S/o - would you allow child to take out loans for dream school

[Anonymous]

We have enough money to pay for anything in-state for DS. Just under $30K is our max. His "dream" schools, even if he maxes out on merit aid, will still come in $5,000-$15,000 more than what we'd pay for state flagship. If you were the parent in this situation, would you allow the child to take out loans? I cannot imagine allowing my child to start off his adult life in debt when it could have been prevented.

[Anonymous]

Of course! I took out loans to go to UG (Ivy ) and law school (T6), never regretted it.

[Anonymous]

Not for undergrad. It's too difficult and burdensome to pay that money back, especially when you make so little right out of college.

I know what it feels like to drown in hundreds of thousands of student loan debt. It has kept me awake many nights and I will never allow my children to be in that position, especially not for an undergraduate degree.

[Anonymous]

Heck yeah, I don't really know anyone who didn't have undergrad loans. I had 'em for undergrad and law school.

[Anonymous]

We are faced with this same situation. HYPSM - probably. But the schools my DC wants to go to - which aren't even top 50 but still >$45K per year - no. Not worth it.

[Anonymous]

Anonymous wrote:We are faced with this same situation. HYPSM - probably. But the schools my DC wants to go to - which aren't even top 50 but still >$45K per year - no. Not worth it.

What is the M in HYPSM?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are faced with this same situation. HYPSM - probably. But the schools my DC wants to go to - which aren't even top 50 but still >$45K per year - no. Not worth it.

What is the M in HYPSM?

MIT.

[Anonymous]

I think the subsidized Stafford loan limits--a total of $23,000 for 4 years--provide a good rule of thumb, and that's the max that I would feel comfortable allowing my child to borrow. A total debt of $23k means a monthly payment of about $260, which would be manageable even if my kid dropped out or couldn't find a job and had to wait tables. So that works out to borrowing less than $6k per year.

In almost all circumstances dependent undergrads can borrow only up to a total of $31k on their own, and only up to $5500 freshman year. Beyond that, someone needs to cosign. Under no circumstances would I cosign a college loan for my child. It is simply not something I would do for a child who had in-state options that I could afford; doing so would violate my financial sensibilities (for my kid and for myself).

I don't believe in the concept of "dream" school as it's commonly defined. If you can't afford it, that's a nightmare, not a dream, lol. My kids understand that they can't leave the state unless the price is right, no matter how much they love a school.

[Anonymous]

I think it depends on the kid and the school. Many private colleges graduate most all kids in 4 years whereas a lot of public universities do not.

Also, does your child know what they want to do? If they want to be a school teacher, nurse, etc, then a private school might not be the best option.

I agree with the PP poster that the stafford loan limits do provide a good rule of thumb.
Also, just from personal experience, I took out loans to go to a small midwestern liberal arts college that is not a big name. It was, however, a great education and allowed me to go on to University of Chicago for grad school. Ambitious, but fairly poor, I am grateful that my parents encouraged me to go to my no-name dream school, even though I had to take out loans.

[Anonymous]

Anonymous wrote:I think the subsidized Stafford loan limits--a total of $23,000 for 4 years--provide a good rule of thumb, and that's the max that I would feel comfortable allowing my child to borrow. A total debt of $23k means a monthly payment of about $260, which would be manageable even if my kid dropped out or couldn't find a job and had to wait tables. So that works out to borrowing less than $6k per year.

In almost all circumstances dependent undergrads can borrow only up to a total of $31k on their own, and only up to $5500 freshman year. Beyond that, someone needs to cosign. Under no circumstances would I cosign a college loan for my child. It is simply not something I would do for a child who had in-state options that I could afford; doing so would violate my financial sensibilities (for my kid and for myself).

I don't believe in the concept of "dream" school as it's commonly defined. If you can't afford it, that's a nightmare, not a dream, lol. My kids understand that they can't leave the state unless the price is right, no matter how much they love a school.

I agree with this. Modest loans are fine - and may help a student take ownership of his/her education - but nothing more.

We have rising HS senior, and we've been open about money from the beginning of the college process. She knows how much we can pay, and she knows that we will not go over that number. She actually knocked a couple of interesting schools out early in her investigations because they were expensive and didn't give merit aid (or not for students with her profile). Better to eliminate them early before falling in love with an unaffordable school.

Plus, she is not the kind of kid who has a "dream school." She has a good list of affordable schools she likes, and she'd be happy to attend any one of them. It's her younger sister I worry about - she's more the dream school type, but the story remains the same. Modest loans only, and no going above the number.

[Anonymous]

Anonymous wrote:We have enough money to pay for anything in-state for DS. Just under $30K is our max. His "dream" schools, even if he maxes out on merit aid, will still come in $5,000-$15,000 more than what we'd pay for state flagship. If you were the parent in this situation, would you allow the child to take out loans? I cannot imagine allowing my child to start off his adult life in debt when it could have been prevented.

If nothing in-state is floating his boat, maybe take a look at some of the cheaper OOS schools. New College of Florida, Texas, Florida, most of the Canadian universities are all in the $30,000 range if you are OOS. He might find a new dream school there.

[Anonymous]

No.

[Anonymous]

Yes - as a High School student I wanted to get away from my home state.

I worked all year round for pocket money, clothes, food during the school year. I took out subsidized and private loans.

I also understood that I was responsible for paying back every dime and what that would mean.

For me - it meant that I needed to get a job upon graduation in a field that made the investment worthwhile.

By going to a private university out of state, I was exposed to things I would not have been at the flagship state university. I have a school on my resume that has opened doors. I graduated in 1991 when the economy was close to rock bottom. Most of my classmates had jobs - many of my friends who took the path through the state university system struggled for a few years.

[Anonymous]

Absolutely. My biggest regret in life by far is that my parents "forced" me to go to an ok local school for financial reasons rather than the ivy of my dreams. I took out loans and went ivy when I went to law school (T3) but it can't undo my undergrad.

[Anonymous]

Depends on the school and the major. If the returns are very likely to be high enough to pay it off easily, then yes. If it is to study the harpsichord at some very expensive but third tier institution, then no way.