<p>Very true Private school does not always equal big debt. I sent 3 kids to private schools but I would not allow them to borrow above their Federal Loans. They got a good mix of merit scholarships and need grants. You just need to find the “right” school.</p>
<p>They did get some offers from some other privates that just were out of reach. The financial aid package was not good enough and would have required us to pay 4 times our EFC. We were guided to private loans, and in one instance my conversation with the financial aid officer thought this was okay.</p>
<p>With the advent of private and parent loans the temptation is out there to “over borrow”. Qualifying for these loans is based on one’s credit rating not the ability to repay the loan. Both parents and students can get way in over their heads when it’s time to pay the piper.
The sad thing is many colleges push them. It’s a way to get you in the door and you can just figure out how to pay later. This is very risky.
My kids do have debt but I won’t let them borrow above their Federal Stafford Loans. </p>
<p>The bottom line for parents is if you can’t afford it then you can’t afford it. </p>
<p>IMO - for parents with money “in the bank” PLUS loans can be a great deal. You have the money, interest free until repayment begins in the spring. Back when the interest rate was low and the stock markets was high they were an even better deal…<em>sigh</em></p>
<p>Come on Taxguy - those are not sexy titles!
How about “Everything You Always Wanted to know about Financial planning but were afraid to ask”, or “The Joy of Financial Planning” ;)</p>
<p>“OP, private school does not always = big debt.”</p>
<p>It usually does, though. You seem to forget the fact that your daughter happened to have hit the jackpot by getting to an incredibly elite school that has fantastic financial aid. (Good for her! She’s clearly very bright and deserving.) Not everyone can get into Stanford et al, Dad II. For MOST people, the decision to send a child to a private university equals a significant amount of debt. Whether they think that debt is worth it is, of course, dependent on their own financial situation, whether there is an in-state school alternative they think is viable, etc. But stop projecting Stanford’s incredibly generous FA onto most parents who are looking to send a child to a private university. YK, if your daughter weren’t as bright as she was, she might have “only” gotten into schools that wouldn’t have given her the level of financial aid she currently enjoys. What would you have done then? I’m betting you’d send her to OSU before you would have spent money on a private university that didn’t have the “name” that’s so important to you.</p>
<p>What great discussion - will have son read later. Trying to come to grips with free tuition @ State Univ. vs little aid at top SE privates. It is hard for these kids who have been top (1/500, 2330SAT, NMF, etc.) to settle for only what we/they can afford and not what they can get into though when the ‘world’ tells them that ‘prestigious U’ is where they ‘should’ be going.</p>
<p>Very, very seriously consider the free tuition @ State Univ.</p>
<p>Look there are advantages to being at the “top of the heap”. Bright kids have a tendency to bloom where they are planted. If his long term goals include grad school - which they probably do - then he will not be saddled with undergrad loans.
He can then shoot for the Ivy or other top school.</p>
<p>JustAMomof4- He’s in at UGA Honors - which is really coming up in stats/ranking these days - thanks to lots of top students staying in state. I think Kiplinger’s ranked them #4 in best value public.</p>
<p>OK, but this doesn’t work for everyone. State Univs can’t accommodate all the kids who want to go to college. If every kid applying to college this year decided to go to State U, half of them would be declined. Someone has to go to private college. So someone is going to be forking over private college tuition.</p>
<p>Maybe State U is the answer for this family, but it isn’t for everyone. It can’t be.</p>
<p>Lafalum84- I totally agree. In some states the competition to get into state colleges is brutal.
If there were no private colleges, some students would be denied the chance to get an education. Also, with many private colleges going to need based aid only, the middle and upper middle class students are the clear losers.</p>
<p>Pumkin5 - I can relate completely. My DD has been offered a very attractive in-state scholarship and I think you hit the nail on the head. It’s as if these very talented children have been brainwashed to believe that the state schools are beneath them. That because they’re 99th percentile, the gates of HYPS will open wide for them and anything less is unacceptable because they are so bright and they’ve done all the right things. The other part of the problem is that there are a number of us - I’m including myself - have bought into the same idea. </p>
<p>In today’s economy, it just doesn’t make good financial sense to go into the hold for an undergraduate degree. The bright ones will bloom where planted. Indeed, there’s a lot to be said for being at the top of the heap in some schools - honors programs, special internships, grooming for national scholarships, etc.</p>
<p>Some state schools are real bargain, in the N.East, they can be a little pricier, but still cheaper than public. As wonderful as those 4 years can be, they go and they go fast…many of my nieces friends have been working for a few years now and she said it really didn’t matter as much as she thougt, where she went. At her compan in DC, there are students from state schools, Ivies, privates of all tiers and they all seem to be on the same plane and other than a few polite questions, no one talks about it very much.</p>
<p>It is hard to say goodbye to a “dream school” but there will be other dreams to come…it’s not worth going deep into debt.</p>
<p>I just had to respond to this little post. That is an average of $7500 a year for college costs. I’m sorry Dad II…but for someone who has posted that he earns in the range of $10,000 a month AND is getting a bonus this year, I think that $7500 is a very modest amount. In addition…I think $7500 a year average is an amount most middle class families WISH they were paying for a private or public school education. Heck…the kid could have taken out a Stafford loan and the parents would have been paying only $3000 a year or so for that education. And if the kid had a summer job…easily could earn $3000 meaning the parents would be paying virtually nothing.</p>
<p>Sorry…but $30K for FOUR years of private college education including room and board in one of the most expensive real estate markets in the country…well…it’s a bargain.</p>
<p>Debruns noted,“It is hard to say goodbye to a “dream school” but there will be other dreams to come…it’s not worth going deep into debt.”</p>
<p>Response; Frankly, I have seen many folks have their dreams crushed due to too much debt. Many jobs don’t necessarily pay well but provide a great springboard for other things and future positions. The movie industry is particularly known for this as is acting, theater, and music, and many other professions. If a kid has a LOT of debt that needs to be paid off, they might not be able to afford these lower paying, entry level positions which might kill off their dreams much too early!</p>
<p>And something else that a lot of people don’t realize. Your degree matter most for your 1st job. That’s it. If you plan on working for some major corporation, major bank, large R&D, etc… then maybe the undergraduate school you go to will really matter. If you are planning on a normal company and such, then the college isn’t that important. And AFTER you’ve had that 1st job and have successfully stayed there long enough to where you are moving on or up; they don’t care 1 ounce about where you went to college. They really don’t. They are now looking at your work experience. I’ve seen people with AAS degrees and 10 years experience get jobs over HYPS grads with 1-2 years experience.</p>
<p>So keep this in mind.</p>
<ol>
<li>Unless your plans include working for a major company/firm in the industry that is highly competitive, don’t waste your money on the over priced undergraduate program.</li>
<li>If what you plan on doing almost guarantees that you HAVE to go to graduate school for a masters or PhD; then don’t waste your money on the over priced undergraduate program. Save it for your graduate school</li>
<li>Your degree only really matters for the 1st job. If what you want to do is going to require stepping stones to get up to the recognized corporate/firm that you are striving for; then don’t waste your money on the over priced under graduate school. Your years of experience in the field will mean more to the company/firm than the school that you graduated from MANY years ago.</li>
<li>And don’t buy the fact that all this extra money you spend at the over priced under graduate school is also getting you some great social experience; as though you can’t get that type of socializing in a less expensive school. You can. Just because the name of the school is Harvard, Yale, Brown, Princeton, etc… DOESN’T mean the students are smarter or better. They aren’t. They just think they are.</li>
</ol>
<p>Now; let me reiterate. There are definitely times when the HYPS type expensive school; walking out with more debt that a public or less expensive private school is worth it. If the career you are wanting to go into is very specialized; the career is very competitive on a national/international level; or that particular school happens to be known for being the best at that course of study; then yes. It is possible that the additional debt for that school would be worth it. But if you are going for the generic degrees like Liberal arts; Business; behavioral sciences; etc… then you will get just as good an education from the University of Whereverthehell that you would get from the high priced. And again; the whole social experience excuse; as though other schools don’t have any social life; is pure B.S.</p>
<p>Now, if by chance money is not an issue for you; and you are wealthy; then you’re probably not on these forums anyway. In that case, do whatever you want. But if you’ve ever wondered how some people become extremely well off; part of it is that they didn’t waste their money. That includes things like an over priced education that is going to put them in debt for many years to come.</p>
<p>Hey afadad! CC is not just about financials. Some of us are here for other things. However, whether or not you believe Ms. Orman is the ultimate arbiter of financial wizardry, consider that shes never followed her own advice. For years, while advocating investment strategies for you & me, her own money was invested incredibly conservatively (almost entirely in tax free municipal bonds & CDs). Since my savings is invested similarly, I found it amusing when this expose appeared on the news within the past few years. So, as everyone argues the value of her advice, be aware that she might have taken a different path regardless of what she advised you.</p>
<p>Perhaps shed argue that at her income level, a different strategy applies. But thats not relevant to this topic.</p>
<p>Personally, I believe privates arent worth the cost [of debt]. My oldest daughter has heard many times how fortunate she was to be able to turn down the 100% merit scholarship at TCNJ to attend the Ivy of her choice at full tuition. This has always been a topic with varied opinions. For instance, my daughters boyfriend has parents who see his education as an investment in THEIR future. </p>
<p>Many think that a top notch private education is the ticket to financial freedom. Id argue against that point. And I might use my own neighborhood (a nice one) as an example. I went to SUNY undergrad & CUNY for grad. You cant rank my neighbors financially by their schools. A few of the very successful people I know never even went to college. So, to take out huge loans as an investment in an imagined future is quite a gamble.</p>
<p>Just another opinion. But afadads other point about that first job is one Ive made many times to my daughters. And my sister-in-law and her husband are excellent (and independently very successful) examples of his point #2 all great points with one addendum: In general, I think high caliber students benefit greatly from exposure to other high caliber students. Any school that can achieve that degree of academic selectivity likely confers significant advantages as a side-effect (specifically to that academically gifted group) but thats a whole new topic for discussion.</p>
<p>mpnsoft notes,“In general, I think high caliber students benefit greatly from exposure to other high caliber students”</p>
<p>Response: Yes, I generally agree. However, don’t you think that there are PLENTY of high caliber students found at many colleges and especially now at state universities? At both SUNY and CUNY there are an abundance of very smart, driven kids. Yes, not all of them may be like the average kid at an IVY or MIT type school. However, there are certainly enough to provide for any amount of stimulation that a kid might ask for. Again, this is particularly true for many flagship , state universities.</p>
<p>Absolutely taxguy… but for lack of a better classification… I was referring to the kids with minimum mid 700 SAT’s & straight A’s… those generally acknowledged by their own peers as the best of the best. I believe these kids often stimulate and feed off one another in ways that go beyond the instituition they’re at (not that the concept applies only to them). However, they tend to be concentrated at some schools over others.</p>
<p>And one more thing that stuck with me all these years. A close friend who entered medical school from a top SUNY school circa 1981 remarked [at the time] that he was at a disadvantage compared with his Ivy trained peers. They seem to have learned more as undergrads. I’m sure that’s not the general case… but… I remember it all these years later and it certainly influenced my decision (I didn’t tell her this) to allow my daughter to spend $200,000 of her parents hard earned money on college.</p>
<p>Maybe it depends a lot on the person, their classes and the major. My niece got a great job graduating from a lower tier 1 school in business in Washington DC. She was a little nervous when her co-workers mentioned the Ivies they went too but then realized they were as clueless as she was in some areas and didn’t work any harder. Sometimes life and work are great levelers. They are also paying for her MA in accounting which is great but a lot of work. In her field she’s glad she went with the lowest tuition and not her “dream school”, but everyone has different thoughts and backgrounds and you can’t say one thing is correct.</p>
<p>The point is that NO ONE should be crippling themselves or their parents with nearly $200,000 worth of debt. I would choose the local state school over Harvard (and yes, I know Harvard has good financial aid) if going to Harvard meant taking on that much debt. This much debt could prevent the student from being able to buy a home in the future, and is overall just a horrible financial decision. This is not to say that there is something wrong with taking on a loan. Of course, some students have to do it. However, if students don’t understand the financial implications of taking on loans, especially such a huge amount of money, they’re in for a big wake up call once they graduate. </p>
<p>I chose a state school over a private, and as a result will graduate debt-free. When I was applying to college, I didn’t understand the implications of taking on student loans. Especially in this economy, students need to understand what debt means for their future. As much as some people believe that education is worth any price, its not.</p>