LOANS: Too much? Private vs federal? Interest? Grad school? HELP!

<p>Can I afford MIT?
I don't know anything about loans or finances. Neither my mom nor dad has gone through the college admissions process. They are not involved in my college decision. My mom is working 12hr shifts and my dad disdains the idea of college. I don't know who to talk to.</p>

<p>MIT gave me:
21000 grant
1900 Federal loan</p>

<h1>3000 work study</h1>

<p>we pay ~25000/yr
My mom says she can pay only $5000/yr. I have a large sum in the bank from my great aunt that will pay $8000/yr.
That leaves ~$12000/yr in private loans, plus the $1900 federal loan.</p>


<p>How much will I really end up paying over the years I pay off my loan?
How does interest work?
What is subsidized?
How long do I have to pay off a loan?
<strong>Do I have to pay my loans while I'm in graduate school?</strong>
Citibank and salliemae?
Is it really as hard as people say it is to get loans these days in this economy?</p>

<h2>I'm so clueless about all of this!</h2>

<p>As far as future plans/income:
I want to continue directly to grad school and work towards a PhD in a natural science and become a professor or researcher. Not a doctor or engineer...</p>

<p>Thank you greatly!</p>

<p>Student</a> loan repayment calculator</p>

<p>Please go to this calculator & check it out. You will see how much you will owe monthly - and how much your loans will actually cost you. Private loans are NOT subsidized - that is, interest begins accumulating as soon as you get the loan. Some loans expect the interest to be paid as you go & others allow you to roll it back into the loan (this makes the loan end up being a lot more than originally borrowed). </p>

<p>Actually, you will be eligible for more than $1900 federal loan. As a freshman, you will be able to borrow $5500 in Stafford loan - but it may be that only 1900 is subsidized. The remainder may be unsubsidized (see above - interest begins right away & makes loan much larger if not paid off regularly).</p>

<p>Subsidized loans - 5.6%, interest doesn't accumulate until loan is due. Unsubsidized loans - 6.8%, interest accumulates as soon as loan is disbursed. Private loans - rate varies, ALWAYS unsubsidized interest (even if they say it is subsidized, it is not - they may allow you to roll it into the loan rather than paying it as you go, but that is not the same as being subsidized).</p>

<p>bump, this is a similar question that I have.</p>

<p>You mention that you have a large sum in the bank that will pay 8K per year. The colleges will likely expect you to spend the principal of that, if they know about it. At today's intereest rates, the 8K per year is indicative of quite a lot of principal.</p>

<p>Manythings, no one can tell you the answer to the loan question. You have to decide for yourself how much debt is "too much." Please go to the loan calculator link. Enter amounts. See what you payments would be. Search the internet for starting salaries for the field you plan to enter - figure you'll take home 2/3 at best (I only take home 1/2 after deductions for life insurance, parking fees, and retirement). Consider how much you will have to pay monthly for food, housing, transportation, health care, clothing, utilities, etc - then decide if you would have enough left out of your take-home pay to pay your loan payments AND cover your monthly expenses. Remember, student loans cannot be discharged in bankruptcy.</p>

<p>kafy - perhaps the OP was referring to a fund that would pay out 8K a year for 4 years, meaning they had 32K in the fund, to the OP that might BE the large sum</p>

<p>Agreed the 8K in interest/dividend income per year is quite a lot!
It would take 160K at 5% interest to generate that kinda $$. I don't think the OP would have money concerns if that were the case :-)</p>

<p>I should amend my post #5. Student loans are extremely difficult to discharge in bankruptcy. It happens in certain situations.</p>