Your debate with your dad is hypothetical until you get admitted to a prestigious school. Are you a junior? Once you have some actual test scores, you can begin coming up with a list of possible reaches, matches, and safeties.
Even now though, if you want to continue the debate with your dad, how about going to the websites of example colleges in each category and calculating the net price for your family using each college’s Net Price Calculator. Prestige schools might not require as many loans as your dad thinks and can sometimes be less expensive than public options. Or, perhaps looking closer at what schools happen to hold the prestige for your prospective major will show that the options are different than you and your dad assume.
I suggest having test scores and looking at NPCs to flesh out your debate some more. Putting actual numbers on the expected family contribution, different types of loans, possible grants and scholarships, can help build a much more accurate picture. (Some NPCs include possible merit, for which you’d need test scores. RPI comes to mind as one well-regarded engineering school that does so.)
The choice isn’t necessarily binary, between 70k Prestige School and 30k No Name School; there are lots of schools in between, possibly less-expensive ones with great reputations and more expensive ones with less-good reputations for engineering. And then there are some big merit schools like Alabama Huntsville that can add to your debate.
A typical conservative limit is the federal direct loan limit ($5,500 first year, $6,500 second year, $7,500 third and fourth years), which is the limit of loans you can get without a cosigner. Some people are more conservative with debt than that and prefer a lower limit.
Do you know what your parents will contribute (without loans), and have you run the net price calculators on various colleges of interest to see what they are likely to expect you to pay?
@caralhoman Since you appear to be a senior, why not list the schools, their Net Prices, and how much of the EFC your dad would consider borrowing? A more concrete comparison would make it easier for others to offer advice.
“Your debate with your dad is hypothetical until you get admitted to a prestigious school.”
I think that it is also hypothetical until @caralhoman knows just how much debt is going to be needed for each school. A reasonable approach would be to apply to a range of schools, and see what the relative prices will be when the acceptances come in. At that point what @evergreen5 suggests is a good plan: List the schools and the total debt that would be needed for each (total for 4 years), and then a concrete comparison would be possible.
It all depends…what major, which colleges, your long-term professional plans, your family’s overall financial situation. A few thoughts/suggestions…(1) When applying to colleges, balance the list, including adding a few top programs/colleges; (2) Many top colleges have strong need-based aid programs; (3) After getting decisions back, evaluate and decide based on your goals. Bottomline, I would look at college education the same way I would look at any other investment…in general, taking calculated risks is essential to one’s success.
Depends on how much you take out in loans. If you go to Stanford, sure you might get a 100k job, but in California, that’s paycheck to paycheck. Add 150k in student loans to that and you have a recipe for failure. Loans are fine, but you have to be smart about them. I got loans at a “non elite” school, and I’m doing just fine in my career. I went to a less expensive school. The idea is to use them to get a strong education.
OP, it looks from past threads like you picked your school list before running net price calculators and your parents can’t contribute much. That probably also means realistically the can’t qualify for much in loans. Your best path is to take out just your federal loans (the $5500 freshman year, etc). Your dad is certainly mistaken that large loans beyond that are a good idea.
Thanks for the responses!
Based on some of the replies, I think I will most likely will make a new thread when I get the acceptances from the schools I have applied to and how much aid I will receive.
I have done the financial aid calculators for some schools and I am pretty sure I will qualify for need based aid for the ones I am applying to. However, my dad also wants me to apply to top out of state public schools like Purdue, U of Michigan, U of Illinois.
Unless you got merit aid (very competitive) from out of state public schools, getting into to private schools, many of which have need-based aid, can actually cheaper for you to attend.
You can use an online loan calculator to see the impact of your debt on your future. Your dad might be surprised how much more expensive it is to borrow for an education today. When I was in school the interest rates were closer to zero, and car loans were 7-8%. Now student loans are high and cars can be financed for near zero. The FinAid site’s calculator figures your monthly payment but also the amount of income needed to sustain that debt without going into default in the paragraphs below the results grid. Student loan default can create an endless cycle of debt because of the exorbitant default fees and inability to bankrupt away the debt. http://www.finaid.org/calculators/loanpayments.phtml
It’s not clear here what you mean by “some schools,” but you and your dad, together (i.e. with your dad’s accurate numbers, not your own guessing), should run the NPC for every. single. school. you have applied to or plan on applying to. There’s no reason to keep your heads in the sand until March.
The ship has sailed on Purdue and UIUC, whose RD deadlines were Jan 1. Looks like Michigan has a deadline of Feb 1. Michigan OOS COA is 62k. Michigan may offer some financial aid:
Purdue, Illinois and Michigan…flagships are terrific, but very costly for OOS students.
What schools DID you apply to? It’s possible that, for engineering, you already have some good choices. So??
Your other threads indicate you are applying to some Ivies…and had questions about aid at MIT and Stanford.
And you have financial issues in that your dad gets a tuition benefit at your private school that is considered compensation.
So…where did you apply…because your other threads indicate all very highly competitive, expensive reach schools. Can’t imagine that those public universities you mention upstream are more competitive.
Also, don’t you live outside the U.S? That being the case…ALL public universities will be at the OOS rate…unless there is some reason why you would qualify for instate someplace.
Something I don’t see mentioned a lot… short of Ivies, CalTech, etc, a lot of prestige is regional and relative. One person’s prestige is another’s safety. Some of the hardest schools to get into are much less known across the country, where you may be applying for jobs upon graduation. Don’t depend upon what your peers are talking about, or what was true when your father was applying to school.
Look at graduation and job placement rates in your field. A few percentage points, by the way, is not worth an extra 100k of debt.
As always, lots of knee jerk reactions when a question like this comes up. If you follow the rule that the most you should ever borrow is the federal allowed amount, a pretty high percentage of middle class kids can’t ever afford to go to even their in state directional college.
Most middle class kids (under maybe $150,000 parent income) can go to a full need school for the same or less than their in state flagship. I’m assuming if Dad is talking about a prestigious school, it meets this category. Which still could mean borrowing $10-20,000 a year if the family can’t realistically contribute much.
Now, do I think it makes sense to be full pay at a no-name private college? Probably not, unless your parents for some reason are happy to make the payments. But the reality is that for a large majority of students substantial debt is the only way they will get an education. Full Stop. And if you are borrowing money, you really need to do an honest assessment of what your prospects will be upon graduation. From what I have read on this board, Engineering is a field where the name brand doesn’t help as much. If it cost an extra $5,000 a year to go to Princeton or MIT (and you are fortunate enough to have that option) it is still probably worth it. If it cost an extra $70,000 a year, then probably not. But very few students are looking at those options. The vast majority will get some aid at a full need school, and some will get very substantial aid. Until you know at least roughly what you will qualify for, it’s pretty hard to have an intelligent conversation. It doesn’t take long to run a few NPC calculators, which will give you a good idea of what the difference really is, and what the debt load will really be.
Are you sure that you are OOS everywhere? Perhaps your parents meet the residency requirements of a state even if they are physically overseas.
I’m not opposed to judicious borrowing for college, but lots of people go way overboard and later regret it, especially for an undergrad degree. Lots of the high-stat students on CC will be headed to law, medical, business school, etc., after undergrad, and will need to have the ability to fund that.
OP, don’t post for us how much aid you got. Post what the total cost is oneyou apply that aid (what you have to pay outright and what you will borrow) for each school. Don’t forget to include the cost of health insurance – in most cases you will be required to purchase the school plan unless you have some unusual arrangement that covers you fully at school. And consider travel as well. Assume 2 trips home per year (one for winter break, one for summer).