05.08.09 | What are You Willing to Pay?
I am the moderator of a financial aid forum where students
post all sorts of questions regarding their financial aid, their tuition, and basically anything else that relates to college. I recently have been seeing a lot of posts about how to cover graduate school programs, and even in some cases undergraduate programs that will cost in excess of 150k-200k. All I have to say to that is WHY? Why would you do that to yourself?
One person who posted wanted to go to Vanderbilt because it has a good name and a good reputation, but it was going to cost her $200k to get a bachelor’s degree; and when I say cost her, I mean that she has to pay it all…she didn’t get scholarships from the school, or grants from the government. She simply wanted to go to Vanderbilt and borrow $200k to complete her bachelor’s degree there.
It is one thing if you get in to a reputable school and they offer you an action packed financial aid package…leaving you with maybe $20k to pay a year…that is doable, but to borrow that much for a bachelors degree is just absurd to me (and I think it is just as absurd to borrow that much for a graduate degree as well). $200k in loans will give her a monthly payment of at least $1300, and that is only if she consolidates and stretches the loan out to 30 years of repayment. On the standard 10 year repayment her monthly payment will be $2400. There goes her financial future.
I recently filled out a Stafford loan entrance counseling form…and they had this neat little page that asked me how much I was planning on making per year once I am done with school. It also asks you how much you are planning to borrow. With a student loan debt of $35K it advised me that I would need to make at least $45k a year to afford my monthly payments. I have always said that people borrow way too much in loans when the degree they are getting will not provide them with a salary large enough to pay off their loan debt. A friend of mine is getting her graduate degree in teaching, and she is borrowing 60k to get it. Do you know any teachers that make upwards of 75k a year? Some teacher’s might be lucky to make this 10 to 15 years into their teaching career. So what will they do for those 15 years when the loan collectors are knocking on their door?
What are you willing to borrow to get the degree you want from the school you want to get it from? Where is the line drawn? Let’s hear it people.
Join the forum! I need help replying to posts, so if you feel confident in your financial aid knowledge or you just have a lot of experience dealing with the happy folks in your Financial Aid Office PLEASE JOIN.
Redeem your points!!! Code: EXCESSIVEBORROWING101
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