No school. That degree is not worth that much debt. An education has value, intrinsically. But when it requires you to make loan payments, it needs an ROI.
“Since you mentioned upthread that your son got about $40,000 in grants (very close to the average aid), that implies that your high income financial situation is pretty close to the average financial situation of financial aid recipients there.”
Yes, but I don’t consider $120K a year particularly high and I think most people with that income consider themselves middle/upper middle, not part of the “very” rich or part of the poor - which is what was stated in the article was the population of the students at elite schools. So, imo, there are a great many people who are middle/upper middle getting aid at the elite schools and her statement is simply not true.
The family in the article complaining about their debt earns $175,000, well above emilybee’s family’s $120K.
Anyone else have a problem with the FA office at Williams being asked to indirectly help support adult children and their kids?
“With an income between $120-$130K/yr my son received $40K/yr in need based grant (no loans) from his top 20 only need based aid given LAC.”
There are schools that give good financial aid even for people that, for example, Pell Grant’s consider 'too well off", but here are two factors here:
1)120-130k and how it falls for financial aid depends on where you like. 120k in some places in this country is a very, very handsome salary, in silicon valley or if you live in NYC, it is not particularly that great, cost of living plays a huge role, too. Financial aid takes into account family income, and it also takes into factor costs like housing and so forth, not to mention if other kids are in school. Someone who is making 120k in a rural area far from an expensive city where housing and costs are cheap would likely get less aid then someone living in an expensive suburban area, for example.
2)Some school are known for giving good aid, the Ivies are a classic example of that, but they also don’t represent all schools nor do they represent I would guess a majority of schools these days. NYU for example is outright crappy with aid, unless you are very poor, I am not surprised kids are dumb enough to take out loans to go there (if you are going to go to NYU, make a slightly bigger effort and go to an ivy or some of the other elite schools with good aid, NYU is amazingly overpriced for what they offer IMO). The big music schools are not necessarily great with aid either, at places like Juilliard it is all needs tinged (straight aid and merit), and a lot of the students there are paying full freight or near full freight, same at some of the other top programs IME.
120k-130k is technically in a top percentile (it seems to depend on who you talk to), but there recently was an article in the NY Times about what it took to be in the top 5%,10% in an area, and in some areas that would have a hard time cracking the top 10% of household income, others it would be top 5.
“Someone who is making 120k in a rural area far from an expensive city where housing and costs are cheap would likely get less aid then someone living in an expensive suburban area, for example.”
I live in upstate NY outside of Albany, and while it is not the most inexpensive place in the country - it is much less than metro NYC/SF metro/Boston/DC etc.
My mortgage is $1000/month and only one kid and his school knew pretty much exactly our financial picture since we had to file a CSS.
“Some school are known for giving good aid, the Ivies are a classic example of that, but they also don’t represent all schools nor do they represent I would guess a majority of schools these days.”
But in the article they were talking specifically about elite schools in reference to only very rich/only poor and no middle class. It’s an absurd statement.
As usual, emilybee misses the point. The question is, what schools would you be willing to go into six figure debt for, for a creative writing degree?
Simple question, really.
There’s an implication that 120-130k families aren’t “needy” on account of them being top quartile. But families earning 120-130k cannot be expected to “afford” a Lambourghini. Nor would it be prudent for them to take out a short-term 6-figure loan, in order to acquire one. They would be committing IFI.
I would not go into debt like that (or burden my children) with debt for ANY school/ any degree/ any major. And I am saying that having sent both D’s to NYU.
Older D applied to NYU and received an $11K a year merit scholarship (no need.) At the time we knew that younger D would also need to attend school and husband was making less money than today (but our combined income–NYC area-- still made our FAFSA too high for need based aid.)
So older D only applied to private schools that offered merit aid and a SUNY. No ivies. No schools that met full need.
Our finances were better when younger D was applying and since she wanted NYU, too,and it was the best fit/ program for her, we let her go as well (no merit.)
We have no regrets spending the money we did, because both girls got excellent educations that couldn’t be matched elsewhere (given their criteria.)
And I am thankful we were in a position to grant them this. But if we couldn’t, they would have made more compromises. But I would never have let them take out more debt than subsidized loans, and even that would have been as a last resort. If we couldn’t afford more, both girls would have stayed at home and attended a CUNY.
This year some colleges are shifting their enrollment management/admissions strategies to target full-pay students plus, let’s call it, full-need students (with an eye toward ensuring racial diversity on that end). So, I do expect to see a gutting of middle class students attending those schools. (Off topic, I guess. But, I like the index idea.)
Personally, I wouldn’t go $100K into debt for any undergraduate degree, including any STEM degree. But I’m a little risk-averse when it comes to taking on debt.
There’s an argument that this is irrational, however. At most elite private colleges and universities, total COA now runs around $60K/year, and half or more of the undergraduates are full-pay. That means half the families are deciding it’s “worth it” to invest $240K in their child’s undergraduate education, regardless of major. That may or may not be rational, but I don’t see why it’s any less rational to say, “Well, I’d rather pay $140K over the next 4 years and spread the remaining $100K over more years by taking out $100K in loans.” Of course, you’ll end up paying more that way because of the interest rate on the loans, but that’s true anytime you borrow money, whether it’s for a new home, home remodeling, a vacation home, a boat, expansion of a family business, or whatever. And the interest cost is at least partially offset by the time value of money and inflation. Student loans or parent PLUS loans tend to have higher interest rates because they’re unsecured and have a relatively high default rate, but even so, it could be rational to take out loans if you expect your future earnings to be higher, or your future expenses to be lower (e.g., because you’ll no longer have Junior to support), or because you expect a windfall from a likely inheritance or sale of the family business or whatever. A similar logic would apply to families who are not full-pays; if you can’t pay $240K but you’re willing to pay, say, $160K over 4 years, there could be circumstances under which it’s rational to pay $15K per year now and to spread the remaining $100K (plus interest) over future years by taking out loans.
What is not only irrational but also cruel and unfair, IMO, is to expect to unload all that debt onto Junior, who will almost invariably have lower earnings at the outset of his or her career, and for whom the cost of servicing $100K in debt is likely to be crushing. I’d never do that to my kid, not for any undergraduate degree in any major.
Medical school and law school might be a different story. My impression is many newly minted MD’s have $100K or more in accumulated educational debt, and most seem to make it financially, though not without some penny-pinching in the early years. It used to work for lawyers, too, but given the current state of the legal market it’s now a much riskier proposition, even at elite law schools. Still, many students at the elite law school successfully navigate that.
Med/law students have already demonstrated the ability to finish strongly, so a large loan for them does not carry the same risk level as it does for an unproven undergrad. Plus, starting income for professional degrees tend to be high.
I singled out “creative writing”, not to bash the value of creative writing, but to highlight the potential to pay back the 6-figure loan w the expected starting salary for that major.
We do sometimes see posts here from students who are under pressure from parents to go to the most prestigious college possible, but the parents expect the student to carry all of the cost through large amounts of debt, and would not approve of the student attending University of Automatic Full Ride Merit Scholarship. Agree that this is cruel and foolish of the parents to try to burden their kids with that much debt.
The AAMC debt fact card lists a considerably higher debt level as the mean and median, and uses something like that in its examples:
https://www.aamc.org/download/152968/data/debtfactcard.pdf
I think the issue is that since the loans are not secured loans (and you are paying a premium for that), many of the people who take them out are just not in a position to afford them. And often the parent expects the student to pay them off in addition to any subsidized loans.
So I don’t think it is a situation of a parent saying we can pay in full, but maybe it makes sense to take out a loan since we can use our money in a different way in terms of investing.
The middle-class (and middle-ability) squeeze (“middle” meaning “middle and upper-middle” in both cases) is a real problem, though. Where can a kid who’s family makes $120K, can afford to pay $20K a year, lives in IL/PA, and has a 28 ACT afford to go? That test score is comfortably within PSU’s middle 50 percent range (also within UIUC’s 50 percent range, though entrance criteria there differs widely by major), but would this kid be able to (afford to) attend any flagship?
If no merit scholarships are earned, probably one in South Dakota (for out-of-state students, USD and SDSU are about $18,000-$19,000 billed costs and books, plus a few thousand in misc. and travel expenses).
@ucbalumnus, limited majors, no?
Any engineering?
BTW, these days, it may be even more dire for a poor kid with a 28 ACT.
Not a ton of options open now that fin aid almost never covers the full COA at most publics.
@ucbalumnus, OK, SDSU offers some engineering (but not, say, material science).
However, they charge more for engineering, and that may push the affordability past the limit, given travel costs.
BTW, check out SDSU’s wacky tuition schedule for EE: http://www.sdstate.edu/academic/tuition-fee-pricing.cfm?residency=Non-Resident
So these days, for a kid who isn’t 95th percentile or above but is willing to work hard but who’s family can’t pay for much (or qualify for much aid) and can’t commute somewhere, it seems that AP/CLEP/IB/CC/dual enrollment may be the only options, but that’s good for only the first 2 years or so. After that . . . work at Starbucks and get an online degree?
Well, my point is precisely that perhaps parents shouldn’t think about educational debt as being the sole responsibility of the student. And it won’t be, frankly. There’s no way an undergraduate student is going to be able to rack up $100K in loans in his or her name alone without the parent(s) also signing on to be guarantors of the loans. So it’s a family debt, not just Junior’s debt, The question of how much of that debt Junior can reasonably be expected to pay back is a family decision.
South Dakota State does charge by credit, and the high tuition years/semesters correspond to high credits (e.g. 18 credits in both sophomore semesters for EE). It also looks like there are lab surcharges.
Starting at CC can save money to allow for a higher budget for a four year school the last two years. For example, if the budget is $80,000 total, then two years of a $10,000 community college (including commuting costs and food/utilities for the student at home) plus two years of $30,000 at a four year school would be within that budget.
It is true that students living in states like PA and IL do not have as affordable in-state public options compared to those in some other states.
@ucbalumnus: I forgot, there’s Germany and other countries.