Too Much Debt?

Paying for College
21

<p>Xigbar…</p>

<p>Is the projected PRIVATE loan $30-40k debt correct? It sounds like you’ll have about $20-27k in debt from fed loans PLUS $30-40k in private loans…for about $50-70k total debt by the time you graduate (not the $30-40 that you keep mentioning). Is that right?</p>

<p>You say that you already have loans in your FA package and that you also have a $10k gap that you’re going to fill with loans. So, why are you only talking about $30 or 40k in debt when you’ll really have a LOT more in debt by the time your graduate? </p>

<p>Why aren’t you also counting the fed loan debt???</p>

<p>If you’re going to end up with about $50-70k in debt for an undergrad degree that is twice as much as you should have.</p>

<p>Since your mom isn’t going to be able to co-sign for you anyway, how were you going to get those private loans?</p>

<p>*A state school isn’t in the picture. I never applied to one, so it’s too late. *</p>

<p>That is very unfortunate. You may have to take a gap year and re-apply.</p>

<p>Your faith will not be undermined by attending an affordable school.</p>

22

<p>Nope, I meant $30k-$40k total debt. I’m only taking the loans they’re offering–that’s all I need. </p>

<p>It’s funny, I’ve read all over online, and have been hearing from you guys that $20k-$30k is the max one should be in debt, but many people I know have been saying that that isn’t bad at all. Not arguing with you guys, just pointing out an interesting contradiction.</p>

23

<p><a href=“http://www.nytimes.com/2010/05/29/your-money/student-loans/29money.html[/url]”>http://www.nytimes.com/2010/05/29/your-money/student-loans/29money.html&lt;/a&gt;&lt;/p&gt;

<p><a href=“College Loans Weigh Heavier on Graduates - The New York Times”>College Loans Weigh Heavier on Graduates - The New York Times;

<p>Ultimately, you are going to have to make your own decision. But, you should get as informed as you can about the long term choice of taking on this kind of debt. </p>

<p>Good luck to you.</p>

24

<p>Take a gap year and apply to cheaper schools or go to community college.</p>

25

<p>*I received my financial aid package to my dream school of Bethel. Tuiton, Room and Board is $38k a year. I was offered roughly $28k a year in gift aid.</p>

<p>*</p>

<p>So, are you saying that you were offered $28k in grants and $5500 in loans? </p>

<p>Are you saying that you only need another $4500 to cover the rest of tuition, R&B and books? </p>

<p>If your mom applies for a Plus loan and is denied, then you can borrow $4k more. However, you should try to minimize that by working over the summer if you can. </p>

<p>How much can you earn in a summer job?</p>

<p>What is the total COA for the school (including transportation costs and personal expenses)? </p>

<p>were you offered any work-study? If so, how much?</p>

<p>If you weren’t offered work study, can you work part time during the school year?</p>

<p>*I’ve read all over online, and have been hearing from you guys that $20k-$30k is the max one should be in debt, but many people I know have been saying that that isn’t bad at all. Not arguing with you guys, just pointing out an interesting contradiction. *</p>

<p>Who is telling you that $40k in debt isn’t bad at all? other students online?</p>

26

<p>Xigbar, you need to run the calculator I posted earlier. There also are good loan repayment calculators at that same website. Do this now so that you know how much you are going to have to pay back each month for those long 10 years (or more). Remember that you will need to make enough money to live on as well as pay down your student debts.</p>

<p>For more fun reading on this topic, see [Project</a> on Student Debt: Home](<a href=“http://www.projectonstudentdebt.org%5DProject”>http://www.projectonstudentdebt.org)</p>

27

<p>Your undergraduate loan should not exceed $25,000.</p>

28

<p>My exact breakdown is as follows–</p>

<p>MN State Grant Accepted<br>
$3,702.00</p>

<p>Pell Grant Accepted<br>
$5,550.00</p>

<p>Direct Subsidized Loan Offered
$3,500.00</p>

<p>Direct Unsubsidized Loan Offered
$2,000.00</p>

<p>Other Loan Eligibility Offered
$5,430.00</p>

<p>Bethel Opportunity Grant Accepted<br>
$2,000.00</p>

<p>Bethel Campus Housing Grant Accepted<br>
$2,000.00</p>

<p>Bethel Grant Accepted<br>
$2,000.00</p>

<p>President’s Scholarship Accepted<br>
$12,500.00</p>

<p>Federal Workstudy Eligibility Offered
$2,500.00</p>

<p>Total<br>
$41,182.00</p>

<p>I would most likely not take the work study as I have a part time job that pays $10/hr. This job would cover extra expenses–cell phone, toiletries, entertainment etc. </p>

<p>I have maybe $3k in bonds saved up, that I will put towards books and miscellaneous expenses. I’m going to plan on buying used, or renting my books. </p>

<p>Just people that I talk to. A Mom who has a daughter finishing High School. The business administrator at my church. People like that.</p>

<p>I will run the calculator for sure!</p>

29

<p>$11,000 per year is still too much even with working part-time. Is the other loan subsidized? Explore cheaper options.</p>

30

<p>Xigbar, as you know, in the end it is you who has to make this decision and repay any loans taken. What are your other alternatives and how unpalatable are they to you? Look at how much your monthly payments will be for how long if you go to Bethel and think what sort of job opportunities you will have coming out of there. Look at the kids graduating from Bethel–not the high flying flukes that are the exception and see what they are earning. With a zero family EFC, you cannot expect your family to help you there, and I assure you that when you get out of school and look for work and being truly independent, it is not an inexpensive process. My kids are struggling even with NO loans and a family nearby that has been generous to them in their start up. If we had a zero EFC, and they had loans, they would be so strapped. They are so grateful that at least they owe no money for their education. My oldest went to a top 25 university and it took him 5 years to be making a living wage and even so he is not rolling in the money. He has a tough time making ends meet especially because he had to have a reliable car for the jobs he got. He finally moved out of the house at age 27 last week, mainly because his car loan of $300 a month was paid this year. Couldn’t afford rent, car and other expenses. My close friend’s son is still struggling with the Stafford loans at age 28–just married and it’s been a tough go for him even with what is considered a good salary. So do the numbers and look at other alternatives before making your decision.</p>

<p>There are situations where it is worth the hardship of taking on such loans. I wouldn’t just throw the idea out the window, but do look at other alternatives because repaying school loans is a painful experience that is usually a 14 year sentence. Much longer than your time in college. You’ll be in your mid 30’s still paying off those loans. So what you are getting for 4 years has gotta really be worth a 14 year sentence.</p>

31

<p>The Stafford loans for undergrad come to about $27K for the four years total. If you have loans in addition and your total for four years is about $40,000, you will have a at least $400 in loan payments per month for at least ten years. Only YOU can determine if you feel that is too much debt.</p>

32

<p>My exact breakdown is as follows–</p>

<p>$3,702.00 - MN State Grant Accepted </p>

<p>$5,550.00 - Pell Grant Accepted </p>

<p>$2,000.00 - Bethel Opportunity Grant Accepted </p>

<p>$2,000.00 - Bethel Campus Housing Grant Accepted </p>

<p>$2,000.00 - Bethel Grant Accepted </p>

<p>$12,500.00 - President’s Scholarship Accepted </p>

<hr>

<p>$27,752 free money :)</p>

<p>$3,500.00 - Direct Subsidized Loan Offered </p>

<h2>$2,000.00 - Direct Unsubsidized Loan Offered </h2>

<p>$5500 - fed student loan</p>

<p>$5,430.00 - Other Loan Eligibility Offered (What is this? Is this a Parent Plus loan or what?)</p>

<h2>$2,500.00 - Federal Workstudy Eligibility Offered </h2>

<p>Total - $41,182.00</p>

<p>COA</p>

<p>Typical Charges for 2011-2012
Tuition (12-18 credits per semester, plus 1-5 credits for interim) $29,320
Room (new student rate) $4,900
Meal Plan (approximate cost) $3,630 </p>

<h2>Student Activity Fee (if full time) $140 </h2>

<p>Total $37,990 (This doesn’t include personal expenses nor transportation costs…so probably need to add $3k for those costs.)</p>

<p>I would most likely not take the work study as I have a part time job that pays $10/hr. This job would cover extra expenses–cell phone, toiletries, entertainment etc. </p>

<p>Is this a job that you can work during the school year??? If not, then why not take the work study. also, if you turn down the work study you then risk not getting it in the future when you MAY need it. You don’t have to work ALL of the hours/money.</p>

<p>*I have maybe $3k in bonds saved up, that I will put towards books and miscellaneous expenses. I’m going to plan on buying used, or renting my books. *</p>

<p>I would keep the savings bonds money in reserve for emergency use over the 4 years. I wouldn’t use it for books, etc. Since your mom is low income, she won’t be able to be a resource for an unexpected expense…like replacing a computer or something else unexpected. </p>

<p>Re: $40k debt and people who think that’s fine… </p>

<p>*Just people that I talk to. A Mom who has a daughter finishing High School. The business administrator at my church. People like that.</p>

<p>I will run the calculator for sure!*</p>

<p>these people may not have any real experience making payments of $40k of undergrad debt nor do they know how much you’ll be earning upon graduation. I would talk to people who are newish grads who are ACTUALLY making payments on $40k debt and ask how those monthly payments are affecting their lives.</p>

<p>$40k in debt will be about $460 a month for 10 years. That is like an extra very large car payment in addition to any real car payment and other costs that you’ll have: rent, utilities, cell phone, internet, food, clothing, car expenses/gas/insurance, health insurance, state/federal/FICA/local taxes, etc.</p>

33

<p>I think some discrepency in what people perceive to be acceptable debt is also based on the overall family situation and the ability of parents to help reduce loan amounts in the years immediately following college - you do not appear to have this option.</p>

<p>You’ve not been to college yet so it may be premature to plan on 3 years until graduation - and it may not be possible if your course of study is highly sequenced.</p>