, not a 4 year plan.</p>

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<p>First, congratulations to Ohio_mom's niece, who has already achieved great success.</p>

<p>However, Newchick, you should be aware that (even assuming that you continue to be interested in a career in law) that 100K opportunities for new graduates remain the exception, not the rule. Ohio_mom's niece almost certainly either attended an extremely selective national law school or did VERY well at a regional or local law school. Although you were obviously a very good student in high school, you cannot confidently expect either outcome at this point--whichever school you choose for your undergraduate education.</p>

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<p>"But an undergrad education, while valuable, isn't quite the same."</p>

<p>Exactly, because for most students, borrowing for a professional education is the difference between getting the degree and not getting the degree.</p>

<p>But the OP is unquestionably going to college somewhere reputable; the loans only reflect purchasing the difference between more and less preferred schools. There's no question that a dedicated student who is in love with a bucolic Seven Sisters school can have a challenging and rewarding experience at an LAC like St. Mary's.</p>

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<p>Ad Officer- this country is filled with people (and their ranks are about to increase if you believe the WSJ) who borrowed the maximum amount to buy their dream home, assuming that since prices had skyrocketed for the last 5 years they would continue to do so. Well, prices have leveled off or decreased, those adjustable rate mortgages are ratcheting upwards, and for many, one missed paycheck or unanticipated car trouble is all it takes to send the repo man your way. The fact that all sorts of naive people get taken advantage of every year to take on mortgages they can't afford for houses they've got no business buying, or that people load up on consumer debt to buy a big screen tv or some other piece of electronic nonsense has no bearing on whether the OP should or shouldn't take on massive amounts of debt for Bryn Mawr. Ask any realtor... the amount of money a bank is prepared to lend you for a house is obscene.... and also assumes that you don't like to eat or that your kids will never need shoes or that you'll never make a charitable contribution. Do people go down the drain every day due to unrealistic debt obligations? Read your local newspaper. </p>

<p>All those fancy degrees of yours and you never took a logic class?</p>

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<p>adofficer - as for borrowing for a house that can be wiped off the planet by a natural disaster (i'm sure the folks in Biloxi, Miss, know all about that!), well that is what insurance is for. the house next door to us burned to the ground a year ago. the neighbors have been living in a rent house the insurance paid for while they rebuilt their house with insurance proceeds. they just moved back in. to my knowledge their is no insurance that pays off your college loans if your job prospects don't pan out the way you thought they would.</p>

<p>however, your posts do answer a question that has bugged me in all these college debt debates, which is how people are paying back these massive loan amounts in 10 years and it looks like the answer is they're not. it was my understanding that there is a 10 year pay out on college loans (there was on mine), but it now seems there are private lenders who can offer "graduated repayment options" and other means of extending the payments to 20, 25, or even 30 years.</p>

<p>this explains an apparently new phenonmenon i read about in the fall where college financial aid offices are starting to see applicants whose parents haven't finished paying off their own college loans, so they can't afford their efc for that reason. the newspaper article either stated or implied that the whole fafsa/profile system formulas don't have a procedure in place to deal with parents who still have their own student loan debt to contend with.</p>

<p>this really seems like the whole process is starting (!) to spiral out of control at an alarming rate.</p>

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<p>my student loans were for law school. i am so old it took all of $10k to go to law school!</p>

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<p>I like the have/have some/have not scheme of Momwaitingfornew (I want to put an "s" onto her name so bad...). But I would make some differentiation at the top. </p>

<p>I would divide the haves into 2 categories. There are the haves (those who can pay for tuition out of income--a rare breed) and the have-if-you-plan-for-its. The have-if-you-plan-for-its have a high income that would preclude good financial aid, but can't finance an expensive education out of cash flow. The have-if-you-plan-for-its have to PLAN if they hope to send their kids to a private school.</p>

<p>That means starting to save and invest early (before birth?), building up equity in their homes so that they can borrow against it if needed (not moving up to a more expensive home when you could have and restart the whole mortgage debt, or take out the equity in your home for cars, TVs, remodeling unless the it's a really needed repair), have fewer kids, not take expensive vacations or buy expensive cars, TVs, etc. It could include a plan to have a non-working spouse go back to work during those college years. Bottom line: they will be able to send their kids to a $$ private school if the have-if-you-plan-for-its plan for it. If they plan for it (and all goes according to plan--no job loss/big medical problems, etc), they will be able to cobble together parent loans, student loans, equity from the house, income from student jobs and current parental income flow to pay for that $$$ expensive education.</p>

<p>OP's parents, from what I remember, have a very good income but didn't have a plan to save the kind of $$ needed for a Bryn Mawr education (in fact, the plan was to NOT save because it would mess with financial aid, a chancey plan at best--another chancey plan is "Junior will get a scholarship"). But they probably provided enriching experiences with the $$ they spent. Unfortunately, that money wasn't available for college when the need came.</p>

<p>Bottom line: you can't always get what you want. I think Elvis has already left the building on the issue of OP's getting a 4 year experience at Bryn Mawr. But OP is in a great position to get a college education and she should PLAN ahead so that when her children get ready to go to college, they will not have to restrict their choices because of financial reasons.</p>

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<p>Posters have posted some good thoughts on how much student debt is too much (I like TheDad's idea of "crush depth").</p>

<p>Is there any consensus about the amount of parental debt taken out?</p>

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<p>elle: It seems that any recommended parent debt would be meaningless without specifics: age of parents, their retirement savings, number and age of children, etc. I'm mainly chiming in here because on the big "debt" thread a poster (and I'm not trying to pick on him) claims that he would go 100K x 5 (kids) in debt if necessary. That's one person's opinion. I'm sort of in the other direction on this question ; ) But in reading that long thread, you see that all kinds of factors get included, such as family trends and traditions.</p>

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<p>blossom...
no need to insult me...and yes, i took a few logic classes, actually, in college...and, actually, i have two friends who work in the mortgage business so i am aware of predator lending practices. oh, yes, and my sister was a mortgage broker for 7 years until she had a baby. </p>

<p>mercymom...yes, i am aware that insurance exists for homes, although have you tried to get flood insurance recently in coastal areas? </p>

<p>regardless, i was throwing out the idea that material things seem more important to SOME people than paying for education...just contributing to the general conversation. my point, which seems lost now, is that it is interesting to me that people in American society are more apt to borrow large sums of money for material things - which do not necessary better you or make you a more productive member of society - yet are quite afraid to borrow a large sum for their education. i think this reflects our values as a society...as Momwaiting pointed out, many families with incomes that do not qualify them for much need based financial aid are in debt (mortgages, car payments, etc...), which makes it difficult to pay the full freight of $45k for a dream school out of pocket when there are so many other bills to pay. i have witnessed, year after year, this problem. yet when parents with incomes over $150k are forced to look at the manner in which they are accustomed to living after getting their financial aid awards, they don't seem to have a problem with their debt for material things, yet they DO have a problem when you then mention the PLUS loan to them. year after year, i have spoken with parents with incomes/assets of over $150k who simply refuse to borrow for their child's education yet are driving bmws, mercedes, land rovers, etc..., when they leave the financial aid office ticked off the college didn't give them another $10k in aid. i don't think anyone contributing here, in this thread, falls into this boat, but this is something that, at least in my experience working at 4 different institutions, is common (especially this time of year!). for families with incomes closer to $100k, the need for more aid is very important at these very expensive schools; however, as income rises, it seems as though people think they are poorer and poorer! </p>

<p>Dad...i think the way you look at the PLUS loan is the way many parents do...it's another car payment! it is nice that you are willing to borrow to help your students through college!</p>

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<p>I've seen this also in many families of my acquaintance. You can't really go up to a neighbor and say, "Do you realize that the $$ you spent on that RV and boat could have gone to college savings?" "Lucky" for them only one kid made it to college.</p>

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<p>EMM1 -
"However, Newchick, you should be aware that (even assuming that you continue to be interested in a career in law) that 100K opportunities for new graduates remain the exception, not the rule. Ohio_mom's niece almost certainly either attended an extremely selective national law school or did VERY well at a regional or local law school. Although you were obviously a very good student in high school, you cannot confidently expect either outcome at this point--whichever school you choose for your undergraduate education."</p>

<p>Exactly - she attended UT Austin - did very well there - passed the Bar on the first shot. As you mention, this is NOT the rule - and thanks for noting it!</p>

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<p>Ad officer-- I agree with you conceptuallly.... but where the rubber hits the road is that you're giving advice to the kid, not the parent.... the kid can't hit the replay button on the last 18 years of her parents life; the kid can't possibly know how much or how little risk is involved in her parent's retirement portfolio (how many kids couldn't finance college after the Enron retirement plan, much of it in Enron stock, went belly-up?) etc. So it seems irresponsible to me, since you're posting as an expert on college and financial aid, to advise this kid to take on extraordinary debt which would require her parents to co-sign, give that they've told her their bottom line which is that she'd be responsible for the payments.</p>

<p>that's my beef. agree with you that people finance all sorts of stupid things and then expect the world to bail them out of their messes... on that we are of one mind!</p>

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<p>AdOfficer -
"however, as income rises, it seems as though people think they are poorer and poorer! "</p>

<p>This reminds me of a young man that posted on CC about 3 years ago. This parents encouraged him to apply all over. He was accepted pretty much everywhere. Between the time he applied and was accepted, his parent reno'd the kitchen (granite, new appliances, etc.), bought 2 new cars, and a parrot (several hundred dollars). They then told him that they had no money for college ... which may have been argueably true at that point. So, he was off to State U as his only option - and I don't remember it being a particularly wonderful state u, either. I hope the parents have their old age home picked out.</p>

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<p>A parrot? LOL. Seems like they were really searching for a way to spend money. They must not have factored in the 'backtalk'. </p>

<p>My rule of thumb on debt for students echoes other posters: the maximum Stafford. (I'm assuming they put some thought into it when they set their caps.) It happens to coincide with the limit I found comfortable when I borrowed for UG - basically the cost of a new Corolla (thankfully Toyota still makes Corollas so it works as a benchmark.)</p>

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<p>"A parrot? LOL. Seems like they were really searching for a way to spend money."</p>

<p>Is that any different from buying a purebred dog?</p>

<p>Back to the topic: it really is a matter of priorities, but a generation removed. The priorities of the parents can become the handicap of their ambitious children, even if their children value education above material objects.</p>

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<p>Let's go easy on the OP's parents, about whom we know nothing. They clearly had a single child late. There might have been a massive (and expensive) health problem in the past, a major business failure, care of elderly parents, the list could be endless, and it might result in a relatively high income today, but little to show for it in the way of assets. It may have nothing to do with priorities or motivations. </p>

<p>PLUS loans are great, when you can pay 'em. There's no need to beat on folks who, for whatever reason, have determined that they can't.</p>

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<p>Mini, I think we've moved beyond the OP and her particular situation to something more general. I don't think anyone is condemning her parents -- for exactly the reasons you state. We know nothing about them. Even what the OP gives us (father thought saving would hurt FA) is given through the filter of a teenage girl who would love to attend an out-of-reach-financially college.</p>

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<p>But this would be true for ANY set of parents, not just the OP's.</p>