I'm Graduating From A College I Can’t Afford - NYU - Page 5

scualum · 10-28-2008, 05:20 PM

Fun conversation with the DS and DD last night at dinner. As our 25th wedding anniversary is coming up, they asked us what we did on our honeymoon. When we explained that our wedding night was a Howard Johnsons, the second and third nights at a nice Bed and Breakfast in the napa valley and the 4th night in a motel that backed up to the Napa State Mental institution, their eyes got bigger and bigger...

cptofthehouse · 10-28-2008, 05:24 PM

Garland, a nice house in a good neighborhood can benefit the entire family. It gives a great home environment, good schools, neighbors, makes every day life easier. Believe me, I can say so as I have lived in some fringe neighborhoods, in less than nice homes. And I have and do live in a good neighborhood. Also, houses can end up being a good investment. Around here, the older folks were doing well selling their houses at big mark ups and moving into things much more modest. Until this housing crunch, the home was also a big part of the pension picture for many families, and buying a bit more house than affordable was not such a bad idea if the picture for future earnings was good. Many I know did very well this way. If things change in the housing/credit market, it will again be a good investment that is used every bit of the time one lives in it. It is, however, a risk. Right now we are at risk, since we have more house than we need, and it would be very difficult to sell it.

To me, loans, credit is the big problem. If you spend furiously and owe much on consumer goods and get too used to living that way; eating out, entertainment, material goods, it can be dangerous, especially for young people who are living at their parents' income/asset level which they, the kids are not going to be able to match for a long time. I'm seeing a lot of that here. Garland, your kids are indeed lucky if they did not get an addiction to high price life, as that can really make for ugly, unhappy people. THat is a problem that many of us who are upper, middle income have as we raise our kids and give them all we can, even if we, and ultimately they are not able to afford it.

cptofthehouse · 10-28-2008, 05:28 PM

It's not just the kids who are hurting with those big loans. I know some families who borrowed PLUS for their kids and dug into the HELOC. They are now hurting. Paying back that money when pay is not what it used to be and the house is not worth what it was, is a big, big problem.

Perhaps with credit getting tighter, more kids and parents are going to have to cut back on loans, and schools are going to have to make adjustments when that money is no longer available.

scualum · 10-28-2008, 05:36 PM

I think we will see a shift in people's willingness to incur this level of debt just to pay the tuition bill for an undergraduate degree - at least I hope so. Long term there just needs to be better controls on what banks are willing to lend to students - but that implies a government level of regulation that currently does not exist.

Of course the next gotcha will be student credit cards. I just got the mail and DS just got 4 more offers... What are these banks thinking...

JustAMomOf4 · 10-28-2008, 05:46 PM

^
watch the interest rate - some are well over 20%

scualum · 10-28-2008, 05:54 PM

He knows what to look for. We read the first few offers together - and I showed him where the traps were.

I also showed him how to get a reputable card - which he did. The first couple of bills we went through together - now he knows how to read it and what to do if there is a problem.

As for these offers, he just throws them in the shredder.

cptofthehouse · 10-28-2008, 06:46 PM

My kids got into trouble with credit cards. They got a low interest card, but then blew it when late for a payment. With cards these days, one late payment can bring you into sky high interest rates AND late payment charges.

garland · 10-28-2008, 06:56 PM

Cpt--I think we're pretty much on the same page with what is important.

cptofthehouse · 10-28-2008, 07:18 PM

You've done a better job in imparting the knowledge to your kids, Garland. That I freely admit. We did our kids no favors when we did not include them in our financial discussions and when we "treated" them too often. They are finally getting it, but not without bumps on the way.

What to do if you have a child who really wants to go to a college that is out of range financially and is going to mean $80K in loans for the child to go there. My son is projected to have $20K in loans. I worry about that. We'll owe $40K for his education. He could have had a full ride +, but did not want it. He could have gone to a school that would have cost us $15K a year, which would have been no loans for anyone. He could have commuted and gone to a private college for that amount also. But he wanted an unusal LAC, some distance away that is close to $50k in cost, has good reason for wanting the school.

In our case, I am prejudiced towards making school choice a high priority and am willing to go into debt or scrimp to make it happen. Also we are in the financial situation that we can afford the loans and are likely to be able to hopefully help S pay some of his loans back, and help him out in starting his after college life. However, if we were in a tight situation, what would I say, do? Would I take out those loans if they were going to be truly ornerous to repay? Would I "let" him take out more in loans? My second son chose a state school in part because of the financial talk we had. The reality is that he is unlikely to be making much money out of school with his career choice of theater and will probably want us to help out for some years as he tries to "make it". We could not do it, if he chose a $50K+ school. Because we are able to afford to pay for his college, and he will not have loans, we are likely to be able to continue to support him somewhat for 2-3 years after graduation. We did go over all of that, and it was a prime reason for his choice in schools.

garland · 10-28-2008, 07:37 PM

Well, cpt, the one place we did splurge was school. We've been able to swing it, but I think, I hope, they understand that their dad and I forwent a lot of choices we might have made for ourselves. And things aren't perfect in Garlandville, either, with S still on indefinite leave from college while he figures himself out--though at the same time working hard to pay for the "privilege."

but it is true, they don't look for stuff much. Neither has a credit card, either, which is probably a good thing, esp. for S.

Paying for the expensive private for D was the right thing to do--it helped her be who she is and learn in many ways, in a way that the public she transfered from wasn't doing. S? I'll get back to ya on that.

britbrat1961 · 10-28-2008, 07:43 PM

"As a senior in high school, I'd considered a range of colleges: I looked at some State University of New York schools, other state universities, and a few less expensive private colleges. But, in my heart of hearts, I really wanted to go to the best college I could possibly get into."

BEST COLLEGE!!?? Says who? Does this mean that the college has a career placement office that will help guarantee employment following 4 years at their school to help pay off that debt? I highly doubt it!! Who rates these schools and how credible is the rating?

tenisghs · 10-28-2008, 08:04 PM

I didn't get credit cards until I graduated from college. I only have them (note: very small balances) because I needed to build up good credit when I get my own belongings (i.e. apartment). Having no credit is unfortunately similar to bad credit.

citymom · 10-28-2008, 08:34 PM

I guess I'm with Blossom here: it is too early to conclde that gettig into the 90K debt was a bad decision. After all, te girl can stay in New York (where salaries are not bad), live with her parents (saving on housing and, to some extent, on food). College loans will give her a good tax deduction. With a 50K salary she should be able to save maybe as much as 10K a year. In 3-4 years her loans willot be so ridiculous

hmom5 · 10-28-2008, 08:50 PM

Garland, love your post #70 and wonder if you can articulate what the extra investment "bought" your daughter.

cptofthehouse · 10-28-2008, 08:56 PM

Salaries are not commensurate to costs most of the time in the NYC area. I am assuming this young lady lived in Manhattan at NYU rather than commuted as some kids in my area have done, given the numbers. I know that 4 years at NYU can run about $140K over 4 years. If parents can contribute $40K of that, scholarship of $26K, $14K savings, leaves $60K in loans. You can find work to bring that down by about another $20K. The kids I know are about $20-40k in debt for going to NYU and commuting.

Don't know too many kids making $50K right out of school unless they have a nursing or other vocational major that is in demand (engineering, computers, accounting, etc) My son could not make a go of it here on about $40K without living at home. Big problem was he needed a car for his job and it came down to either the car or his own place. Could not find a comparable job that let him ditch the car. Granted, he made some financial errors that he is still paying. But the problem is those early years do not have much margin for such errors.