<p>Examples of 2 schools:</p>
<p>School A-
1st year average student loan is 3125. Undergraduate average need based is loan is 4750.
Average 5 year grad rate is 75%. Average debt at graduation is 27,550</p>
<p>School B-
1st year average need based student loan is 4390. Average undergraduate need based loan is 4850. Average 5 year graduation rate is 65%. Average debt at graduation is 24,500.</p>
<p>How is it possible that the average debt at graduationfor school B is less than A?</p>
<p>Northeastmom,</p>
<p>Boy, that does not seem to add up to me! Did you get these from the schools themselves?</p>
<p>are these both schools that meet 100% need?
The only thing I can think of is that while "average" student loan( that is offered by the college) is $4,750, that is not the amount that the student ultimately has to take out- and so total debt is higher-</p>
<p>I was thinking the same thing , emerald city . Did you get the numbers from latest US NEWS ?</p>
<p>Kid has a new laptop, and I inherited his freshman laptop. This is so much fun on a high speed system rather than his HS desktop.</p>
<p>Comment: the last 4 years, student loans were extremely inexpensive and many students and parents (us included) took advantage of the low interest rates and consequently took on loans that today would be borderline wise. The data may be skewed.</p>
<p>Ek, I am a little thick headed when it comes to these math puzzles. I think that you are on to something too.</p>
<p>School A meets 90% of freshmen and 90% undergraduate need.
School B meets 77% of freshmen need and 74% of undergraduate need.</p>
<p>Here is my new question to add onto my first- Does this mean that School B might really be the worse of the 2 deals, but not apparent, b/c the parent is also taking out "parent plus loans" or perhaps home equity loans to additionally fund the 26% gap for 3 years, and the freshmen gap of 23%?</p>
<p>School A is gapping only 10%.</p>
<p>momofthree,</p>
<p>I got this from usnews.</p>
<p>NE,</p>
<p>look at it this way (stay with me, we will eventually make sense of it)</p>
<p>If your student took the max. stafford loans over 5 years (under the new guidelines, the indebtness would be $23,625</p>
<p>2625 freshman year
4500 sophmore year
5500 junior year
5500 senior year
5500 5th year</p>
<p>So personally any thing over this amount is too much because it means that they are tacking on a perkins loan each year (which can max out at $4000 per year). Remember that Perkins loans is a campus-based loan program, with the school acting as the lender using a limited pool of funds provided by the federal government.</p>
<p>let's look at School A</p>
<p>Right now school the average student loan from school A for freshmen is $3,125 which is probably the max stafford (2625) and a perkins of 500. </p>
<p>If average need based loan of all students including freshmen 4750, I think you need to back out the numbers .</p>
<ol>
<li><p>add the max amount of stafford loans for 5 years 2625 + 3000+ 5500+5500+5500 = 22,125. </p></li>
<li><p>Take the 22125/ 5 years = $4425 (average of the max loans per year). </p></li>
</ol>
<p>while the "average loan is $4425, in reality, your child has accrued 22,125 in debt (I guess average sounds better)</p>
<p>The average undergrad debt from school A is $27,500</p>
<p>$27,500 - 22,125 (maxed out stafford) = 5375 (in Perkins loans)</p>
<p>5375 - 500 (avg loan from freshman year) = 4875</p>
<p>4875 spread out over the remaining 4 years = $1218.75 in perkins loans each year.</p>
<p>Because of the new loan guidelines that will kick in sophmore year, your child's max stafford debt will be $23,625</p>
<p>2625 Freshman Year
4500 sophmore year
5500 junior year
5500 senior year
5500 5th year</p>
<p>This averages out to 4725 per year. (23,625/5)</p>
<p>If the amount of perkins loans that school A does not change, you child will have $29,000 worth of debt at graduation (if it takes 5 years).</p>
<p>Thank you so much Sybbie. I do not know what a Perkins loan is. I have a feeling that this is a type of loan with a lower interest rate, and that our family would not be eligible to take this out. We have received a few financial aid packages and were not offered these loans. I assume this is for students with more need than our family. My son was offered both subsidized staffords in two packages and unsubsidized staffords in two different packages. If this is the case, can I assume that my son's debt would be the max staffords allowed to be taken out?</p>
<p>Hey Scott, </p>
<p>where are you????</p>
<p>I'll take a stab at it...</p>
<p>I think your best bet would be to plug in some numbers(actual mileage may vary).</p>
<p>for example </p>
<p>Look at both schools being $40,000 per year. Your EFC is 10,000</p>
<p>School A meets 90% of need (30,000)</p>
<p>30,000 * .90 = $27,000 leaving a $3000 gap</p>
<p>School B meets 77% of need freshman year</p>
<p>30,000 * .77 = $23,100 leaving a 6900 gap.</p>
<p>If everything were to remain constant over the next 4 years (and we know that it wont :( )</p>
<p>At school A your gap would be $15,000 (over 5 years)</p>
<p>3000 per yr * 5 years</p>
<p>at school b your gap would be $36,900</p>
<p>First keep in mind that in subsequent they have stated the next year less of your need will be met.</p>
<p>30,000 *.74 = 22500 leaving a 7500/year gap years 2 thru 4</p>
<p>4 * 7500 = 30,000</p>
<p>30,000 + 6900 = $36,900</p>
<p>total out of pocket cost (because the gap and the loans must be aid along with the EFC)</p>
<p>School A</p>
<p>50,000 EFC
15,000 gap
$27,550 undergrad debt</p>
<p>$92,550 total</p>
<p>**School B **</p>
<p>50,000 EFC
36,900 gap
24,500 undergrad debt</p>
<p>** $111,400 **</p>
<p>Over the course of 5 years you will pay out $18,850 more for school B</p>
<p>Ok, </p>
<p>If your son had gotten a perkins loan it just would have meant a lower interest rate. with the unsub stafford, the interest starts adding up almost immeadiately. Just substitute the terminology. </p>
<p>I guess your best bet is looking at his package what percentage of his total loans are subsidized and what percentage is unsubsidized.</p>
<p>Did they offer him the max. subsidized loan?</p>
<p>Sybbie, Thank you very much! I will need to reread this when I can focus on this.</p>
<p>Yes, he was offered the max subsidized stafford in 2 packages where no merit aid was offered. He was also offered grants at these schools (one also offered work-study). He was not offered subsidized staffords at one school where he received a large merit award, and at one school he just got a horrible package and he will definitely not attend.</p>
<p>Sybbie, I understand your explanation. It was very clear. I have not gotten the packages to these two schools yet. My son was awarded merit aid at school A already. School B wii send out their merit award with the financial aid package, and I expect that my son will get merit aid there too. Thank your very much for your help.</p>