How much debt is worth it?

fireandrain
Fri, 20 Apr 2012 16:39:55 +0000

No more than the federal maximum, unless you were majoring in computer science. Especially since your other choice is UMich, which is such a great school. And I say that as a booster for Brown.

Here’s one approach. Find a loan calculator online, and figure out what your monthly payments will be. Remember that the amount will be more than $20,000/year – Brown’s costs go up 2-4% each year, and there is interest due on the loan that will accrue each year. So your total amount owed at the end of four years could be more like $70,000.

If you want to major in econ and you are interested in investment banking, approach this like an investment banker would. Figure out your monthly loan costs. Then figure out your monthly salary (and think on the low side), and calculate all of your expenses (housing, insurance, food, taxes, transportation, etc. --ask your parents about all of their bills). Look at all that hard data, and make your decision based on that.