Student Loan Amount - Is $50K too much?

Paying for College
21

@Isabella12345 usually student earnings are used for student expenses like books, personal expenses, transportation, etc. You also have no way to know if you will actually be able to earn $3600 a year while you are a college student.

Here is my opinion…if finances are an issue (and from what you wrote, they are), I would suggest not applying ED anywhere. ED acceptances are binding ones…and you have their estimated net costs right in front of you.

IMHO you would be better off applying RD everywhere (EA where it is offered) so that you can compare net costs amongst acceptances.

What year are you in high school?

1 Like
22

Thank you! Senior. The only problem is that ED really boosts my chances of admission. I’m a strong candidate - top ACT, GPA, good solid activities, strong recs and essays but nothing wildly unique so I want to maximize my chances of admission. I’m thinking hard about it though.

23

Higher ED admission rates are inflated by inclusion of recruited athletes and such. How much ED actually boosts likelihood of admission varies by school (particularly whether they consider “level of applicant’s interest”), but is unlikely to be as much as differences in admission rates may lead you to believe.

6 Likes
24

As noted…this boost probably isn’t all you think it is.

If you are a strong enough candidate at most places for ED, you are in the mix for RD. In my opinion.

Lots of ED applications are due…tomorrow.

3 Likes
25

You would be able to borrow loans for a fifth year assuming that you have been making satisfactory academic progress - you can borrow the difference between what you’ve already borrowed & the maximum undergraduate borrowing limit ($31,000). If the fifth year is a reduced load of classes, your borrowing eligibility for that year is reduced. Also, what you borrow as an undergraduate is counted in your graduate lifetime maximum of $100,000 ($200,000 for programs listed as approved professional programs).

3 Likes
26

You’re also asking if it’s “too much” but that really is based on what your anticipated income is post graduation and you have no real idea. Going into education? To me that’s way too much in debt for the average starting teacher salary. And what if you can’t find a job immediately? Are you thinking of an advanced degree? That probably means you’d have to pile on more debt.

ED is risky financially. Yes it sucks for us donut hole families, but my personal thought is that undergrad debt is rarely worth it.

7 Likes
27

Just adding…if this college has a 20% acceptance rate or lower, there is really no predicting your chances of acceptance either ED or RD.

But in your case, with financial considerations, in my opinion, RD is the way to go.

Do you have any other siblings who will be or are attending college now.

28

Correct. Nothing saved. We have had tight budgets. We’d rely entirely on a combination of loans, plus any work study or small community scholarships I may get but I know not to bank on these last two items.

29

I’m a little confused. What is the annual budget your parents can pay for you for college? IMHO, that plus the Direct Loan should be viewed as your annual college budget.

It sounds like this college will be too costly…or right on the edge.

Remember also, costs will increase at college annually.

2 Likes
30

Getting outside scholarships should be considered a lottery ticket and not a plan.

6 Likes
31

I’d suggest getting a part time job now and working full time this summer. Regardless of where you end up, any money you earn now and in the summer could cover personal expenses and, potentially, reduce the amount you need to borrow. Given your financial constraints, I’d hesitate to go ED, because it won’t allow you to compare financial offers.

4 Likes
32

I am also skeptical there is any sort of ED “boost” that is given to all ED applicants.

More importantly, though–a higher chance of getting a binding offer you shouldn’t be taking in the first place is not actually a benefit. It is more of a trap, which you have the power to avoid.

In the end this is up to you, but I will note as a final point that when people have done surveys of college graduates, by FAR the largest source of regret is paying too much for their college degree, and associated things like too much debt. Not going to a college that wasn’t ranked higher, or more prestigious, or so on–by far the main regret is just paying too much.

And that is because with the benefit of more experience, most such people realize they could have gotten to the same place with less cost. Like, they are literally looking at the people next to them, seeing the variety of colleges they attended, and realizing they could have done that instead and been much better off.

Or, even worse, looking at people who went to such colleges who are doing things they wish they could do, but can’t because they have too much in loans to pay.

So why does this keep happening? Well, without a lot of life experience, it can be hard to really understand exactly what sort of burden debt places on you, and how it can be limiting. So some kids, and indeed sometimes at the urging of their parents, keep going for the “better” college despite a lot higher price and more debt . . . and then very often regretting it later.

5 Likes
33

What exactly is this? There’s not necessarily such a thing. Have you looked at the criteria US News or whoever is telling you a school is tops is actually using? How will that impact your income?

What’s your major - Your major is likely more important than the school name. For example, did you know Alabama marketers earn more out of school than those from Indiana (highly rated b school).

Engineering - really doesn’t matter where you go short of a few schools.

The WSJ rates Babson #2. Have you heard of it? Linkedin - rates Babson 12th - they know a thing or two about people’s outcomes.

Linkedin says Bucknell is the strongest LAC, followed by W&L, Colgate, Richmond and Trinity (CT). Higher than Amherst, Williams and Bowdoin.

WSJ says UC Merced - the safety UC is top 20 as are San Jose State and Loyola Maryland.

  1. $50k is arguably too much - there’s always substitute schools.

  2. Even those that claim an advantage in ED typically have to let in far more RD than ED. Yes, they fill a big chunk ED but their RD has a much lower yield so some have to admit 5+ kids for every one that will accept.

You can tell us the school and major but in most every case, unless you are assured to come out making big bucks, that’s too much. Interest rates are high and don’t forget loans have fees so you are netting less than you are borrowing, at least above the student loans.

Find schools you can afford no loans - that’s typically your best bet - or at least that stay within the federal limits. They are there for a reason.

You don’t want to be held hostage by loans when you graduate.

Also, you say this school is $18K a year. What would other school’s cost? Are they more than $18K a year.

The answer is not to ED - because you don’t want to lose flexibility - not to mention be saddled with loans. Many “top school” however you define that - have kids end up in grad school - more costs - or low paid jobs.

And ED rates are not what they seem because they include athletes, Questbridge where affiliated and other invited candidates.

Good luck. But heck no, you shouldn’t ED - not when significant loans are involved. The richest schools often go sans loans.

Loans = bad, especially in that amount. If you told me you’ll come out in six figures and not NYC, I’d say ok - but it’s unlikely. Heck, with AI, the stability of the job market is unknown.

Many who take loans come back to regret them.

Best wishes.

3 Likes
34

One last thing - if the school is telling you - ED is your best hope, etc. - don’t forget, admissions counselors are sales people. They are excited about (which is a good thing) and selling their program.

But you need to look out for Isabella, not them.

You might do a chance me and list all your schools and ask for guidance and perhaps there are even other schools that might fill the same need, at a better price.

It’s hard to totally evaluate your situation without knowing your stats, major, school list, etc. But in general, yeah - don’t go above the federal limits and others mock me for saying it, but short of necessity, I wouldn’t even use those.

1 Like
35

Bottom line: do not ED under these circumstances you listed. Your odds of better financial and life outcomes are way higher if you apply to a good list of schools, including some which are affordable without such massive loans (if your stats are as good as you indicate, there will be great schools willing to offer solid merit aid for you), and then compare your options. You can still apply to the ED school RD, and may even get in there and take it into consideration in context of other options.

My one disagreement with others here is the notion that ED never has better odds for unhooked applicants. Though it is an outlier for many reasons, students from my kid’s school almost never got into UChicago RD. But lots of them got in ED and the high school told students their odds were significantly worse at Chicago RD. But having said that, I would not ED to Chicago if I had to take out the debt you are taking about. I’d seek merit scholarship at a quality school that wouldn’t put me in life restricting debt by age 22.

3 Likes
36

I think without knowing the school list - you are correct - it’s hard to know.

There is no info given other than I think I’d get in ED.

So doing a chance / match me would be smart for the student - and knowing their major and ultimate goals would be helpful as well.

We know schools like Chicago and Case - yes, ED matters. But it may matter also if the school is need aware vs. need blind - i.e. someone with an $18K contribution is at a disadvantage.

We don’t really know anything about the student or situation other than the generics they provided.

2 Likes
37

So just to be clear, I think places like Chicago and others do sometimes practice yield protection among unhooked applicants. The setup for yield protection is you apply non-binding, they really like your application and they would love to enroll you, but their yield model then says you are extremely likely to take another offer instead. So, they might waitlist or even reject you rather than hold open a non-binding offer.

If this is a risk for you, you can avoid it by applying ED. Your estimated yield in their model should automatically shoot up to something like 97%, which is because most people do what they agreed and pull their other applications, so they never see these other offers the non-binding yield model was implicitly worried about.

I note as an aside if a college has low but predictable RD yield, this is probably not necessary. Most publics likely fit in this category. Also, colleges can potentially make their RD yield more predictable with merit, even if it remains low. So, most of the “usual suspects” for a lot of yield protection fit a certain profile: privates, little or no merit, not the most popular in their peer set, or maybe not the most popular in their locale.

OK, so if a college does practice a lot of yield protection, then that will contribute to a higher ED acceptance rate. And it does mean for certain types of applicants, moving from RD to ED can change them from waitlist/reject to accept.

But what it doesn’t mean is someone they didn’t want in the first place got “boosted” by applying ED.

And it also doesn’t mean ED is always a good idea, even if it “works”. In fact, if their yield model was right as applied to you–and they are very good at this–meaning if you were extremely likely to get offers you would prefer, you made a mistake to apply ED and never see those offers.

So even at colleges which practice yield protection, ED only makes sense if you are pretty sure you are an exception, that their yield model is wrong that you will get offers you prefer. And that is usually only going to be true if you know you love this specific college, including in light of what it would cost you, more than any other possible offer.

Like, Chicago’s yield model is implicitly saying kids like you usually get into Yale, or Brown, or Amherst, or some great college with merit, or so on, and then take one of those offers instead. You need to then think, nope, I don’t care if any of that will actually happen, I would still want to choose Chicago. So I don’t even need to see these offers the Chicago yield model thinks I would prefer, I know I wouldn’t prefer them.

And fair enough if so.

But if not, EDing Chicago, or any other college where the implied benefit is avoiding the risk of yield protection, is likely a mistake.

1 Like
38

Agree with the last couple of posts that there can be an ED boost for unhooked applicants…at some schools. But my sense is the advantage is small, certainly not the 3x ED vs RD admit rate that’s unadjusted/includes all the hooked applicants.

It’s difficult to help OP because they haven’t answered a lot of questions that posters have asked, and these answers might allow posters to give more nuanced advice.

IMO knowing what we know so far, it would be a mistake to apply ED as the NPC suggests the family might need to take out $70K+ in loans (taking the $18K NPC x 4 for worst case.)

39

I think another thing is the mental aspect.

It’s easy to spend money before you realize - it’s being spent and has to be paid back.

If you ED somewhere, you’re likely done - especially if they provide you what you expected.

There is no going back - if you change your minds.

We all think differently.

I gave my kids a $50K budget. We weren’t going a nickel over and loans were absolutely not a thing.

If our budget was $20K, I’d have the same no loan rule.

Other families and posters are less cautious.

So a lot also has to do with your - accepting of risk. I’m risk averse. Others less so.

Given your contribution, I’m assuming other schools may cost more.

It’s the “top” I would take out of the equation. I’m not sure it’s a thing…

40

$50,000 is a LOT of debt for someone who is a newly minted university graduate. You should look for more affordable options.

This much debt might be just barely tolerable for someone who is in a major that will for sure lead to a good paying job right after graduation. However, this leads to a lot of risk. As one example, engineering tends to lead to good paying jobs with just a bachelor’s degree. However, something like half of all students who start university as an engineering major end up switching majors. Engineering classes are tough, and are tough intentionally. We do not want a weak student to be doing the structural engineering for a bridge, nor to be doing the heat analysis for a consumer device. We do not want bridges falling down (and a few have). We do not want 100,000 consumer devices catching fire in 100,000 homes.

Similarly computer science is another area which is expected to lead to a good job right after graduation. However, there is a lot of talk of AI taking away low level coding jobs, and again there is no guarantee. What the job market is like now and what it will be like in 4 years are two completely different things.

And engineering and computer science, the very fields where there tends to be good paying jobs for someone with a bachelor’s degree, are fields where it really does not matter much where you attend university, and where there are a multiple very good programs that are at relatively affordable public universities.

Thus to me $50,000 in debt is a huge risk, and is relatively likely to end up being a mistake.

If you are in any field where graduate school is likely, then this much debt would be even worse.

There is another risk: It is possible to get part way through a bachelor’s degree, run up significant debt, and then discover that you do not qualify to borrow enough money to finish your degree. I have met at least one person who this happened to. He ended up having to transfer to a lower ranked public school where he was able to qualify for a lot of merit aid (and he was in-state). He would have been way better off to have just started at the public school in the first place.

We set a strict budget for our daughter’s undergraduate education, and would not let them take on any debt at all. One daughter was frustrated by this (for example, there were two very good private universities that we just would not let her attend because they would be way over budget). Five years later (from mid-senior-year of high school to six months after getting her bachelor’s degree) she found herself working at an interesting but low-paying job, that she could only afford to take because she had no college debt at all. She then thanked me at least twice for not letting her take on any debt for her bachelor’s degree.

The stats regarding ED are skewed. As one example, recruited athletes are required to apply ED. Then of course they get in because they are recruited athletes. However, that does not mean that someone who is not a recruited athlete will get the same ED boost.

The other thing that you should understand is that there really are an enormous number of very good universities. If you do graduate from a big name famous school and then get a job, you are likely to find yourself working alongside graduates from a huge range of schools and no one will care where you got your degree. Harvard graduates and MIT graduates routinely work alongside U.Mass graduates and UNH graduates and Rutgers graduates and each of us get respected and paid based on what we can do and how easy we are to work with – not based on where we got our degree. Similarly if you go on to a graduate program again students who graduated from a huge range of universities will typically study alongside each other in very good graduate programs. I know multiple people who either got their graduate degrees at a highly ranked program or are currently studying in a highly ranked graduate program and they all say the same thing – the other students in their program come from “all over the place”.

I would strongly recommend that you do not apply ED anywhere. Instead apply to a range of universities, see what offers you get, and then decide where to attend. Pay attention to your budget and to what would be a good fit for you when deciding between multiple offers.

If you are competitive at all for admissions to a famous and highly ranked university, then you are going to be admitted to multiple very good and affordable other choices.

5 Likes