Question a out paying for college and availability of student loans

[Anonymous]

Many years ago. I ended up going to a good private college, and the way we made finances work is that I took out loads of student loans and worked a job during the school year to pay for living expenses. My parents also helped out by loaning me money to pay for rent. This was hard, and I left college with lots of debt, but I meant I could pay for a very expensive college without any scholarship money, even though there was no way my parents could afford to pay for college for me.

Is this approach still available to high school students these days? In other words, could a smart middle class kid admitted to a top Ivy League university essentially finance his college education via student loans?

I'm not asking whether it's a smart move or not, because I know exiting college with huge student loans is daunting. I also recognize that a student coming from a middle class background may need to be more risk averse than a comparable student from an upper middle class background, since there will be less family support to rely on in times of trouble. There are also other reasons a middle class student might choose a cheaper college even if admitted to a top Ivy League school.

But for the student hoping to maximize his/her college education, are student loans just as available now as they were 25 years ago?

TIA.

[Anonymous]

Student loans are easy to procure. But undergrad debt is a crisis, depressed starting salaries may well make even small student loan indebtedness crushing, and the very top private colleges and universities basically meet all financial need in cash now. It is next to impossible, for example, to graduate from princeton (no, I didn't go there) with any student loan debt at all, because the very top-endowed schools no longer make student loans a part of the undergrad package. Instead, scholarship grants have become significantly more generous as tuition and fees have skyrocketed.

[Anonymous]

OP back again. Thanks for your response. So I gather that money is never an excuse for someone to choose UMD over Princeton (for example) because Princeton will ensure the student can afford to attend via scholarships or loans? Is that what you're saying?

BTW, the title should be "about," not "a out."

[Anonymous]

Any other answers?

[Anonymous]

I would not agree with OP's conclusion at all - although some colleges try to claim it is true, i.e, they will provide enough scholarship money to make their Princetons the same cost as UMDs. The cost/debt structure of private college and grad schools is not comparable to what most parents on this post (I am probably a little older than post parents posting here) experienced when they went through the system. I received merit scholarship for college provided by the state (no longer available), a national church scholarship (also no longer available), and student loans for the remainder. I worked every summer but did not work jobs on campus during the school year because my parents wanted me to focus exclusively on studying. I don't remember the balance of the student loans when I graduated but the payments were only $35 every month until age 37. Law school was similar. I left with an additional payment of $45.00 per month, also ending at about age 37. I believe my tuition for college in 1979 was $4500 (not including room and board); that tuition is now over $50,000 (on campus residency is required for three years so you must pay room and board); law school was @ $6500 in 1983 - that is now well over $70,000 I have heard. My total education ran about $16,000 for undergrad and $18,000 for law school for a total of $34,000, some of which was offset by merit scholarships. That same education today in the same institutions would run about $416,000. No one can justify those increases.

In sharp contrast to the inexpensive cost of my loans, a relative recently graduated from a comparable college to the one I graduated from. She is more than $100K in debt to the federal government. She will not receive her diploma form the college until she has paid up what she owes the college. She has credit card debt of $20,000. She has her diploma but is 24, no job and without a W2 cannot go to a loan consolidator so will probably have to declare bankruptcy. Her college was approx. $43 a year. $43K x 4 (or 5 years in this case, as is common as you must know) is $215,000. My total for college was probably $16,000 - I don't remember what portion was covered by scholarships and what portion was loan but I carried it all myself. The monthly payments for college and for law school were incredibly reasonable.

The simple fact is that colleges and universities have priced themselves out of the market for middle-class or even upper middle-class families. Scholarly studies have shown the increase is not in lockstep with inflation or any other warranted indicators. Also, colleges have not followed a basic rule of capitalism. If Harvard jacks its tuition up to $54,000, then Longfellow college jacks its tuition up to match. A Porsche does not equal a Honda, but since U.S. parents are increasingly desperate to send their kids to these overpriced colleges, Longfellow can fill its ranks and charge the same price as Harvard (some antitrust lawyer ought to look at this as a class-action). Meanwhile, colleges and universities hire more and more marketing people to try to increase their "yield" numbers for U.S. News & World Report while at the same time working over alums like me to provide scholarship monies to provide whatever financial aid they can because they know most parents/kids cannot afford these obscene fees. The system is simply broken -- eventually only the very well to-do and the very poor, the exceptional athletes, or the affirmative action candidates who are on full scholarship will be in our nation's colleges and universities - with an enormous influx of international students (you thought it was peculiar that students came from India to attend med school here in the states? Wait until you see the influx of full-paying students coming in from China) filling in the ranks of the seats that used to go to the children of the middle class and upper middle class.

Read Andy Ferguson's "Crazy U". His book and website discuss the bizarre pace of increased pricing of our nation's private schools. His book also has a good chapter on filling out the FAFSA forms and the process of obtaining student loans.

[Anonymous]

If the student can get into Princeton..they should go to Princeton...will increase lifetime earnings potential: http://money.msn.com/personal-finance/is-acing-the-sat-worth-dollar100000

And, if someone's parents make under about $200k -- they will generally qualify for some form of financial support from Princeton that won't require them to pay the money back.

Anonymous wrote:OP back again. Thanks for your response. So I gather that money is never an excuse for someone to choose UMD over Princeton (for example) because Princeton will ensure the student can afford to attend via scholarships or loans? Is that what you're saying?

BTW, the title should be "about," not "a out."

[Anonymous]

I'm torn. On the one hand, I went to a top 5 college and paid dearly for it (over 130K). Now, someone is likely to pay 50K/semester or 400K for 4 years. Graduate school was free. I am now at 100K. Frankly, I am still not sure it was worth it. Yes, it was "easier" to get jobs. Is that worth 130K up front?

Also to the PP with the bankrupt relative - student loans cannot be discharged in bankruptcy. They stick with you, forever.

[Anonymous]

Why not make some student loans dischargeable? This would even the playing field and prices would fall. Easy access to these loans causes the universities to jack up tuition and the lenders are happy to write non dischargeable debt. This would seem to be a republican solution but something tells me their free market theories run into interference with the loan company donors.

[Anonymous]

Yes is the answer to your question, OP.

[Anonymous]

Anonymous wrote:

In sharp contrast to the inexpensive cost of my loans, a relative recently graduated from a comparable college to the one I graduated from. She is more than $100K in debt to the federal government. She will not receive her diploma form the college until she has paid up what she owes the college. She has credit card debt of $20,000. She has her diploma but is 24, no job and without a W2 cannot go to a loan consolidator so will probably have to declare bankruptcy. Her college was approx. $43 a year. $43K x 4 (or 5 years in this case, as is common as you must know) is $215,000. My total for college was probably $16,000 - I don't remember what portion was covered by scholarships and what portion was loan but I carried it all myself. The monthly payments for college and for law school were incredibly reasonable..

can the college legally withold her diploma? How is she supposed to get a job without it? What if she was to study further? Would the school allow that?