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<p>For the record, I have private loans and my interest rate jumps all over the place. My minimum monthly payment changes with it to compensate-- it’s gotten to be significantly higher than it was. I have to try to ignore the voice in the back of my mind that incessantly asks me what I will do if the rate jumps above my ability to pay.</p>
<p>*This happens to be in last week’s WSJ: Getting Going: Don’t Major in Student Debt - WSJ.com</p>
<p>“He recommends that students keep their total borrowing to no more than their expected annual income the first year out of school.”*</p>
<p>I don’t like that “rule of thumb”. First of all, kids tend to over-estimate how much they’ll be earning upon graduation. Secondly, higher incomes are usually paid in areas with high COLAs so the “bonus” in income is negated by high rents and other higher costs.</p>
<p>Agree that kids have no realistic idea of what they’ll be making or if they will even GET A JOB, no matter what their major. Know many college grads struggling for ANY job & who have had MANY interviews without any job so far! It is TOUGH out there and debt makes it much rougher to have options.</p>
<p>OP- can your parents qualify for a HELOC? Depending on how long you’ve lived in the house and how much equity they have, they may be able to bridge the gap that way.</p>
<p>I think your assumptions about interest rates are not realistic. Go do some research on the recession of the early 80’s when interest rates sky-rocketed, the economy tanked, and people were both maxed out on credit with high interest rates AND unemployed. You need to take a longer view of the economy than just the three years that you optimistically think it will take you to graduate. If it were that easy for your parents to take on more debt, they would have saved more along the way— you need to recognize that it’s a lot to cheaper to spend 50K that you already have in the bank than to borrow that 50K over time.</p>