Traditional College Loan or Home Equity Loan

Which household expense are you prepared to give up to free up enough money to pay off a loan of that size? Start looking at your budget now- and then realize that once you’ve eliminated the extras, you STILL aren’t halfway close to coming up with that kind of cash (yes, cash) every single month.

I have sat with neighbors and friends of friends to do this exercise and they are always shocked. In their heads, “well, we’ll give up eating in restaurants and go back to basic cable”. The reality? That nets them $200 a month. Nowhere NEAR what they need. So they say “well, my expenses will go down with Sally off in college” so we take a look at that- net savings of what- $50/month in shampoo and hot water for the endless showering? Even the food budget won’t go down by much because if you’ve got younger kids, you still need to put dinner on the table every night so it’s not as though you can make meaningful cuts to your food shopping.

Start to look carefully at where your money goes. My guess is it goes to keep the lights on and to put shoes on everyone’s feet. Because if you had all this extra cash every month, you’d have a 529 plan for each kid with a healthy amount in it, you’d have a nice savings cushion, and we wouldn’t be having this conversation.

Do both parents work? If not, perhaps the second parent needs to start working now to help create a savings cushion, AND to help pay the college costs.

We had two kids overlap for undergrad for year, and I can tell you…it was a tight financial year. But we were able to plan ahead for that one year…and we also had savings if it had come to that.

I can’t imagine paying two college bills at the same time for four years…you are saying $30,000EACH is what you can afford. That’s $60,000 a year. You earn $100,000. The simple arithmetic doesn’t work for me IF you have NO savings.

$60,000 is the bulk of your take home pay. Or are you planning to finances that solely with loans?

The Excelsior would provide FREE tuition at a SUNY. @sybbie719 am I correct? For each of your twins. You would be responsible for the other costs. That would be HALF of what you say you can afford.

@Leducate2018 I say this with love…you do realize, don’t you, that tens of thousands of kids don’t get their first choice school because of finances? All over the country right now. Parents are having The Conversation with their kids about finances, avoiding massive debt, making smart choices and then going out and making their life at another school that is affordable.

You know that right?

Wait—he can go to a SUNY for free? And you’re choosing Siena for $160k in debt? It’s Siena, not Harvard. What is it about Siena that you or your son thinks is superior to SUNY Binghamton, Oneonta, Geneseo, Albany, Stony Brook, New Paltz, Plattsburgh, or any of the others?

@brantly, No, SUNYs are NOT free. TUITION might be free. They cost $22k/year, but only $6k of that is tuition. The Excelsior grant is ~$6k if you get no Pell or state need based aid. Students who get $6k worth of Pell and/or TAP (state tuition grant) get $0 Excelsior. If they get $4k Pell + TAP then they’d get $2k Excelsior. Tuition and fees is $8-10k/year, though, so the federal student loan and a summer job would cover direct costs for a commuter.

Thanks for the clarification. Still…

I don’t think this family would be Pell eligible. Income of $100,000 with one in college.

The Excelsior would pay $6000 per kid. Plus each kiddo can take the $5500 Direct Loan for freshmen. That would be $11,500 off the sticker price of the SUNY schools. That’s more than 1/2 the COA of the SUNY schools…and would require FAR less than $40,000 a year in loans.

I have this coworker with 3 kids. His oldest is a few years older than my oldest kid. His oldest is smart- all 3 of his kids are- but none of them got big merit.

His first started at a local private college. It’s within commuting distance but the kid opted for the dorm. He got a bit knocked off the sticker price but not a lot. My coworker was okay with that- his kid took federal loans and he took parent plus loans for the balance. He was pretty sure his kid would become a doctor so he figured his kid would help out with the payments on the parents plus loans.

Fast forward a year and the kid was struggling, eventually transferring to the instate public (not within commuting distance though there is an instate public within that distance.) Kid finished his undergrad- not premed by then- and coworker continued to take out parent plus loans to bridge the gap between the federal loans and the cost of college.

Coworker’s second and third kids chose another nearby private school and again neither kid will commute. Similar to above, he continues to borrow parent plus loans for his two plus pay back the one for his oldest.

He told me a couple of weeks ago that he expects to owe $450k in parent plus loans (including interest) by the time the youngest graduates.

Short of winning the lottery, he will never retire. I’m out of the workforce not long after my kids graduate from grad school (if they go). I cannot imagine hamstringing my future like that. My kids’ college costs are covered. We lucked out. But you know what? If we couldn’t have covered the difference between merit and cost (for whatever reason- bad planning, lower salary, unexpected job loss or devastating illness) then they would’ve commuted to the state university in town. And they would’ve been able to do that easily.

The OP has gotten amazing advice. I’m just stunned that they are still considering the financial suicide. Truly stunned.

$450k? Whoa. That is, I don’t have the word for that!

OP, just look at it rationally. That is all you need to do. There are many things you would pass on your first choice because your second choice is just as good and costs much less. I’d liken this to paying double for a car just bc it is red. Take a harder look at the other choices and have an honest conversation with your kids.

My partner and I have to spend on college for kids and retirement for his mom who failed to plan. Don’t put youself in that place until you have had an honest discussion with both kids.

Siena College ? The second most popular major, according to US News, is “Administrative Assistant and Secretarial Science”.

Most popular major is Accounting.

OP: Most SUNYs, maybe all, are more prestigious than this college. So you are not buying prestige for your $160,000 in loans.

I am still wondering if this student applied to any SUNY schools.

If I were an employer, I’d be much more impressed with any degree from SUNY Brockport or SUNY Fredonia – never mind Binghamton or Stony Brook! – than a degree from Siena. I hope you are not conflating “private” with “better.”

^ I think that’s what’s happening. It’s also not uncommon for students and parents in some NYS communities to shun the SUNY schools and to think that… anything … is better than SUNY. I don’t know why… and I agree that Siena is not worth the extra cost.

Siena MIGHT be worth the extra cost IF this family wasn’t planning to take $40,000 a year in LOANS to attend the school. But $40,000 a year in loans for ANY college is extremely high…and especially when there are way more affordable options hopefully in the application hopper.

Exactly… nothing wrong with Siena. The issue here is that there are perfectly good schools that cost a lot less. $160,000 in loans is crazy.

Siena College ? The second most popular major, according to US News, is “Administrative Assistant and Secretarial Science”.

This assertion is patently false. Just visited the college site. There is no such major.

Siena has an arrangement with Albany Medical College whereby a group of students who complete their bachelors degrees at Siena gain automatic admission to the medical school. Not a lot of schools feature this sort of leg up in med school admission. And statistics bear out that Siena alumni outearn SUNY alumni over the course of an average career.

So yes, I think Siena is at least as worthy a choice, if not much better in some instances, as most if not all SUNYs, depending on a student’s career goals.

On the other hand, SUNY is a bargain, no doubt about it. If the choice was any private school and $40,000 in annual debt v a public option, I would elect the public option.

This needs clarification

About 12 high stats high school students are selected to be in this BA to MD program… simply being Premed and completing a bachelor’s is not enough

I didn’t say it was.

MODERATOR’S NOTE: The Terms of Service state that CC is not a debating society. The OP hasn’t been on the site in over a month. Closing thread.