Should you incur substantial debt for that "dream" school? or an arts major?

Parents Forum
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<p>taxguy: I actually have some young friends (late 20s, early 30s) who are in pretty big debt from educational loans (on top of their car loans and credit cards). Here are their somewhat sorry tales:</p>

<p>One (30 yrs old) is an architect and is having trouble paying her's back (just over $100,000.) She is still living in a bad apartment with 3 roommates. She feels like she will never stop living like a college student. She defaulted on her payments at some point and got hit with fines over $10,000, which were added to her loan. She would like to get married, but her boyfriend also has big debt than hers and she is very reluctant to take that on since he is a musician out of Eastman...</p>

<p>A second (25 yrs old) works for a non-profit and probably earns around $28,000/year. Her debt is around $30,000 from Univ. of Rochester. She is planning on going to graduate school this fall - on her own dime. Although she got good money from her grad school (I don't know the details) she has no idea how she will pay her living expenses. She also has some credit debt and lives extremely poorly (but hey, she's young).</p>

<p>The third (31 yrs old) went to MIT and Virginia Tech grad school. She is heading up a non-profit and earning (maybe) $40,000/year. Her debt is over $70,000. She loves her job - and has a passion for what she does. But she is in such deep financial doo-doo that she got rejected for a Target credit card the other day. Yikes.</p>

<p>Anyway, it is pretty sobering when you actually see young people trying to pay off this debt. Yeah, it's one thing if their parents will pick it up, but some of them just can't or won't.</p>

22

<p>Weenie, I appreciate your stories. I too have seen people in similar situations. Parents, here in CC, seem to feel that if a school has a great reputation,send the kids there under the auspices of "finances be damned." This was a response by someone in the parent's Cafe forum to this same post.</p>

<p>I just wanted to provide some reality and some counterweight to this type of thinking.</p>

23

<p>Weenie noted the following stories:</p>

<p>taxguy: I actually have some young friends (late 20s, early 30s) who are in pretty big debt from educational loans (on top of their car loans and credit cards). Here are their somewhat sorry tales:</p>

<p>One (30 yrs old) is an architect and is having trouble paying her's back (just over $100,000.) She is still living in a bad apartment with 3 roommates. She feels like she will never stop living like a college student. She defaulted on her payments at some point and got hit with fines over $10,000, which were added to her loan. She would like to get married, but her boyfriend also has big debt than hers and she is very reluctant to take that on since he is a musician out of Eastman...</p>

<p>A second (25 yrs old) works for a non-profit and probably earns around $28,000/year. Her debt is around $30,000 from Univ. of Rochester. She is planning on going to graduate school this fall - on her own dime. Although she got good money from her grad school (I don't know the details) she has no idea how she will pay her living expenses. She also has some credit debt and lives extremely poorly (but hey, she's young).</p>

<p>The third (31 yrs old) went to MIT and Virginia Tech grad school. She is heading up a non-profit and earning (maybe) $40,000/year. Her debt is over $70,000. She loves her job - and has a passion for what she does. But she is in such deep financial doo-doo that she got rejected for a Target credit card the other day. Yikes.</p>

<p>Anyway, it is pretty sobering when you actually see young people trying to pay off this debt. Yeah, it's one thing if their parents will pick it up, but some of them just can't or won't</p>

<p>Taxguy's response: I am NOT saying that expensive schools and schools with a "name brand' aren't worth it. I just want to present a counter to the general feeling on CC that kids should pursue their dream school at any cost. There is a cost! I just wanted to point out how high the cost really can be.</p>

24

<p>Weenie noted the following from the Parent's forum;</p>

<p>taxguy: I actually have some young friends (late 20s, early 30s) who are in pretty big debt from educational loans (on top of their car loans and credit cards). Here are their somewhat sorry tales:</p>

<p>One (30 yrs old) is an architect and is having trouble paying her's back (just over $100,000.) She is still living in a bad apartment with 3 roommates. She feels like she will never stop living like a college student. She defaulted on her payments at some point and got hit with fines over $10,000, which were added to her loan. She would like to get married, but her boyfriend also has big debt than hers and she is very reluctant to take that on since he is a musician out of Eastman...</p>

<p>A second (25 yrs old) works for a non-profit and probably earns around $28,000/year. Her debt is around $30,000 from Univ. of Rochester. She is planning on going to graduate school this fall - on her own dime. Although she got good money from her grad school (I don't know the details) she has no idea how she will pay her living expenses. She also has some credit debt and lives extremely poorly (but hey, she's young).</p>

<p>The third (31 yrs old) went to MIT and Virginia Tech grad school. She is heading up a non-profit and earning (maybe) $40,000/year. Her debt is over $70,000. She loves her job - and has a passion for what she does. But she is in such deep financial doo-doo that she got rejected for a Target credit card the other day. Yikes.</p>

<p>Anyway, it is pretty sobering when you actually see young people trying to pay off this debt. Yeah, it's one thing if their parents will pick it up, but some of them just can't or won't</p>

25

<p>Taxguy - I feel a lot more of a "always take the top scholarship school!" vibe from parents on this forum. Well, at least from the regular posters. Maybe it's just me, but reading a lot of the threads debating scholarship school vs. prestige school makes me want to head for a SUNY. :)</p>

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<p>It helps a lot if you work during the school year. In my experience, the people who worked for their money also tried harder to stay on a reasonable budget, because they valued the cash more. People who didn't work found it very easy to just take out a couple thousand more in loans, which adds up if you do it every semester. </p>

<p>If one nets $3500 each summer, plus makes about $8/hr for 10 hours a week (assuming 40 wks/year) during school, they end up reducing their loan need by more than $25,000 over the course of a 4 year program. Compared to how much that $25,000 could cost them to repay with interest, I don't see how people can pass it up so easily.</p>

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<p>Yes, larationalist, people can clearly get that debt down below the $150,000 or even $100,000 estimate of mine. However, they do need to work like dogs to earn as much money as they can during the year and during the summer. Being an RA also helps a lot since many schools give free room and board for that job.However, it can be a very hard, time-consuming job.</p>

28

<p>It is definitely different if the student him/herself must pay back the debt. As I said, the cost of education and the debt that goes with it, is one that we are shouldering, not our kids, by our choice. </p>

<p>Berurah, I understand what you are saying and things differ from family to family and I appreciate that. Our decisions are not the ones that others might make. </p>

<p>However, I can tell you that prestige of the school had nothing at all to do with our willingness to pay for the pricetag or to take on the debt. I would have paid the same amount for their safety schools. While my Musical Theater kid didn't apply to OCU (and I am aware that is is very good in her field but she didn't want the South), I would have paid the exact same as I would pay for NYU/Tisch. Had she chosen to go to Penn State's BFA program (where she was admitted) which cost less, fine with me. Had it cost the same, fine. </p>

<p>That said, my D got a substantial four year scholarship to Tisch and so the cost of the school is not the price tag either.</p>

<p>Even so, she is entering a very low paying field with very difficult odds of getting work. I'm still not concerned, however, that she attends a pricey school because I think the value of her education is worth it for its own sake for her as a person, regardless of which jobs she gets down the line. An education never goes out of style. I am confident she will do fruitful work in the future, whether on stage or off. Her major is not a factor to me in that way. </p>

<p>I don't see one college as worth more money than another or one major worth more money than another. I would have been willing to pay the same amount for a state college (granted they don't charge the same as NYU but hypothetically speaking) if she loved the school, it fit her well, and she could study her passions. I'd pay the same if she was studying engineering, pre med, finance, dance, theater, English, or classics. Further, many people go onto successful careers that don't necessarily match up neatly with their college major anyway.</p>

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<p>yes, they do need to work like dogs. I guess I don't see the problem with that- if one wants to go to an expensive school because they think it is better, they should be willing to work for it.</p>

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<p>taxguy: I think it's great that you posted this! </p>

<p>I was thinking about what you wrote here:

[quote]
...that if a school has a great reputation...[then] "finances be damned"...

[/quote]
</p>

<p>Think how many things you could insert in where the word "school" is. Car, house, shoes, plastic surgeon, kitchen appliances... It's sort of how our generation lives. I'm not comfortable with that, but maybe they'll be laughing in the end when they die with huge debt but lots of good stuff. I don't know. ;)</p>

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<p>(I asked the mods to combine these threads. OK?)</p>

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<p>

IMHO, your D's odds for a great job in her field are substantially increased by the fact that her degree will be from Tisch. NO comparison to some of the lesser known schools. The director of our esteemed Music Theatre of Wichita holds special audtions at Ann Arbor and Tisch for his summer company (he auditions THOUSANDS and selects about 20). Are you saying that this "job payoff" was not considered at ALL in her decision? :confused: What Duke could offer my son that others couldn't very much played into his decision, including the 300 million dollar AIDS research project that was just getting underway. This absolutely contributed to his decision to choose Duke over Penn or JHU. Of course money played a major role in our decison throughout, though any of the three would have been ultimately workable on that front.</p>

<p>~berurah</p>

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<p>I still think putting "dream" and "school" in the same phrase is an oxymoron.</p>

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<p>In case of Susan and many other families the entire family is pitching in to make the dream school a reality. In case of taxguy's scenerio and weenie's example the kids are doing it alone. Yes to first and no to second.</p>

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<p>The combining of "dream" and "school" in the same phrase is an oxymoron.</p>

36

<p>
[quote]
The combining of "dream" and "school" in the same phrase is an oxymoron.

[/quote]
</p>

<p>Why do you say that?</p>

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<p>I will graduate from Dartmouth around $50,000 in debt, most likely with a degree in the social sciences. I'm considering a career in international development, possibly with the World Bank or another international organization, but I'm open to other possibilities as well. It's a bit daunting to think about taking on this debt by myself (I don't expect any help from my parents), but I'm not a high-maintenance person and definitely not the kind to take on credit card debt to pay for frivolous expenses, so hopefully I'll manage. I'm the first person in my family to go to college outside of Europe and don't really know what is considered reasonable, so I guess I'll have to keep my fingers crossed and hope I can work it out somehow. :eek:</p>

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<p>yeah mini, why do you say that?</p>

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<p>Cam. Don't be too concerned about your anticipated $50k in debt. You are going to live for the next 4 years in a small room and have a tight budget. If you are willing to do that for another year or so after college, you can knock that debt amount down a long way. The financial advisors will always tell us that we would be better off if we set aside a big pile of money and watched it grow over the decades. Great idea, but we only walk this earth once. Go off and have a great time at Dartmouth and you will make the experience worth the money.</p>

<p>I do agree that it makes no sense for a student to take on debts of $100k and up. There is a point where even good job prospects and frugal living will not make it work.</p>

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<p>camelia 50k debt for 7 years at 7% equals monthly payment of $750. It should be OK.</p>