<p>At least your niece will have a 6 figure job to help her pay off her loans…</p>
<p>I am very sorry for my “convoluted” writing. </p>
<p>As I stated - unclearly perhaps - my OLDER daughter is $40,000 in debt for her undergrad degree. My YOUNGER daughter will indeed be $100,000 in debt by the time she earns her masters degree. Tuition and fees for that program, which includes summers as well as the traditional school year, will be $70,000 a year. She will also have housing, food, and transportation expenses. </p>
<p>The cost of the graduate program at her private school is definitely higher than the cost of the one Pennsylvania state college that offers Physician Assistant program. She chose the more expensive college for three reasons:
The private college offered a very generous scholarship that made attending there for the first four years less expensive than the state school; and
The PA education is a 3+2 program. After 4 years the student earns a BS in health sciences. But during the fourth year, students start take graduate level courses and are in the professional stage for that year and an additional year. The private college guarantees a place in the graduate program for students entering the program in the freshman year and maintaining decent grades. The state college makes no promise, and accepts far more freshmen into their pre-PA program than the graduate program can accept. It is very difficult to be accepted into a graduate program after three years of undergrad preparation. Attending the state school and then being denied entry into the graduate program would not be beneficial; and
The private college’s Physician Assistant program has better reputation and a higher percentage of students passing the licensing exam than does the public school.</p>
<pre><code>Which gets me back to the point of my “convoluted” post: When is borrowing considered irresponsible? Is it wiser to borrow a larger amount of money in order to be able to have the career you feel called to, or to not attend college and stay out of debt? Is it foolish to go to the more expensive school when that school gives you the best chance of success?
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<p>You have framed the questions incorrectly, IMO.</p>
<p>Taking out massive loans to pursue a career for which you are ‘called’ when the career has little chance of a job makes is irresponsible, IMO. For example, borrowing hundreds of thousands to attend a fine arts college…</p>
<p>There is absolutely no supporting data that attending an expensive college gives you “the best chance of success.” None.</p>
<p>(IMO, you are not paying for ‘success’ but for a guaranteed admission to a 5th year. While perhaps worth something, is the guarantee really worth $100k? What if your D went the public route? Even if not accepted into Year 5, she could get a job and reapply, and still be a whole LOT financially better off.)</p>
<p>^I don’t think it’s irresponsible unless the student is just throwing money at a “dream school”, with little/no prospect of being able to repay the debt. I didn’t mean to imply that I thought your D had made an irresponsible choice, only that I was confused that a single year would be that expensive! I think the reasons she had for choosing the private school were valid, she was clearly willing to assume a larger debt as a tradeoff, and will be entering a high demand field with a decent earning potential. Others would take their chances with the lower cost program and cross the grad school bridge when they come to it, perhaps feeling that students often change their majors or that the individual student will be a strong candidate for the professional program. I don’t think one approach is better than the other, as it depends on the individual student/family and their situation and preferences.</p>
<p>That being said, for certain careers/fields of study, I think it would be wiser to take the lowest debt alternative, even if it means starting at a CC or working for a few years to save, in order to avoid having to live like a student indefinitely! Or even majoring in something that may not be their “calling” and having a minor in the field they’re really interested in…there’s always grad school for that if one can’t find another entry point into the field.</p>
<p>"Yes. And they should start saving quickly, because according to the financial planners out there, one should expect to pay nearly half a million dollars for a four year education for a baby born today if you are “full pay.” </p>
<p>. . . and for a student in the class of 2055, it will be cheaper to build your own college than be a four-year full pay!</p>
<p>jmm123- the rate for Direct Student loans is 4.5%. The Parent direct loans’ rate is 7.9.%</p>
<p>[Direct</a> Loans—Parent PLUS Information](<a href=“http://www2.ed.gov/offices/OSFAP/DirectLoan/parent.html]Direct”>http://www2.ed.gov/offices/OSFAP/DirectLoan/parent.html)</p>
<p>If you think that is bad, you should have seen the rates banks were charging students & parents a couple of years ago! The “shuffling” took place because the students and their parents were being ripped off unbelievably – schools were getting kickbacks from lenders to require all of their FA kids to take loans through only those banks, etc. The gov’t taking hold of the loans was actually a godsend to parents of the upcoming college classes. </p>
<p>The banks howled and wept–but no one is stopping them from making private loans to anyone who wants to borrow from them. What has been stopped is the forcing of students to use certain banks or other lenders. And also, the interest is now going to the govt (to be used to make more student loans), not to line the pockets of the bankers. </p>
<p>Paying interest is fair enough — you are using the money to go to school; it is fair to pay interest on it. My student loans were 6% and that was in the 1970s.</p>
<p>You can consolidate loans-- my brother has. You can also have them forgiven entirely if you are working in certain social service jobs or for certain social services employers. </p>
<p>“Go to the Public Service Loan Forgiveness fact sheet for more information on the terms and conditions of the program and to understand what types of public service jobs qualify.” see below</p>
<p>[Student</a> Aid on the Web](<a href=“http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp]Student”>http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp)</p>
<p>[Student</a> Aid on the Web](<a href=“http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp]Student”>http://studentaid.ed.gov/PORTALSWebApp/students/english/PSF.jsp) oops, link did not come up</p>
<p>Hey JRZMom–</p>
<p>You mean I should’ve asked for a student discount when I applied for the PLUS loans? :)</p>
<p>Seriously, I know. I’ve been in the ‘game’ since '05. Fortunately, D1’s school was the conduit & handled the loan servicing & consolidation very well, even if I knew they were getting a piece of something from somewhere. Private loans? No way, too much risk from shysters. And–although it was tempting at the time–I didn’t tap into my home equity either. Didn’t want to combine mortgage & education monies, much like the separation of church & state! And in hindsight, glad I didn’t with the spiraling home value vortex.</p>
<p>So we have the PLUS loans, and although I hate like hell paying the juice, it is what it is until we turn 59+ and can start to siphon some IRA money. And BTW, it ain’t that easy earning over 7.9% in that just to keep up, unless I take on some added risk.</p>
<p>I still think–regardless of which administration is in there at the time–there will be more loosening of the IRA distribution laws. One can hope anyway!</p>
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<p>Thanks, JRZMom, for explaining.</p>
<p>I will add that BC liberalized the programs to encourage market competition on the model of Freddie/Fannie. GWB added his cronnies to the DOE. Congress allowed the system to continue to 10s of billions $$$$ until the D’s restructured the system in early 2006 and again in 2009. </p>
<p>Lenders were guaranteed by the DOE, 6.5% for stafford and 8.5% for PLUS and similar for consolidated. We won big as did the lenders, but the taxpayer is paying even more. Like I said, I tried to be Patriotic, in not borrowing as much as we could have.</p>
<p>There used to be a scam where a con man would send out a letter to people with mortgages tell them that their mortgage has been sold to XYZ Corp. and that from now on, they would send their payments to a certain PO Box. A month later, they found out that the mortgage had not been sold, and the con man had taken off with the payments. After this happened, the Feds required that your current mortgage company must also send you a letter saying the mortgage has been sold. </p>
<p>Just watch out - someone may try this scam with college loans, too.</p>